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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.

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Read in Chinese

Speakers:

Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC)

Lin Nianxiu, vice chairman of the NDRC

Hu Zucai, vice chairman of the NDRC

Chairperson:

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

Date:

March 7, 2022

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by three vice chairmen of the National Development and Reform Commission (NDRC): Mr. Lian Weiliang, Mr. Lin Nianxiu and Mr. Hu Zucai, who will introduce the topic at hand and answer your questions.

Next, let's first give the floor to Mr. Lian Weiliang.

Lian Weiliang:

Ladies and gentlemen, friends from the press:

Good morning. On the morning of the day before yesterday, He Lifeng, head of the NDRC, was interviewed on the sidelines of the annual legislative session. Today, along with Mr. Lin Nianxiu and Mr. Hu Zucai, both vice chairmen of the NDRC, I'm very happy to meet you here. First of all, I would like to express my heartfelt thanks and respect to all friends from the media for your long-term concern, support and assistance to the development and reform work.

Since last year, the external environment has become more complex, severe and uncertain. China's economic development is facing threefold pressures of shrinking demand, supply shocks and weakening expectations. 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 coordinated pandemic controls and socio-economic development, and innovated and improved macroeconomic regulations and controls, achieving higher growth and lower inflation. China has accomplished its main targets and tasks for last year, and the 14th Five-Year Plan (2021-2025) is off to a good start.

On the morning of March 5, Premier Li Keqiang delivered a government work report, making comprehensive arrangements for various tasks this year, and clarified the goals and tasks for economic and social development throughout the year. The draft plan on national economic and social development in 2022 has been submitted to the National People's Congress (NPC) for review and approval and to members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) for deliberation. The NDRC will conscientiously implement the decisions and deployments of the CPC Central Committee and the State Council, adhere to the principle of ensuring stability is a priority while making new progress, and focus on stabilizing the macroeconomic market, keep the economy operating within a reasonable range, maintain overall social stability, and take practical actions to greet the convening of the 20th National Congress of the CPC.

Now, we are willing to answer your questions.

Xing Huina:

Thank you for your introduction, Mr. Lian. The floor is now open for questions. Please identify the news outlet you work for before asking your question.

CCTV:

In the face of the current pressure on China's economic and social development, it is necessary to focus on stimulating economic vitality through reform. What are the key tasks for reforming the economic system this year? How can we further stimulate economic and social development through reform? Thank you.

Lian Weiliang:

Thank you for your questions. Both the Central Economic Work Conference and the premier's government work report clearly stated that "reform and opening-up policies should lend impetus to development." The Party Central Committee and the State Council have deployed a series of major reforms to vitalize development. The NDRC will act on its new development philosophy, build on its new development paradigm, promote high-quality development, and earnestly implement these major reforms, particularly in the five areas of implementing reforms to stimulate the vitality of market players, to build a high-standard market system, to stabilize growth and expand domestic demand, to promote high-level opening-up, and to promote the transition to green and low-carbon growth.

First, we will accelerate reforms to stimulate the vitality of market players. We will complete the three-year action plan (2020–2022) for the reform of state-owned enterprises (SOEs), move faster to adjust and improve the layout and structure of the state-owned sector, and deepen the reform of mixed ownership actively and steadily. We will encourage and guide private enterprises to accelerate the pace of structural reform and achieve high-quality development. We will focus on the concerns of market players, continue to strengthen support for micro, small and medium-sized enterprises (MSMEs), and create a favorable environment for various market players to compete for development. We will advocate an entrepreneurial spirit and accelerate the building of world-class enterprises.

Second, we will accelerate reforms to build a high-standard market system. Efforts will be made to remove market barriers, improve the fundamental market system, and build a unified domestic market. We will carry out comprehensive pilot reforms of the market-based allocation of production factors, strive to achieve major breakthroughs in land, labor, capital and technology, and make significant progress in the basic system related to data. We will steadily promote market-oriented reform of competitive areas in key industries, accelerate the building of a unified national market system for electric power, and further improve the unified national oil and gas market system.

Third, we will accelerate reforms to stabilize growth and expand domestic demand. We will innovate the investment and financing system, promote reforms to introduce a business-invested project commitment system, improve investment facilitation, and better leverage private capital to expand effective investment. We will promote the quality and scale of consumption, further improve the consumption environment, and facilitate the continuous recovery of consumer spending. We will improve the institutions and mechanisms for distribution based on factors of production and expand the size of the middle-income group.

Fourth, we will accelerate reforms to achieve a higher level of opening-up. We will continue to promote institutional opening-up, ensure national treatment for all foreign-invested enterprises, further ease market access for foreign capital, and ensure that the negative list for cross-border service trade is fully observed. We will speed up construction of the Hainan Free Trade Port, and do a good job in the island-wide customs clearance operation. We will optimize services for foreign investors and speed up the implementation of major foreign investment projects.

Fifth, we will accelerate reforms to shift toward green and low-carbon development. Efforts will be made to achieve the peak carbon and carbon neutrality goals. We will improve assessment and statistical accounting systems for greenhouse gas emissions, and avoid one-size-fits-all or campaign-style approaches in carbon reduction. We will speed up improvements to policy incentives for reducing pollution and carbon emissions and policy constraints on such emissions, and launch trials for the trading of energy consumption rights and green power. We will improve the price formation mechanism and promote important breakthroughs in the ecological product value-realization mechanism.

In accordance with the requirements of the CPC Central Committee and the State Council, we will make full use of the "key tactic" of reform to inject strong impetus into the stable and healthy development of the economy and society.

Thank you.

Nikkei:

Recently, due to the impact of geopolitical conflict, commodity prices have risen sharply, which will inevitably have a negative impact on the Chinese economy to a certain extent. How will the NDRC mitigate the impact of rising commodity prices in order to sustain growth? Thank you.

Hu Zucai:

Changes in the prices of commodities such as grain, energy and minerals are related to people's wellbeing, industrial and agricultural production, and the macroeconomic market. Stable prices will ensure an orderly market, stable economy and society. The CPC Central Committee and the State Council attach great importance to the work of ensuring the supply and price stability of commodities.

Last year, due to factors such as the COVID-19 pandemic, excess liquidity and supply bottlenecks, the prices of international bulk commodities such as oil, natural gas, coal and iron ore rose sharply, driving up global inflation. Prices in many countries hit multi-year highs. For example, the U.S. consumer price index (CPI) rose 7% in December last year, hitting a 40-year high. China's economy is deeply integrated into the world economy. We purchase a relatively high proportion of oil, natural gas, iron ore and other commodities. Rising international prices have increased imported inflation pressure and pushed up the prices of domestic energy and raw materials. In October last year, the domestic producer price index (PPI) reached 13.5%, a new high for many years, which had an adverse impact on the production of enterprises and people's lives, and brought challenges to the stable operation of the macro economy. We fully implemented the decisions and arrangements of the CPC Central Committee and the State Council, coordinated pandemic controls and economic and social development, coordinated development and safety, took multiple measures, and adopted a series of measures to ensure supply and stabilize prices such as making supply and demand adjustments, carrying out market supervision and guiding expectations. All these measures have achieved positive results. The overall domestic price has remained within a reasonable range. Last year, China's CPI rose by an average of 0.9%, in sharp contrast to the high inflation in major international economies, playing an important role in stabilizing global prices.

Since the beginning of this year, influenced by multiple factors such as the COVID-19 pandemic, the adjustment of monetary policies of major economies, and in particular, the aggravation of geopolitical conflicts, the trend in global commodity prices presented to be more challenging and complicated with uncertainties. In recent days, the global oil price surpassed the US$110-per-barrel mark and soared to $139 today. Prices of coal, natural gas, and iron ore remained high, and there is a rising trend in prices of corn and other grains. All these pose a challenge to our work of ensuring domestic supply and stabilizing prices.

Generally speaking, China's economy features strong resilience and large market space. With abundant policy tools, particularly bumper grain harvest in consecutive years, adequate production of hogs, and sufficient supply of industrial and agricultural products and services, China has all the necessary conditions as well as the capability and confidence to continue to keep prices running smoothly. Therefore, the projected target for CPI increase at around 3%, which was set in this year's government work report, is achievable. In January of 2022, China's CPI rose by 0.9% year-on-year, much lower than the percentages in the United States and the eurozone, which were 7.5% and 5.1%, respectively. The year-on-year increase of PPI fell back to 9.1% in January, which was also substantially lower than the level of more than 20% in the eurozone.

To ensure the supply and stabilize prices of commodities are of weighty responsibility. Faced by the complicated and grave situation this year, we will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, evaluate worst-case scenarios, implement policies in a comprehensive way, and strengthen precision regulation so as to make every effort to ensure the supply and stabilize prices of commodities.

First, we will make efforts to ensure the supply and price stability of grains to guarantee food security. Grain prices are the basis of all prices. The stability of grain prices can provide solid support for our efforts to stabilize all prices. China has sufficient stocks and supply of rice, wheat, and other types of grains, and therefore is fully self-sufficient. This year, we will ensure a stable sowing area and grain output and make efforts to ensure the supply and stabilize the price of chemical fertilizer. In this way, we will manage to keep grain output sufficient and its price stable, so as to ensure that the Chinese people can hold their bowls firmly. At the same time, we will strengthen our work to ensure the supply and the price stability of corn and soybeans, tap domestic potentials, make more efforts to improve the production capacity of soybeans and oilseed crops, reasonably make use of global resources, strengthen reserve adjustment, and maintain the balance between supply and demand.

Second, we will make efforts to ensure supply and price stability of energy to guarantee energy security. We will focus on the work to stabilize coal supply and prices. China's coal consumption accounts for 56% of the total energy consumption, and coal-fired power generation accounts for about 60%. If the coal price is stable, then the electricity price will be stable accordingly, and furthermore, the fundamentals of energy price will be stable. Recently, the NDRC issued a notice to further improve the pricing mechanism for the coal market, aiming at improving range-based regulation for coal prices and creating synergy between an efficient market and a well-functioning government. Next, we will fully carry out this major reform to ensure the implementation and effectiveness of reform measures. We will improve the coal production, supply, storage, and marketing system, improve the adjustment capacity of supply and demand, ensure a reasonable and sufficient production capacity, strengthen market expectation management, guide coal prices to run within a reasonable range, and improve the transmission mechanism of coal and electricity prices, so as to ensure a secure and stable supply.

Third, we will make efforts to ensure supply and price stability of major minerals to guarantee the security of industrial and supply chains. We will intensify our efforts on domestic exploration and development of iron ore, accelerate the construction of mineral products bases, expand the recycling of steel scrap and other renewable resources, enhance support capacity of domestic resources, strengthen import and export adjustment capacity, and resolutely curb the blind expansion of energy-intensive, high emission, and low-standard projects, so that we can ensure a secure supply and basic price stability of major minerals.

Fourth, we will keep a close eye on market trends and strengthen law-based market supervision. We will pay close attention to the supply and demand and price performance of key commodity markets and strengthen monitoring and analysis to keep abreast of the situation. We will keep high-standard market supervision and strengthen coordinated supervision of futures and spot markets. We will crack down on the fabricating and spreading word of possible price increases, price gouging, hoarding and profiteering, other violations of laws and regulations, and malicious speculation of capital in particular.

Fifth, we will make solid efforts to guarantee a basic living to people who encounter difficulties to ensure that their basic living needs are met. We will guide localities to earnestly implement a linkage mechanism of subsidies, and provide temporary subsidies in full and in a timely manner to effectively guarantee a basic living to people in difficulties.

Cover News:

Last year, there was a global shortage of energy supply, and some parts of China also saw a shortage of coal and electricity. Although we have ensured a stable supply of energy in a very short period of time, there are still worries about whether a similar situation would take place this year. What countermeasures does the NDRC have to ensure a stable supply of energy? Thank you.

Lian Weiliang:

Thank you for your question. Last year, we indeed faced grave challenges in our efforts to ensure energy supply. China's capability to turn the tide in a short time to ensure energy supply in some places is mainly attributable to the close attention of the CPC Central Committee and the State Council. In recent years, China has planned in advance the construction of energy production, supply, storage, and marketing systems and continued to increase the effective supply of energy. In key window period before the heating season, decisive policies were made, and a series of practical policies and measures were quickly adopted, such as increasing coal production and supply, ensuring full operation of generator units, making early preparation, and keeping sufficient storage of natural gas, as well as coupling the price of coal with that of electricity in a reasonable way. China's institutional strength also helps enhance its capability to ensure energy supply. We have implemented full coverage of medium and long-term contracts for thermal coal and coal used for heating, guided coal prices to return to a reasonable range, and ensured that people's basic energy needs are met. Generally speaking, the energy supply and demand in the heating season was relatively stable, coal stockpiles for heating at power plants were adequate for no less than 20 days of consumption, and there was neither power nor gas rationing. All these have effectively ensured the smooth running of economic and social development as well as a warm winter for all residents.

We understand that our people remain concerned about the energy supply of this year. The global energy supply has been in continuing shortage, both the rapid recovery of our country's economy and rapid growth of exports have driven the rapid increase of energy demand, and our efforts to steadily achieve the carbon-peak and carbon-neutralization goals have required for an accelerated transformation into clean and low-carbon energy, all of which put forward new and higher requirements for ensuring energy supply. China has been deeply integrated into the global economy. The rise in global commodity prices has driven the demand for energy-intensive products, and geopolitical conflicts and changes in global energy supply and demand will affect the security and reliability of the energy supply in our country.

Despite the increasingly unpromising challenges we are facing, China has the condition, ability, confidence and solutions to ensure a secure and reliable supply of energy. In accordance with the deployment and requirements of the CPC Central Committee and the State Council, we will give full play to the coordination mechanism for coal, electricity, oil, gas, and transportation services and focus on ensuring energy supply from four aspects. To be specific, we will emphasize the three "intensifies" and one "ensure," that is, to intensify efforts to increase production capacity, intensify efforts to guarantee reserves, intensify efforts to ensure a stable supply and price, and ensure that people's basic energy needs are met.

First, we will intensify our efforts to increase production capacity. We will vigorously promote the construction of large-scale wind power and photovoltaic bases in sandy areas, rocky areas, and deserts, and build a significant number of peak-shaving plants that utilize pumped storage for electricity generation, by which ways we will increase the effective output of various power generation in a coordinated manner. We will greatly increase investment in oil and gas exploration and development to promote the increase of petroleum and gas reserves and output and free up advanced coal production capacity in an orderly way to maintain the coal output at a reasonable level.

Second, we will intensify our efforts to guarantee reserves. We will accelerate the construction of government- deployable coal reserve capacity to more than 200 million tons, add gas storage facilities of more than five billion cubic meters, increase the electricity supply of pre-emergency and peak-shaving plants to more than 300 million kilowatts, and guide major energy production enterprises and large energy consumers to strengthen their consciousness of social responsibility.

Third, we will intensify our efforts to ensure a stable supply and stable prices. We will give full play to the role of medium and long-term energy contracts and achieve full coverage of medium and long-term contracts for coal, electricity, and gas services in key areas related to people's livelihood and economic development. We will help keep coal prices running within a reasonable range and improve the transmission mechanism of coal and electricity prices.

We will make efforts to ensure that people's basic energy needs are met. Although we are guaranteed with reliable energy supply capacity, with the significant increase in the proportion of unstable power sources, such as climate-vulnerable wind power and photovoltaic plants, residents and enterprises have higher and higher requirements for reliable energy to meet their living and production needs. Through a larger margined, more secure, and more reliable supply guarantee plan, we will ensure energy security and supply in all situations. We will ensure that there will be neither electricity nor gas rationing unless in extreme cases, and even if there's an extreme case, the switches and valves will not be turned off. Supported by the above comprehensive measures, we will ensure the security and reliable supply of energy in China and reassure our people and all energy users.

Thank you.

Reuters:

China set a 5.5% GDP growth target for this year, which is believed by many analysts as a bit difficult to achieve and may require much stronger policy support. What's your take on that? Also, do you have fears of the negative effects of stimulus policies, for example, lower investment efficiency, excess capacity, and possible risks of an asset bubble? In addition, what is the impact of the Ukraine crisis on the Chinese economy and the Belt and Road Initiative (BRI)? Thank you.

Lian Weiliang:

Thank you for your questions. Premier Li Keqiang made a thorough explanation on this year's growth target and the measures to achieve it. The government work report emphasized that the target of around 5.5% represents a medium-high growth rate from a large base figure and demonstrates the country's ability to move proactively. Achieving this goal will require arduous efforts.

NDRC Chairman He Lifeng also expounded on ways to achieve the GDP growth target as he joined the "minister aisle" interview on the sidelines of the ongoing "two sessions." We are well poised to achieve this year's target. We have ample room for development, which is created by implementing the new development philosophy, building the new development paradigm, and promoting high-quality development. We have also accumulated practical experience in driving high-quality development against the backdrop of the COVID-19 pandemic. Particularly, we have an effective policy mix, including prudent and effective macro policies, micro policies that continuously stimulate the vitality of market entities, structural policies that ensure smooth flow of economic activity, policies in the sci-tech sector that energize innovative potential, reform and opening-up policies that drive development, policies that promote more balanced and coordinated regional development, as well as social policies that meet people's basic living needs.

More importantly, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we have accumulated rich experience in developing new ways to improve macro regulation as we address various risks and challenges. We have both macro-policy tools and space available to us, and we used them to intensify cross- and counter-cyclical adjustments. We did not adopt a deluge of strong stimulus policies but paid attention to the precision, efficiency, and sustainability of policies. While making sure we achieve the growth target, we effectively avoided problems such as lower investment efficiency, excess capacity, and asset bubble.

This year, we will work on the following three aspects to achieve the GDP growth target. First, we will pay more attention to the implementation of major decisions, issue more policies and measures to further expand domestic demand, and strive to maintain the sound development momentum of foreign trade. Second, we will enhance the coordination of macro policies in order to unleash their combined role in stabilizing growth. In particular, we will strengthen the assessment and analysis of newly issued policies in order to accelerate policies that contribute to economic stability and keep an eye out for policies that work otherwise. Third, we will attach more importance to addressing various risks and challenges, and ensuring food security, energy security, and the stability of industrial and supply chains. We will also work on pandemic control in a more precise manner.

As to the possible impact of the Russia-Ukraine conflict, we are paying as much attention as you do. The conflict brings more uncertainty to global economic development. I want to emphasize that the Chinese economy has strong resilience, ample potential, and adequate space for development. Though the external environment is becoming more complicated, the fundamentals underpinning China's long-term growth remain sound. China is still able to keep its major economic indicators within the appropriate range. Regarding the BRI, both Russia and Ukraine are participating countries of the initiative. China will work along with all participating countries of the Belt and Road, including Russia and Ukraine, to promote the high-quality development of the Belt and Road in the Silk Road spirit of peace and cooperation, openness and inclusiveness, mutual learning, and mutual benefit. We also look forward to seeing the concerned parties peacefully resolve the issues through dialogue, and minimize the conflict's impact on the world economy.

Thank you.

Economic Daily:

The internal and external environment that China faces has undergone significant changes. The Central Economic Work Conference held last year underlined the smooth operation of the industrial chain. Can you please introduce the efforts on maintaining the security and stability of industrial and supply chains and what new measures will be taken in the future? Thanks.

Lin Nianxiu:

Maintaining the security and stability of industrial and supply chains is a strategic requirement of building the new development paradigm. It also matters to China's long-term development and security. The CPC Central Committee and the State Council attach great importance to the security and stability of the industrial and supply chains. General Secretary Xi Jinping has made important instructions on numerous occasions, pointing out the direction and providing the fundamental principles for us. In recent years, the NDRC has worked along with other departments to earnestly implement decisions and policies of the CPC Central Committee and the State Council, shored up the industrial economy, resolved impediments to industrial development, and smoothened economic circulation. This has contributed to a much stronger resilience of industrial and supply chains and increased our capability of maintaining the security and reliability of industrial and supply chains. This can be seen in the following four aspects.

First, a more stable operation. The industrial economy continued to develop steadily. In 2021, industrial added value above the designated size rose 9.6% year on year. Key industries and sectors maintained stable operation. We managed to maintain the supply and steady the prices of commodities and raw materials, effectively guarding against the impact brought to industrial and supply chains by undue fluctuations in prices.

Second, a better structure. We made breakthroughs in key and core technologies, achieving unprecedented results and making major improvements in a number of sectors. Companies generated more vitality and improved their cost-effectiveness. A number of outstanding companies and key equipment have become a calling card of China. A batch of small and medium-sized companies with high growth potential, advanced technology, strong market competitive edges as well as single-product specialists emerged more quickly and showed a promising outlook. Strategic emerging industrial clusters with unique characteristics and complement each other develop and thrive nationwide, adding to the efforts of maintaining stable industrial and supply chains.

Third, stronger development momentum. Industrial sectors amassed great momentum in transformation, upgrading and technological innovation. In 2021, China's high-tech industry saw its investment rise 17.1% year on year, 12.2 percentage points higher than that of investment in general. The manufacturing industry saw its investment in technological transformation rise 13.6% year on year, higher than the growth rate of overall investment in the manufacturing industry, adding new impetus to improving industrial and supply chains.

Fourth, stronger competitiveness. China's exports and global market share created record highs. In 2021, the export delivery value of industrial enterprises rose 17.7% year on year. China's 5G network facilities and applications led the world. The production and sales of new energy vehicles topped the world for seven consecutive years. The production of photovoltaic modules accounted for more than 70% of the world's total. Power transmission and transformation and rail transit already led the world. Industries with strong competitiveness continued to grow, and they have taken up a much better position in global industrial and supply chains.

We should also be keenly aware that facing the complex and volatile international environment and domestic conditions, we still face multiple difficulties and challenges in keeping industrial and supply chains safe and stable. This year's work requires extraordinary efforts from us. Next, the NDRC will work with related departments to take effective measures to keep industrial and supply chains secure and stable. We will continue our major work in five aspects as follows:

First, we will continue to shore up weaknesses. The amount of water a bucket can hold is determined by its shortest plank. Major weak links in industrial chains always hinder the healthy development of the economy. We will focus on key areas concerning the economy, people's wellbeing, as well as strategic and security matters. Dealing with bottleneck problems will be our focal point. We will coordinate the efforts to strengthen weaknesses, promote iterative applications, improve the industrial ecology, and make breakthroughs in key and core technologies. We will implement projects for rebuilding industrial foundations, strengthen weaknesses in basic industries, and cement the foundation for industrial and supply chains.

Second, we will continue to build up and harness our strengths. Our strength maintains the core competitiveness and a powerful and effective tool for industrial competition. We should work to build up our strength. First, we will expand strength in upgrading traditional industries. We will step up efforts to implement the Five-Year Action Plan on Enhancing Core Competitiveness in the Manufacturing Sector. We will increase competitive edges throughout the complete industrial chains and in major areas. Second, we will increase strength in fostering emerging industrial chains. We will seize the opportunity to develop cutting-edge industries and deepen our efforts to develop national strategic emerging industrial clusters. Efforts will be made to accelerate the development of new industries, new business forms, and new models.

Third, continue to eliminate bottlenecks and restrictions. Smoothing economic circulation is the key to stabilizing industrial and supply chains. At present, we will focus on solving the chip shortage problem in the automobile and other manufacturing industries. Last year, due to multiple reasons, there was a global shortage in chips supply, which we will tackle this year. We will continue to ensure the stability of supplies and prices for bulk commodities and raw materials; improve the production, supply, storage, and marketing systems; and strengthen effective supervision of futures and spot markets. We will also carry out projects to link the industrial and supply chains in key fields; set up industrial coalitions in collaborative R&D, product development, and experimental verification; and rely on leading enterprises to guarantee and stabilize industrial and supply chains.

Fourth, we will continue to deepen opening-up and cooperation. We will support the development of cross-border e-commerce and overseas warehouses and promote the efficient operation of industrial and supply chains in the foreign trade sector. We will make better use of foreign investment, encourage foreign-invested enterprises to expand investment in high-end manufacturing and high-tech fields, and support the innovative development of foreign-funded R&D centers. We will also implement regional trade agreements such as RCEP, make good use of various multilateral mechanisms, and establish a mutually beneficial cooperation system for industrial and supply chains.

Fifth, we will continue to strengthen risk prevention. We will establish a risk monitoring system for industrial and supply chains and improve mechanisms for risk assessment, early warning and response so as to enhance our capability to identify and accurately handle risks. We will tighten all parties' responsibilities and strive for early detection, reporting, assessment, and response of risks in order to guarantee the stable operation of industrial and supply chains. Thank you.

Beijing News:

In recent years, due to a rapidly increasing elderly population and gradually increasing costs of raising children, many Chinese people feel the pressure of having to take care of both. What policies will be taken to expand the supply of elderly care and child care services? Thank you.

Lian Weiliang:

Thanks for your question. Elderly care and child care are the most popular issues currently concerning people's livelihoods, with topics such as aging population, the three-child policy, and taking care of elderly and young children frequently trending on the internet. The CPC Central Committee and the State Council have attached great importance to this issue. General Secretary Xi Jinping emphasizes that we should pay high attention to solving the problem of elderly care and child care, accelerate the system of services for the elderly, and support social forces to develop public accessible child care services. In this year's government work report, unveiled during the ongoing "two sessions," Premier Li Keqiang emphasizes the need to improve elderly care in urban and rural areas and publicly-accessible child care services. Increasing the effective supply of elderly care and child care services will be a key task for this year's economic and social development. In this regard, we will focus on three aspects: improving both quantity and quality, ensuring accessible and nearby services, and exercising strict supervision and regulation.

First, we will improve both the quantity and quality of care. At present, the social demand for elderly care and child care, especially high-quality services, is very urgent. By the end of the 14th Five-Year Plan period (2021-2025), there will be more than 9 million elderly care beds and over 6 million nursery positions for infants and young children in the country. We will expand the scale of high-quality resources to meet the public's needs. For those nursing homes and nursery institutions where it is hard to find a bed or position, the central government budgetary investment will give key support. Relevant policies including fiscal and taxation, credit, land, and talents will be implemented so as to greatly increase the high-quality resources supply of elderly care and child care services.

Second, we will ensure accessible and nearby services. After years of development, the total number of nursing homes and elderly care beds has increased significantly. However, the utilization rate of some beds is not high. Apart from the epidemic impact in the past two years, another important reason has been the mismatch between supply and demand or the lack of precise and quality supply. The public's most needs are affordable, convenient, accessible, and nearby services. Therefore, the focus of improving both quantity and quality is to ensure accessible and nearby services. Accessible means that the government should give greater policy support to help service agencies reduce costs and then lower prices for consumers. Nearby means to fully implement the requirements of providing elderly care and child care services in communities. At the same time, we will guide all kinds of elderly care and child care services to extend to communities and families.

Third, exercising strict supervision and regulation. The quality and reliability of elderly care and child care services are currently the most concerning problem. At present, there are indeed a number of problems in this regard. For example, some institutions provide low-quality services but charge unreasonable fees, which brought about consumer complaints. Some institutions lack integrity, or even cheat the elderly out of their money and then make off, which seriously impacts the bottom line of social morality and law. To prevent this, we will strengthen the coordinated supervision and regulation and further optimize standards and norms so as to comprehensively improve the service quality and level of elderly care and child care.

After the epidemic, China will witness a recovery and rapid growth of elderly care and child care services, which ask us to fully prepare for and increase its effective supply. Thank you.

Xinhua News Agency:

Since the outbreak of the epidemic, relevant departments have adopted a series of policies to boost consumption. However, the recovery of consumption is still relatively slow. How do you forecast the consumption situation this year? What other policies will be adopted to promote consumption? Thank you.

Lian Weiliang:

Mr. Hu will answer questions about consumption.

Hu Zucai:

Thanks for your question. Consumption is the final demand, the lasting driving force behind economic growth, as well as an important guarantee to meet people's growing needs for a better life. The CPC Central Committee and the State Council have attached great importance to this issue. We have steadfastly implemented the strategy of boosting domestic demand, carried out a series of policies and measures to promote consumption in an orderly manner, and consolidated the fundamental role of consumption in economic development.

In 2021, sporadic COVID-19 cases were reported in China, which affected consumption a lot. We earnestly implemented the decisions and plans of the CPC Central Committee and the State Council, coordinated pandemic prevention and control with socioeconomic development, and promoted the improving and upgrading of consumption, which have boosted its recovery. China's retail sales of consumer goods totaled 44.1 trillion yuan last year, up 12.5% year on year, with final consumption expenditure contributing 65.4% to full-year economic growth. Driving GDP growth by 5.3 percentage points, China's consumption has re-established itself as the biggest driver of economic growth. At the same time, there are many new hotspots and highlights in the consumption sector. For example, online consumption bucked the trend and grew, and the online sales increased 14.1% year on year. The development of green consumption accelerated, with sales of new energy vehicles increasing 160% year on year. The demand for upgrading consumption became stronger, with retail sales of sports and fitness consumer goods maintaining double-digit growth. Thanks to the momentum from the Beijing 2022 Winter Olympics, the consumption of ice and snow sports-related products continues to grow. Since January, online sales of ski suit and skiing equipment increased by 110.7% and 61.6%, respectively.

China enjoys a huge domestic demand market, with a population of over 1.4 billion and the world's largest and fastest-growing middle-income group. Last year, China's per capita GDP reached around 12,500 U.S. dollars, which is close to the threshold of the World Bank's standard for high-income countries. With the steady increase in personal income, a huge demand for upgrading consumption will emerge, and the momentum of sustained growth in consumption will remain unchanged. At present, consumption is getting more diversified, personalized and high-quality, and intelligent, green, and healthy consumption has become a new trend for residents. The strong domestic market provides solid support for the fostering of a new development dynamic, with the domestic economy and international engagement reinforcing each other and the former as the mainstay. However, due to the epidemic and other factors in the past two years, consumption of some of the services that entail face-to-face contact, population movements and gathering of people has been seriously affected. Last year, the passenger volume in China dropped 14.1% year on year, and the number of domestic tourists and the domestic tourism revenue only recovered to 54% and 51% of that of 2019, respectively. Therefore, the task to promote sustained recovery of consumption is still arduous.

This year's government work report made comprehensive deployments for boosting consumption in 2022. The NDRC will firmly implement the strategy of boosting domestic demand, further unleashing consumption potential, and taking multiple measures to promote sustained recovery of consumption on the basis of targeted and effective epidemic prevention and control. We will focus on the following aspects.

First is to enhance consumption capability. We will strengthen pro-employment policies, implement measures to stabilize employment, support innovation and business startups in creating jobs, and provide targeted employment support for key groups so as to increase workers' incomes through fuller and higher-quality employment. We will further improve social security, optimize income distribution structure, increase incomes of low- and middle-income groups, and further expand the middle-income group, which will lay a solid foundation for expanding consumption.

Second, we will cultivate new growth areas of consumption. We will better meet the needs of conducting pandemic prevention and control on an ongoing basis, actively develop online consumption, and promote the deep integration of online and offline consumption. We will also cultivate and expand new consumption forms and models such as smart retail, smart tourism, digital culture, and smart sports. We will vigorously develop ice and snow tourism and ice and snow consumption, and promote the implementation of the action plan for the development of ice and snow tourism. We will work harder to promote the consumption of services such as nursing care for the elderly and children, and develop elderly-friendly technologies and products and products safe and healthy for infants. We will upgrade and expand domestic services. And we will further expand county- and township-level consumption, and speed up the integration of e-commerce and express delivery systems in counties, townships and villages. At the same time, we must implement relief and assistance measures to support industries in difficulties, such as catering, retail, tourism, and transportation; promote recovery in consumption of consumer services; and steadily increase major consumption.

Third, we will vigorously develop green consumption. We will fully carry out the implementation plan for promoting green consumption recently issued by the NDRC. On the one hand, we must promote the expansion of the supply and consumption of green and low-carbon products. We will comprehensively promote green and low-carbon building materials, continue to support the consumption of new-energy vehicles, and encourage local governments to promote spending on green and smart home appliances in rural areas as well as the replacement of old home appliances. On the other hand, we will advocate a simple, moderate, green and low-carbon, civilized and healthy lifestyle and consumption model, and make green consumption a new fashion. We will enhance the national awareness of resource conservation, carry out in-depth food conservation campaigns such as the "Clear Your Plate" campaign, promote the greening, reduction, and recycling of commodity packaging and commodity distribution, and strengthen the recycling of waste and old materials.

Fourth, we will create a safe and secure consumption environment. We will optimize the urban consumption network under the framework of domestic circulation, promote the cultivation and construction of international consumption center cities, and promote the creation of regional consumption centers. We will improve community commercial supporting facilities, build a convenient urban living circle, and improve consumption infrastructure and service environment. We will strengthen the building of the consumer credit system and the quality standard system, improve the diversified consumer rights protection mechanism and dispute resolution mechanism, increase the quality and safety supervision of consumer goods, crack down on counterfeit and shoddy products, strengthen the protection of consumers' rights and interests, and strive to improve people's consumption experience and their willingness to consume. Thank you.

Zhinews of Shenzhen Satellite TV:

In recent years, the NDRC has taken the lead in establishing a business environment evaluation system, and has carried out multiple rounds of evaluations, covering hundreds of cities across the country. What achievements and progress have been made in China's business environment assessment work? What are the priorities for optimizing the business environment this year? Thank you.

Lian Weiliang:

Mr. Lin Nianxiu, please answer the questions.

Lin Nianxiu:

Establishing a business environment evaluation system that conforms to China's national conditions and conducting business environment evaluation is an institutional arrangement made by the Regulations on Optimizing Business Environment. Since 2018, the NDRC has led the establishment of China's business environment evaluation system in accordance with the deployment of the CPC Central Committee and the State Council. So far, six batches of evaluations have been carried out. A total of 98 cities across the country have participated in the evaluations, covering 31 provinces, autonomous regions, and municipalities. In this process, we have formed three "1+N" working mechanisms in systems, indicators, and reports for optimizing the business environment, which have effectively promoted the optimization and upgrading of business environment nationwide.

Regarding these three "1+N" mechanisms, the first is the system "1+N". "1" is China's "Regulations on Optimizing Business Environment", and "N" is the supporting regulations and policies issued by various regions. For the indicator "1+N", "1" is the evaluation indicator system of China's business environment, including 18 major items and 87 small items, and "N" is the indexes added by local governments in accordance with local situations. As for the report "1+N" mechanism, "1" is the "China Business Environment Report" issued by the NDRC every year, and "N" is the local self-assessment reports. Each region has carried out targeted reforms in line with the national indicator system. At present, 28 provinces, autonomous regions and municipalities have formulated local regulations. Many cities' plans for optimizing business environment have been upgraded from version 1.0 to version 5.0, while all regions are showing enormous enthusiasm to compete with each other to optimize their business environment.

You all know that business environment is the soil for the survival and development of enterprises, and the quality of the "soil" is directly related to the vitality of market entities and the driving force of economic development. The NDRC will conscientiously implement the deployment of the CPC Central Committee and the State Council, focus on key points, continue to make efforts, and strive to create a market-oriented, law-based, internationalized, and convenient top-class business environment to better cultivate and stimulate the vitality of market players. To sum up, the next key measures can be summarized in five words, namely, "fairness, justice, openness, convenience, and satisfaction."

Fairness means continuing to relax market access, allowing enterprises to enter and compete on an equal footing. We will focus on implementing list-based management and fully implement administrative systems such as the negative list for market access and the list of items requiring administrative licensing. The most urgent task is to speed up the removal of hidden barriers in the market, break down the "glass door", clean up and abolish regulations and practices that hinder a unified market and fair competition, and ensure that various market players can equally use various production factors and public service resources in accordance with the law.

Justice means implementing scientific and effective supervision, enhancing corporate investment confidence, and stabilizing market expectations. We will focus on promoting the "three meticulous implementations." The first is to meticulously implement the "Regulations on Optimizing Business Environment" and solve the "last-mile" problems in the implementation of laws and regulations. The second is to meticulously implement supervision system rules, strictly regulate administrative law enforcement, and implement "double randoms, one disclosure" supervision (i.e. randomly select inspection objects and inspectors, and disclose the results timely), credit supervision, smart supervision, remote supervision, and mobile supervision. The third is to meticulously implement the regulations and procedures for formulating enterprise-related policies, allowing entrepreneurs to actively participate in policy formulation so that policy measures are more grounded, operational, and effective.

Openness means treating domestic and foreign enterprises equally and promoting the stable development of foreign investment and foreign trade. On the one hand, we will focus on the implementation of the Foreign Investment Law and supporting regulations, implement the catalog of industries that encourage foreign investment, and promote the implementation of major foreign investment projects. On the other hand, we will intensify our efforts to serve and guarantee foreign-funded enterprises and make every effort to coordinate and resolve the reasonable demands of foreign-funded enterprises so as to make China an attractive investment destination in the long run.

Convenience means improving the quality and efficiency of government services and making it more convenient and efficient for enterprises and the people to proceed with their businesses there. The emphasis is on "three pushes". The first is to push forward the quality and efficiency of window services, enhance the "one-stop" service function at government service halls, and promote the integrated handling of more government affairs. The second is to push forward the deep integration of online and offline services, and strengthen the coordination between the physical government service hall and the online government service platform, so as to facilitate enterprises and the people to handle their procedures there. The third is to push forward the optimization of the technology empowerment process, develop more digital service scenarios, and realize a broader range of online and cross-province one-stop services.

Satisfaction means playing the role of evaluation in guidance and supervision, stimulating local governments to introduce stronger and more practical measures recognized by market entities. Whether the business environment is good enough should be judged by enterprises. We will continue to improve the evaluation mechanism that focuses on the satisfaction of market players and the public, promote the evaluation of China's business environment in an orderly manner, guide and support more cities to make up for their shortcomings and weaknesses in line with advanced practices, and actively carry out reforms and innovations. For example, we will introduce a new measure to establish a "collection and notification system for cases that damage business environment." We will collect the problems that damage the business environment in different places and take the collected problems and rectification progress as an important part of China's business environment evaluation so as to promote solutions one by one. Thank you.

Market News International:

The conflict between Russia and Ukraine continues to escalate, and international oil and gas prices continue to rise further. Does China have any plans to ensure the supply of energy? Will you consider increasing imports? What are the appropriate import channels that China can utilize? Thank you.

Lian Weiliang:

Thank you for your questions. The recent escalation of the conflict between Russia and Ukraine has had an impact on the global energy market, and international crude oil and natural gas prices have risen greatly. Due to the high proportion of China's crude oil and natural gas being from outside its border, we will definitely be affected, and the import cost will rise. But overall, the impact is controllable. This is because, on the one hand, China is a big energy consumer and also a big energy producer, so the overall energy supply is guaranteed. The sources of China's crude oil and natural gas imports have been diversified, and long-term contracts account for a high proportion. As long as all parties comply with the contracts, imports can remain generally stable. At the same time, China is vigorously promoting the high-quality development of renewable energy and accelerating the implementation of renewable energy substitution. The rapid increase in clean energy will also effectively hedge and mitigate external impacts. In the past year, the proportion of clean energy in our total energy consumption has increased by 1.2 percentage points; in the national power generation in the past year, the proportion of power generation from wind power and photovoltaics increased by 2.2 percentage points. In addition, our current CPI is at a low level. Just now, Mr. Hu Zucai introduced the situation. We will take comprehensive measures to alleviate the impact of imported inflation.

As for how to ensure energy security and stabilize supply, we will make efforts in the following four aspects, as I mentioned just now. This includes expanding production capacity, increasing energy reserve, ensuring supply and stabilizing prices, and resolutely working to meet people's basic living needs of energy. These measures center on two keywords, namely "increasing" and "stabilizing." We need to increase the capacity and volume of production, the reserve, and the supply of energy. In the meantime, we also need to stabilize energy imports, prices, and relevant expectations. With the implementation of these measures, we have the confidence to ensure energy security and reliable supply, and meanwhile promote the green and low-carbon transformation of energy in an orderly manner.

Thank you.

21st Century Business Herald:

The Report on the Work of the Government notes that China will continue expanding effective investment this year. In this regard, new infrastructure is one of the key aspects. For example, the east-to-west computing resource transfer project launched in February has caught the attention of many market players. What progress has China made in the construction of new infrastructure facilities? What are the key tasks this year? Thank you.

Lian Weiliang:

Mr. Lin will take these questions.

Lin Nianxiu:

Accelerating the construction of new infrastructure facilities is a major decision made by the CPC Central Committee and the State Council, and also a key task stipulated in the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development. It is of paramount significance to the promotion of the digital transformation of economy and society and realizing high-quality sci-tech self-reliance. The new infrastructure we proposed mainly consists of three categories concerning information technologies, integrated development, and sci-tech innovations. In recent years, the NRDC has worked with relevant government bodies to carry out a series of projects focusing on these three categories. We have seen sound progress and made new achievements in the following three aspects.

First, a new development foundation has been built for the digital economy. In recent years, China's construction of information infrastructure has sped up remarkably. We established the world's largest and most advanced network of information and communication. China's 5G network has covered all of its prefecture-level cities, the majority of counties, and most townships and villages. The gigabit fiber-optic networks have been rolled out across the country, which is able to cover 300 million households. The overall layout for the national integrated big-data center system has also been completed. Since 2021, the NDRC has approved the construction plans of eight national computing hubs and has comprehensively launched the east-to-west computing resource transfer project. The project aims to give full play to the respective advantages of the east and west regions and translate the demand for computing capacity in the east into a growth momentum in the west so as to further realize nationwide coordination of energy and computing capacity. The civil space infrastructure has also witnessed rapid development. Currently, China's remote-sensing satellite system has realized global observation. In major fields, the self-sufficiency rate of data collected by domestic satellites exceeds 90%.

Second, new pillars have been created to support high-quality development. Regarding the construction of infrastructure that promotes integration, China's capacity of using information technologies has been greatly enhanced in advancing the intelligent transformation of traditional infrastructure facilities, facilitating economic upgrading and transformation, and improving people's livelihood. For instance, in terms of smart transport, we have seen remarkable progress in the intelligent transformation of ports and freeways. Digital map achieved full coverage, and the e-tickets have been rollout out comprehensively. Electronic waybills have been applied to more than 90% of express delivery services. People's traveling experiences and other logistic services have been greatly facilitated. In terms of the intelligent transformation of the energy sector, China introduced the world's first high-reliability 5G network for coal mines. After renovation, these coal mines have extensively adopted unmanned operating systems, and the number of employees working at high-risk posts has been reduced by more than half. This has effectively safeguarded people's possessions and lives. In terms of industrial internet, more than 2,000 "5G plus industrial network" projects have been carried out across China, which became a crucial pillar supporting the recovery of work and production and maintaining stability of industrial and supply chains. To sum up, 5G network not only facilitates online shopping activities but also improves the efficiency of industrial manufacturing and makes it more intelligent.

Third, new advantages have been fostered for high-level self-reliance. Since the 18th CPC National Congress, China has made many breakthroughs in the innovation of infrastructure. In terms of the number of projects, China has already made plans and established a total of 57 major sci-tech infrastructure facilities. With a group of high-level infrastructure projects set to be built in the next five years, the number of large-scale infrastructure projects in China will rank among the top globally. Compared with the rest of the world, China's major sci-tech infrastructure has seen remarkable improvement. We were mostly left behind five years ago, but the gap nowadays keeps narrowing down, and we have even become a world-leading force in certain fields. For instance, our Five-hundred-meter Aperture Spherical Radio Telescope (FAST), also dubbed the "China Sky Eye," has made many important astronomical discoveries. China's experimental advanced superconducting tokamak (EAST), or the Chinese "artificial sun," has achieved a reproducible, stable, and continuous plasma operation for the first time. It achieved a plasma temperature of 120 million degrees Celsius for 101 seconds, which is truly remarkable.

Regarding the application of sci-tech achievements, a group of strategic industrial technologies has been developed in recent years, and a number of major issues associated with society and people's livelihood have been addressed. For example, the Shanghai Synchrotron Radiation Facility has explored new solutions for the efficient use of natural gas and shale gas, which provides a strong basis for our future exploitation work of the two resources. The Heavy Ion Research Facility in Lanzhou has developed a heavy ion device for cancer treatment, which is a major breakthrough in high-end medical instruments. In this sense, these seemingly highly-advanced major sci-tech infrastructure facilities are actually closely associated with us and are profoundly changing the way of production and life.

The Central Economic Work Conference for 2022 proposed that infrastructure investment should be implemented in advance in a moderate manner. In accordance with relevant arrangements and requirements, the NDRC will ramp up efforts in the following three aspects:

First, the NDRC will speed up the construction of projects in major fields. To begin with, efforts will be made to accelerate the improvement of internet facilities. We will work to carry out the project that improves basic internet facilities in small and medium-sized cities in central and western China as well as the demonstration projects featuring 5G integration and application. By doing so, we can narrow the digital divide and strengthen weak links in application. We will also unify the efforts in rolling out the construction of node-like facilities. We will accelerate the building of ten national data center clusters and implement, in a stable and orderly manner, the construction of the new National Internet Exchange Center and key junctions of direct internet connection. In addition, we will deploy forward-looking facilities in advance. We will accelerate the efforts to implement the preparatory work of projects, speeding up the launch, execution and construction of major sci-tech infrastructure projects that are stipulated in the 14th Five-Year Plan. We will also launch a group of pre-research projects in a timely manner and continuously enhance China's capacity of the original innovation.

Second, the NDRC will fully mobilize the initiative of investment among market entities. We need to make sufficient efforts in three aspects. For starters, we will leave enough room for private capital. Since new infrastructure facilities are invested and established mainly by market entities, we will further expand market access and lower the entry threshold of investment in a bid to fully leverage the role of private capital in the sector. We will also provide sufficient policy support. We will boost credit support for the construction of new infrastructure, innovate financial tools, and expand the channel of financing, providing more favorable conditions especially for private businesses that participate in the construction of new infrastructure. In addition, we will ramp up efforts to accelerate the reform in relevant sectors, support enterprises to carry out technical and business model innovation, create a market environment featuring fair competition, and foster new growth momentum for the economic and social development.

Third, we will realize our carbon peak and neutrality goals and advance green development. The period covered by the 14th Five-Year Plan will be the first five years since China set its carbon peak and neutrality goals. In line with the deployment of the CPC Central Committee and the State Council, the NDRC issued an implementation plan for the green and high-quality development of new infrastructure such as data centers and 5G at the end of last year. The implementation plan made comprehensive arrangements for improving computing power and energy efficiency, optimizing energy-saving models, facilitating innovations in energy efficiency technology, and promoting economic transformation and upgrading. We will focus on the plan and step up efforts in energy conservation and emission reduction in the next step. In terms of energy conservation, we will support breakthroughs in high-efficiency energy conservative technologies, improve energy efficiency standards for ultra-large data centers, and carry out demonstration projects for energy-saving in 5G networks. In terms of emission reduction, we will promote the coordinated development of 5G facilities, computing resources, and renewable energy, support the transfer of more data centers to the western regions rich in renewable energy, and gradually reduce carbon emissions while increasing the supply of computing capacity. Thanks!

China Development and Reform News:

My questions are about new urbanization. According to the 2021 statistical communiqué, China's urbanization rate of permanent residents registered 64.72%. Will the previous rapid growth rate be sustained? What are the key tasks for new urbanization this year? Thanks.

Hu Zucai:

Thank you for the questions. Urbanization is essential for modernization and holds the greatest demand potential in China. It plays a vital role in promoting steady and healthy economic and social development, fostering a new development paradigm, and building shared prosperity. General Secretary Xi Jinping emphasized that a uniquely Chinese approach to urbanization will continue to guide the people-centered new urbanization process. Over the past year, we have implemented the plans of the CPC Central Committee and the State Council and achieved fresh progress in new urbanization. Improvements have been made in five aspects.

First, the level and quality of urbanization have steadily improved. By the end of 2021, China's urbanization rate of permanent residents reached 64.72%, and the rate of the registered population rose to 46.7%, a year-on-year increase of 0.83 and 1.3 percentage points, respectively. The gap between the two rates narrowed for the first time since the 13th Five-Year Plan period. Second, the provision of public services for migrant workers has steadily improved. We worked across the board to ensured that children living with their migrant worker parents in cities have access to compulsory education. As a result, 81.8% of such children studied at public schools of mandatory education, increasing 1.8 percentage points over the previous year. When considering those studying in private schools with their tuition fees covered by the government, the figure was 90.9%, a year-on-year increase of 5.1 percentage points. In addition, we organized extensive vocational skills training for rural migrant workers. Third, the carrying capacity of city clusters and metropolitan areas has steadily improved. Solid progress has been made in the coordinated development of the Beijing-Tianjin-Hebei region, the integrated development in the Yangtze River Delta, and the development of Guangdong-Hong Kong-Macao Greater Bay Area. The development of the Chengdu-Chongqing economic circle maintained powerful momentum. The development of city clusters in the middle reaches of the Yangtze River picked up the pace. Plans for developing metropolitan areas, including Nanjing, Fuzhou, and Chengdu, were issued. Fourth, the quality of urban development has steadily improved. We began the renovation of 56,000 old urban residential communities and accelerated the development of elderly and child care service systems. Fifth, the integrated development of urban and rural areas has steadily improved. As a result, the gap between urban and rural areas has been narrowed. The ratio of urban income to rural income per capita dropped to 2.5 from 2.56 in the previous year.

At present, China's urbanization is already in the middle and late stages of rapid development and entering a new stage of comprehensive quality improvement. Nevertheless, the driving force behind urbanization is still strong, promising substantial domestic demand and development momentum. We will advance a new people-centered urbanization strategy featuring high-quality development for some time to come. This year, we will steadily improve the quality of new urbanization and fully play its role in stimulating consumer spending and effective investment. We will focus on the following four aspects.

First, we will improve residency status for rural migrants who were granted permanent urban residency, which is the top priority of urbanization. We will continue deepening the reform of the household registration system, widening channels for rural migrants who have stable jobs and have lived in urban areas for a long time to gain urban residency, and at the same time protect their rights in rural areas. We will move faster to ensure that all urban residents access essential public services. With the new generation of migrant workers as the focus, we will ensure that children who moved from rural to urban areas along with their parents receive compulsory education. We will also improve employment service and vocational skills training. In 2022, we plan to offer at least 6 million subsidized training opportunities for migrant workers.

Second, we will promote the coordinated development of large, medium-sized, and small cities and towns. We will transform the development model of megacities. These cities should solve urban maladies; relieve their central areas of non-essential functions; appropriately control the scale, development intensity, and population density; promote multi-center, multi-level, and cluster development; and drive the growth of surrounding cities and counties to form a modern metropolitan area. We will advance the integrated development of urban clusters and metropolitan regions; accelerate the construction of highly connected rail transit in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area; promote the development of Chengdu-Chongqing economic circle; move faster to build modern metropolitan areas; and release development plans for Changsha-Zhuzhou-Xiangtan, Xi'an, and Chongqing metropolitan areas. We will promote county-level urbanization by supporting a group of counties with favorable conditions to speed up development and taking targeted measures to shore up weak links in counties. We will better meet the growing demand of rural residents to work and settle in counties. We will improve urbanization in border areas and promote characteristic towns' standardized and healthy development.

Third, we will improve livability and working conditions in cities. China's urban population has exceeded 900 million, and the number is expected to increase year by year. Therefore, we should make our cities more attractive and function better. We will create high-quality living spaces and provide more inclusive and convenient public services for urban residents. We will increase the supply of education, healthcare, childcare, elderly care, domestic, sports, and public culture services and create 15-minute community-life circles. We will promote urban renewal in an orderly manner, improve public facilities to cope with storms and droughts, initiate the upgrading of urban pipelines, including those for gas supply, improve living conditions for 8.4 million households living in old residential areas and increase urban safety and resilience. We will pay more attention to the urban ecological environment and support Chengdu in building into a demonstration park city that follows the new development philosophy. We will strengthen the conservation of historical and cultural heritage, put an end to large-scale demolition for grandiose projects, and prohibit large-scale migration and felling of old trees.

Fourth, we will drive the integrated development of urban and rural areas. Even when China basically achieves its urbanization goal, around 400 million people will still live in rural areas. We will take coordinated measures to promote urban and rural modernization, channel more urban public services to rural regions by taking counties as the basic units, promote the extension of urban utilities to rural areas according to local conditions, advance modernization of agriculture and rural areas, and provide a better living environment for rural residents. Thank you.

Shanghai Securities News:

China still faces some difficulties and challenges in developing the real economy. What measures will be taken to promote the high-quality development of real-economy sectors, including a new type of real economy-based enterprises? Thank you.

Lin Nianxiu:

The real economy is a cornerstone of our country and a wellspring of wealth. Attaching high importance to the real economy, General Secretary Xi Jinping gave important instructions on various occasions, pointing the way forward and providing guidelines to carry out related work.

Through years of effort, major advances have been made in China's real economy in terms of size, scale, structure, and quality, which is an outstanding achievement in the world's history. Our added value of the manufacturing sector has ranked top worldwide for 12 consecutive years. China has become the world's largest producer of over 220 categories of industrial products, and the only country in the world to have all the industrial categories listed in the United Nations' industrial classification. The influence of Chinese manufacturing on global industrial and supply chains has been increasing. All these are the biggest source of inspiration that will enable us to achieve the transformation from a major economy to an economic powerhouse.

However, compared with the world's industrial powerhouses, there are still some deficiencies and weak links in our work on developing the real economy, that have caused us to fall short of the requirements of high-quality development. To accelerate remedying these deficiencies, we will double our efforts and take coordinated action that covers all sectors and focus on two priorities to promote the high-quality development of the real economy.

The first priority is to continue boosting the industrial economy to increase the size of the real economy. The Central Economic Work Conference required us to seek steady progress in economic work this year. To stabilize the economy, I think we should first stabilize the industrial sector by maintaining its growth at a certain pace. At the end of last year, in accordance with the plans of the CPC Central Committee and the State Council, the NDRC worked together with relevant departments to issue an implementation plan to invigorate the industrial economy and promote high-quality industrial development. Recently, with the approval by the State Council, another document was issued on several policies for promoting steady growth of the industrial economy. In order to accelerate the implementation of relevant policies, the NDRC and the Ministry of Industry and Information Technology (MIIT) jointly held a national teleconference recently to make concrete plans to maintain the stable growth of the industrial economy. Next, relevant departments and local governments will continue efforts to implement the above two documents to ensure our policies bring benefits to enterprises as soon as possible and to promote the steady and healthy development of the industrial economy.

On the one hand, we will provide vital relief to businesses and reduce their burdens to help them survive and achieve better development. Enterprises are market entities. The stable performance of enterprises will help maintain market confidence with better economic prospects. To achieve this, we will truly ease the tax burden on businesses, strengthen financial support, and make an all-out effort to ensure supply and price stability of important raw materials and primary products. We will also stabilize the production and business operations of big enterprises, relieve the burden on small and medium enterprises, and increase the vitality of high-tech enterprises. By keeping market entities of all kinds fully motivated, we will boost market confidence as well as development expectations.

On the other hand, we will invigorate enterprises by solid investment and strengthen the basis for sustained growth. Investment in manufacturing plays an important role in stabilizing current economic growth, as well as affecting future industrial structure and development momentum. With manufacturing investment high on our agenda, we will work to facilitate transformation in traditional industries and foster new growth drivers. Upholding a principle of ensuring all projects follow the planning and all production factors follow the projects, we will speed up preliminary work for major projects listed in the outline of the 14th Five-Year Plan and other major strategic planning to help them begin construction as soon as possible. You may have noticed that recently there have been a lot of major projects starting construction all over the country. Meanwhile, we will make efforts on the planning, reserve, and construction of major projects in various fields to help them become higher-end, smarter, more eco-friendly, giving full play to the key role of investment.

The second priority is to advance industrial restructuring to strengthen the quality of the real economy. To effectively carry out this year's economic work, we should remain committed to the general principle of pursuing progress while ensuring stability. Stability is the basis of our pursuit to further progress. In regard to the real economy, specifically, we will attach more importance to increasing its quality while keeping a certain growth pace. We will continue to promote industrial restructuring and move faster up to the medium-high end of the global value chain to realize high-quality development of our economy.

First, we will work to transform and upgrade traditional industries. Making full use of a dynamic domestic market, we will focus on traditional industries with enormous upgrading and market potential and step up efforts on technological transformation and equipment upgrading. We will expand supply based on good quality to better satisfy the needs of investment and upgrading consumption and ensure smooth flow of production, sale, and reserve. We will also promote industries with extensive energy consumption to conserve energy and reduce carbon emissions through transformation and upgrading, strengthen breakthroughs in and deployment of green technologies, and improve the level of technique in steel, non-ferrous metals, construction materials, and petrochemical industries.

Second, we will work to increase the core competitiveness of the manufacturing sector. We will take concrete actions to increase core competitiveness of the manufacturing industry, encourage enterprises to put advanced and applicable technologies into practical use, enhance equipment upgrading and large-scale applications of new products, and accelerate breakthroughs in and industrial application of core technologies in key areas, including new-energy automobiles and high-end equipment to develop new advantages over manufacturing competition. We will also support enterprises to improve brand-building, achieving a growing popularity and influence of Chinese brands.

Third, we will work to boost the integrated development of manufacturing and service industries. We will continue trials to integrate the development of advanced manufacturing and modernized services, guide local governments and enterprises to explore new models and a new path, review typical experiences and successful models and apply them on a broad scale. We will also optimize the allocation of production factors and resources, and improve the quality and efficiency of supply to support the development of high-quality manufacturing.

Xing Huina:

Today's press conference is hereby concluded. Thanks to the three speakers as well as our media friends. Goodbye.

Translated and edited by Wang Yiming, Wang Qian, Zhou Jing, Lin Liyao, Liu Sitong, Zhu Bochen, Zhang Rui, Zhang Liying, Li Huiru, Li Xiao, Wang Yanfang, Chen Xia, He Shan, Zhang Lulu, Jay Birbeck, David Ball 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:

Xiang Dong, deputy director of the State Council Research Office

Liu Rihong, director general of the First Department of General Research of the State Council Research Office

Song Li, director general of the International Department of the State Council Research Office

Chairperson: 

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

Date: 

March 5, 2022

Shou Xiaoli:

Ladies and gentlemen, welcome to this briefing held by the State Council Information Office (SCIO). The fifth session of the 13th National People's Congress (NPC) opened this morning, and Premier Li Keqiang delivered the annual Report on the Work of the Government. To help the public better understand the report, we have invited Mr. Xiang Dong, deputy director of the State Council Research Office, to elaborate on the report and take your questions. We also have with us Mr. Liu Rihong, director general of the First Department of General Research of the State Council Research Office, and Mr. Song Li, director general of the International Department of the State Council Research Office.

First, we will give the floor to Mr. Xiang.

Xiang Dong:

Friends from the media, good afternoon.

This morning, Premier Li Keqiang delivered the Report on the Work of the Government to the fifth session of the 13th National People's Congress. Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implementing the guiding principles of the19th National Congress of the Communist Party of China (CPC), all plenary sessions of the 19th Party Central Committee and the Central Economic Work Conference last year, the report reviews the major achievements and major tasks in promoting China's economic and social development in the past year, and puts forward the main projected targets, policy orientation and major tasks for 2022.

I have been reading media reports on the premier's work report and the public's reaction to it. Many NPC deputies and members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) believe that the report is down to earth, displays foresight and strategic vision, and responds to the concerns of all sectors of society. Some say that they can feel much of the progress outlined in the report in their own lives. In the context of the ongoing pandemic and the complex and volatile global economic situation, the achievements in the past year have been particularly hard-won and made people proud. Some say that in the report, they found practical measures to address the key tasks of economic and social development and tackle the difficult issues that concern people, and that many packages of policies have also been introduced. They expressed stronger confidence in the future development of the country and greater hope for the new year. It can be said that the report fully implements the decisions and arrangements of the Party Central Committee and fully responds to social concerns. It is a pragmatic and inspiring report.

2022 is a very important year for the development of the Party and the country. The CPC will hold its 20th National Party Congress. Drafting the report was a key task, and the Party Central Committee and the State Council attached great importance to it. General Secretary Xi Jinping presided over meetings of the Standing Committee of the Political Bureau of the CPC Central Committee and the Political Bureau of the CPC Central Committee to discuss the drafting of the report, made important instructions on the drafting, and put forward specific requirements for further revisions and improvements, which provided fundamental guidelines for drafting and revising the report. The guiding principles for this year's work, policy orientation, and main goals and tasks proposed in the report were all drafted in accordance with the principles of the Central Economic Work Conference. Premier Li Keqiang presided over the drafting and revision of the report and chaired executive and plenary meetings of the State Council to discuss the draft. He also presided over several themed symposiums to directly hear opinions and suggestions from all parties. Li and other leading officials of the State Council also listened to opinions and suggestions through investigation and research in various places.

In accordance with the important instructions of General Secretary Xi Jinping on openly collecting suggestions and pooling wisdom, we have attached great importance to listening to and adopting the opinions of all sectors of society in drafting and revising the report. It can be said that the drafting is a process of gathering the wisdom and strength of the public, and also a process of meeting the expectations of society, and constantly refining and detailing the policy measures. In drafting the report, we solicited thousands of opinions and suggestions from multiple channels and took them under advisement:

First, Premier Li Keqiang presided over several symposiums to directly listen to opinions and suggestions. In late January, the premier presided over a symposium attended by experts and entrepreneurs, a symposium attended by representatives from the education, science and technology, culture, health, and sports sectors, a symposium attended by representatives from the central committees of non-Communist parties, the All-China Federation of Industry and Commerce, and non-party affiliated individuals. He conducted face-to-face exchanges and heard opinions and suggestions from people from all walks of life on a draft government work report.

Second, opinions from various regions and departments were extensively solicited. To collect opinions and suggestions, the draft report, discussed and revised at the plenary meeting of the State Council, was printed out and distributed in accordance with the procedures to all provinces, autonomous regions and municipalities, Party organizations, central government agencies, the military, people's organizations, some enterprises, and other entities. Thousands of opinions for revisions were collected, of which more than 300 important opinions were taken into consideration.

Third, media platforms were used to solicit opinions. For example, a campaign called "Share Your Ideas with the Premier" was launched for the eighth consecutive year to solicit suggestions from the public. The campaign was launched by www.gov.cn in cooperation with 22 online platforms, including people.com.cn and xinhuanet.com, as well as the websites of various provinces, autonomous regions and municipalities. People were invited to offer their opinions on 21 topics such as "employment and entrepreneurship," "enterprises and self-employed businesses" and "technological innovation." Nearly 1 million comments from netizens were received. The top five topics that received the largest amount of advice were: public affairs, social security and assistance, education, macroeconomics, and housing. The www.gov.cn carefully sorted through and selected more than 1,100 typical suggestions, and the report has taken some key advice. 

In drafting the report, we have collected a large number of explicit comments and suggestions on almost every section and paragraph of the report. Regarding these opinions and suggestions, whether they came from local governments, departments, enterprises or ordinary citizens, the premier asked us to carefully sort through and summarize them and study them one by one, in a bid to better respond to the public's demands and gather wisdom from the whole of society.

This year's government work report is divided into three parts. The first part is a review and summary of last year's work and achievements. The second part expounds on the overall requirements, main projected targets and policy orientation for this year's economic and social development. The third part puts forward nine major tasks for achieving economic and social development in 2022. At the same time, it also touches on the topic of government building, the affairs of ethnic groups, religions, overseas Chinese, affairs related to Hong Kong, Macao and Taiwan, and national defense as well as diplomacy.

Next, I and my colleagues, Liu Rihong and Song Li, would like to discuss the drafting of the report with you.

Shou Xiaoli:

Thank you, Mr. Xiang. The floor is now open for questions. Please identify your news outlet before raising your question.

CCTV:

This year's government work report pointed out in its beginning part that "last year was a milestone in the history of the Party and our country." The report also said, "Looking back on the past year, we can see that our achievements did not come easily." Could you specify what "a milestone" and "not easily" mean in this context? Thank you.

Xiang Dong:

Thanks for your question. The report pointed out that the year 2021 was a milestone in the history of the Party and the country. The CPC Central Committee with Comrade Xi Jinping at its core united and led the entire Party and the Chinese people of all ethnic groups to effectively manage many difficult and urgent matters and successfully hold many momentous and joyous events. We solemnly celebrated the centenary of the founding of the CPC, successfully convened the sixth plenary session of the 19th CPC Central Committee, and adopted the Party's third resolution on historical issues. We won the battle against poverty as scheduled, realized the first centenary goal of building our country into a moderately prosperous society in all respects as scheduled, and embarked on the journey of achieving the second centenary goal of building our country into a modern socialist country in an all-round way.

In the government work report, Premier Li Keqiang made a comprehensive summary of the achievements and work in economic and social development over the past year. I was impressed mainly by the following aspects. 

In the aspect of economic recovery and development, China's GDP increased by 8.1%, exceeding 110 trillion yuan. That was about US$17.7 trillion as calculated at the yearly average exchange rate, ranking second globally and was estimated to account for more than 18% of the world economy. The per capita GDP exceeded US$12,000 and reached US$12,500, which was expected to surpass the global per capita level. The aim of maintaining stable growth is primarily to secure employment. Last year, 12.69 million new urban jobs were added, and the average surveyed urban unemployment rate was 5.1%. Consumer prices rose by 0.9%. It can be said that China's economy has achieved a rapid growth with a relatively low inflation rate and a relatively high employment rate, which is an optimized combination.

In terms of scientific and technological innovation, the Shenzhou-12 and Shenzhou-13 manned spaceships were launched in succession, the Chinese people for the first time entered their own space station, and China's Mars probe Tianwen-1 successfully landed on Mars. China's strategic capacity in science and technology has become stronger, and a number of national laboratories have been established. China's manufacturing industry has seen continued development, and the resilience of industrial and supply chains has been improved.

As for reform and opening-up, supply-side structural reforms were deeply advanced, and reforms in key areas were accelerated. Progress was made in reforms to streamline administration and delegate power, improve regulation, and upgrade services. A market-oriented, law-based, and internationalized business environment was formed at a faster speed. By the end of 2021, China had more than 150 million registered market entities, and the number has now reached 154 million, among which 100 million are self-employed businesses and households. Foreign trade and foreign investment also witnessed rapid growth, with both the volume of trade in goods and foreign exchange reserves ranking first globally. In 2021, China's economic growth was estimated to contribute around 25% to the world economic growth, continuing to be an important force leading the recovery of the world economy.

In ensuring and improving people's living standards, the growth of residents' income has basically kept pace with the economic growth, the income gap between urban and rural residents has continued to narrow, and the achievements made in poverty eradication have been consolidated and expanded. Basic old-age insurance, basic medical care, and social assistance have been better ensured, and the standards for the basic pension and preferential treatment of the retired people have continued to be improved. New steps have also been taken in the reform and development of education.

Regarding the COVID-19 prevention and control, we have made continued efforts in our long-term fight against the epidemic. By the end of last year, more than 85% of the total population had been fully vaccinated. By the end of this February, the percentage has risen to 87%. We have responded to cluster cases in some areas in a timely and effective manner to safeguard our people's lives and health.

Meanwhile, we have also made progress in coordinated development between regions and between urban and rural areas, in ecological and environmental protection, and in social governance, among other fields.

The challenge was unknown until we ourselves went through the process. Looking back on the past year, China faced complicated and grave situations and a number of risks and challenges rarely seen in many years. Reeling from the severe impact of epidemic outbreaks, China's economy was still in the process of recovery which is not solidly based. In addition, as the domestic and overseas situations evolved, a series of new questions and challenges arose beyond expectations. Challenges came one after another: industrial and supply chain circulation was not smooth, commodity prices rose sharply, sporadic COVID-19 cases broke out in many places, severe floods brought damages to some areas, and electricity and coal were once in short supply. These challenges made it increasingly difficult for us to maintain economic stability and make decisions about macro-control measures. Many of you have been through these together with us. I believe we all feel the same in many aspects. Against such a background, it was not easy for China to attain these development achievements. All these achievements were made thanks 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 the Chinese people of all ethnic groups. All of these have fully proved that policies and plans made by the CPC Central Committee with Comrade Xi Jinping at its core are correct and fully demonstrated that China's economy has ample resilience, enormous potential, and risk resistance capacity. 

Thank you.

Beijing Youth Daily:

According to the government work report, the task of stabilizing employment is more formidable this year. At the same time, China targets a surveyed urban unemployment rate of no more than 5.5% for 2022, which is even lower than the rate of around 5.5% last year. How was this target set? What are our considerations? Will it be completed this year? In addition, I noticed that it is said that there are 200 million workers in flexible employment in China. What's your take on that? Thanks.

Xiang Dong:

Employment is a significant issue concerning people's livelihood, especially for a large country like us with a population of more than 1.4 billion. Last year, stabilizing employment was much affected as enterprise, especially micro, small and medium enterprises (MSMEs), ran into difficulties due to multiple problems such as high commodity prices, the COVID-19 pandemic and other natural disasters. Nevertheless, we kept macro policy targeted, and strengthened efforts to keep the operations of market entities stable, maintain stable employment, and ensure people's wellbeing. Departments at local levels also took measures actively to support people to start business or secure employment through multiple channels. With the joint efforts, 12.69 million urban jobs were added, and the average surveyed unemployment rate stood at 5.1%. We accomplished the target for the year, which was a hard-won achievement. 

This year, the task of stabilizing employment is more formidable. There will be nearly 16 million new entrants into the workforce, including a record high of 10.76 million college graduates. On the other hand, MSMEs and self-employed individuals, which are the sources of employment for several hundred million people, still face multiple difficulties. The government work report set the target of maintaining a surveyed urban unemployment rate of no more than 5.5%, lower than the target of around 5.5% last year. This is because employment is key to people's wellbeing and social stability, and following the recovery and development of the economy, we must further prioritize employment-first efforts and ensure all parties fulfill their duties. Therefore, the government work report said that the employment-first policy should be pursued with intensified efforts to deliver the desired outcomes. And we will take complete consideration of the need to stabilize employment when formulating policies concerning tax and fee reductions, support of industries facing particular difficulties, and key groups, among others. With the intensified measures and policies, we are confident of achieving the target for the year. Of course, the target is for the whole year, and that of some individual months may be relatively high. We will step up our efforts to keep the unemployment rate as low as possible.

You mentioned flexible employment. Flexible employment is an important way to boost employment. As the mindset of workers on career choice has changed and enterprises have varied their ways of hiring people, especially with the rapid development of new industries and new forms of business, there is an increasing number of workers in flexible employment, which is now about 200 million. Flexible employment creates jobs for people, especially those in difficulty. At the same time, it demands more from the employment service and social security. Flexible employment is particularly important in ensuring the well-being of people during the COVID-19 pandemic. Therefore, we will improve our support measures for flexible employment and optimize its labor and social security policies to promote its healthy development, and encourage companies to create more jobs with stable income and sufficient guarantees and in different types as they recover and develop.

CNBC:

I have several questions. My first question is about the consumption sector. According to the government work report, there will be different ways to promote consumption. What are the considerations behind that? And how will these measures be carried out? The government work report also mentioned risks from overseas. So what are the significant aspects and considerations for supporting foreign investment? Thanks. 

Xiang Dong:

I will first answer your questions about consumption.

Last year, China's consumption sector recovered, with the retail sales of consumer goods and per capita consumption expenditure growing by 12.5% and 12.6%, respectively, both higher than 2020. Final consumption expenditure drove China's GDP growth by 5.3 percentage points during the past year. It contributed 65.4% of China's economic growth, playing a primary role among the three major growth drives. 

At the same time, we should recognize that last year's consumption sector recovered from the low base in 2020. If we look at the average growth rate over the past two years, the growth rate of the consumption sector is still lower than the pre-pandemic level. Especially affected by the ongoing COVID-19 pandemic, consumption of consumer services remains in the doldrums, with the growth of revenues from the tourism and accommodation sector and box office revenue still lower than in pre-pandemic 2019.

China is a large consumption market with enormous potential. For example, the number of motor vehicles per thousand people is less than half of that in Japan and South Korea, and a quarter in the United States. Another example is that the per capita consumer spending on services only accounts for 44% of the total consumption expenditure, which is lower than that of other countries at the same development stage. Also, China's consumption sector upgrades rapidly in recent years, and people's demand for high-end consumption is substantial. However, the potential is not fully released due to the supply shortage.

This year's government work report said that China would promote sustained consumption recovery. And there are concrete measures to be put into place, which are as follows: First, we will boost the recovery in consumption of consumer services. This is the biggest weakness we need to strengthen to recover the consumption sector. And consumption of consumer services has the most significant potential. Second, we will keep major consumption stable. Last year, the sales of new energy vehicles rocketed to 3.82 million, up by 160%. This year, we will continue to support consumer spending on new energy vehicles. At the same time, we will promote spending on green and smart home appliances in rural areas as well as the replacement of old home appliances. Third, we will promote consumer spending at the community, township, and county levels. Efforts will include strengthening the building of community-level consumer services facilities in urban areas and county-level commercial systems and developing e-commerce and express delivery services in rural areas to promote and upgrade consumption by providing convenience and accessibility. In addition, we need to focus on improving the quality of products and services, to meet people's needs better. 

Your question about the consumption sector is, in fact, a question about expanding domestic demand. Growing domestic demand includes efforts to promote the consumption sector and investment. The government work report also mentioned effective investment. China has enormous potential and space to expand effective investment. Investment from the central government budget will reach 640 billion yuan this year. Special-purpose bonds for local governments will total 3.65 trillion yuan. There is still carry-over from last year. The government spending is expanding compared to the previous year. We will focus on supporting the major projects in the 14th Five-Year Plan, infrastructure projects related to urban utility networks and others, and strengthening weaknesses in ensuring people's well-being. Private investment accounts for a large proportion of China's investment. And we will use government investment funds rationally and work to play its role in leading and driving effective investment. 

Your question about foreign investment will go to Mr. Liu.

Liu Rihong:

Thank you for your question. Opening up is China's basic national policy, and the use of foreign capital makes a major part of China's opening up. You probably have seen the data released by the relevant authorities regarding China's utilization of foreign investment last year, which showed that its actual use of foreign capital exceeded 1 trillion yuan, or more than $170 billion, for the first time. Why has China been able to maintain such a growth rate in its use of foreign investment against the backdrop of the pandemic? From my point of view, the reasons are as follows:

First, China's effective pandemic prevention and control have created a favorable environment for enterprises to ensure normal production and operation. It's fair to say that Chinese economy has become a "stabilizer" and "safe haven" for the global economy over the past two years. 

Second, China has complete industrial and supply chains, and the Chinese people are hard-working and talented. Therefore, foreign enterprises have become optimistic about the Chinese market, and are willing to achieve shared success and common development with such a huge market.

Regarding the policies on foreign investment in this year's government work report, I'd like to give you a brief introduction in the following aspects: First, it will ensure the implementation of national treatment for foreign-invested enterprises. In recent years, China has been downsizing its negative lists of market access for foreign investment, and the access to Chinese market has been improved. For example, items on the national negative list and the negative list for pilot free trade zones have been cut by nine and 10, respectively, over the past two years after the breakout of the pandemic. Such reduction is impressive. At present, foreign ownership caps on automobile manufacturing companies have been removed, and restrictions on foreign investment in the manufacturing sector in pilot free trade zones have been removed, achieving remarkable progress in opening up. After the negative lists become shorter, we will work to ensure that foreign investment can access sectors beyond the negative lists in a law-based and equal manner. Therefore, this year's report pointed out that we will fully observe the negative list for foreign investment and ensure national treatment for all foreign-invested enterprises, so as to ensure fair competition among all types of businesses. Second, besides the negative lists, we have a catalog of industries for foreign investment, which from my point of view, is a positive list. After years of practice, our negative lists are becoming shorter and shorter, while the positive lists are growing longer. What is a positive list? Foreign enterprises will obtain some preferential treatment in terms of tax and land use if they invest in the sectors or regions on the list. This was mentioned in this year's report, as it pointed out that we will encourage foreign-invested enterprises to move into a broader range of sectors. Third, we will build and improve the platforms for China's opening up. What are these platforms? They are pilot free trade zones, the Hainan Free Trade Port, economic development zones and integrated bonded areas. In addition, more comprehensive trials on the opening of the service sector are expected to be launched this year. China is a large country, so it has been an important experience for us to launch pilots first while pursuing opening up. Those aforementioned platforms have been launched to implement pilot standards and rules for the opening up. Over the past years, a lot of achievements have been made and enabled us to establish relevant systems, and thereby have been promoted nationwide.

Thanks to these policies, I believe, just as the report says: "The vast, open Chinese market is sure to provide even greater business opportunities for foreign enterprises in China."

Thank you.

CNR：

The report pointed out that we will issue VAT and VAT credit refunds on a bigger scale this year. Could you please brief us on the background and details of the policy adoption? Why now instead of sometime earlier? Moreover, why do the VAT credit refunds not cover all the industries? What is the significance of the policy for the improvement of the VAT system in the future? Thank you. 

Xiang Dong:

Thank you. These is a good question. I'd like to invite Mr. Song to answer it. 

Song Li:

VAT credit refunding is an important tax-and-fee support policy adopted this year. Under the current VAT system, an enterprise will have VAT credits if its output VAT is less than the input VAT during a tax period. We have deepened reform since April 2019, establishing and improving the end-of-tax-period VAT credit refund system so as to refund part of the VAT credits.

Currently, China's VAT credit refunds mainly focus on the newly added part generated after April 2019. Among them, we will refund all the newly added VAT credits to advanced manufacturing enterprises, while for other industries, we will refund 60% of the newly added VAT credits that meet the standards.

The report pointed out that we will issue VAT credit refunds on a large scale this year, including the newly added and outstanding ones so as to significantly increase the amount of tax refunds. Given the downward economic pressure, the policy will help enterprises resume their development. Major policies lie in the following two aspects:  

First, we will give priority to micro and small enterprises, refunding outstanding VAT credits to them in one lump sum by the end of June, while also fully refunding newly added credits. In order to ensure that the policy takes full effect, the central government will provide greater fiscal support for local governments to ease their burden. We will ensure that the tax credits are fully refunded in time. 

Second, with a focus on supporting manufacturing, we will work to fully resolve problems in refunding VAT credits in manufacturing, research and technical services, environmental protection, electricity and gas, and transportation industries. 

After the launch of VAT credit refunds on a large scale this year, we will continue to refund the outstanding VAT credits and refund the newly added credits in time, which is of great significance to improving the VAT system.

Thank you.

21st Century Business Herald:

The COVID-19 pandemic has been going on for more than two years now. We have seen that some countries have begun to lift the lockdowns amid the still raging pandemic and gradually relax control measures. Some places have been fully open without any restrictions. So I want to know, what will China's pandemic prevention and control strategies and measures be in the next step? Thank you.

Xiang Dong:

Thank you for your question. I have noticed that people have paid great attention to this issue in several recent press conferences. In the face of the pandemic of the century, the Chinese government insists on putting people first and putting life first, insists on preventing imports from abroad and preventing rebounds from within, insists on scientific precision and dynamic zero-case policies, and quickly handled and resolved many clustered cases in local areas. The Chinese government has maintained its dominant position in global pandemic prevention and control, creating conditions for economic and social development. At the same time, it should be noted that there are still many uncertainties and variables in the current global pandemic development trend, which brings significant challenges to China's prevention and control. Next, we will continue to adhere to external defense against imported cases and internal defense against rebounds, scientifically and accurately handle clustered cases, protect people's lives and health, and minimize the impact on people's everyday work and life. We will focus our work on the following four areas:

The first is to strictly prevent the import of the pandemic. More than 40 sporadic cases and clustered outbreaks occurred in China in the past two years. After gene sequencing analysis and epidemiological investigation, they were all caused by overseas imports. Therefore, the prevention and control of port cities should be the top priority, and the common prevention and control efforts on "people, objects, and environment" should be strengthened. We must guard the national gate of pandemic prevention and control and resolutely prevent large-scale import and spread.

The second is the precise implementation of prevention and control measures. In response to the problems of prevention and control in some localities, such as one-policy-fits-all and taking excessive policy steps, all localities are required to establish a special working mechanism for reporting, verifying, and correcting relevant problems. In addition, all localities are required to strictly implement the "three don'ts." Don't break through the existing regulations on pandemic prevention and control to lock down cities and districts; don't interrupt public transportation unnecessarily or without approval; don't arbitrarily increase the service industry's pandemic prevention and control measures. We must firmly prevent the two trends of "relaxing prevention and control" and "excessive prevention and control."

The third is to continue to promote the vaccination work. As I mentioned just now, as of the end of last year, China's full-course vaccination rate exceeded 85%, and by the end of February this year, it had exceeded 87%. Therefore, it is necessary to promote sequential immunization and booster vaccination to further improve the effect of immunization.

The fourth is to strengthen scientific research breakthroughs on pandemic prevention and control. We will actively promote the research and prevention of COVID-19 variants, increase the development of vaccine adaptability and specific therapeutic drugs, and strive to find a sharp weapon to control the pandemic as soon as possible.

Thank you.

The Poster News APP:

The Report on the Work of the Government stated that the main projected target for this year's development is a GDP growth of around 5.5%. Considering the current complex and severe domestic and overseas economic environment, are there any special considerations for such a projection? Thank you.

Xiang Dong:

Thank you for your question. After Premier Li Keqiang finished delivering the report, everyone has been concerned about the projected growth rate this year. China's economy's two-year average growth rate has dropped from the 6% growth rate in 2019, mainly due to factors such as the continuation of the pandemic. From a global perspective, major economies' two-year average economic growth rate is generally slower than that before the pandemic, and the rate of slowdown is greater than that of China.

Setting GDP growth target at around 5.5% this year, first of all, has considered the need to maintain stable employment, meet basic living needs, and guard against risks. Economic stability is the foundation. Employment and income will be difficult to stabilize if the economy is unstable, and some hidden risks will be revealed. Achieving a growth rate of about 5.5% this year, we will have the foundation to expand employment and increase income. The economy's operation will be able to be maintained in a reasonable range.

Second, it is also considered in keeping with the average growth rates of the last two years and the goals of the 14th Five-Year Plan. As you just said, China's economy has grown by an average of 5.1% in the past two years. In 2019, before the pandemic, China's economic growth target was projected to be 6%-6.5%, and the actual growth rate for that year was 6.1%. Although the 14th Five-Year Plan does not set specific economic growth expectations, it requires keeping within a reasonable range. Taking these factors into consideration, it is relatively scientific and reasonable to set the projected economic growth target for this year at around 5.5%, which is in line with China's potential growth level at the current stage and is conducive to guiding expectations, boosting confidence, and building consensus on development.

Third, as the report stated, it represents a medium-high growth rate given our large economic aggregate and demonstrates our ability to move proactively. For example, last year, China's GDP reached 114.4 trillion yuan. On this basis, when it achieves an increase of 5.5%, which is equivalent to an increase of 7.4% five years ago and an increase of 10.5% ten years ago; the corresponding economic increment exceeds 9 trillion yuan, which is close to the annual economic aggregate of the 11th and 12th largest economies in the world. But achieving this goal is not easy and will require arduous efforts. Therefore, to achieve the projected economic growth target of "about 5.5%," we should focus on the following aspects this year:

The first is to insist on ensuring stability a top priority and seeking progress while maintaining stability. We must put stable growth in a more prominent position. All localities and government bodies should earnestly shoulder the responsibility of stabilizing the macroeconomy and actively introduce policies conducive to economic stability. Of course, stable growth is not just about speed ignoring quality. It is about adhering to the new concept for development and promoting the steady improvement in quality and rational growth of the quantity.

The second is to intensify the implementation of macro policies. This year's fiscal, monetary, employment priority, and other policies are sizable. Fiscal expenditure exceeds 26 trillion yuan, and tax rebates and tax reductions are around 2.5 trillion yuan. In addition, monetary policy should strengthen support for the real economy, which can provide strong support for the smooth operation of the economy.

The third is to deepen reform, expand opening-up, and promote innovation. We will firmly implement the strategy of expanding domestic demand and strive to stimulate market vitality and enhance the endogenous driving force for development.

And there is an important premise here: it is still necessary to ensure pandemic prevention and control. We must coordinate pandemic prevention and control with economic and social development, ensure normalized pandemic prevention and control, protect people's lives and health, minimize the impact on production and life, and create conditions for maintaining normal production and living order. This is an essential prerequisite for consolidating economic recovery and development.

Overall, the economic fundamentals sustain long-term growth. The total number of market entities in China has exceeded 150 million and continues to grow quickly. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we will work together, keep going and make pragmatic and persistent efforts to accomplish the targets and tasks for economic and social development this year, with the result of the hard work and vision of more than 1.4 billion Chinese people, a variety of instruments and space for macro policies and a wealth of invaluable experience on responding to significant challenges and withstanding major risks.

Kyodo News Service: 

I have three questions. First, have you considered the international volatility raised by the Ukraine crisis while drafting the government work report of this year? Second, the deficit-to-GDP ratio this year is projected at 2.8%. What's the consideration behind this? Third, this year's government work report has not mentioned the dynamic zero-COVID 19 policy. Does it mean that there are possibilities for the country to adjust its virus control strategy? Thank you.

Xiang Dong:

I want to answer your first question briefly. We have taken various considerations into account while drafting this year's report.

Second, I would like to offer some details about your question concerning the fiscal deficit.

The work report says the proactive fiscal policy will be more effective, targeted, and sustainable. The deficit-to-GDP ratio has been cut appropriately in the recent two years. We mainly take the following factors into account.

First, China's proactive fiscal policies will remain unchanged though the deficit-to-GDP ratio was lowered moderately. According to the work report, it is projected that fiscal revenue will continue to grow in 2022. In addition, we also have available to us the surplus profits of state-owned financial institutions and state monopoly business operations from recent years turned over in accordance with the law and funds transferred from the Central Budget Stabilization Fund. This will make it possible for government to increase expenditures by more than two trillion yuan over last year, putting significantly greater fiscal resources at our disposal. We will implement a new package of tax-and-fee policies to support enterprises, with tax refunds and cuts totaling about 2.5 trillion yuan. Furthermore, this year, special-purpose bonds for local governments will total 3.65 trillion yuan, and a portion of special bonds carried over from last year will be available for further use. In addition, investment from the central government budget will reach 640 billion yuan, an increase of 30 billion yuan over last year. As a result, we will see that the proactive fiscal policy is more effective.

Second, it is conducive to boosting fiscal sustainability. The government set the deficit-to-GDP ratio in 2020 at more than 3.6% to address the COVID-19 pandemic, which was an extraordinary measure for an unusual time. As economic performance recovers stably, we moderately cut the deficit-to-GDP ratio in time, which is constructive to enhancing fiscal sustainability. We have also considered the need to leave policy space to address risks that could arise in the future.

Third, in cutting the deficit-to-GDP ratio to within 3%, we have signaled that China's economy and finance perform prudently, which can boost market confidence.

As for your third question, please refer to my answer to a similar question just now. Thank you.

The Paper:

In last year's government work report, the CPI was projected to increase by around 3%. However, the CPI rose by 0.9% in 2021. What factors slowed down the CPI increases of last year? Moreover, we noticed that the CPI is set to increase by 3% in this year's report. Will China continue to maintain a low growth this year? Will last year's "low base" impact achieving this year's expected goals? Thank you.

Xiang Dong:

Over the course of last year, the CPI rose moderately by 0.9% on average, creating a favorable environment for economic recovery and improvement of people's lives. Against the backdrop of sharply increasing international commodity prices and increasing global inflationary pressure, China's CPI has remained stable, mainly due to abundant market supply and a bumper harvest in agriculture. In particular, pork prices fall because the pig production has remained favorable. In addition, the CPC Central Committee and the State Council have strengthened market regulation, stepped up efforts to ensure the supply of energy and raw materials, and keep their prices stable, thus creating conditions for price stability.

At present, China's industrial and agricultural production situation is pretty good. The number of hogs and "breeding sows remains high. The supply of major industrial and agricultural products is guaranteed, all of which lays a foundation to keep CPI stable this year. On the other hand, energy prices on the international market have risen considerably in recent months, which puts upward pressure on domestic prices. Due to climate change and other factors, we can't rule out that some agricultural products like vegetables will rise for the current period on the Chinese market. In addition, consumer prices of last year were exerting a 0.9 percentage point of carryover effect on prices this year. In comparison, the carryover effect of prices in 2020 was only a minus 0.1 percentage point. It is predicted that a CPI increase rate year-on-year will expand in 2022. However, it will still rise mildly. The CPI is projected to rise by around 3% this year. We have taken complete account of various potential factors affecting prices and leaving some leeway. This is also in compliance with last year's projected target and will help stabilize market expectations.

Bloomberg:

According to the work report, this year's fiscal plan focuses on using funds from state-owned enterprises and local government debt to boost consumption and spending. However, the expenditure on infrastructure was relative slow last year because of insufficient good infrastructure projects. How shall we ensure the effective spending of these funds and ensure the problem of last year be well addressed? And how can you keep these policies and measures consistent, and whether it can promote investment in fixed assets?

Xiang Dong:

Thank you. The questions you raised are mainly related to finance. Regarding the government's expenditure mentioned in the work report, there are two major expenditures this year: tax reductions and refunds. I covered the former one, and I'd like to invite Mr. Liu to elaborate briefly on the latter.

Liu Rihong:

As Mr. Xiang said, my colleague covered some of your questions. I would like to add some more details for your reference. 

In terms of government expenditure, we will first increase overall spending. According to the report, government expenditure in 2022 is budgeted to increase by more than two trillion yuan over the previous year. You may be curious about the reasons for such an increase. One of the significant reasons is to facilitate tax refunds and cuts. Our practices in recent years prove that tax and fee cuts are crucial measures to innovate macro adjustment and the fairest, most inclusive, and most effective method to support market entities. Statistics show that since the 13th Five-Year Plan was launched, the volume of newly-issued tax and fee cuts has totaled 8.8 trillion yuan, effectively reducing the burden of enterprises. Although policies on tax and fee cuts continue to take effect, China's public finance has achieved sustainable and stable operation due to the growing vitality of market entities and the development of new tax-related market entities. From 2013 to 2021, new tax-related market entities have paid 4.76 trillion yuan in tax. This demonstrates the policy effect of tax and fee cuts.

One of the major reasons for expanding government expenditure this year is to increase transfer payments to local governments, help carry out tax and fee cuts, and ensure that policies concerning 2.5 trillion yuan of tax refunds and cuts can be well implemented.

Another reason is to help expand effective investment. In 2022, 3.65 trillion yuan of special bonds will be issued, similar to the previous year. In the meantime, 640 billion yuan will be allocated for investment in the central government budget, 30 billion yuan more than the previous year. Therefore, there is substantial growing space for China's effective investment. As for the investment in infrastructure you mentioned, indeed, the growth rate in this regard has been comparatively low in recent years, and we will ramp up investment this year. However, our efforts to increase investment are not made in an extensive manner as we did in the past. What we expand nowadays is an effective investment, applied to projects urgently needed for economic growth and people's livelihoods. For example, a bond issued this year will focus on supporting major engineering projects of the 14th Five-Year Plan and those concerning the weakness of society and people's livelihood. With the implementation of the funds, effective investment will be continuously leveraged, which will effectively support the stable operation of the Chinese economy.

Thank you.

Shou Xiaoli:

Due to time constraints, we are open to two more questions.

Economic Daily:

Currently, China's economy faces new downward pressure, and the country's GDP in the fourth quarter of 2021 only expanded 4% year-on-year. We noted that the government work report proposed many policies and measures in this regard. What are the considerations behind this? Thank you.

Xiang Dong:

China's economy in 2022 faces the triple pressures of shrinking demand, disrupted supply, and weakening expectations, and we must overcome these difficulties. Building on an in-depth analysis of situations both at home and abroad, the government work report has made comprehensive arrangements for the tasks of the government in 2022, proposing a series of policies and measures which aim to continuously maintain sound economic and social development. Regarding your question, I personally think that we can analyze the measures in the following aspects.

First, we need to follow the general principle of prioritizing stability and seeking progress while ensuring stability. The term "stability" is one of the keywords of this year's report and has been mentioned 76 times. The report clearly stipulates that the work in 2022 should follow the aforementioned general principle and attach greater importance to stabilizing growth. All regions and sectors need to take responsibility for stabilizing the economy and proactively introducing policies that help ensure economic stability.

Second, we need to stick to the main policy direction, ensuring stability in the macroeconomy. The report proposed that the efficiency of proactive fiscal policies should be improved and that the fiscal spending will increase by over 2 trillion yuan over the previous year. The central government transfer payments to local governments will reach nearly 9.8 trillion yuan, 1.5 trillion yuan more than the previous year, up 18%, the most significant increase in recent years. A total of 3.65 trillion yuan of local government special bonds will be issued, and 640 billion yuan will be earmarked for investment in the central government budget. China will further strive to implement a prudent monetary policy to expand the scale of newly-issued loans. The policy that prioritizes employment will be further strengthened. China will spare no effort to ensure food and energy security. The report stressed that more efforts should be made to stabilize the production and ensure the supply of grain and other vital agricultural products, keep crop acreage stable and boost the yield of soybeans and other oil crops, in a bid to ensure the food supply for 1.4 billion Chinese people.

Third, we need to properly implement policies to ensure the stable growth of market entities and employment. The report put forward a package of highly effective and well-targeted, hardcore measures. For example, China implemented a new set of combined taxation policies. The total volume of tax refunds and cuts is expected to total around 2.5 trillion yuan, including 1.5 trillion yuan of value-added tax credit refunds. For businesses that didn't lay off employees or only had a few layoffs, refunding unemployment insurance will be continuously implemented. The ratio of funds refunded to micro, small and medium-sized enterprises will significantly improve. More support will be given to catering, hospitality, retail sales, tourism, passenger transportation, and other industries and businesses facing difficulties.

Fourth, we will work to complete the new tasks of expanding domestic demand and improving the quality of economic development. For example, the report rolled out measures of raising the extra tax deduction coverage for small and medium-sized sci-tech enterprises from 75% to 100%. It also calls for granting tax breaks to enterprises that invest in basic research and improving policies on accelerated depreciation of equipment and tools and preferential corporate income tax for new and high-tech enterprises. Furthermore, to speed up the recovery of consumption and investment, the report introduced effective measures of supporting the purchase of new-energy vehicles, accelerating the upgrading of urban pipelines, including those for gas supply, and keeping energy consumption of major national projects under separate management. Meanwhile, according to the report, the government will fully implement all major regional development strategies and coordinate regional development, improve the quality of new urbanization, improve the environment and promote green and low-carbon development.

Fifth, we will implement new initiatives to deepen reform and expand opening-up. The report introduced a series of new measures to build a high-standard market system, advance reforms of state-owned enterprises and the fiscal, taxation, and financial reforms, and deepen reforms to streamline administration and delegate power, improve regulation, and upgrade services. This year, we will face tremendous pressure to ensure stable foreign trade and foreign investment. Despite all the changes in the international landscape, we will open wider to the world and take multiple measures to stabilize the overall performance of foreign trade and foreign investment.

Sixth, we will take new measures to ensure and improve people's wellbeing. Policies and measures in this regard have been a highlight of each year's government work report. This year's report has also rolled out a raft of pragmatic measures. For example, the government will allocate educational resources according to the size of the residential population, and see that school-age children can enroll in nearby schools; steadily enhance services for the prevention and treatment of illnesses including cardiovascular and cerebrovascular diseases and cancer, and better ensure the supply of medicines for rare diseases; appropriately raise the basic pensions and pension standard for urban and rural residents, which will benefit nearly 300 million people; and make care expenses for children under three part of the special additional deductions for individual income tax to ease the burden of giving birth and raising a family.

Seventh, we will meet the new requirements for the improvement of government. Facing new developments and tasks, the government must adopt a new approach. The report requires that governments at all levels and all government employee perform their duties, shoulder their responsibilities, make concerted efforts to promote development and ensure public wellbeing and accomplish new achievements.

Shou Xiaoli:

The last question, please.

Red Star News:

Major economies globally, including the U.S. the EU, have entered the interest rate rise cycle. Will this affect China's monetary policy? The report says a considerable drop will be seen in the overall financing costs of businesses. What measures will be taken to this end? Thank you.

Xiang Dong:

You have paid attention to the monetary policy. Therefore, Mr. Song will answer the questions.

Song Li:

Historically, most policy adjustments in developed economies have produced spillover effects, affecting the global economy and increasing economic and financial volatility in developing countries, especially emerging market economies. Therefore, China needs to pay close attention to these adjustments as an open economy. However, compared with the last interest rate rise cycle of developed economies, China's ability to deal with external shocks has been significantly improved:

First, China's economy has grown in size, with stronger resilience, broad prospects, and plenty of room to maneuver.

Second, there is much room for policy adjustment. We have been firm in choosing not to adopt a deluge of strong stimulus policies. With ample monetary policy instruments and policy space, we have a strong ability to deal with external shocks effectively.

Third, the RMB exchange rate remains generally stable and floats more freely. So, it can better function as an automatic stabilizer.

Fourth, China's financial system has become more prudent; mutual openness in the financial sector has been enhanced; two-way cross-border capital flows have become more active; RMB assets have become more attractive, and the vitality and resilience of the capital market are increasing.

In the next stage, we will continue implementing a prudent monetary policy and maintaining reasonably adequate liquidity. We will give full play to the role of monetary policy in terms of both amount and structure to provide stronger support for the real economy. Regarding the amount, we will increase new loans, ensure the increases in money supply and aggregate financing are generally in step with economic growth in nominal terms, and further improve the transmission mechanism of monetary policy. Regarding the structure, we will channel more funds to key areas and weak links and extend the coverage of inclusive financing. In addition, we will encourage financial institutions to lower real loan interest rates and cut fees, increase inclusive loans to micro and small businesses, including credit loan, make it easier for those businesses to access financing, and reduce overall financing costs to help them solve financing difficulties.

Thank you.

Shou Xiaoli:

Thank you, Mr. Xiang. Thank you to all the speakers and friends from the media. Today's press briefing is at this moment concluded. Goodbye.

Translated and edited by Zhang Rui, Liu Sitong, Ma Yujia, Li Huiru, Zhu Bochen, Zhang Liying, Wang Yanfang, Chen Xia, Gong Yingchun, He Shan, Zhou Jing, Wang Qian, Wang Yiming, Yuan Fang, Cui Can, Jay Birbeck, David Ball 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:

Lyu Yansong, vice minister of the Publicity Department of the Central Committee of the Communist Party of China (CPC)

Wang Meimei, vice president of the executive board of the China Disabled Persons' Federation (CDPF)

Liu Guoyong, vice minister of the General Administration of Sports of China

Guo Liqun, spokesperson of the CDPF

Chairperson:

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

Date: 

March 3, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO issued a white paper titled "China's Parasports: Progress and the Protection of Rights," which we will now introduce and interpret for you. At this press conference, we are joined by Mr. Lyu Yansong, vice minister of the Publicity Department of the Central Committee of the Communist Party of China (CPC); Ms. Wang Meimei, vice president of the executive board of the China Disabled Persons' Federation (CDPF); Mr. Liu Guoyong, vice minister of the General Administration of Sports of China; and Mr. Guo Liqun, spokesperson of the CDPF.

Now, let's give the floor to Mr. Lyu to introduce the white paper.

Lyu Yansong:

Ladies and gentlemen, friends from the media, good morning. General Secretary Xi Jinping has attached great importance to the wellbeing of the 85 million people with disabilities in China. Since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has incorporated the cause of people with disabilities into the Five-sphere Integrated Plan and the Four-pronged Comprehensive Strategy. As a result, the rights and interests of people with disabilities have been better protected, and the goals of equality, participation and sharing have been improved. People with disabilities have an increasingly stronger sense of fulfillment, happiness and security.

The "China's Parasports: Progress and the Protection of Rights" white paper, issued by the SCIO today, is also the first white paper in China on the development of parasports.

China has made historic achievements in developing rehabilitation, fitness activities and athletics for people with disabilities, promoting their equal participation in society, and ensuring their right to share in the fruits of the country's development. Developing parasports is an effective way to help people with disabilities improve their physical fitness, pursue physical and mental rehabilitation, participate in social activities, and achieve all-round development. It also provides a special opportunity for the public to better understand the potential and value of disabled people, and promote social harmony and progress. In addition, developing parasports is of great importance in ensuring that people with disabilities can enjoy equal rights, integrate readily into society, and share the fruits of economic and social progress.

The white paper consists of a preamble, main body and conclusion. The main body is divided into five parts, titled "Parasports Have Progressed Through National Development," "Physical Activities for Persons with Disabilities Have Flourished," "Performances in Parasports Are Improving Steadily," "Contributing to International Parasports" and "Achievements in Parasports Reflect Improvements in China's Human Rights." From these five aspects, it is clear to us that parasports are a mirror reflecting the living standards and human rights of people with disabilities. China guarantees their economic, political, social and cultural rights, laying a solid foundation for them to participate in sports, be active in other fields, and achieve all-round development.

First, parasports have progressed through national development. In the cause of socialist revolution and reconstruction, reform and opening-up, socialist modernization, and socialism with Chinese characteristics for a new era, along with making progress in the cause of people with disabilities, parasports have steadily developed and prospered, embarking on a path which has distinct Chinese features and respects the trends of the times. After the founding of the People's Republic of China (PRC), parasports have been gradually launched in the country. Parasports saw rapid progress following China's reform and opening-up and witnessed historic achievements in the new era. General Secretary Xi Jinping has made a series of important proposals and instructions regarding the causes of people with disabilities and parasports, chartering the course for future development. China has incorporated programs for people with disabilities into its overall national plans such as its national fitness program, the Healthy China initiative, and the program to build China's strength in sports. These demonstrate China's institutional strengths in promoting development of the cause of people with disabilities. Throughout the country, understanding, respect, care and help for people with disabilities are growing in strength. More and more people with disabilities are realizing their dreams and achieving remarkable improvements in their lives through sports. The courage, tenacity and resilience that people with disabilities show in pushing boundaries and forging ahead have inspired the whole nation and promoted social and cultural progress.

Second, physical activities for people with disabilities have flourished. At the community level, a variety of rehabilitation and fitness activities for people with disabilities have been organized, and adapted to local conditions in urban and rural areas. People with disabilities regularly participate in national parasports events, such as the National Special Olympics Day, Fitness Week for Persons with Disabilities, and Winter Sports Season for Persons with Disabilities. Every year since 2016, China has hosted a Winter Sports Season for Persons with Disabilities, providing them with a platform to participate in winter sports, and fulfilling the commitment to engage 300 million people in winter sports made during the bid to host Beijing 2022. China has launched a Self-improvement Fitness Project and a Sports Rehabilitation Care Plan to engage people with disabilities in rehabilitation and physical activities. Progress has also been made in parasports education and research. People with disabilities have also become more active in group rehabilitation and fitness activities.

Third, performances in parasports are improving steadily. In recent years, more and more athletes with disabilities have competed in sporting events both at home and abroad. They are willing to meet challenges, pursuing self-improvement, demonstrating an indomitable spirit, and fighting for wonderful and successful lives. Chinese para-athletes have made outstanding performances at major international sporting events. In nearly four decades of participating in international competitions, China's Paralympic delegation has ranked first in both gold medals and total medal count at the past five Paralympic Games. China also won its first-ever Winter Paralympics medal in Pyeongchang 2018, opening a new chapter in the country's participation in Paralympic Winter Games. The influence of national parasports events continues to grow, and China has trained a number of athletes with disabilities and improved their sports skills. Chinese athletes show growing strength in Winter Paralympic sports. From 2015 to 2021, the number of Winter Paralympic sports in China increased from two to six, so that all Winter Paralympic sports are now covered. The number of athletes increased from fewer than 50 to nearly 1,000, and mechanisms for athlete training and support are improving at the same time.

Fourth, China has contributed to the development of international parasports. The white paper systematically explains how China successfully hosted the Being 2008 Summer Paralympic Games, the Shanghai 2007 Special Olympics World Summer Games, the Sixth Far East and South Pacific Games for the Disabled, and the Guangzhou 2010 Asian Para Games, and made full preparations for the Beijing 2022 Paralympic Winter Games and Hangzhou 2022 Asian Para Games. This has given a strong boost to the cause of the disabled in China and made an outstanding contribution to international parasports. China has made full preparations for the Beijing 2022 Paralympic Winter Games. China advances towards a global community of shared future, takes an active part in world parasports affairs, and is deeply engaged in international exchanges on parasports contributing to mutual learning through exchanges between civilizations.

Forth, achievements in parasports reflect improvements in China's human rights. The remarkable achievements of parasports in China reflect both the sportsmanship and sporting prowess of people with disabilities and China's progress in human rights. China adheres to a people-centered approach and promotes the physical and mental health of persons with disabilities. China upholds equality and integration for persons with disabilities in the national conditions. China attaches equal importance to all human rights to achieve all-round development for persons with disabilities. China encourages international cooperation and exchanges in parasports. The development of parasports accords with China's general development; it effectively responds to the needs of persons with disabilities and promotes their physical and mental health. Parasports are a vivid reflection of the development and progress of human rights in China.

Caring for persons with disabilities is a marker of social progress. Developing parasports is vital in encouraging persons with disabilities to build self-esteem, confidence, independence, and strength and pursue self-improvement. It carries forward the spirit of continuous self-renewal. It creates an atmosphere that encourages the whole of society to understand, respect, care for, and support people with disabilities and their causes. It encourages people to work together to promote the all-round development and common prosperity of people with disabilities. During the process of building China into a modern socialist country in all respects, China will take concrete measures to respect and protect the rights and interests of people with disabilities, including the right to participate in sports, to promote the cause of persons with disabilities and meet their expectations for a better life.

Thank you.

Shou Xiaoli:

Thank you, Mr. Lyu, for your introduction. Let's move on to the question-and-answer session. Please identify the media outlet you represent before asking a question.

China Media Group:

You mentioned earlier that this is the first time China has issued a white paper on the development of sports for people with disabilities. How do you see the relationship between respecting and safeguarding human rights and sports for people with disabilities?

Lyu Yansong:

General Secretary Xi Jinping made important remarks while presiding over the 37th group study session of the Political Bureau of the CPC Central Committee on China's position, perspective and the development path on human rights in a holistic and systematic way. He emphasized making further efforts to understand the importance and urgency of human rights work, unswervingly adhering to China's path of human rights development, paying more attention to respecting and safeguarding human rights, and better advancing the development of China's human rights cause. Xi said that the role of groups and organizations should be given full play to better protect the rights and interests of women, children, the elderly and people with disabilities.

Both respecting and safeguarding human rights will not be left behind. Protecting the rights and interests of people with disabilities and developing their cause, including sports, are an important part of the cause of human rights in China. Parasports on the rise mark the cause of people with disabilities in China moving up a notch and a vivid reflection of progress in China's human rights philosophy and practice.

We uphold the Party's leadership and the socialist system, ensure people's position as masters of the country, ensure people fairly share human rights and promote the all-round development of human rights. To provide better protection to persons with disabilities, we have formed a support system in which Party committees exercise leadership, the government assumes responsibility, the public gets involved, and organizations of people with disabilities play their full role. Party committees and governments at all levels should shoulder the responsibility of developing the cause of people with disabilities, incorporate programs for disabled people into their various undertakings, continue to improve the system of safeguarding rights and interests of people with disabilities to fulfill and protect the fundamental interests of the overwhelming majority of the Chinese people, including people with disabilities.

We uphold and respect the primacy of the people and stimulate their enthusiasm, initiative, and creativity, which engages them to become the main contributors, promoters, and beneficiaries of the development of the cause of human rights. China promotes the development of parasports, upholds the combination of improving the well-being of people with disabilities and building up their strength, focuses on respecting and protecting the personal rights and dignity of people with disabilities, respects their will, and pushes them to become real subjects of rights, to ensure their equal status and give them the equal opportunity to participate in social life and enjoy the fruits of the country's material and cultural progress.

We insist on a combination of the principle of human rights' universality and the nation's actual conditions. Acting based on China's actual conditions and people's demands, China has facilitated the progress of human rights, ensured its people enjoy extensive and substantive human rights. The Party and the government have rolled out a series of major measures to develop the cause of people with disabilities and improve their conditions, promoted the parasports and scored historical achievements. The goals of equality, participation and sharing have drawn closer.

China firmly believes that the rights to subsistence and development are the primary and basic human rights, treats people's wellbeing as the primary human right, and fully and faithfully implements the new development philosophy to protect the rights and interests of people with disabilities through development. Since the 18th CPC National Congress, China has set up a special welfare system covering tens of millions of people with disabilities. Persons with disabilities from poor households in rural areas, numbering in the millions, have become a focus in the final fight against poverty. The parasports development has been included in China's national strategies of Fitness-for-All, Healthy China initiative, and Building China into a Country Strong in Sports. The supply of basic public services for persons with disabilities has been improved, and the goal of "building a moderately prosperous society in all respects, leaving no one behind, including persons with disabilities,” was achieved. More and more people with disabilities have received better education, found jobs or started their businesses, and participated in social life on an equal footing. Therefore, their sense of fulfillment, happiness, and security continues to grow.

We safeguard human rights in accordance with the law, adhere to the principles of equality before the law, insist that respecting and protecting human rights should be strengthened to fully cover the whole process of legislation, law enforcement, administration of justice, and observance of the law, and enhance role of the rule of law in protecting human rights. China's legal and regulatory system for protecting the rights and interests of people with disabilities has been set up with the Constitution as the core and the Law of the People's Republic of China on the Protection of Persons with Disabilities as the backbone. It is backed up by the Regulations on the Disability Prevention and Rehabilitation of Persons with Disabilities, Regulations on Education for the Disabled, Regulations on Employment for the Disabled, and Regulations on Building an Accessible Environment.

We actively participate in global human rights governance, enhance common values of humanity, practice genuine multilateralism, and work to build a community with a shared future for mankind. China fulfills its responsibilities and obligations as a signatory to the Convention on the Rights of Persons with Disabilities adopted by the United Nations General Assembly and promotes the international cause of persons with disabilities. Regarding parasports as a significant part of international exchanges among the disabled, China has vigorously boosted regional and global sports development for persons with disabilities. Thank you.

Phoenix TV:

The recent Beijing Olympic Winter Games showed us the charm of winter sports. Could you brief us on China's development of winter parasports and the participation of persons with disabilities in winter sports? Thank you.

Wang Meimei:

China pays great attention to winter parasports. We have taken multiple measures to encourage more persons with disabilities to participate in winter sports in recent years. As a result, especially after China's successful bid for the Beijing 2022 Olympic and Paralympic Winter Games, more and more persons with disabilities took part in and enjoyed the charm of winter sports.

First, although winter Paralympic sports began late in China, they grew quickly in recent years. Before 2015, China only developed Paralympic cross-country skiing and wheelchair curling among six Winter Paralympic sports. In 2002, China participated in the Paralympic Winter Games in Salt Lake City of the U.S. In the Sochi 2014 Paralympic Winter Games, 10 Chinese athletes took part in 2 sports and 6 events, and the wheelchair curling team finished fourth, which was the best ever result for the Chinese winter Paralympic team. In the 2018 Pyeongchang Paralympic Winter Games, Chinese athletes won gold in wheelchair curling, marking China's first medal in Winter Paralympics.

Second, China's successful bid for the 2022 Paralympic Winter Games has generated great opportunities to develop its Winter Paralympic sports. In July 2015, together with Zhangjiakou, Beijing won the bid to host the 2022 Olympic and Paralympic Winter Games, which created major development opportunities for China's winter parasports. Thanks to unremitting efforts during the past few years, China's winter Paralympic sports have made great progress. From 2015 to 2021, the number of Winter Paralympic sports in China increased from 2 to 6, so all Winter Paralympic sports are now covered. In addition, the number of athletes increased from fewer than 50 to nearly 1,000. Since 2018, annual national competitions for sporting events in Winter Paralympics have been held. All the six Winter Paralympic sports - alpine skiing, the biathlon, cross-country skiing, snowboarding, ice hockey, and wheelchair curling - have been included in the National Games for Persons with Disabilities. Since 2016, Chinese parasports athletes have participated in international events related to the Winter Paralympic Games, accumulating experience and improving their capabilities. In the Beijing 2022 Paralympic Winter Games, 96 Chinese athletes will take part in all 6 sports and 73 events. Compared with the Sochi 2014 Paralympic Winter Games, the number of athletes will increase by 86, the number of sports by 4, and the number of events by 67.

Third, taking the Winter Paralympics as an opportunity, China's winter parasports rise. China's successful bid for the 2022 Olympic and Paralympic Winter Games allowed persons with disabilities to feel the charm of winter sports. Since 2016, China has hosted Winter Sports Seasons for Persons with Disabilities for 6 consecutive years, providing them with a platform to participate in winter sports and fulfilling the Beijing 2022 bid commitment of engaging 300 million people in winter sports. The scale of participation has expanded from 14 provincial-level units in the first Winter Sports Season to 31 provinces and equivalent administrative units. Various winter parasports activities suited to local conditions have been held, allowing participants to experience Paralympic Winter Games events and participate in mass-participation winter sports, winter rehabilitation and fitness training camps, and ice and snow festivals. A variety of winter sports for mass participation have been created and promoted, such as mini skiing, dryland skiing, dryland curling, ice cuju (a traditional Chinese game of competing for a ball on the ice rink), skating, sledding, sleighing, ice bikes, snow football, and ice dragon boating. These novel and fun sports have proved very popular among persons with disabilities. In addition, the promulgation of materials such as A Guidebook on Winter Sports and Fitness Programs for Persons with Disabilities provides services and support for persons with disabilities to participate in winter sports and fitness.

Khabar 24:

Besides parasports, how will the Chinese government ensure a barrier-free environment in the everyday life, education and employment of persons with disabilities? What will you do over the next few years? Thank you.

Guo Liqun:

Thanks for your question. The Chinese government attaches great importance to protecting the rights and interests of persons with disabilities. Therefore, it strengthens the building of an accessible environment in all aspects to provide a convenient environment for them to live, study and work.

First, we strengthened legal construction for an accessible environment. China has set up a legal system based on the Law of the People's Republic of China on the Protection of Persons with Disabilities, with the Regulations on Building an Accessible Environment as the backbone, and supplemented by local laws and government regulations. This system provides a fundamental legal enforcement basis for constructing, managing, and supervising an accessible environment.

Second, we included building an accessible environment in the country's overall economic and social development plans and its relevant specialized plans. Creating an accessible environment is strengthened in the 14th Five-Year Plan for National Economic and Social Development, Vision 2035, and a batch of specialized plans focusing on protecting and developing persons with disabilities, improving elderly life, and boosting informatization, tourism and transportation. It is also underlined in the National Human Rights Action Plan, which clarifies China's human rights commitments and fulfills the relevant requirements of the UN Convention on the Rights of Persons with Disabilities. In addition, central departments issued a series of policies and measures to promote accessible environment construction, significantly improving its level.

Third, we promoted accessible environment construction in all aspects and continued to increase the coverage of accessible facilities.

The first is to ensure that newly-built (renovated or expanded) roads, buildings, and residential areas in urban and rural areas are equipped with barrier-free facilities, and increase the barrier-free renovations of existing facilities. 81% of the entrances and exits, 56% of the service counters, and 38% of the toilets among comprehensive service facilities in villages (communities) nationwide have been upgraded for barrier-free access. During the 13th Five-Year Plan period, home adaptation was carried out for 650,000 registered families with severely disabled members, helping them shake off poverty and improve the quality of their life.

The second is to create a barrier-free travel and service environment. The Chinese government continues to strengthen building and upgrading of accessible transport infrastructure, so as to create a barrier-free travel environment. It promotes the application of barrier-free passenger vehicles across the country; 3,598 trains have reserved seats for the disabled; public transport vehicles have special seats for the elderly, the infirm, the sick, and the disabled, and have adopted low-floor buses and barrier-free taxis; and city buses are equipped with visual and audio announcement systems.

The third is to comprehensively promote information accessibility. China strives to solve the difficulties encountered by special groups such as the elderly and the disabled when using intelligent technologies such as the internet, increase the supply of accessible terminal products, push forward the promotion and application of barrier-free products and service technologies, broaden the channels for persons with disabilities to participate in the information society, promote the application of information technology to foster an accessible environment,, and work hard to bridge the "digital divide" to help the disabled enjoy the digital life.

The fourth is to actively promote the construction of a barrier-free environment on campuses and at workplaces. The Chinese government vigorously promotes inclusive education, strengthens the construction and installment of accessible facilities and equipment in schools, and provides relevant supporting services and adequate convenience for students with disabilities to study and live in schools. We have fully guaranteed the employment rights and interests of the disabled; encouraged Party and government organs, public institutions, and state-owned enterprises to take the lead in helping the disabled find jobs; and required employers to improve accessibility of workplaces and provided adequate support for people with disabilities, so as to create necessary labor security conditions for the disabled to find employment.

In the future, the Chinese government will actively implement the requirements of the implementation plan for barrier-free environment construction during the 14th Five-Year Plan period and related regulations and policies, accelerate legislation on the construction of barrier-free environment, implement the working mechanism, improve the policy and standard system, and enhance accessibility of urban and rural infrastructure. It will carry out home adaptation for 1.1 million households with disabled members in financial difficulty and severely disabled members, vigorously promote information accessibility, and further raise the accessibility awareness of the whole society. The government will speed up the building of an accessible environment with complete facilities, complete functions, smooth information, and comfortable experience so as to better facilitate work, life, and study of the disabled, and promote their all-round development and shared prosperity.

Thank you.

People's Daily:

How does the General Administration of Sport of China (GAS) coordinate the development of parasports in the process of implementing national strategies such as the Fitness-for-All initiative, and Building China into a Country Strong in Sports? Thank you.

Liu Guoyong:

Thank you. As you know, sports for the disabled are an important part of the cause of people with disabilities, and it is also an important part of the sound development of our sports. The Party and the state have always attached great importance to sports for the disabled, and especially since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has given top priority to the development of sports, including sports for the disabled, and has made a series of new arrangements for sports from the perspective of national strategy, and put forward a series of new requirements. We believe that in order to implement the requirements of the CPC Central Committee and the State Council, it is very important to strengthen top-level design, especially to strengthen policy guarantees for people with disabilities to participate in sports activities. The "Regulations on the Nationwide Fitness Program" stipulates that "citizens have the right to participate in fitness-for-all activities in accordance with the law,” which clarifies that participation in fitness-for-all activities for all citizens, including people with disabilities, is a basic right that must be ensured. The "National Fitness Plan (2021-2025)" proposes: "support the holding of various sports events for the disabled, and carry out sports and fitness activities involving both the disabled and those in good health,” and further "improve accessibility of public fitness facilities, and carry out rehabilitation and fitness activities for the disabled.” Meanwhile, the "Outline for Building a Leading Sports Nation" proposed: "promote the extensive development of rehabilitation sports and fitness sports for the disabled,” and the "14th Five-Year Plan for Sports Development" proposed to "further improve national fitness public services for the elderly, professional groups, and the disabled."

The GAS and the CDPF have jointly issued the notice on printing and distributing the implementation plan for the development of parasports during the 14th Five-Year Plan period and the guiding opinions on further developing rehabilitation and fitness sports for persons with disabilities, which incorporate the rehabilitation and physical fitness of the disabled into the whole process of national fitness work, so as to guarantee the disabled people's equal right to enjoy sports, realize equal access to basic public services in sports, and further enhance the disabled people's sense of gains and happiness. We believe that with these laws and regulations and the support of relevant policies, governments at all levels will have the basis for exercising law-based administration and the sports sector can also strengthen supervision according to these laws, regulations, and policies so that the disabled people can enjoy a healthier and happier life.

Thecover.cn:

Why should we vigorously develop parasports, and what is the significance and value of doing so? Thank you.

Wang Meimei:

Thank you for your question. First of all, sports are an important way for disabled people to keep fit. Physical activities can promote the healthy development of the body's movement, nerves, circulation, respiration, and digestion, as well as the endocrine, immunity, urinary, and other systems, and make our bodies stronger. By participating in various forms of sports activities, disabled people can also enhance their physical fitness, improve their physical functions, and facilitate their physical and mental health. Therefore, we have adopted various measures to encourage disabled people to actively participate in public sports and competitive sports.

Secondly, sports are an important means to promote the rehabilitation of the disabled. According to the national standard of "Classification and Grading Criteria of Disability,” Persons with disabilities in China include those who have visual, auditory, speech, physical, intellectual, or mental impairments, as well as those with multiple disabilities, while each type of disability is divided into four levels based on the degree of disability. Disabled persons with different types and degrees of disabilities suffer from corresponding physical and mental impairments. Through different rehabilitation methods, the functional impairments may be alleviated or even eliminated, and sports are an effective means of rehabilitation. Through targeted sports activities, the disabled people can build up fitness, enhance capacity to self-support, and improve the quality of life.

Third, sports are an important path for persons with disabilities to

integrate into society. By participating in sports, people with disabilities are encouraged to go out, pursue interests and hobbies, increase their social contact, and enrich their lives. The public is also able to have a better understanding of people with disabilities through their participation and demonstration in sports activities. Assisting persons with disabilities to integrate better into society is an important symbol of the progress of social civilization, and is also a significant goal of the cause of the people with disabilities.

Fourth, sports are an important part of human rights protection for persons with disabilities. The Convention on the Rights of Persons with Disabilities explicitly requires the signatories to take appropriate measures in order to encourage and promote the participation of persons with disabilities in various sports activities. The Law of the People's Republic of China on the Protection of Persons with Disabilities and other laws and regulations contain specific provisions to ensure persons with disabilities can participate in sports activities. Promoting the participation of persons with disabilities in sports is an essential requirement for fulfilling the obligations of the UN's Convention and implementing the provisions of Chinese laws and regulations. And it is also a concrete manifestation of China's protection of human rights. Therefore, we should encourage persons with disabilities to fully participate in sports activities, continuously develop their potential, show a spirit of self-improvement and an optimistic and enterprising spirit, and demonstrate the basic freedom, dignity, value, and power of mankind.

In practice, especially after the majority of persons with disabilities have achieved poverty alleviation and prosperity, they have a stronger demand for cultural life, including sports activities. Participation in sports has become an indispensable part of a better life for persons with disabilities, and more have been enjoying the joy brought by sports.

Thank you.

Southern Metropolitan Daily:

We were deeply impressed by the extraordinary results of Chinese athletes at the Summer Paralympics in Tokyo last year. Could you brief us a little about what outstanding achievements China has made in the field of competitive sports for persons with disabilities? Thank you.

Wang Meimei:

Thank you for your question. I'll answer this. We all know that the Chinese parasports athletes have given outstanding performances at major international sporting events. In 1984, the Chinese Paralympic delegation made its debut at the Seventh Summer Paralympic in New York, USA, for the first time, and they won their first ever Paralympic gold medal. Since then, there has been an upsurge of enthusiasm for sports among people with disabilities, and at the following Summer Paralympics, Team China's performance showed a marked improvement. In 2004, at the Summer Paralympics in Athens, the Chinese delegation ranked first in both medals and golds won. In 2021, at the Summer Paralympics in Tokyo, Team China topped both the gold medal tally and the overall medal standings for the fifth consecutive time. At the same time, since 1987, Chinese athletes with intellectual disabilities have participated in nine Special Olympics World Summer Games and seven Special Olympics World Winter Games. In 1989, Chinese deaf athletes made their international debut at the 16th World Games for the Deaf. Meanwhile, Team China performed very well in the Asian Para Games. During the 13th Five-year Plan period (2016-2020), China sent delegations of parasports athletes to participate in 160 international sporting events and won a total of 1,114 gold medals.

National sports events are also wonderful. Since China organized its first National Games for Persons with Disabilities (NGPD) in 1984, 11 such events have been held, with the number of sports increasing from three – Athletics, Swimming and Table Tennis – to 34. Since the third games in 1992, the NGPD has been listed as a large-scale sporting event ratified by the State Council and held once every four years. This confirms the institutionalization and standardization of parasports in China. In 2019, Tianjin hosted the 10th NGPD (together with the Seventh National Special Olympic Games) and the National Games of China. This made the city the first to host both the NGPD and the National Games of China. In 2021, Shaanxi hosted the 11th NGPD (together with the Eighth National Special Olympic Games) and the National Games of China. It was the first time that the NGPD had been held in the same city and during the same year as the National Games of China. This allowed synchronized planning and implementation and both games were equally successful.

Para-athletes train hard, challenge the limits, forge ahead, and have the courage to win – the keys to achieving extraordinary results. In the Tokyo 2020 Paralympic Summer Games, Team China won 96 gold medals, 60 silver medals, 51 bronze medals, and broke 29 world records. This not only represents outstanding performance but also the Chinese spirit displayed by Team China in the international arena. This spirit is the noble spirit of patriotism, unyielding national spirit, the collective spirit of unity, and the spirit of optimism. It is a source of strength and spiritual support for our athletes and coaches to overcome their difficulties.

China's achievements in competitive sports for persons with disabilities are the result of the dedication of many unsung heroes. The decades of perseverance and hard work of several generations of sports workers for persons with disabilities in China have laid the foundation for the great development of these sports. Among these workers, there are coaches, research teams, and staff, of high professional level, and full of love and selfless dedication. And there are also the para-athletes guides and other assistants who have accompanied the para-athletes all year around. These people are the unsung heroes behind our outstanding results. They have helped para-athletes in their training and competitions, grown with them, and ensured that every athlete is in the best condition to achieve the best result in competition.

China's sports cause for persons with disabilities has been developed in the course of opening up. We would like to express our honest thanks to our international counterparts for their sincere help.

China Daily:

The Beijing 2022 Paralympic Winter Games is just around the corner. Could you tell us a little about the current preparation status of the Chinese delegation? What expectations do we have for this Paralympic Winter Games? Thank you.

Wang Meimei:

The para ice hockey, para-alpine skiing, para snowboarding, para cross-country skiing, and para biathlon teams of the Chinese delegation for the Beijing 2022 Paralympic Winter Games checked in into the Paralympic villages in Beijing, Yanqing, and Zhangjiakou, respectively, on February 25. And the wheelchair curling team checked into the Beijing Paralympic village on March 2.

Currently, the athletes in the villages have been training before their competitions, which mainly includes adapting to the venues, getting familiar with the competition streamline, improving the competition plan, and adjusting their psychological state. They are looking forward to the upcoming Games.

Compared with summer Paralympic sports, winter Paralympic sports in China got off to a later start, have a relatively weak foundation and are still improving. At the Sochi 2014 Paralympic Winter Games, which was held before Beijing's bid to host the Winter Games, China only had 10 athletes participating in two sports and six events. This time, a total of 96 athletes from China are taking part in all six sports and 73 events. Our objectives are:

First, to demonstrate to the world the spirit of perseverance of Chinese people with disabilities in the new era. Paralympians are focused on displaying their spirit. General Secretary Xi Jinping has highly praised the indomitable and hard-working spirit of China's para-athletes. Even though the competitiveness of China's Paralympians is still improving, their spirit in seeking to meet challenges and pursue self-improvement will undoubtedly inspire us to fully demonstrate their sound spirit.

Second, to present China's achievements in developing winter Paralympic sports. General Secretary Xi Jinping has made several important instructions for the preparatory work of the Beijing Winter Olympics and Paralympics. Following the important instructions, the CDPF considered the preparation and competition as a major political task, set up a leading group for the Beijing 2022 Paralympic Winter Games to guide the preparatory work for the Game. Through six years of concerted efforts of the disabled persons' federations at all levels across the country, we achieved fundamental breakthroughs in our Paralympic winter sports. This year marks China's sixth participation in the Winter Paralympics, featuring its largest-ever delegation and highest-ever number of athletes, who are participating in more categories of sports and events at the Games than ever before.

Third, to strive to achieve good results and win honors for the country. On Feb. 24, General Secretary Xi Jinping wrote a reply to Chinese snowboarder Su Yiming. The Chinese delegation organized its members to study the guiding spirit of the letter in the first place and was determined to follow the spirit to act on the pledge of "keeping the mission in mind and striving together," and to work hard and transcend the self to achieve excellent results and achieve glory for the country.

Thank you.

Beijing Youth Daily:

Just now it was mentioned that equal participation in sports represents an important right for people with disabilities. Can you elaborate on how China has safeguarded equal participation for people with disabilities in sports by law? Thank you.

Lyu Yansong:

First, China has not only included parasports in its national fitness program, Healthy China initiative, and program to build China's strength in sports, but also strengthened equal protection and special assistance for the rights and interests of people with disabilities through legislation, confirming their specific right to participate in sports. Among the regulations, articles 41 to 45 of the Law of the People's Republic of China on the Protection of Persons with Disabilities stipulates the concrete measures that the government and society should take to ensure that people with disabilities enjoy rights related to culture and sports. Article 16 of the Law on Physical Culture and Sports stipulates that the whole of society should care for people with disabilities and support their participation in sports. All levels of government should take measures to ensure people with disabilities have better access to sporting events. Article 45 also stipulates that public sports facilities should make it convenient for people to conduct sports activities and implement preferential measures for people with disabilities.

Second, the Chinese government has actively promoted the construction of barrier-free environments, and effectively guaranteed the equal participation of people with disabilities in all sports activities. For example, in 2019, Beijing launched a special program to foster a barrier-free environment, focusing on 17 major tasks in key areas such as urban roads, public transport, public service venues, and information exchange. A total of 336,000 facilities and sites have been modified, realizing basic accessibility in the core area of the capital city, making its barrier-free environment more standardized, accommodating and systemic. Zhangjiakou has also actively nurtured a barrier-free environment, leading to a significant improvement in accessibility.

Third, China has continuously improved its public sports service system and vigorously promoted the equal participation of people with disabilities in rich and colorful sports and cultural activities. Both the Law on Guaranteeing Public Cultural Services and the Regulations on the Nationwide Fitness Program require corresponding cultural and sport services be provided according to the physical and mental characteristics and needs of people with disabilities. In the efforts to implement the national fitness program, governments at all levels have innovated service methods and launched extensive rehabilitation and fitness activities for people with disabilities at the grassroots level. To improve the sport service ability, local regions have also established sport instructor teams for people with disabilities, so as to effectively guarantee the right of people with disabilities to enjoy basic public sport services. Thank you.

The Beijing News:

Parasports is an essential part of China's national fitness program. Therefore, I would like to invite the speaker of the General Administration of Sports of China to share what advancements have been made on public fitness services for persons with disabilities.

Liu Guoyong:

Thank you for your question. Mr. Lyu and Ms. Wang have elaborated on the importance for persons with disabilities to participate in sports activities. As you mentioned, as part of our efforts to ensure that persons with disabilities can be part of the national fitness program, we will improve the relevant public service system. From the perspective of sports, we should make efforts in the following three aspects to improve the national fitness public service system for persons with disabilities.

First, we will provide more accessible sports facilities. Second, we will organize more sports activities for persons with disabilities. Third, we will strengthen guidance for persons with disabilities when they participate in sports activities.

Regarding this, the General Administration of Sports of China has made efforts in the following aspects.

First, we have channeled central funds to promote the implementation of the Disability Support Project under the National Fitness Program at the local level. As we see, many communities have equipped with fitness facilities and trails. Now, the needs of persons with disabilities were also considered in our efforts to improve those sports facilities and trails. We have accelerated the implementation of regulations on barrier-free facilities design at various kinds of public fitness venues to enhance all fitness equipment and facilities for persons with disabilities. Additionally, we have encouraged relevant enterprises to research and develop fitness equipment and facilities customized for persons with disabilities and mobilized all social forces to provide public services for persons with disabilities. We have jointly issued the National Basic Public Service Standards for Mass Sports and the Basic Public Standards for Public Sports Venues with relevant departments to provide a more suitable fitness environment for persons with disabilities.

Second, we have provided support and guidance for local sports authorities and parasports organizations to better serve persons with disabilities when they participate in sports activities. Only by organizing them to engage in more activities can they further integrate into society, better playing the role of fitness. Not only on the National Fitness Day but many other important occasions for parasports, we should never forget the essential right of persons with disabilities in participating in sports. Additionally, we have played a positive role in cooperating with the CDPF in international sports events over the last few years. We have provided more convenience and opportunities for persons with disabilities to participate in sports with the successful operation of a series of comprehensive sports events represented by the Paralympic Games, the Asian Paralympic Games, and the National Games for Persons with Disabilities.

Third, it's essential to have specialized personnel to instruct persons with disabilities to participate in sports activities. We have more than 2 million social sports instructors. In recent years, we have improved relevant teaching materials on training for persons with disabilities during the instructor training process, which has enabled the social sports instructors to better understand the characteristics and patterns of persons with disabilities when they engage in sports activities to effectively guide them to participate in sports, build up their body strength, and better integrate into society.

Thank you.

Shou Xiaoli:

Thank you to all the speakers and friends from the media. Today's press conference is with this concluded. Goodbye.

Translated and edited by Lin Liyao, Liu Sitong, Zhang Rui, Zhang Junmian, Yan Xiaoqing, Wang Yanfang, Zhang Tingting, Zhou Jing, Qin Qi, Li Huiru, Wang Qian, Zhu Bochen, Yang Xi, Jay Birbeck, David Ball 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:

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission

Hu Xiaolian, chairman of the Export-Import Bank of China

Chen Siqing, chairman of the Industrial and Commercial Bank of China

Tian Guoli, chairman of the China Construction Bank

Bai Tao, Party secretary of China Life Insurance (Group) Company 

Wang Sidong, chairman of China Taiping Insurance Group Company Limited

Chairperson: 

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

Date: 

March 2, 2022

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office. Today, we are delighted to be joined by Mr. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), who will introduce China's efforts to promote a virtuous cycle of finance and economy amid high-quality development, and answer your questions. Also present at the press conference today are Ms. Hu Xiaolian, chairman of the Export-Import Bank of China (China Exim Bank); Mr. Chen Siqing, chairman of the Industrial and Commercial Bank of China (ICBC); Mr. Tian Guoli, chairman of the China Construction Bank (CCB); Mr. Bai Tao, Party secretary of China Life Insurance (Group) Company; and Mr. Wang Sidong, chairman of China Taiping Insurance Group Company Limited. 

Now, I will give the floor to Mr. Guo Shuqing.

Guo Shuqing:

Thank you, Ms. Shou. Ladies and gentlemen, comrades and friends, good afternoon. I am very happy to be speaking with you about the development of China's banking and insurance sectors. First of all, on behalf of the CBIRC and the other speakers, I would like to express my sincere gratitude to friends from the media for your constant interest and support regarding the financial services sector.

2021 was a landmark year in the history of our Party and our country. The CBIRC and the entire banking and insurance sectors have followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; grasped the decisive significance of establishing Comrade Xi Jinping's core position on the CPC Central Committee and in the Party as a whole, and defining the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; strengthened 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; stayed confident in the path, theory, system and culture of socialism with Chinese characteristics; upheld General Secretary Xi Jinping's core position on the CPC Central Committee and in the Party as a whole, and the Party Central Committee's authority and its centralized, unified leadership; borne in mind the country's most fundamental interests; and implemented the decisions and plans of the CPC Central Committee and the State Council. Following the specific directions of the financial stability and development committee under the State Council, we have risen undaunted to face challenges and acted proactively, thus achieving solid progress on multiple fronts.

First, we have made persistent efforts to forestall and defuse financial risks. With regards to the requirements put forward by General Secretary Xi Jinping at the 2017 National Financial Work Conference, by the end of 2019, substantial progress had been achieved in forestalling and defusing major financial risks, and risks in eight areas had been significantly constrained. In 2020, due to the unprecedented COVID-19 pandemic, the leverage ratio of all national economic sectors rebounded. In 2021, risks in key areas continued to be contained, the macro leverage ratio fell by around 8 percentage points, and asset expansion in the financial system, back to a comparatively low level, re-entered the single-digit range. From 2017 to 2021, high-risk shadow banking worth up to 25 trillion yuan has been dismantled, decreasing by 11.5 trillion yuan within the past two years. Non-performing assets worth 12 trillion yuan were disposed of in the past five years, of which more than 6 trillion yuan was handled within the past two years. The hidden debt of local governments has been reduced. The financialization and bubbles in real estate have been curbed. A number of high-risk enterprises and financial institutions that violated laws and regulations have been dealt with in an orderly manner. All internet-based P2P lenders have been shut down, and the outstanding loan balance has been reduced to 490 billion yuan. A total of 25,000 illegal fundraising cases have been investigated and dealt with. China's resilience against external shocks has been improved.

Second, we have contributed to the national economy's return to steady growth. We have met the reasonable and effective financing needs of the real economy and promoted the stable recovery and virtuous cycle of the national economy. In 2021, RMB loans increased by nearly 20 trillion yuan, and banks and insurance institutions issued 7.7 trillion yuan in bonds. The balance of medium- and long-term loans to manufacturers increased by nearly 30% year on year, loans for scientific research increased by 28.9%, and green credit by 21%. We have strengthened financial services for fields severely affected by the pandemic, and the policy to postpone principal and interest repayments on loans will be smoothly shifted after the extension period. We have provided strong support for the normal operation of the coal-fired power industry. Insurance payments increased by 14.1%. About 11.6 billion yuan of payments were allocated for reconstruction after heavy rains in Henan and Shanxi provinces. COVID-19 vaccine insurance has provided risk protection via over 2.8 billion doses of vaccines.

Third, we have opened up new prospects for inclusive financial services. The volume of financial services for small and micro enterprises has increased and the cost has decreased. In the past four years, the annual average growth rate of inclusive loans to small and micro enterprises exceeded 25% and the interest rate fell by more than 2 percentage points. Innovative products such as online insurance and digital credit have developed rapidly. Inclusive financial services have become more extensive and targeted. Large and medium-sized banks leveraged their advantages in technology and data to continuously improve their ability to serve long-tail customers, remote areas and rural revitalization. In 2021, inclusive loans granted by the five largest banks to small and micro enterprises increased by 41.4%. Serious illness insurance covered 1.22 billion urban and rural residents. Agricultural insurance provided 4.7 trillion yuan of risk protection for 180 million households. We advanced the regulated development of the commercial endowment insurance — the third pillar in China's three-pillar pension system. The pilot area of exclusive commercial endowment insurance has been expanded to the whole country. The pilot program for pension wealth management products has been expanded to "10 places and 10 institutions." Another pilot program for pension savings will be launched soon. Commercial pension services for low- and middle-income groups are also being prepared. According to reports by the World Bank and the International Monetary Fund, China's inclusive financial services have maintained an international leading level.

Fourth, we have continued to deepen the reform and opening-up of the banking and insurance sectors. We have implemented the Three-Year Action Plan for corporate governance, continuously improved the modern financial enterprise system with Chinese characteristics, and integrated Party leadership with corporate governance based on the conditions of different regions and institutions. We have taken province-specific measures to deepen the reform of small and medium-sized banks and rural credit cooperatives according to local situations. Zhejiang Rural Credit Union has been restructured into Zhejiang Rural Commercial Union Bank. We have improved the professional management capabilities of small and medium-sized financial institutions, promoted the development of the professional manager market, and started construction on China's financial talent pool. We have deepened the reform of property insurance and life insurance. The comprehensive reform of auto insurance saved more than 250 billion yuan for consumers. The Solvency Regulatory Rules for Insurance Companies (II) has been formulated. We have revised support systems to open up the financial sector at a higher level. A group of international financial institutions with first-class professional advantages in wealth management, non-performing asset disposal, and pension finance have entered the Chinese market.

Fifth, we have resolutely curbed the disorderly expansion of capital in the financial sector. We have strengthened the supervision of non-financial enterprises investing in financial institutions, and consolidated the firewall between industrial capital and financial capital. We have regularly carried out special campaigns to strengthen oversights of shareholders' equity and related party transactions. We have removed the equity of shareholders who violated rules at high-risk institutions in an orderly fashion, and cracked down on illegal shareholders who maliciously hollowed out financial institutions. Four groups of shareholders in violation of laws and rules have been made public. We have put equal emphasis on regulation and development, and adhered to the principle that financial innovation must be made under prudent supervision. We have given equal treatment to the same types of business and entities, and brought internet-based financial business under regulation in accordance with the law. We have strengthened financial anti-monopoly and anti-unfair competition measures, and regulated business cooperation between licensed institutions and internet platforms to maintain market order.

Sixth, we have continued to advance oversight and regulation in a tough manner. We have exercised full and strict governance over Party members and taken integrated steps to punish financial corruption and prevent and control financial risks. We have ramped up efforts to investigate the financial corruption behind the various problems in the financial sector. We have stepped up efforts to strengthen the rule of financial law, improve the rule of law in the bond market, and unify the basic rules for corporate credit bonds. We have promoted financial stability and accelerated the legislation of financial derivates to manage them with "unified regulations and rules." In 2021, the CBIRC amended and released 14 rules and 44 regulatory documents. In addition, we have made the penalties for violating laws and regulations much more costly. A total of 3,870 punishments were meted out to banking and insurance institutions and 6,005 people responsible were punished last year, with confiscated illicit gains or fines totaling 2.7 billion yuan.

Under the overall deployments of the CPC Central Committee, Party committees or leading Party members groups of the financial authorities and financial institutions at all levels are making great efforts to implement thorough rectification according to the results of the eighth round of disciplinary inspection by the 19th CPC Central Committee. We will fulfill the political responsibilities in this regard. We are now formulating rectification plans, and work to ensure that the plans will be very specific to address all of the problems in a comprehensive manner, following the requirements of the CPC Central Committee to strengthen inspection and rectification and ensure better utilization of the inspection results. We need to make solid efforts to ensure that we can learn by analogy and address both the symptoms and root causes. We will be resolved to push reform, take on responsibility, and establish a long-term mechanism to complete the rectification in a high-standard and strict manner. At the same time, we will also urge the financial enterprises to implement rectification measures and resolve the problems found in fulfilling duties. We will further implement the spirit of the 19th CPC National Congress and the plenary sessions of the 19th CPC Central Committee, uphold the leadership of the CPC Central Committee over the financial work and practice the new development philosophy in a thorough, accurate and comprehensive manner. We will ensure that our rectification in response to the disciplinary inspection will enable us to better serve the real economy, prevent and defuse financial risks, and deepen financial reform and opening up to promote high-quality development of the banking and insurance industry, and greet the convening of the upcoming 20th CPC National Congress with concrete actions.

That concludes my introduction. Next, my colleagues and I would like to answer your questions. Thank you all!

Shou Xiaoli:

Thank you, Mr. Guo. Now the floor is open for questions. Please identify your media outlet before raising your questions. 

CCTV:

The Central Economic Work Conference pointed out that China's economic development faces triple pressures of demand contraction, supply shocks, and weakening expectations. What policies and measures will the CBIRC adopt to enable the financial sector to support the stable growth of the real economy? How will the ICBC and other financial institutions implement all these measures? Thank you.

Guo Shuqing:

Indeed. Due to the uncertainties caused by the COVID-19 pandemic at home and abroad, as well as the changes in the environment in other aspects, economic demand is not very strong, with the growth of both consumption and investment being slow. We thereby have to adopt some strong measures. However, we are not talking about a deluge of strong stimulus measures to ease the monetary policies. Fiscal policies will also promote structural adjustments with more specific measures. For the banking and insurance sector in this regard, we hope to promote consumption and expand investment in a targeted manner.  

To be more specific, we will first support the production and operation of micro, small and medium-sized enterprises, especially those struggling with difficulties. 

Second, we will support rural revitalization. The modernization of rural areas remains arduous, although we have achieved the targets and tasks of poverty alleviation. Rural revitalization needs to boost development in various aspects regarding infrastructure and public cause, such as transportation, roads, energy, water supply, power supply, and schools and hospitals. Moreover, the housing conditions of the rural people need to be improved. Ultimately, rural revitalization is one of our priorities.

Third, after soliciting opinions of a dozen departments, the CBIRC and the People's Bank of China will soon release a document that aims to offer financial services to "new urban residents." The "new urban residents" refer to people who live in cities but have not yet obtained an urban hukou or those who have had an urban hukou for less than two or three years. There are more than 300 million such new urban residents, and they have a rigid demand for housing, jobs, starting up businesses, renting or buying a home, child education, and eldercare. We’ve learned from investigation that these people from rural areas are self-employed individuals or migrant workers who are not in permanent employment. According to statistics, the average working time for rural migrant workers in a company or their posts is around six months. However, they are usually required to submit an income certificate while applying for loans, which is quite tricky for them to do. Child education is also a problem for them. As such, we would like to launch a special document to offer advice for the banking and insurance institutions to provide better services for these "new urban residents." This has been a part of our efforts, in general, to deal with the issues related to agriculture, rural areas, and farmers. Besides this, the financial sector needs to continue to shore up the weak links on various fronts, such as the aforementioned micro and small enterprises, rural revitalization, scientific & technological innovation, and green development. Our efforts will follow market and commerce principles. 

Chen Siqing:

Thank you, Mr. Guo. Thanks for the question. Mr. Guo has briefly introduced the support measures of the financial sector, the banking and insurance sector in particular, for the real economy. I'd like to continue to make a general introduction about the measures the ICBC has implemented to support the real economy, especially the manufacturing sector in this regard. 

It is the responsibility of the financial sector to offer services for the real economy, which is also the principle that we must follow. In recent years, under the leadership of the CPC Central Committee and the State Council and the guidance of the CBIRC, we have continued to ramp up efforts to support the development of the real economy, achieving remarkable results.

In 2021, ICBC's new loans hit a new high record, with most of them going to the key areas and weak links of the real economy. The average interest rates of the newly issued inclusive loans and those to manufacturing businesses dropped from the 2020 level. The rates of 2020 dropped remarkably from the previous year's level, and they saw a further reduction in 2021, which has effectively helped the manufacturing enterprises, especially those small and medium-sized companies, in terms of reducing costs and enhancing efficiency.

The ICBC has always been committed to offering services to the industrial and manufacturing sectors. In recent years, in response to the national efforts to strengthen manufacturing, we have stepped up efforts to tackle the pains, difficulties, and impediments in financial services to serve the manufacturing sector better. The measures that we've adopted are as follows:

First, we increased loan support. In the past three years, the ICBC's new loans for the manufacturing industry exceeded 100 billion yuan, 200 billion yuan and 300 billion yuan, respectively. The cumulative growth rate exceeded 40%, and the loan balance exceeded 2 trillion yuan. During the 14th Five-Year Plan period, we will strive to take the lead in breaking the 3 trillion yuan loan balance for the manufacturing industry. 

Second, we helped stabilize and solidify the industrial chain. By the end of 2021, the ICBC's financing balance for core enterprises in the industrial chain in the manufacturing industry exceeded 750 billion yuan, and financing for upstream and downstream manufacturing enterprises in the industrial chain exceeded 300 billion yuan.

Third, we highlighted key areas. We improved the "credit + non-credit" comprehensive service system. We not only provided credit support, but also contributed to the high-quality development of the manufacturing industry by building an "overpass" for manufacturing industry financial services. By the end of 2021, the ICBC's financing balance for strategic emerging industries exceeded 1 trillion yuan, supporting the manufacture of domestically-produced large aircraft, Fuxing high-speed trains and other major machinery made in China.

At the same time, we have also been paying special attention to the development of small- and medium-sized manufacturing enterprises "with high growth potential, advanced technology and strong market competitive edge" in accordance with the national strategic policy, and we continue to provide specialized financial services in a targeted manner.

All of you are very interested in these enterprises with high growth potential, advanced technology and strong market competitive edge. The ICBC has set up a special mechanism, issued a special plan serving these enterprises, and launched a special campaign. The bank has established 11 financial service centers at headquarter-level for scientific and technological innovation enterprises, and established 100 specialist sub-branches of the bank. By the end of 2021, the number of corporate credit customers of enterprises with high growth potential, advanced technology and strong market competitive edge exceeded 15,000, and the financing balance exceeded 100 billion yuan, with a growth rate of more than 18%.

At the same time, we have developed exclusive plans for enterprises with high growth potential, advanced technology and strong market competitive edge. We launched a special loan financing plan for these enterprises to fully meet their financial needs, and proactively granted credit to more than 6,000 such enterprises.

We offered exclusive products. We have accelerated the promotion of intellectual property pledge loans, actively promoted investment and loan linkage, established long-term cooperation with enterprises, actively solved the problems of difficult and expensive financing for enterprises, and helped enterprises avoid premature dilution of equity and achieve stronger and better performance.

Of course, we are also soberly aware that we still have shortcomings in serving the real economy. Going forward, the ICBC will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and actively implement the rectifications required by the CPC central inspection teams. We will actively implement the new development philosophy, serve the new development paradigm, and make substantive efforts in serving the real economy as the starting point and objective of our work. We must practice the people-centered development philosophy and unswervingly follow the path of financial development with Chinese characteristics. Thank you.

Economic Daily:

My question is for Chairman Tian of the CCB. Everyone says "if you want housing, go to the CCB," what is your opinion on the current real estate market and its regulatory policies? How do you see risks in the real estate market and future trends? Thank you.

Tian Guoli:

The slogan "if you want housing, go to the CCB" was put forward by the CCB more than three decades ago. At that time, everyone in the country lived in public rental housing, and basically no one was purchasing a house. When we were on the road to housing reform, people struggled to scrape together 50,000 yuan or 100,000 yuan to buy a house. However, people couldn't afford it and were under a lot of pressure. China wanted to develop quickly and so needed to solve the problem of housing marketization, so the CCB took the lead in proposing "if you want to buy a house, go to the CCB." At that time, we designed some financial products along this way of thinking, including the mortgage loans that everyone is now familiar with and has experienced.

With the gradual deepening of market reforms and the increase in the rate of home ownership, it is now basically market-oriented. We have seen a deep-seated problem, that is, the rent-to-purchase ratio needs to be balanced. At present, it is not very balanced. The price-to-rent ratio is basically 1:700. From a financial point of view, it is necessary to design new products to rebalance this problem. Everyone remembers "if you want to buy a house, go to the CCB," but I hope everyone can remember "if you want to rent a house, go to the CCB." It's more cost-effective (to rent a house), given the ratio of 1:700, even in global terms. No matter how much housing prices fall in the future, it will still be difficult to truly solve the issue of housing for the working class, and especially difficult to meet the housing needs of ordinary people, those without savings, migrant workers, and new urban citizens. In the future, we need to rely on rental housing to solve the problem. Since the 18th CPC National Congress in particular, we have emphasized that people are the center, the housing market must be controlled rationally, and there must be a new model. Now the rate of people renting is over 10%, which is already pretty good. Our goal is to push the figure up to more than 30%. Then there will be a fundamental change in the country's real estate market. In other words, it is still the implementation of the saying, "housing is for living in, not for speculation."

The CCB is a major state-owned bank. On the one hand, we should undertake our social responsibilities. On the other, we also have strong professional design capabilities. The CCB already launched a housing rental platform more than four years ago. While the platform is not perfect, it has already covered more than 300 cities across the country. We are working hard to establish relationships with houseowners, and also trying hard to connect with the market and customers. In this regard, the CCB is not engaged in this platform to seek benefits, instead we hope to try and help balance this long-term problem that has troubled society.

As you all know, the real estate issue is a worldwide problem. After Japan's housing bubble burst in the early 1990s, it had a profound impact on its economy. The subprime mortgage crisis in the United States actually stemmed from excess real estate. Fortunately, we have some policy and institutional strengths. But how can we use financial market-oriented means to gradually turn these advantages into economic momentum for sustainable development? We feel stronger and stronger that if we continue to design financial products around this, we will see a new scenario, that is, many residents will gradually become accustomed to renting in the future. You may have noticed that we have some slogans, the first is "if you want to rent a house, go to the CCB" and the second is "housing is for living in, renting is pretty good." In fact, from the perspective of financial management, renting is also a good idea, because now people don't always think that the value of a house will appreciate after buying. That era has now passed. Even if the house appreciates, it is very difficult to cash out. In fact, Europe has some good models for this, and has many financial products for people to manage their money, such as the stock market, bond market and rare metals. People can turn to these as it will be quicker to make money, and they are all relatively good in terms of liquidity, security and being risk-proof. In fact, real estate is not a particularly ideal asset for buying and selling. As the market matures in China, the era of relying on renting will soon definitely come.

Centering on this thought, the CCB put forward the slogan that "If you want to deposit a home in a bank, choose CCB." To be precise, there are some structural problems in the Chinese housing market. The housing vacancy rate is relatively high, and the rental market is unbalanced in two aspects. On one hand, from a landlord's perspective, it's still unclarified how laws would protect their income, and how they would enjoy preferential policies on the tax. Currently, we're discussing these issues with related departments. On the other hand, people may feel it's not so convenient to rent homes. Some leases can be cut short when landlords change their minds. Therefore, renters often lack a sense of stability in their lives.

The CCB put forward another notion that "Long-term rental means long-term stay; long-term stay equals settling down." From the perspective of a new urban resident, if the fixed term could last for three, five, or ten years, it should be enough. Even if you buy homes, you may want to purchase new ones after five to eight years or have new demands. We try to satisfy the needs of new urban residents through these means. There are now over 38 million people registering on the platform of the CCB to conduct transactions of this kind. At the same time, the CCB has a deposit of nearly 130,000 apartments. Sometimes we feel that landlords are not unwilling to rent out homes, since they may not rest assured, apart from taxes and troubles involved. But if the CCB assumes the responsibility, it will help improve their credit. As people have already deposited money in banks, why not homes? At the same time, we use our advantages in this aspect and try to fix long-term periods. During the years when the apartments are deposited in banks, we lock the rent and term to offer a stable home for new urban residents as possible as we can. Gradually, people will get used to renting homes, and it will become a choice and a normal for more new urban residents. We have offered some products in this aspect. We've also set up a housing rental industry alliance which unites sectors like housing design, renovation, and building materials. As for old apartments, the CCB established a comprehensive housing rental system entitled "CCB Jianrong Home." As some neighborhoods were outdated, we employed the best designers to design and renovate them with the best, high-quality, environment-friendly, and branded sanitary ware to lower the cost and offer new urban residents an affordable price. Usually, these run-down areas are located downtown, so the rental should be affordable for them. In Guangzhou, we built homes for sanitation workers through collaboration with the government. They are located in the downtown area, and are just hundreds of steps away from the river bank. These apartments have separate restrooms and kitchens. Though each one is probably about 20 square meters, our exquisite design makes it decent and comfortable. We also have many homes for high-end talents with elaborate designs. The mechanism can be more flexible with rental as the mainstay. It can satisfy the housing rental needs of all strata of society.  

Finally, I would like to emphasize that the CCB does not aim to replace property agencies by doing this, but expects to help more property agencies get involved in the transition of the market, based on our responsibility and integrity, including our financial support capacity, and jointly build a new market supply. We believe it can help find a complete solution for the balance of properties in the long run. If the ratio of rental to purchase reaches 4:6, the real estate market would be very stable, and the concern be eased. The CCB has made some attempts, but we're still far away from the target. I hope the media will pay attention to our practice, come to the CCB and CCB Jianrong Home across China for a visit, and promote our notion. Thank you.

Guo Shuqing: 

Mr. Tian has talked a lot. He has a good idea and encourages us to rent homes. The housing price declined last year, and the bubble and monetization of properties have been reversed fundamentally. The real estate market is not as active as before, but housing is still in demand, especially its rental and renovation. Therefore, it's of great significance to provide such financial services. We had a slogan in the past that "if you want to have homes, go to CCB." Over twenty years ago, applying for individual housing loans was inconvenient. I have my own experience. At that time, I served as the head of the State Administration of Foreign Exchange and applied for the housing provident fund loan from the CCB. It took half a year from my application to the issuance of the loan. However, afterwards, the financial services in real estate improved at a fast speed. Currently, housing mortgages are issued in great number and they account for a high proportion of loans from large banks. We always remind those banks that they should pay attention to risks as many buy homes for investment and speculation. If the home prices fell in the future, or other problems appeared, a huge financial crisis would arise. Some adjustments in the price of real estate and changes in the demand structure are good things for the financial industry. But we hope the adjustments are not that acute or exert huge influences on the economy. We need a smooth transition. That is all I want to add.

Red Star News:

China's import and export of cargoes and services contributed over 20% of GDP last year. In recent years, the financial sector has enhanced support to exports and offered them a lot of credit funds. So my question is, how does the financial industry support high-quality trade development? Are they equal to export subsidies in real terms? Thank you.

Guo Shuqing:

They're definitely not subsidies. They are all commercial banks and should make money. Their profits, especially those of large banks, grew significantly. Let's give the floor to our authoritative expert Ms. Hu Xiaolian to answer the question. 

Hu Xiaolian:

I'll make an illustration for the question. In the past two years, against the backdrop of the severe pandemic globally, China's exports have maintained great momentum, showcasing the strong resilience of China's foreign trade. China's exports have played an active role in stabilizing global products and industries and ensuring a stable supply. It is indeed difficult to achieve the accomplishment as foreign enterprises have also faced many common obstacles, such as the pandemic. Meanwhile, many uncertainties exist in the industrial and supply chains, and transportation also faces difficulties. Recently, the surge of commodity prices, the turbulence of international markets, changes in exchange rates, and the risk of geopolitics have all brought significant challenges for foreign trade enterprises to maintain steady growth.  

The CPC Central Committee and the State Council have attached great importance to it, as keeping foreign trade stable is an important part of ensuring stability on the six fronts and security in the six areas. Offering financial support for foreign trade is the major responsibility and task of the Import-Export Bank of China. We have always put supporting high-quality development of foreign trade as a key component of financial services, and made efforts in the following aspects.

First, we scale up the allocation of financial resources to foreign trade enterprises to ensure their funding needs can be met. 

Second, we prioritize the development of medium, small, and micro foreign trade enterprises. They are significant contributors to China's exports, so we rely on fin-tech to handpick eligible enterprises with export competitiveness as the candidates of our support programs. 

Third, we mainly keep a close watch on the development of the new mode of foreign trade as we render financial support. New foreign trade modes are a new driving force. Such new modes as the centralized procurement, overseas warehouses and cross-border e-commerce pose challenges to financial institutions. Mortgages, a traditional financing means, can hardly meet the funding needs of new foreign trade modes. This requires us to keep innovating products. 

Forth, to prop up foreign trade, we must reinforce its foundations to sharpen the edges of our foreign trade commodities in the global market and strengthen the foreign trade industry. In addition, we have paid extra attention to supporting the development of the foreign trade industry and promoting the quality and efficiency of both upstream and downstream of the foreign trade industry.

The four aforementioned endeavors have given full play to the role of policy-backed finance in bolstering the high-quality development of foreign trade. But, of course, some reporters may ask, what is the difference between policy-backed finance and commercial finance in supporting foreign trade? Just now Mr. Guo said that foreign trade is not a franchise business and policy-backed finance has two characteristics in supporting foreign trade:

First, policy-backed financial support tends to come when foreign trade companies face difficulties. The more dire the situation they face is, the more we need to provide support. So, I think banks can provide solid support for foreign trade enterprises when they are in straits amid an uncertain market.

Second, we have maintained good cooperation with industrial partners. Through industrial collaboration, we can integrate the strength of policy-backed finance and commercial finance. For example, we now support small and micro-sized foreign trade enterprises to turn to on-lending and sign on-lending deals with commercial, financial institutions. Since commercial, financial institutions have many outlets and have built close contact and relationship with many small and micro-sized enterprises, we work with them to provide financial support for such enterprises.

Just now, a reporter asked whether such support is a subsidy. What is a subsidy? According to the definition of the WTO, first, it depends on whether the financial resources provided by financial institutions are indistinguishable or whether financial institutions only provide financial credit support for a particular type of enterprise, a specific sector, or a particular type of products. Second, whether the loan interest rate is far lower than the market average level. According to the definition, the financing support we provide to foreign trade enterprises is by no means a subsidy. Chinese policy banks, especially official export credit institutions, provide support to foreign trade enterprises in the same vein as their foreign counterparts and in accordance with international practice.

The enterprises we support do not belong to a particular type or a particular sector. We support both large and small and medium-sized enterprises; we support both Chinese and foreign-funded enterprises without discrimination. We offer interest rates in line with market principles. Export and import banks also get capital from the financial market. Our financing cost is not low, roughly the same as the bond rates of the ICBC and the CCB in the financial market. We ensure our business covers the cost and runs with a low-profit margin. Under such circumstances, we will not provide subsidies to foreign trade enterprises at interest rates much lower than the market average. This is my answer. Thank you.

Xinhua News Agency:

Just now, Mr. Guo mentioned the need to regulate the third pillar endowment insurance development. You have repeatedly stressed that the insurance industry should stick to its nature of being a means of protection from financial losses. What will the CBIRC do to maintain insurance as a means of protection and bring it into play in the national social security system and pension financial services? Thank you.

Guo Shuqing:

There are two colleagues from insurance companies. I think they can give you a more detailed answer. Let me say something briefly.

China's financial industry grew very fast. We had only about 4 trillion yuan in financial assets in 1990. The figure has exceeded 370 trillion, and bancassurance accounts for the majority. Especially over the last 30 years, the industry has developed very fast at a fantastic speed. Despite some problems, we have not had a full-blown financial crisis, thanks to the system of socialism with Chinese characteristics, the strong leadership of the Communist Party of China, and the China program and the Chinese system in the financial sector. When it comes to endowment insurance, commercial old-age insurance, medical insurance, and health insurance develop very fast. Compared with European and American countries, however, the development of our insurance and banking sector still lags behind. Our total banking assets rank first in the world, surpassing Europe and the United States, and our insurance volume ranks second in the world. However, the depth and density of our insurance are below the world average level, especially the level of developed countries. We have worked hard to develop endowment insurance. You mentioned the three pillars of endowment insurance: basic old-age insurance, corporate annuities as supplementary insurance, and commercial old-age insurance as the third pillar insurance.

In comparison, the third pillar of insurance lags behind the other two pillars and calls for a boost. Since last year, we have taken some measures and made headway, but we can't be too hasty because we have to guard against risks. In this regard, we proceed with the policy laid down by the financial commission of the State Council -- "Jogging with short steps and making gradual progress." Mr. Bai Tao, take the floor, please.

Bai Tao:

Thank you, Mr. Guo. Thank you for your questions. Social security concerns thousands of households, the interests and the well-being of every people, and the long-term stability of our country. The insurance industry can function as a "shock absorber" for the economy and a "stabilizer" for society. We have always stuck to the nature of insurance to protect from financial loss, which is an essential requirement set forth by the CPC Central Committee and the State Council. We have participated in developing the social security system in a comprehensive and multilevel way and tried to build an excellent social security net for the better lives of the people.

The life insurer owned by China Life Insurance (Group) Company is a triple-listed company, and its life insurance products and services cover the whole life cycle of people, including medical support, healthcare, elderly care, education, accidents, and so on. The property insurer's support services against risks cover urban and rural regions, companies and individuals, as well as all fields such as property safety and accident prevention. Our life and property insurance have provided nearly 540 trillion yuan of protection against risks for the whole society, offering services for over 800 million clients. We have given full play to the company's advantages, such as its specialized services, widespread networks, technological capacity, and professional personnel. One of the most important strengths of the company is its huge sales network, and we have made full use of the advantages in these aspects and provided efficient services for social security. For example, in terms of critical illness insurance, we have carried out more than 210 projects and offered services for some 350 million urban and rural residents. We also established "one-stop" connections with over 30,000 hospitals so as to gradually resolve the difficulty of payment settlement for medical treatment incurred outside the provincial-level administrative area where the patient's medical insurance is registered. In addition, for supplementary medical insurance, we have offered services for over 91 million clients so far.

Regarding the "third pillar" of China's pension system you just said, Mr. Guo also mentioned that there is a relatively big gap on this issue between China and Western countries. I'll add more information in this regard. In terms of the development of the "first pillar," we have given full play to our role as China's biggest pension insurance company and provided nearly 30 billion yuan of services to social security funds. In terms of the "second pillar," China Life has made full use of its function as a professional pension insurance company, providing management services for occupational pension in 32 coordination regions and providing services for nearly 30,000 companies for company annuity. Currently, the total amount of company annuity and occupational pension that are managed by us amounted to 1.2 trillion yuan, and we have been working to maintain and increase the value of pension funds for clients. As for the "third pillar," we proactively rolled out long-term care insurance for over 23 million people. I'll add another piece of information. Our life insurer has undertaken over 52 million pieces of insurance business that are associated with elderly care, and the total amount of reserve has reached 1.7 trillion yuan, which can provide fund reserve for pensions of our clients.

In addition, another aspect that draws wide attention is our contribution to the improvement of the health support system. We have fully leveraged insurance funds’ character of the long cyclical period, set up a "Grand Pension Fund," and invested in a group of elderly care institutions in South, North, East, and Southwest China. Currently, these institutions started to operate and provide multi-layered elderly care services in retirement homes, communities as well as the homes of the elderly themselves. Besides, based on the need of the health management, we established a "Grand Health Fund" and invested in over 40 companies. We have integrated service resources concerning health care, medicines, and those in hospitals, and provided health management services for our clients.

In conclusion, China Life will continue carrying out the decisions and deployments being made by the CPC Central Committee and the State Council, comprehensively strengthen capacity building, and further give full play to the role of insurance as a "shock absorber" for the national economy and a "stabilizer" for society. We will also make all efforts to develop a social security system that ensures people's basic needs and is inclusive and diversified so as to make the CPC Central Committee be assured and people satisfied. Thank you.

Bloomberg:

I have two questions. Many European countries have rolled out measures to sanction Russia recently. How will this affect China's financial institutions? Will China follow suit with similar financial sanctions against Russian banks? Secondly, can you update some of the latest progress of the rectification of Ant Group and other fin-tech platforms? What are the next steps? Thank you.

Guo Shuqing:

Regarding your first question, we have paid great attention to the recent armed conflict, or war, between Russia and Ukraine. The Ministry of Foreign Affairs has fully explained China's take on the issue, and our international policies remain consistent. We don't support financial sanctions, especially those proposed unilaterally. This is because such sanctions do not have good effects or much legal basis. We won't join such sanctions and will continue the normal economic, trading, and financial activities with relevant parties. As for how these sanctions will affect China's economy and finance, the impact so far is not clear, and the situation requires further observation. Nevertheless, we believe that, in general, there will not be much impact in the future, for our economy and finance are fairly steady and resilient.

In terms of the second question, not long ago, a special report was released to introduce the situation regarding the rectification of 14 internet platforms that are associated with financial businesses, such as Ant Group. Led by the People's Bank of China, three government bodies, including the CBIRC, the China Securities Regulatory Commission and the State Administration of Foreign Exchange have launched the rectification work since 2020. The rectification has been going well in general. The financial business offered by these platforms is innovative to a certain extent and was not supervised in the past. It takes some time to bring them under supervision. There are many problems during the rectification process, such as how the enterprises and administrative departments identify or certify these products, personal data and privacy protection, and the safeguard of business information and trade secrets, to name a few. These problems concern various aspects and are very complicated, but in general, we are confident in our ability to implement the rectification work well. 

Yicai:

I have a question for Mr. Guo, and this is also a hot issue for many stock investors. In recent years, the stock price of large-scale banks has remained comparatively low, and they have a low price-to-book (P/B) ratio. What do you think of this issue? Will there be any measure taken next to make the stock price of these banks truly reflect its value? Thank you.

Guo Shuqing:

I'd like to invite Mr. Tian Guoli, chairman of the CCB, to take your questions. The CCB is the first among China's four big banks to be listed, and it has done a lot of research and analysis on this issue. Mr. Tian will have the floor.

Tian Guoli:

Thank you for your questions. This issue has attracted many stock investors' attention. To put it precisely, since the subprime mortgage crisis in 2008, investors have been holding a less favorable opinion of the business models of traditional commercial banks. Glories of the past no longer exist, and their P/B ratio dropped from over 2 to less than 1. Under this situation, China and the rest of the world have been closely connected, and to a certain extent, finance has become a business that knows no borders. As for the actual market value of Chinese-funded banks, their average P/B ratio of A-share basically stands at 0.66, and that of H-share is 0.47, higher than Japan's 0.44 and lower than Europe's 0.72 and 1.42 of the U.S. Therefore, what I want to say is that this is actually a problem of how stock investors view traditional finance. For the investment itself, I think this is still lucrative. Take CCB, for example. Since it was listed in 2005, CCB has paid more than 900 billion yuan in dividends. In 2019 and 2016, the dividend yield of A-share reached 4.48% and 5.05%, and that of H-share hit 5.66% and 6.09%. Large-scale banks are not suitable for short-term investment. However, in the long run, our dividend yield has far exceeded that of other financial products, meanwhile, shareholders can have the opportunity to make a profit after holding our stocks. As for the issue of stock price, we still need to keep working on the matter. Despite our weaknesses, there are also aspects of our work that the public is not familiar with. For example, CCB has been working to promote new finance. In fact, CCB has transformed. Using an Internet-based thinking model, we have set up 520,000 inclusive financing facilities in about 80% to 90% of villages across China in a bid to provide financing services for rural residents. We have completely applied new platforms and internet-based logic, and our services have covered almost all villages. The future market potential is huge.

The CCB also excels in fintech. Now, CCB's fintech not only provides system construction for CCB itself but also offers support in system construction for its peers. It is increasingly market-oriented. Now, it is delivering results. I hope that people will pay attention to these new moves by CCB. I believe that, with the help of a positive outlook, this will bring a handsome income to the shareholders. Thank you.

Cover News:

According to data released by the CBIRC, China's shadow banking sector shrank by 4.2 trillion yuan last year. What is the current size of shadow banks? What new measures will the CBIRC take to continue dismantling shadow banks? Thank you.

Guo Shuqing:

Shadow banking was once a serious financial risk for China, which peaked in 2016. Around 25 trillion yuan's worth of risky shadow banks were dismantled in the past five years, but there is still about 29 trillion yuan. The so-called risky shadow banks actually provide loan products, which were also referred to as "quasi-credit" products by industry insiders. There are also other financial products, such as entrusted loans and WMPs, that are not strictly regulated as bank credit. Overall, these risks are completely manageable. In the future, related risks will be gradually resolved from high to low. Take P2P, for example. During the peak period, the transaction volume of P2P reached 2 to 3 trillion yuan each year. Now, the total funds of lenders that have not yet been repaid only stand at over 490 billion yuan. The risk of shadow banks has been greatly reduced.

Of course, as a supervisory department, we will never cease being vigilant because, with the development of the scientific, technological, economic, and financial sectors, there are still many fake "new financial products" and "innovative products." Many are deceptive, even fraudulent products with great risk. So, the CBIRC and all sectors of society should all remain on high alert. Thank you.

The Paper:

According to a meeting of the Political Bureau of the Communist Party of China Central Committee held on Feb. 25, supervision of leading officials and leading groups in the financial sector should be strengthened, and efforts will be made to tackle typical problems such as violations of the central Party leadership's eight-point decision on improving work conduct and the "revolving door." For the CBIRC, what will be done in this regard? Thank you.

Guo Shuqing:

Thanks for your question. All of us here are heads of financial intuitions. The eighth round of disciplinary inspection launched by the CPC Central Committee uncovered various problems in more than 20 institutions in the financial sector, some of which are very serious and need our close attention. I believe that the whole of society is also highly concerned. We will rectify these mistakes in a serious manner, especially violations of the central Party leadership's eight-point decision on improving work conduct that are intolerable. It has been nearly 10n years since the eight-point decision was put forward after the 18th National Congress in 2012. It is very wrong to make such mistakes, and we must resolutely correct them.

You mentioned the "revolving door" problem. There are officials who have left their posts in financial watchdogs, such as in PBOC, CBIRC, CSRC, and SAFE, and then take up jobs in the financial sector or with companies. The key is that there needs to be a clear system to regulate it. We need to watch out as to whether there are direct connections between their two jobs and figure out their specific original and current posts, whether their original government job will make them have improper influence or generate illegitimate benefits for the current job, and whether they have any wrongdoing during their term in the government. We need to investigate and regulate. Earlier, we made some regulations. A former CBIRC employee cannot directly work in an institution that has been regulated by him or has close relations with him. There is a cooling-off period and waiting period after the confidentiality agreement expires. We believe that the system will be more standardized and more rigorous in the future to solve this problem. Thank you.

CRNTT:

It has been three years since the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) was issued. Does the financial sector have any new explorations and breakthroughs in supporting the development of the GBA? Thank you.

Guo Shuqing:

We have been exploring. Mr. Wang is working in Hong Kong; he knows better than us. Mr. Wang, please.

Wang Sidong:

Thank you, Mr. Guo, and this journalist. The construction of the GBA is a major national strategy planned, deployed, and promoted by General Secretary Xi Jinping, and has achieved remarkable results in recent years. The GBA has strong economic vitality and a developed insurance market. There are more than 160 insurance companies in Hong Kong. The depth and density of insurance in Hong Kong rank second in the world. Last year's data has not yet been released. In 2020, Hong Kong's total gross premiums were HK$581.3 billion. There are 25 insurance companies in Macao, and its premium income in 2020 was 26.3 billion patacas. Guangdong is a province that generates huge insurance on the Chinese mainland. Last year, its premium income was 558 billion yuan, accounting for 12.4% of the national market. In May last year, the PBOC and other three ministries and commissions issued a financial support guideline for the development of the GBA, which greatly promoted the interconnection of financial markets and financial infrastructures in the GBA. In September last year, Mr. Guo conducted in-depth research of the GBA and put forward requirements and hopes for the high-quality development of the insurance industry in the GBA. China Taiping is headquartered in Hong Kong. Its headquarters, nine major subsidiaries, and 172 branches are located in the GBA. In 2021, its premiums in the GBA accounted for 23% of the group's total premiums. The GBA has become a strategic highland for the high-quality development of China Taiping.  

In 2019, we took the lead in publishing a white paper on China Taiping's participation in the development of the GBA in Hong Kong. With a focus on serving the GBA, we innovated insurance products to promote the interconnection of residents in the GBA and ensure people's livelihoods in Hong Kong and Macao. For example, we innovatively launched cross-border auto insurance for crossing the Hong Kong-Zhuhai-Macao Bridge and established a three-region integrated insurance and compensation mechanism for Guangdong, Hong Kong, and Macao, enabling policyholders to buy insurance of the three places in either of them. In addition, we have also launched exclusive critical illness insurance in the GBA, as well as cross-border medical insurance to provide insurance services for residents of the GBA. In addition, we have cooperated with the Macao SAR government to establish a catastrophe insurance system to provide catastrophe insurance services for small and medium-sized enterprises in Macao.

We also give play to the advantages of the long-term investment of insurance funds to provide financial support for the GBA construction. For example, we launched a HK$10-billion-worth Greater Bay Area Homeland Development Fund together with China Merchants Group, and China Resources Group. We established a 6.5-billion-yuan equity fund of China Taiping Medical Health Industry in Shenzhen at the end of last year. The current investment projects totaled about 50 billion yuan in the area. Last December, we also launched the first high-quality development forum on the insurance industry in the GBA, promoting the international exchanges on the insurance industry in the area.

During the 14th Five-Year-Plan period, we will continue our focus on Hong Kong and Macao and invest in development of the GBA. A three-year action plan was formulated to serve the GBA. We hope to reflect the effects of the insurance industry's services for the construction through implementing the specific projects there. First, pressing ahead with the policies of allowing "Macao vehicles travelling to Guangdong" and "Hong Kong vehicles travelling to Guangdong;" second, cooperating with regulatory departments to conduct cross-border insurance connections; third, participating in and boosting the construction of cross-border insurance service centers. In addition, we will also set up elderly care communities in the GBA and build medical and health scientific industrial park zones of China Taiping. Furthermore, we will actively intensify the function of international risk management centers in Hong Kong and participate in the development of the Northern Metropolis Development Strategy of Hong Kong and set up the Taiping-Hong Kong insurance and scientific innovation fund. Furthermore, we have recently discussed with the Macao Special Administrative Region government the coordinated operation of the Guangdong-Macao Traditional Chinese Medicine Science and Technology Industrial Park in Hengqin.

In addition, we will introduce more global quality resources to the GBA. Last year, we made meaningful attempts, which actively promoted the Belt and Road Initiative, dual circulation, and better the mechanism for Hong Kong and Macao to integrate into our overall development plan. So we are full of confidence in pursuing high-quality development there. Thank you!

CNBC: 

I have two questions. First, what is the difference between the fund-raising demand of micro, small and medium-sized enterprises (MSMEs) this year and previous years? What are your considerations? Second, what are CBIRC's considerations and opportunities for foreign investment in the virtuous circle and high-quality development of economy and finance?

Guo Shuqing:

Due to time constraints, let me give you a brief answer. We all know that the financing of MSMEs is a global issue while it was well resolved in China. When talking about the 120 million enterprises, we can see that most of them are micro and small enterprises or self-employed individuals. Data from the Ministry of Industry and Information Technology, All-China Federation of Industry and Commerce as well as Association of Small and Medium Enterprises showed that small and micro-enterprises accounted for about 30% in all those got bank loans. At the same time, some figures are higher or lower. In general, approximately 30% of the market entities can get bank loans, which is an outstanding achievement. However, we are not satisfied with this. We will continue to make good use of such means as science, technology, and digitization to better cultivate a customer-centered culture, provide good services, and mitigate difficulties enterprises face in accessing affordable financing.

Regarding the issue of foreign investment, our opening-up policies remain consistent. Since the 19th CPC National Congress, the CBIRC has adopted more than 50 opening-up policies and measures in financial sector. Among them, 34 are targeting the banking and insurance industries, with some being made into regulations. Related laws were amended accordingly and were put into practice. Though some were still under revision, generally, all these policies were carried out. As a result, more and more institutions approved by us started their operation here, such as the foreign-owned insurance companies, foreign shareholding banks, and wealth management companies, among which are internationally renowned institutions. Thank you!

Shou Xiaoli:

We can only take two more questions due to time constraints.

21st Century Business Herald:

Regarding the reforms of the provincial rural credit unions, we know that the Zhejiang Rural Credit Union has been transformed into Zhejiang Rural Commercial Union Bank. What progress has been made in other provinces? Is there any difference in the direction of reforms? Thank you.

Guo Shuqing:

The direction of reforms is the same: establishing a modern enterprise financial system. This applies to small and medium-sized banks, rural credit cooperatives, and provincial- and county-level credit unions. The specific organizational forms may vary from province to province. Some may choose to invest in its member institutions and becomes their largest shareholder, such as the case of the Zhejiang Rural Commercial Union Bank. With provinces each worked out their own plan, the CBIRC is working to guide and improve on them. We noted that some provinces proposed a double-layer structure – provincial holding company holds stakes in county-level credit unions. There are also plans of a three-tier structure and a type featuring several agricultural and commercial banks and business segments in a single province. In addition, a very small number of provincial rural credit unions were small. They were reformed into two or three rural commercial banks and rural credit cooperatives.

In a word, the forms are various. But there is a common requirement that local CPC committees and governments strengthen their management in this regard. We have made the policies clear: We will respect opinions from the locals while strengthening the Party's overall leadership; we will proceed from reality and strengthen the requirements for professional personnel; a professional manager market will be established to let professional people do professional things; and basic qualifications will be required for the management teams. What's more, we will regulate the corporate governance system strictly according to the law. The system should consist of shareholders' meetings, boards of directors, boards of supervisors, and senior management. And more importantly, we need to learn from the past and conduct a strict review on the shareholders to avoid practices such as one shareholder acquiring a controlling stake, misappropriation of funds through related-party transactions, or directly using bank funds and insurance premiums to increase leverage. In a word, the reform of rural credit cooperatives is progressing well, and yet we still need more time. Thank you.

China News Service:

In recent years, there have been two phenomena taking place. On the one hand, excessive credit funds have flowed from banks into "big clients," including big cities, big enterprises, big projects, and some specific sectors. In contrast, credit to private enterprises and small and microbusinesses have been squeezed. But on the other hand, banks have made a big push to provide targeted inclusive loans to small and micro businesses, increasing the risk of non-performing loans and squeezing profits, which influenced shareholder's returns. I would like to know Mr. Guo's point of view regarding these two phenomena. Thank you.

Guo Shuqing:

There is indeed a big problem in banking services of excessive credit funds flowing into "big clients," especially into the real estate sector. We are now reflecting carefully on the problem and summing up experience and lessons. I think my colleagues here also know this too well. Both banks and insurance companies have suffered severe losses due to investments in high-risk enterprises and conglomerates. That's why we should improve our work in this regard.

On the other hand, while big banks and financial institutions were prompted to make their services accessible to small and micro businesses, they have begun to compete with local medium and small banks and financial institutions and squeeze their living space. Through our field trips to different places, we have heard a lot of complaints from rural credit cooperatives, rural commercial banks, and village banks, saying that the ICBC went too far by grabbing clients from them. And the CCB did this, too. Some small insurance companies also blamed big insurance companies, such as China Life and China Taiping. There were various complaints in this regard. Mr. Tian just said that the CCB had agents at more than 500,000 villages. With an iPad and a commission of 1,000 to 2,000 yuan, these agents can provide villagers with essential financial services, including depositing or withdrawing money and transaction services. So we have seen that competition is very stiff. With the development of digitalization, big banks also face the pressure to survive. The number of physical bank outlets nationwide has declined for three consecutive years. In the future, the whole banking system and its business models will embrace profound changes, and so will the insurance industry. Therefore, all we can do is to earnestly study the situations, follow the prevailing trend, keep abreast of the times, constantly promote supply-side structural reforms and improve the structures of banks and insurance companies. Thank you.

Tian Guoli:

I would like to add something here. The inclusive loans provided by the CCB are less than 800,000 yuan on average, compared to over 2 million yuan of loans provided by medium, small and micro banks. There used to be no financial services targeting clients of loans less than 800,000 yuan. Why did I stress "New Finance?" In fact, both the physical outlets and traditional services of the CCB are now declining. Recently, it was reported in Shanghai that people from across the country can now receive services such as issuing certificates and licenses at the CCB's Shanghai outlets without the hassle of travelling back to their hometowns. Another point is that people don't know much about the share price of the CCB. That may result from our lack of publicity and communication with our friends from the media. Here, I ask you a favor to help popularize the relevant information. 

Shou Xiaoli:

Thank you, Mr. Guo. And thanks to our speakers as well as friends from the press for joining us. Your hard work is greatly appreciated. That's all for today's press conference. Goodbye.

Translated and edited by Zhang Rui, Huang Shan, Mi Xingang, Wang Wei, He Shan, Liu Sitong, Zhu Bochen, Wang Yanfang, Zhang Tingting, Li Huiru, He Shan, Li Xiao, Wang Qian, Zhang Liying, Yuan Fang, Gong Yingchun, Yang Xi, 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.

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Read in Chinese

Speakers:

Wang Wentao, minister of commerce

Wang Shouwen, vice minister of commerce and deputy China international trade representative

Sheng Qiuping, assistant minister of commerce

Chairperson:

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

Date: 

March 1, 2022

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to be joined by Mr. Wang Wentao, minister of commerce, who will introduce China's efforts to pursue stable and high-quality commerce development, and answer your questions. Also present at the press conference today are Mr. Wang Shouwen, vice minister of commerce and deputy China international trade representative, and Mr. Sheng Qiuping, assistant minister of commerce. 

Now, I will give the floor to Mr. Wang Wentao.

Wang Wentao:

Thank you, Ms. Xing. Ladies and gentlemen, friends from the media, I am glad to meet you here, and thank you for your constant interest and support regarding China's commerce development. 2021 was a landmark year in the history of our Party and our country. Faced with the complex domestic and international situation, as well as multiple risks and challenges, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, we focused on the overarching task of fostering a new development paradigm and performed the important role of commerce development in three aspects. I would like to explain the three aspects. First, commerce development is an important part of the domestic economy; second, commerce development is an important juncture connecting domestic and international markets; and third, commerce development is important to the new development paradigm. Last year, China's commerce development remained stable and exceeded expectations. Specifically, domestic consumption continued its steady recovery, and foreign trade became a highlight of economic growth, hitting a record high in terms of both volume and international market share. Utilized foreign investment grew rapidly, outbound investment remained stable, and multilateral and bilateral economic and trade cooperation achieved new breakthroughs.

This year, we will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the guiding principles of the 19th CPC National Congress and plenary sessions of the 19th CPC Central Committee, carry out the decisions of the recent Central Economic Work Conference, pursue progress while ensuring stability, perform the important role of commerce development in three aspects, firmly implement the strategy of boosting domestic demand, promote continued consumption recovery, stabilize the overall performance of foreign trade and foreign investment, open wider to a high standard, make every effort to maintain steady commerce development, and greet the convening of the 20th CPC National Congress with concrete actions.

Next, my colleagues and I would like to answer your questions. Thank you.

Xing Huina:

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

CCTV:

Consumption is the main driving force behind economic growth. Maintaining the stability of consumption is essential to keeping the fundamentals of the economy stable. Currently, sporadic COVID-19 cases have put great pressure on consumption recovery. How do you view the present consumption situation? What measures will be taken to promote the steady recovery of consumption? Thank you.

Wang Wentao:

Thank you for your questions. As we know, consumption is the main force driving economic growth and directly reflects people's demands for a better life. As I mentioned, last year, consumption continued its steady recovery, with total annual retail sales of consumer goods rising 12.5%. In particular, the online retail sales of goods accounted for 24.5% of the total. In addition, as you may have experienced in your daily life, smart, green and health consumption all grew rapidly. Consumption returned to its place as the primary driving force behind economic growth.

However, we also noticed that there have been some problems with consumption since the fourth quarter last year. Downward pressure mounted, with the growth of consumer goods retail sales registering 4.9%, 3.9% and 1.7% in October, November and December, respectively. In general, we feel that the downward pressure on consumption is huge and we face challenges in keeping consumption stable. We will fully enforce the decisions of the CPC Central Committee and the State Council, firmly implement the strategy of boosting domestic demand, balance COVID-19 measures and consumption promotion, make every effort to advance continuous consumption recovery and upgrading, and enhance the role of consumption in economic growth. Going forward, we will do the following:

First, we will fully implement policies that boost the vitality of consumption market entities. Consumption in areas especially related to people's everyday lives and involving gatherings, such as catering, accommodation and retail, has been particularly affected by the pandemic, and these sectors have faced greater difficulties. In particular, small- and medium-sized enterprises (SMEs) face great pressure on their survival. In line with the decisions of the State Council, 14 ministries jointly introduced policies to support the recovery and development of the service industry. We have released strong, targeted bail-out policies for these businesses, especially micro, small and medium-sized enterprises (MSMEs).

Second, we will come up with innovative ideas and approaches to help consumption promotion activities achieve greater success. Last year, commerce departments at all levels organized a series of activities to promote consumption, such as the national consumption promotion month, the online shopping festival for the Chinese New Year, online shopping promotions to boost brand and quality consumption, and time-honored brand carnivals. According to our evaluation, these activities played a positive role in promoting consumption. This year, provided that the prevention and control protocols are duly observed, we will summarize the experience and continue organizing consumption promotion activities. For example, tonight we will hold the launch ceremony for the "Consumption Promotion Month 2022." In the coming period, we will hold various consumption promotion activities integrating online and offline channels, such as consumer goods expos, automobile fairs, and household consumption seasons, to keep the consumption of essential goods stable. We will also organize ice and snow-themed consumption promotion activities as the enthusiasm for winter sports is high thanks to the 2022 Beijing Winter Olympics.

Third, we will continue to serve for a better life and create a consumption upgrade platform. In terms of cities, last year, we set the target of developing five international consumption center cities. After a one-year cultivation, we will summarize and improve. Meanwhile, we will continue to promote the high-quality development of pedestrian streets, build demonstration smart business districts and smart stores, and accelerate the construction of 15-minute radius community circle to facilitate people's life. We will also encourage the development of new business forms and models and new scenarios. Last year, I also mentioned that innovations had been made in many places, where featured streets, internet-famous sites, amid other sites, were built. We will support the development of "first-store economy" and "debut economy" in regions where conditions permit, promote new types of consumption such as customization, experience, intelligence, and fashion consumption, and develop green and healthy consumption to better meet people's aspirations for a better life. Thank you. 

The Paper: 

Building a globally oriented network of high-standard free trade zone is an important measure to align with the high-standard international economic and trade rules and promote institutional opening-up. What is the latest progress made by China in implementing the free trade zone upgrading strategy and building a high-standard free trade zone network? What will be the next step to upgrade the building of free trade zones? Thank you. 

Wang Wentao:

Thank you for your questions, and I will answer these questions as well. Your questions involve two aspects: One is about progress, and the other is how to improve next. 

First, through nearly 20 years of efforts, we have made more friends in the field of free trade, and the content of free trade agreements is increasingly rich in substance, and the level has also improved. A globally oriented network of high-standard free trade zones, which is based on the surrounding areas and stimulates the development of Belt and Road countries, is emerging. According to statistics, we have signed 19 free trade agreements with 26 countries and regions, and our trade partners cover Asia, Oceania, Latin America, Europe, and Africa. Our trade volume with free trade zone partners accounts for about 35% of our total trade. In particular, the Regional Comprehensive Economic Partnership (RCEP) took effect on Jan. 1 this year, which drew close attention. It means that the world's most populous free trade zone with the largest economic and trade scale has been officially launched. We also took this opportunity and worked with five other departments to issue guidelines to promote high-quality RCEP implementation, and launched targeted training programs to improve capabilities of enterprises in making use of the RCEP. I also take this opportunity to call for all regions, departments, especially departments in charge of commerce, and some institutions, to help enterprises strengthen training in this regard and help them learn more about the content of RCEP. Meanwhile, we call for enterprises to search online, and relevant information is available on our website. If they still have questions, they can call us or email us, or contact departments in charge of commerce at all levels, including the MOFCOM. We are willing to help enterprises learn more about the agreement and help them make use of the clauses as soon as possible to inject new vitality into their development. As partners of the RCEP gradually cut their tariffs, I hope that enterprises pay attention to clauses on cumulation in the section of the rules of origin. Dividends of the RCEP will be released gradually, and they will get more real money benefits.

The second question is about how to improve next. We will resolutely implement the decisions of the CPC Central Committee and the State Council, and focus on expanding the coverage and improving the quality and efficiency, implement the strategy of upgrading free trade zones, promote better integration of the domestic and international markets and greater complementarity between domestic and global resources to provide institutional guarantee for higher-level opening up and serve the establishment of the new development paradigm. Last year, we formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), which shows our determination and confidence in deepening reforms and opening up and genuine interest in enhancing global cooperation in the digital economy and promoting innovation and sustainable development. China has contacted, communicated, and negotiated with members of the two agreements. We have also taken the initiative to align ourselves with high-standard international economic and trade rules, comprehensively deepen reforms and accelerate institutional opening up.

Meanwhile, we are also working on free trade agreement negotiations, including China-Gulf Cooperation Council (GCC), China-Ecuador, China-Israel, China-Norway and China-Japan-ROK free trade agreements, and have actively promoted the upgrade of free trade agreements, such as the 3.0 version of China-ASEAN (Association of Southeast Asian Nations) free trade agreement. We are also willing to hold discussions with other economies and countries to explore the signing of free trade agreements. We have actively participated in negotiations on new rules of digital economy, environmental protection and other fields to jointly promote regional economic integration and the liberalization and facilitation of trade and investment. Thank you. 

Nikkei:

What progress has there been since China applied to join the CPTPP last September? Some member countries believe that China needs to solve many problems, including issues related to state-owned enterprises, electronic data, and government procurement, in order to join the CPTPP. Could you introduce the specifics as to how the Ministry of Commerce (MOFCOM) negotiates those problems with the CPTPP members? Thank you. 

Wang Shouwen:

Thank you for your questions. China formally applied to join the CPTPP last September, which has drawn great attention from the international community and given rise to positive repercussions in China and abroad. We all believe that China's application for joining the CPTPP is an important opening-up measure in the new era. Before formally applying to join the CPTPP, we conducted full, comprehensive, and in-depth analysis, research, and evaluation of the CPTPP clauses. Based on CPTPP regulations, we sorted out our laws, regulations and reform measures that need to be improved or modified. At present, we are communicating and negotiating with the relevant members in accordance with CPTPP accession procedures.

It is acknowledged that the CPTPP is a high-standard international economic and trade agreement. What I want to point out, in particular, is that the high standard is in line with China's path to deepen reform and expand opening-up. We are also willing to attain the standard of the CPTPP in all respects through actively deepening reform and expanding opening-up. Mr. Wang just mentioned that China has signed many free trade agreements. To join the CPTPP, the efforts to relax market access will be stronger than the existing agreements and practices we have made before. The efforts are conducive to continuing the opening-up and deepening reform and to the high-quality development. At the same time, it will be helpful for the 11 member states of the CPTPP to expand further their market access to the second-largest economy in the world and promote their cooperation with China in goods and services trade, investment, and other sectors.

You mentioned that there are problems. Indeed, the CPTPP covers many sectors, and some of the articles are more complicated and sensitive. However, we believe that the CPTPP is in line with China's general direction of opening-up and reform. For example, the CPTPP rules require state-owned enterprises (SOEs) to compete fairly with other types of companies, which is the core requirement concerning SOEs. This is also in line with the direction of the market-oriented reform of SOEs we pushed for. As independent market entities, SOEs in China operate their business on a commercial basis. They compete fairly with private enterprises and foreign-invested enterprises. And their operations are in line with the market-oriented and law-based principles. Therefore, China is now qualified to fulfill its duties concerning the requirements for SOEs.

You also mentioned the rules and regulations on e-commerce. Pertinent regulations and rules on e-commerce within the CPTPP are quite strict, which are in line with China's efforts in recent years, such as participating in international cooperation on the digital economy, and continuing to optimize the digital business environment. In recent years, it is known that China has adopted three laws: the Data Security Law, the Cybersecurity Law, and the Personal Information Protection Law. Currently, related departments are mulling over supporting rules and regulations, or implementation guidelines, that are related to the three laws. In addition to working on the supporting rules and regulations, we will also consider the standards of the CPTPP, working to meet the requirements of it. Therefore, in terms of all the issues and articles of CPTPP, we are preparing to discuss and negotiate with related member states in detail. President Xi Jinping announced that China would work actively for joining the CPTPP. We are willing to make concert efforts with all parties to further regional trade and economic integration and contribute to regional economic development and global economic recovery. Thank you.

CGTN: 

We know that in 2021, China's foreign trade grew 21.4% to 39.1 trillion yuan. There are reports saying that due to such a high base, China will face greater pressure and challenges in stabilizing foreign trade this year. So, what's your take on that? In addition, would you like to introduce the measures taken by the Ministry of Commerce to ease difficulties for export companies? What are the arrangements for stabilizing industrial chain and supply chain? Thanks. 

Wang Wentao:

Thank you for your questions. I'd like to answer your questions. Your questions are mainly about how to see and how to do.

About how to see, you mentioned that China's foreign trade grew by 21.4% to 39.1 trillion yuan last year, which is in yuan terms. While in U.S. dollar terms, China's foreign trade move up another notch to $6.05 trillion, exceeding $5 and $6 trillion consecutively, with a growth rate of 30%, the highest number since 2010. Net exports of goods and services contributed 20.9% to the economic growth. In the first three quarters of last year, in U.S. dollar terms, the share of China's foreign trade in the global market hit a record high. It reached 15%, the highest since 1958 as a single economy in the world, which injected new impetus to world economic recovery and development. The strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core has been fundamental to the hard-won achievements we made last year. And such achievements could not have been made without the consistent hard work of China's export companies.

You just mentioned that certain reports questioned how China will do this year on such a high base. I believe that not only reports, our research also showed that we will face huge pressures this year, and the situation is quite complicated and serious. The Central Conference on Economic Work pointed out the threefold pressure faced by the Chinese economy in 2022, namely the contraction of demand, supply shocks, and weaker expectations. In terms of demand contraction, repeated resurgences of the COVID-19 pandemic still exist around the world, the global recovery is somewhat shaky, and foreign demands remain uncertain. Certain international organizations, such as IMF and World Bank, have downgraded the global economic growth forecast of 2022. The latest report from WTO signaled a cooling of merchandise trade growth. In terms of supply shocks, we have seen that the supply of raw materials and bulk commodities is still not back on track. In other words, the bottlenecks in the supply chain are still not addressed, which we estimate is also hard to be eased in the short term. In terms of weaker expectations, export companies are still beset by shortages of containers and labor. And the price of raw materials and shipping costs are still relatively high. According to our surveys, in particular, the earning performance of some small and medium-sized export companies is not optimistic, which also shakes their confidence to receive orders.

In addition, some short-term factors influencing the export faded away. We also analyzed that. Last year, China's foreign trade registered a high growth rate attributable to certain short-term factors. For example, more orders were received at home instead of overseas. Factors also include exporting epidemic prevention supplies and the "stay-at-home economy." With such factors fading away, China will face more significant challenges in stabilizing foreign trade this year. Also, you mentioned the high base in your question. China's foreign trade grew by 30% last year, in U.S. dollars terms. The pressure to expand the growth is quite considerable on such a high base. 

In the face of these difficulties and challenges, we have stepped up efforts to implement policies in accordance with the plans of the CPC Central Committee and the State Council, and rolled out multiple measures to stabilize the foreign trade, including special actions of adopting cross-cyclical adjustment measures, diversifying market, ensuring smooth operation of the supply chains for foreign trade, and promoting innovative and high-quality foreign trade. In the first two months, the foreign trade has basically maintained stable, a stable start of the year. We are confident to accomplish the targets and tasks for the whole year and keep the fundamentals of foreign trade and foreign investment stable. Our efforts will focus on the following three aspects:

First, we will implement policies and prepare for policy options for stabilizing foreign trade. We will work with all local governments and departments to implement the Opinions on Further Stabilizing Foreign Trade by Adopting Cross-Cyclical Adjustment Measures released by the State Council at the end of last year. We will fully implement the policies on tax and fee cuts, make full use of measures on finance and insurance to benefit businesses, and make meticulous efforts to adopt measures on facilitating trade in order to help businesses, especially micro, small and medium businesses, secure orders, stabilize market expectations, and expand market. Meanwhile, we will keep a close eye on external demand and foreign trade and enhance monitoring and early warnings for policy options.

Second, we will guarantee the stability and smooth operation of the industrial and supply chains for foreign trade. Due to the impact of the pandemic and regional conflicts, the flow of people and port operations are still impeded, the problems of barriers and disruption in the global industrial and supply chains remain prominent whilst some new problems emerge. We will promote the transformation and upgrading of foreign trade bases, support the steady development of processing trade, foster a new batch of the on-site processing on a pilot basis from trade between border residents, further promote the integration of domestic and foreign trade, and foster trade enterprises fitting in with China's dual circulation development paradigm, where domestic and overseas markets reinforce each other. We will also strengthen international cooperation to facilitate international logistics and settlement, improve the level of trade facilitation, and promote upstream and downstream coordination of industrial and supply chains

Third, we will continue to promote innovative development of foreign trade. In order to promote the steady and high-quality development of foreign trade, enhance its comprehensive competitiveness, we need to give higher priority to innovative development. Last month, the State Council approved the establishment of 27 new comprehensive pilot zones for cross-border e-commerce. Today, the new list of imported goods for cross-border e-commerce retails has been officially implemented. The goods on the list have been further increased with categories expanded. Meanwhile, we will strength our support for the development of overseas warehouses, build and improve overseas warehouse networks, promote the construction of overseas intelligent logistics platforms, cultivate a number of offshore trading centers in cities (regions), develop and expand new forms and models of foreign trade, and promote the development of trade at a higher level and with higher quality. We will also develop demonstration zones for the innovative development of trade in services, create a number of digital pilot zones for global trade, and develop green trade. Thank you.

Southern Metropolis Daily: 

The Belt and Road Initiative (BRI) is making continuous progress. What new plans will the MOFCOM make this year to promote the initiative in order to foster a new pattern of development? Thank you.

Sheng Qiuping:

Thank you for your question. In the past eight years since the BRI was introduced, China has worked with those countries concerned to uphold the principle of extensive consultation, joint contribution, and shared benefits, and made substantial progress in promoting hard connectivity, soft connectivity, and connectivity of the heart. So far, the BRI has become an international public goods as well as a platform for international cooperation, winning more friends.

Last year, thanks to the joint efforts of all parties, economic and trade cooperation under the BRI continued to deepen and deliver tangible results by overcoming the pandemic and other difficulties, injecting new momentum into global opening-up and cooperation as well as world economic recovery. China's trade with countries along the Belt and Road reached $1.8 trillion, up 32.4% year on year. China's direct investment in these countries stood at $21.46 billion, an increase of 15.3%. China attracted $11.25 billion in foreign investment from these countries, reflecting a 36% rise. All the growth rates are higher than the overall growth. The turnover of China's contracted projects in these countries reached $89.7 billion, accounting for 57.9% of the total.

This year, we will put into practice the guiding principles from President Xi Jinping's speech at the third symposium on the development of the Belt and Road Initiative, precisely grasp the overall requirements for developing the BRI under the new circumstances, strike a balance between rural and urban development, between regional development, between economic and social development, between human and natural harmonious development, and between domestic development and opening-up, and make solid progress in high-quality development of the BRI. We will focus on the following five aspects:

First, we will continue to consolidate fundamentals for cooperation. The BRI is a way of cooperate. Trade and investment cooperation is an important part of the initiative. We will further tap the potential of trade with countries along the Belt and Road, and encourage more imports of quality goods. We will continue to expand three-party and multi-party market cooperation to promote smooth connectivity between industrial and supply chains. We will speed up building a network of free trade zones covering the Belt and Road Initiative, and promote trade and investment liberalization and facilitation.

Second, we will steadily expand new areas of cooperation. A new round of scientific and technological revolution, as well as industrial transformation, is gaining momentum, and countries are more willing to cooperate in the digital economy, green and low-carbon fields. We will actively foster new growth areas for cooperation, deepen the development of Silk Road e-commerce, enhance cooperation in digital trade and new infrastructure, and boost the building of a digital cooperation paradigm. We will also promote green development in outbound investment and cooperation, and strengthen cooperation in areas including new energy, energy conservation, environmental protection, and green infrastructure.

Third, we will build high-quality landmark projects. Over the years, a number of major cooperation projects and livelihood projects have achieved effective results, bringing tangible benefits to the economic development of host countries and improvements in people's livelihoods. For example, the overseas economic and trade cooperation zones set up by Chinese enterprises have paid a total of $6.6 billion in taxes and fees to host countries and created 392,000 local jobs. Next, we will focus on agriculture, poverty reduction, sanitation, health and other fields, and prioritize the construction of more "small and beautiful" projects to enhance the sense of gain among people in host countries. At the same time, we will actively push for the China-Europe rail cargo transport to develop jointly with various cooperation zones and to integrate with new business models such as cross-border e-commerce and overseas warehouses. 

Fourth, we will allow mechanisms and platforms to play a greater role. Since the beginning of this year, the Belt and Road economic and trade cooperation mechanism has been continuously improved. We have established working groups for unimpeded trade with 17 countries, established investment cooperation working groups with 46 countries and regions, and established cooperation mechanisms for such areas as e-commerce and service trade with many countries. We will continue to diversify such cooperation mechanisms, continue to hold major international and regional expos, improve the standard of economic and trade exchanges and cooperation at all levels, and provide better services and guarantees for the joint building of the Belt and Road Initiative (BRI).

Fifth, we will comprehensively strengthen risk prevention and control. Currently, the pandemic is still raging worldwide, geopolitical risks are increasing, and unilateralism and protectionism are intensifying, meaning the international environment for the joint pursuit of the BRI is becoming increasingly complicated. We will pay close attention to the global pandemic situation, promote international anti-pandemic cooperation, and strengthen various risk assessments, monitoring and early warnings. We will also guide enterprises to refine their work plans, standardize their overseas business operations, advance trade and investment cooperation and project construction in a steady and orderly manner, and ensure the safety of personnel and projects of Chinese enterprises.

In short, the MOFCOM will perform the important role of commerce development in three aspects, further promote the high-quality development of the Belt and Road, comprehensively promote a higher level of opening-up, and fully serve the building of a new development paradigm. Thank you.

Yicai:

This January, China's foreign investment increased by 11.6% year on year, demonstrating that China's attractiveness to foreign investment has not diminished under external uncertainties such as repeated coronavirus flare-ups overseas. What are your predictions for China's foreign investment this year? And going forward, what measures will be taken to stabilize the scale and optimize the structure of foreign investment? Thank you.

Wang Wentao:

Regarding the issue of foreign investment, I would like to answer your questions. Over the past two years, due to the impact of the pandemic and adjustments to the global industrial chain and supply chain structure, global cross-border investment has fluctuated greatly. However, China's utilization of foreign investment has maintained steady growth. China has constantly been an attractive destination for foreign investment. In 2021, China's foreign investment hit a new record high, breaking the 1 trillion yuan mark for the first time and reaching 1.15 trillion yuan. This is the first time in the past decade that we achieved double-digit growth, with a growth rate of 14.9%. In terms of U.S. dollars, this figure is $173.5 billion, with a growth rate of 20.2%, and a two-year average of 12.1%. The proportion of foreign investment in high-tech industries exceeded 30% for the first time. The situation of this January was stable and the momentum was relatively good. The actual use of foreign investment in the country maintained double-digit growth, with a growth rate of 11.6%. The Central Economic Work Conference emphasized increasing efforts to attract foreign investment, and we will thoroughly implement this, mainly by further expanding high-level opening-up and further optimizing the business environment. The main direction of the efforts will be in two aspects: one is maintaining stability and the other is promoting excellence. Next, I would like to talk about these two aspects.

The first is maintaining stability, that is, stabilizing the stock of foreign investment and increasing the amount. We will further ease market access for foreign capital. In recent years, we have continued to relax market access, and have reduced negative lists for foreign investment access across the country and in pilot free trade zones for five consecutive years. Last year, we released the negative list of cross-border trade in services for the Hainan Free Trade Port. In addition, we must give full play to the role of some platforms for opening-up in attracting investment. These platforms include 21 pilot free trade zones, the Hainan Free Trade Port, 230 national economic development zones, and the "1+4" localities for showcasing and piloting wider opening-up in service sector. There are also some platforms, such as major expos including the China International Fair for Investment and Trade (CIFIT) and the China International Small and Medium Enterprises Fair (CISMEF), to promote business matchmaking, and attract the signing of more project contracts. We will further strengthen service guarantees. We have a special task force for key foreign-funded projects under the foreign trade and foreign investment coordination mechanism, which is a special team serving enterprises. With this special team, services are more efficient and precise. Last year, we coordinated and resolved more than 1,000 issues reported by foreign-funded enterprises and projects, especially issues we identified as being shared by numerous foreign-funded enterprises, which was welcomed by foreign-funded enterprises. For example, we promoted the introduction of policies to ensure that foreign-funded enterprises can participate in government procurement on an equal footing. Last year, foreign-funded enterprises reported that the relevant ministries and commissions had solved this issue. The special task force will continue to boost services to help enterprises stabilize investment, production and operation, and promote the early signing of projects, early start of production and early reaching of production goals. We will continue to support the promotion of investment everywhere. General Secretary Xi Jinping made a request to the China International Import Expo (CIIE), emphasizing turning exhibits into commodities, and exhibitors into investors. With so many exhibitors coming, how can exhibitors be turned into investors? This presents us with a task. Last year, we used the platform of the CIIE to launch a series of roadshow activities in various regions, the first stop being Sichuan province. I attended the CIIE's Sichuan roadshow event, and saw that 78 exhibitors and 164 enterprise executives participated, which led to a batch of projects settling in Sichuan. This year, we will continue to carry out similar activities to promote the CIIE in local areas, especially in central and western provinces. This is the first aspect I want to talk about.

Second, "advancement" means improvement in structure and quality. Recent years have seen continuous efforts in upgrading the use of foreign investment, for example, high-tech manufacturing industries and high-tech services industries logged an increase of 17.1% and 23.7%, respectively, in absorbing foreign capital last year, and the growth rates in China's central and western regions were above the national average level. However, we also noticed that both the scale and proportion of foreign investment in the manufacturing industry have decreased. In 2021, the scale dropped by 4.6% as against the figure of 2019; the proportion was reduced to 19.4%, which requires us to pay more attention. China is forging ahead from a large manufacturing country toward a manufacturing power and must focus on bringing more foreign funds to this industry. Therefore, we will further intensify support for absorbing more foreign investment, amend the Catalogue of Encouraged Industries for Foreign Investment to include more sectors, and guide more overseas investment into the advanced manufacturing industry, emerging industries of strategic importance, the digital economy, green development, and other areas. Meanwhile, as I just mentioned, China's central and western regions grew at a faster pace in absorbing foreign investment than the national average and have huge potential. China has a vast territory, and its western part has abundant natural resources and adequate labor force. In recent years, China's central and western regions have strengthened their industrial supporting capacity, in particular, the transport infrastructure, which connects China and overseas countries. For example, the launch of China-Europe freight trains and the construction of new land-sea corridor are all driving the growth of imports and exports. After the upgrading of certain airports in the western region, the capacity of land and air transport has been significantly improved. As a result, while pursuing a deeper development in those regions, we will call on more attention from foreign enterprises since the regions have huge potential untapped: a large population, residents' increasing consumption capacity and purchasing power with the growth of the local economy. We will well implement regional plans targeted on both major strategy and coordination development, help these regions bring into full play their advantages, foster new industries, facilitate a smooth transfer of coastal industries to the inland, and create a new growth pole in attracting foreign investment. Thank you! 

21st Century Business Herald:

Since the RCEP took effect on Jan. 1, trade between China and ASEAN countries has been growing rapidly. 

How does the MOFCOM view their further cooperation, and what are MOFCOM's following considerations and arrangements? Thank you!

Sheng Qiuping:

Thank you for your questions. China and ASEAN countries have been old neighbors, good friends, and good partners as they enjoy unique geographical proximity, cultural affinity, and complementary advantages. The year 2021 marks the 30th anniversary of the establishment of China- ASEAN dialogue relationship. Over the past three decades, China-ASEAN cooperation has seen remarkable progress, and the China-ASEAN economic relationship achieved leapfrog development. Last year, trade and economic cooperation between the two sides maintained good momentum, showing strong resilience and huge potential.

First, trade has further expanded. Since 2009, China has remained ASEAN's largest trade partner for 13 consecutive years. Last year, the trade volume hit a new record, reaching 878.2 billion U.S. dollars, accounting for 14.5% of China's total foreign trade. The ASEAN has been China's largest trade partner for two consecutive years, with the trade structure being continuously improved and the industrial and supply chains being connected more closely.

Second, the two-way investment has been booming. As of the end of 2021, the China-ASEAN two-way investment registered about 300 billion U.S. dollars. A large batch of projects has been brought forward under their joint efforts. Industrial parks are one of the highlights. Chinese enterprises have established economic and trade cooperation zones in Thailand, Indonesia, Vietnam, and other ASEAN countries, which has played an important role in local industry development. Good examples for such cooperation include the China-Singapore Suzhou Industrial Park; the China-Malaysia Cooperation on the "Two Countries, Twin Parks" (specifically China-Malaysia Qinzhou Industrial Park and Malaysia-China Kuantan Industrial Park); the China-Indonesia Cooperation on the "Two Countries, Twin Parks" (specifically the Yuanhong Investment Zone in Fuqing; Fujian Province as the Chinese park; and the Bintan Industrial Estate, the Aviarna Industrial Estate, and the Grand Batang City (collectively known as the Indonesian park).

Third, connectivity has been increasingly strengthened. The two sides have advanced the docking of the Belt and Road Initiative with the Master Plan on ASEAN Connectivity 2025 and boosted connectivity. Means of cooperation have been innovated, and a batch of infrastructure projects covering railway, highroad, ports, airports, bridges, and electricity grids have been advanced or completed. The China-Laos Railway started operation and the China-Singapore connectivity project, dubbed the "New International Land-Sea Trade Corridor," have seen remarkable progress.

Fourth, regional economic integration has been accelerated. As you have mentioned, the RCEP took effect on Jan. 1, as scheduled, through the joint efforts of China and ASEAN countries. On the same day, the China-Cambodia Free Trade Agreement also came into force. The two sides have also agreed to upgrade the China-ASEAN Free Trade Area to a higher level so as to promote trade and investment liberalization and facilitation.

In November last year, President Xi Jinping announced the establishment of a comprehensive strategic partnership with ASEAN leaders at the ASEAN-China Special Summit to Commemorate the 30th Anniversary of ASEAN-China Dialogue Relations, which is a new milestone in the history of China-ASEAN relations. Standing at a new historical starting point, we will work with the ASEAN to fully implement the important consensus reached by the leaders of both sides, push China-ASEAN economic and trade cooperation to a new level, and build a closer China-ASEAN community with a shared future.

First, we will deepen trade and investment cooperation. President Xi Jinping announced at the summit that China will import $150 billion of agricultural products from ASEAN in the next five years. We will actively promote the implementation by making good use of exhibition platforms such as the China International Import Expo and the China-ASEAN Expo and expanding the import of agricultural products and other high-quality products from ASEAN. We will better meet domestic needs through these efforts. In terms of investment cooperation, we will focus on expanding cooperation in new fields such as combating COVID-19, digital economy, green and low-carbon growth, promoting successful cooperation models, and jointly building demonstration parks for economic and trade innovation and development.

Second, we will strengthen the connections between industrial chains and supply chains. We will work with all parties to successfully hold the ASEAN Plus China, Japan, and the Republic of Korea (10+3) forum for cooperation on industrial and supply chains, jointly respond to the new situation and challenges of the global industrial chain and supply chains, and promote the coordination, innovation and sustainable development of the regional industrial chain and supply chains. Furthermore, we will continue to encourage the construction of new land-sea corridors and play a supporting role in interconnection, economic and trade cooperation, and industrial and supply chains.

Third, we will improve the institutional arrangements for economic and trade development. We will work with ASEAN and other parties to implement the RCEP well and promote the agreement to enter into force in more countries. We will expedite follow-up talks to complete the upgrading of the China-Singapore Free Trade Agreement within this year. We will actively promote the third version of the joint feasibility study of the ASEAN–China Free Trade Area, expand cooperation in new fields such as the digital economy, strive to start negotiations as soon as possible, and cooperate with ASEAN to build a more inclusive, modern, comprehensive and mutually beneficial free trade agreement.

In conclusion, in the new year, the MOFCOM will continue to deepen China-ASEAN economic and trade cooperation and promote the building of a closer China-ASEAN community with a shared future. Thank you.

Phoenix TV:

My question is for Mr. Wang. Despite multiple challenges last year, the economic and trade cooperation between China and Europe was taken up a notch. How do you evaluate the current economic and trade relations between China and Europe, and what are your expectations for the future? Thank you.

Wang Wentao:

Thank you for your question on the current state and outlook. 

China and the EU are two major independent forces globally with broad strategic consensus and shared interests. We are significant economic and trade partners who complement each other and conduct mutually beneficial and win-win cooperation. In 2021, despite the complex and severe situation, economic and trade cooperation between China and the EU continued a momentum of rapid growth.

Statistically speaking, both the "quantity" and "quality" of bilateral trade have improved. In terms of "quantity," the trade volume between China and the EU has exceeded $800 billion, hitting a record high. China remains the largest trading partner of the EU, and the EU is China's second-largest trading partner. In terms of "quality," the bilateral trade structure has been continuously optimized, and the growth rate of trade in aerospace, biology, optoelectronics, electronics, materials, and other fields has exceeded 30%. In 2021, the agreement between China and the EU on geographical indications took effect. China-Europe freight train trips hit about 1,000 by month and 10,000 by year. Last year, a record 15000 China-Europe freight train trips were made, up 22% from the previous year.

Steady progress has been made in two-way trade. The two-way trade between China and the EU has exceeded $270 billion, and there are sound investments and cooperation in the fields such as finance, vaccine research and development, new energy, electric vehicles, and logistics. China's investment in the EU increased, bucking the trend. According to a European Union Chamber of Commerce survey in China, 60% of the surveyed companies plan to expand their business in China. Nearly half of the surveyed companies' profits in China are higher than the global average. In October last year, I met with the president of the European Union Chamber of Commerce in China. He told me that many companies were optimistic about the Chinese market and China's future prospects and expressed willingness to continue to increase investment in relevant fields.

Meanwhile, economic and trade exchanges have been deepened. Mechanisms for exchanges at all levels, including the China-EU High-level Economic and Trade Dialogue, continue to play a role, and cooperation platforms between local governments and enterprises have become more complete. For example, the 2nd China-Central and Eastern European (CEEC) Countries Expo was successfully held. Four hundred twenty-five companies from CEEC countries participated in the expo, and 7.46 billion yuan of intentional purchases with CEEC were made. In addition, some EU companies actively participated in the 4th China International Import Expo (CIIE). The number of exhibitors, exhibition area, and intentional deals from EU companies accounted for more than one-third. Ireland was the guest country of honor for the China International Fair for Investment and Trade last year. This year, France will be the guest country of honor for the China International Consumer Products Expo this year.

President Xi Jinping pointed out that the two sides should stay committed to the comprehensive strategic partnership and the principle of mutual respect and mutual benefit, so as to ensure consistent, sound, and steady development of China-EU relations. We believe that China's development is an opportunity for the EU, not a challenge, nor a "threat," as some have claimed. We think that China-EU cooperation outweighs the competition. Of course, we also agree that the history, culture, social system, and development stage between China and Europe are different. Therefore, it is not surprising that some differences and divergence of views exist.. However, the two sides can promote healthy competition by strengthening communication. China and the EU are partners rather than rivals.

In the future, we are willing to work with the EU to implement the important consensuses reached by leaders of the two sides, firmly maintain the direction and underlying principle of China-EU economic and trade relations from a strategic perspective, synergize the Belt and Road Initiative with the EU's Global Gateway strategy, expand areas of cooperation, and deepen cooperative mechanisms. The two sides can advance pragmatic cooperation in various fields such as epidemic prevention and control, green development, digitization, finance, and technology, advance the process of ratification and entry into force of the China-EU investment treaty, and inject stability and positive energy into the China-EU relationship.

We can strengthen coordination and cooperation under multilateral frameworks such as the G20, UN, and WTO, promote the implementation of the Global Development Initiative, uphold the WTO-centered multilateral trading regime, and jointly promote the WTO reform in moving in the right direction. We should uphold openness and inclusiveness, reject the zero-sum mentality, oppose protectionism, and deepen market opening-up. We can strengthen cooperation between China and the EU as well as in third-party markets so as to contribute to the economic development of both sides and promote the economic recovery and stability of the whole world. Thank you.

China News Service:

Establishing pilot free trade zones (FTZs) is an important measure of the CPC Central Committee for advancing reform and opening up in the new era. Through explorations based on differentiated conditions and stress testing, pilot FTZs are expected to accumulate experience for high-standard opening-up. What achievements did the MOF make in promoting the construction of pilot FTZs last year? And what measures will be taken this year to further promote their high-quality development? Thank you.

Wang Shouwen:

Thank you. In July last year, General Secretary Xi Jinping presided over the 20th meeting of the central committee for deepening overall reform. Xi spoke highly of the achievements already made in the construction of pilot FTZs and made clear requirements for future work. The MOF, together with other relevant departments and localities, resolutely implemented General Secretary Xi Jinping's important instructions, and in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, made new progress in the construction of pilot FTZs.

First, we further broadened market access, as Minister Wang Wentao just mentioned, and released China's first negative list for cross-border trade in services in South China's Hainan Free Trade Port. The adoption of the negative list represented a major breakthrough in China's management model of cross-border service trade as well as a major step forward in promoting the further opening up in cross-border trade in services.

Second, we further shortened the negative list for market access of foreign investment in pilot FTZs. As we know, China released the first such negative list in 2013. In 2020, the number of items on the negative list was reduced to 30 after six adjustments. Last year, the number of items was further reduced from 30 to 27. China has kept opening wider to the world in investment.

Third, we rolled out a slew of reform measures to boost trade and investment facilitation. We specifically issued a document to grant pilot FTZs greater decision-making power for reforms with 19 measures to enhance trade, investment, international logistics, and the degree of convenience for the financial sector to serve the real economy and to explore judicial guarantee for trade and investment facilitation. We also issued policy documents to strengthen the protection of the ecological environment, pursue high-quality development, and strengthen fair competition.

Fourth, we continued to achieve institutional innovation. Establishing pilot FTZs is not just for the development of some regions. More importantly, it is to accumulate rich experiences for major national strategies. Last year, we unveiled a new batch of 18 best-practice cases. Until now, China's pilot FTZs have seen their successful practices in 278 institutional innovations promoted on the national level.

Fifth, we promoted the development of pilot FTZs. For example, the pilot FTZs have contributed to the stability of the overall performance of foreign trade and foreign investment. Last year, the use of foreign investment in China's 21 pilot FTZs rose 19%, 4.1 percentage points higher than that of the whole country. Their imports and exports increased by 29.5%, 8.1 percentage points higher than that of the whole country. Although the pilot FTZs are small in size, they contribute 18.5% to the total use of foreign investment in China and 17.3% to the country's imports and exports.

This year, we will continue to resolutely implement General Secretary Xi Jinping's important instructions and further promote the high-quality development of pilot FTZs.

First, we will pilot institutional opening-up in line with international high standards in pilot FTZs and free trade ports with the right conditions. As Minister Wang Wentao mentioned, China already took some new measures concerning free trade agreements, including applying to join CPTPP and DEPA. Drawing on these high-standard free trade agreements, we will step up efforts to explore and promote institutional opening-up in the fields of trade in goods, trade in services, e-commerce and intellectual property rights.

Second, we will promote the formulation and implementation of a negative list for cross-border trade in services applicable to all pilot FTZs. Last year, we issued a negative list for cross-border trade in services in Hainan Free Trade Port. On the basis of this list, we will formulate a negative list that will apply to all the 21 pilot FTZs this year so as to expand the scope of opening-up and accumulate experience for wider opening-up in the future.

Third, the MOFCOM will further support the growth of export-oriented industries and contribute to the dual circulation development paradigm where domestic and overseas markets reinforce each other. We will provide targeted suggestions for pilot FTZs and let them carry out whole-industrial-chain opening up and innovation based on their strategic roles, local conditions, and comparative advantages. We will improve the precision of our work on investment attraction, strengthen the effort on attracting industrial chain investment, and optimize service systems for overseas investment. We will also attract global resources of the industrial chains and accelerate the construction of competitive export-oriented industrial clusters so as to give full play to the leading role of pilot FTZs in carrying out high-level opening up.

Fourth, the MOFCOM will further put forward a new set of measures that are proven to work in pilot FTZs and can be replicated and applied elsewhere. We will give full rein to the initiative of pilot FTZs, strengthen explorations based on their differentiated conditions, and put forward more systemic innovation achievements that can be replicated and applied elsewhere. These achievements should be piloted at the provincial level, and those with fruitful results should be compiled as the seventh volume of reform and pilot experiences. After being approved by the State Council, these experiences will be further promoted across the country. Thank you.

Xing Huina:

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

International Business Daily:

Thank you. China has over 800 million people living in its counties, and this has created huge potential for consumption. In 2021, the MOFCOM worked with relevant government bodies to launch a campaign to build commercial facilities in counties. A layered approach has been taken in light of local conditions. What's the progress so far? What are the key tasks for 2022? Thank you.

Wang Wentao:

I'd like to take your questions.

Frankly speaking, commercial networks at the county level and below are the weak links of China's overall logistics system. Therefore, in 2021, the CPC Central Committee and the State Council made arrangements accordingly, and the MOFCOM and another 16 government bodies launched a campaign to build commercial facilities in counties. The campaign seeks to strengthen weak lines, ensure smooth logistics, improve commercial networks, and diversify business forms. The progress made in 2021 can be summarized in the following aspects:

First, a group of commercial sites was built or renovated. In 2021, we built or renovated 834 county-level comprehensive commercial service centers, 1,858 township-level commercial centers, and 369,000 village-level convenience shops.

Second, a group of logistics delivery facilities was improved. We enhanced the capacity of supply and marketing logistics, postal logistics, logistics enterprises, and e-commerce logistics. We have integrated and optimized the logistics resources, and improved a three-layered logistics system covering counties, townships, and villages. A total 1,212 county-level logistics centers and 14,800 village-level e-commerce parcel stations were renovated in 2021. Currently, 98% of townships and villages in China have direct access to big-brand logistics companies, and parcels can be directly delivered to more than 80% of administrative villages. Products purchased online can be delivered more efficiently to villagers. But there are still problems. Some villages are beyond the reach of the logistics networks. Due to China's vast territory and huge geographical differences and regional imbalances, some villages are hard to reach, and the costs of logistics are comparatively high in some mountainous regions.

Third, logistics channels of agricultural products were optimized and expanded. A total of 1,028 farmers' markets and wholesale markets for agricultural products were renovated. The number of agricultural products traded in wholesale markets increased 8.4% year on year, hitting one billion metric tons. Nevertheless, we need to improve the cold chain logistics for agricultural products, which is currently one of the weakest links in this aspect.

Fourth, the driving role of e-commerce entrepreneurship in boosting employment was further enhanced. Based on a demonstration project that brings e-commerce into villages, we continue to expand the coverage of e-commerce business in villages. In 2021, the online retail sales volume in villages amounted to 2.05 trillion yuan, exceeding the two-trillion mark, up 11.3%. The number of e-commerce entities in villages across China reached 16.33 million by the end of 2021.

Nevertheless, there are still weak links. The magnetic effect of agriculture and commerce is yet to strengthen, and market entities remain small-scaled, randomly scattered, and less-developed. These phenomena haven't changed fundamentally. According to feedback, mainly from rural residents, the high cost of logistics is still a prominent problem.

In addition, the commercial development across China is also varied. Take our campaign of building commercial facilities in counties, for example. For regions with sound development basis, the gap between commercial facilities in counties and mid-sized and big cities is narrowing down, and the integration between them is deepening. We have also seen progress in applying digital technologies in commercial facilities and creating new business forms in counties, but there is still room for improvement compared with the situation in developed cities. However, for underdeveloped regions with poor development basis, their weaknesses and problems are more prominent, and commercial facilities there cannot meet the local needs of daily life and production. We have been continuously making improvements by adopting a problem-oriented approach, strengthening coordination at the county level, and enhancing the leading role of the market. We have been implementing various tasks and continuously strengthening support for commercial facilities, logistics, the circulation of agricultural products, and cold chains. We have been working to promote the sales of agricultural products in cities and bring supply chain, logistics, and commodity services in counties and villages so as to further consolidate our efforts in the campaign of building commercial facilities in counties. Thank you.

Xing Huina:

Today's press conference is hereby concluded. Thank you to all the speakers and friends from the media. Goodbye.

Translated and edited by Cui Can, Wang Yanfang, Duan Yaying, Li Huiru, Zhang Rui, Liu Sitong, Zhang Tingting, Liu Qiang, Wang Yiming, Ma Yujia, Zhu Bochen, Chen Xia, Yang Xi, Wang Qian, Zhang Liying, Yuan Fang, Dong Qingpei, Jay Birbeck, David Ball 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:

Xiao Yaqing, minister of industry and information technology

Xin Guobin, vice minister of industry and information technology

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

Chairperson:

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

Date: 

Feb. 28, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press briefing being held by the State Council Information Office (SCIO). Today, we have invited Mr. Xiao Yaqing, minister of industry and information technology, to brief you on promoting the steady operation and quality upgrading of industry and information and communication technologies (ICTs), and to answer your questions. We also have with us Mr. Xin Guobin, vice minister of industry and information technology, and Mr. Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT).

Now, I will give the floor to Mr. Xiao Yaqing.

Xiao Yaqing:

Ladies and gentlemen, friends from the media, good morning. I'd like to begin by thanking you for your attention and support for developing the industry and information technology sector. Together with my colleagues, I'm also glad to speak with you on promoting the steady operation and quality upgrading of industry and ICTs.

As we all know, 2021 was an extraordinary year, marking a milestone in the history of the Communist Party of China (CPC) and the country. Over the past year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Party and the country have achieved new and major achievements in various undertakings. China has taken a leading position in both economic development and pandemic control worldwide, and new steps have been taken to build a new development pattern. New results have been achieved in high-quality development, and the implementation of the 14th Five-Year Plan is off to a good start.

Earnestly carrying out decisions made by the CPC Central Committee and the State Council, the MIIT has forged ahead, overcome difficulties, redoubled its efforts, and effectively responded to risks and challenges. Under the complex and severe situation, the outlook for the industry and information sector is positive, which has contributed to economic and social development. This is mainly reflected in the following aspects:

I. The industrial economy saw sustained recovery and development. Here are some figures:

First, the added value of industries above designated size increased by 9.6%, an increase of 6.8 percentage points over 2020, or an average two-year growth rate of 6.1%. Among them, the added value of the manufacturing industry increased by 9.8%, with an average two-year growth rate of 6.6%. The added value of the manufacturing industry accounted for 27.4% of GDP, with a total amount of 31.4 trillion yuan, ranking first in the world for 12 consecutive years.

Second, the profits of industrial enterprises above designated size increased by 34.3%, an increase of 30.2 percentage points over the previous year, or an average two-year growth rate of 18.2%.

Third, the national industrial capacity utilization rate came in at 77.5%. This is a relatively high level for recent years.

II. The resilience of the supply and industrial chains has been improved. Efforts have been made to solve problems that affect industrial chains and supply chains, and key industrial chains remain safe and stable. The international competitiveness of industrial chains in areas such as photovoltaics, wind power and shipping have been further enhanced. The volume of containers, once in shortage, more than doubled last year, up by 110.6%. Chip production also rose by 33.3%. The export delivery value of industrial enterprises above designated size logged a year-on-year increase of 17.7% and a two-year average increase of 8.3%, which is a high level for recent years. Exports of China's industrial products have made an important contribution to the response to the COVID-19, maintaining the stability and smoothness of the global industrial and supply chains, and promoting the recovery and growth of the global industrial economy.

III. The industrial structure was further optimized and upgraded. This can be seen from three aspects:

First, the leading role of the high-tech manufacturing industry and equipment manufacturing industry has been significantly enhanced, with the added value increasing by 18.2% and 12.9%, respectively. Their contribution rates to the growth of the above-scale industry reached 28.6% and 45%, respectively.

Second, the pace of digital and green transformation of the manufacturing industry has accelerated, and new progress has been made in cluster development. The numerical control rate of key processes of above designated size in key areas was 55.3%, and the penetration rate of digital research and development and design tools was 74.7%. All indicators showed a positive trend. We can also see that energy consumption of the added value of industrial enterprises above designated size decreased by 5.6% year on year, which is also good news.

Third, the guiding role of leading enterprises has been significantly enhanced, and the development pace of small- and medium-sized enterprises (SMEs) that focus on specialization, refinement, uniqueness and innovation has been accelerated. We have incubated more than 40,000 enterprises that focus on specialization, refinement, uniqueness and innovation, over 4,700 "little giant" enterprises, and more than 800 single-product specialists in the manufacturing industry.

IV. New achievements have been made in the innovation and development of key areas, and new breakthroughs have been made in major technological innovations. The Tianwen-1 probe completed orbiting, landing and roving during an exploration mission to Mars, the Shenzhou-12 and Shenzhou-13 manned spaceships were successfully launched, and the Haidou-1 submersible broke many world records. The demonstration plant of the high-temperature gas-cooled reactor was connected to the grid for the first time to generate electricity, and research into new types of displays, machine tools, new materials and other fields has achieved phased results. All of these have strongly supported the development of the industrial economy. Industrial robots and solar cells increased by 44.9% and 42.1% year on year, respectively, and the production and sales of new energy vehicles increased by 1.6 times year on year.

V. New progress has been made in the high-quality development of the information and communications industry. The construction of new information infrastructure has been intensified. A total of more than 1.43 million 5G base stations have been set up and opened, and the number of 5G mobile phone terminal connections has reached 520 million. Full 5G coverage has been achieved across all venues for the 2022 Winter Olympics, providing strong support for the creation of an intelligent Winter Olympics. Spectators found that these measures greatly improved the viewing experience. 5G applications are also rapidly expanding in such fields as industry, energy and transportation, empowering thousands of industries. New formats and models have emerged one after another. The digital economy is showing a strong growth momentum. For the past year, the business revenue of the communications industry, and software and information technology services industry increased by 8% and 17.7%, respectively. All these provide the basis for us to stabilize the industrial economy throughout the year, and also lay a good foundation for this year.

While seeing achievements, we also clearly realize that there are still many problems. For example, the core competitiveness of the manufacturing industry is not strong enough, the quality of the supply system needs to be improved, and there are still many problems related to the security and stability of the industrial chain and supply chain. In particular, the current external environment is more complex, severe, and uncertain, and domestic development is also facing the triple pressure of demand decrease, supply shock, and weakening expectations. The difficulties and challenges faced by the development of industrialization and informatization have increased. We will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and deeply understand the decisive significance of the "Two Establishments," keep in mind "the Nation's Most Fundamental Interests," strengthen the "Four Awarenesses," adhere to the "Four Confidences," achieve the "Two Upholds," carry forward the great founding spirit of the CPC, conscientiously implement the spirit of the Central Economic Work Conference and the decisions and arrangements of the CPC Central Committee and the State Council, adhere to the general principle of seeking progress while maintaining stability, fully, accurately, and comprehensively implement the new concept for development, build a new development pattern, and promote high-quality development. We will uphold the supply-side structural reforms as the main task, coordinate the COVID-19 pandemic prevention and control as well as economic and social development, and coordinate the development and security, implement the tasks of "Six Stabilities" and "Six Guarantees," and put the stable growth of the industry in an important position, focus on boosting the industrial economy, and especially, go all-out to achieve a stable continuity in the first quarter and promote the smooth running of the industrial economy. We will focus on promoting innovations and breakthroughs in basic and key areas, further enhance the resilience of the industrial and supply chains, and focus on increasing relief assistance to SMEs, foster enterprises to become ones with high growth potential, advanced technology and strong market competitive edge, continue to stimulate the vitality of market players. We will focus on strengthening the construction and application of new information infrastructure and improve the supply capacity of information and communication services. We will focus on promoting the in-depth development of the digital transformation of the manufacturing industry, and enhance the new advantages and new dynamic of industrial development. We will focus on the implementation of work for carbon peaking and carbon neutrality, implement the carbon peaking action in the industrial field, and improve the level of green and low-carbon development of the industry. We will follow the requirements of "Three Stricts and Three Earnests," and do a solid job of implementing each work one by one, promote the smooth operation and quality upgrading of industrialization and informatization, keep the proportion of the manufacturing industry basically stable, and enhance the core competitiveness of the manufacturing industry and build a solid economic "ballast stone." We will welcome the successful convention of the 20th CPC National Congress with excellent achievements.

Above is my brief introduction, and then my colleagues and I will answer the questions from you.

Shou Xiaoli:

Thank you, Mr. Xiao, for your introduction. Let's move on to the question-and-answer session.

CCTV:

Mr. Xiao, you just mentioned in your introduction that you will try your best to achieve a stable continuity in the first quarter and promote the smooth running of the industrial economy, build a solid economic "ballast stone." What is the trend of China's industrial economy in the first two months of this year? Next, what measures will the MIIT take to achieve a good start in the first quarter and a smooth running of the industrial economy throughout the year?

Xiao Yaqing:

Thank you for your questions. In general, after efforts from various aspects, so far, China's industrial economy has continued the trend of a steady recovery in the fourth quarter of last year, and the overall operation is stable. Particularly with the implementation of various policies and measures for the growth of the industrial economy, phased results have been achieved in boosting the industrial economy. I don't have the statistics for February yet, but today is the last day of this month, so I would like to introduce the following aspects:

The first is the production during the Spring Festival and the resumption of work after the festival. Our questionnaire survey on more than 20,000 key industrial enterprises showed that 14.5% of enterprises didn't stop production during the Spring Festival, 89.5% of enterprises resumed work before the Lantern Festival, the 15th day of the first lunar month, and 95.5% of enterprises resumed work before Feb. 20. The second is the production and operation of enterprises in key industries in January. According to statistics from relevant associations, the production and sales of automobiles in January were 2.422 million and 2.531 million, respectively, up 1.4% and 0.9% year-on-year, respectively. Among them, the production and sales of new energy vehicles were 452,000 and 431,000, an increase of 1.3 times and 1.4 times, respectively. According to monitoring by the China National Coal Association, the average daily output of coal by key coal enterprises reached 7.44 million tons in January, a year-on-year increase of 1.8%. In January, the SMEs development index was 89.4%, up 0.2% month-on-month, and kept rebounding for three consecutive months. The third is about the situation of industrial-related indicators. The manufacturing PMI in January was 50.1%, which maintained above 50% for three consecutive months; the prosperity index of China's logistics industry was 51.1%, which also remained in the prosperity range; the scale of newly increased social financing and RMB loans both hit record highs and newly increased medium and long-term corporate loans showed a year-on-year increase for the first time since July last year.

Of course, we must also see that, affected by multiple factors, the current situation of the stable recovery of the industrial economy is not yet solid, and great efforts are still needed to promote the smooth operation of the industrial economy.

In the next step, first, we will make every effort to boost the industrial economy and ensure smooth continuity of the first quarter. We will conscientiously implement a series of policies and measures to promote the steady growth of the industrial economy, strengthen policy support, and promote the implementation of various policies and measures. At the same time, we must remain vigilant in identifying potential problems and solve them in a timely and coordinated manner.

Second, we will focus on breaking through the block on the supply of key products. And we will strengthen the guarantee and coordination of energy, logistics, labor, and other factors, give priority to ensuring the stable operation of key enterprises such as basic industrial products and important living materials, including agricultural materials and fertilizers.

Third, we will actively boost effective investment in manufacturing. We will ensure the implementation of major programs and projects in the 14th Five-Year Plan and start the implementation of a number of industrial infrastructure re-establishing projects. We will encourage and support enterprises to strengthen technological transformation, and promote telecom operators to accelerate the progress of investment and construction for 5G and gigabit optical networks.

Fourth, we will take concerted measures to expand consumer demand. We will continue to implement policies such as subsidies for the purchase of new energy vehicles, incentives and subsidies for charging facilities, and reduction and exemption of vehicle and vessel taxes. At the same time, we will carry out activities of bringing new energy vehicles, green smart home appliances, and green construction materials to the countryside. We will also further promote the action of increasing varieties, improving quality, and creating brands for products, and fully support foreign trade enterprises to expand exports. Thank you.

Science and Technology Daily:

Now more and more enterprises have realized the importance of digital transformation, and they are also accelerating the pace of digital transformation. We know that last year the MIIT focused on accelerating the digital transformation of China's manufacturing industry. I would like to know, as the industry's competent authority, how effective were the efforts in this regard? Secondly, what measures will the ministry take in the next step to support the digital transformation of enterprises? Thanks!

Tian Yulong:

Thanks for your question. As you said, the digital transformation is mainly about the popularization and application of the new generation of information technology, which will bring profound changes to production modes, development models, and enterprise forms in the manufacturing industry. It should be a compulsory course for enterprises to improve and develop their competitiveness. In recent years, thanks to joint efforts of the MIIT, relevant departments, and local governments, the digital transformation of China's manufacturing industry has seen accelerated development and good trends in innovation activities. It can be embodied in the following three aspects:

First, the foundation of the digital transformation has been consolidated. Through the implementation of the industrial internet innovation and development projects, more than 150 comparatively large-scale industrial internet platforms have been incubated, serving more than 1.6 million industrial enterprises, which provided strong support for digital transformation. Second, the scope of the digital transformation has been expanded. The new generation of information technology, including 5G, big data, cloud computing, and artificial intelligence, has accelerated integration and penetration with the manufacturing industry. Especially in industrial sectors like steel, automobiles, equipment, electronics, and petrochemicals, integrated and cross-industry innovations have been deepened. More than 2,000 "5G + Industrial Internet" projects are under construction across the country. Third, the degree of digital transformation has been enhanced. Just now, Mr. Xiao mentioned that the numerical control rate of key processes reached 55.3% among industrial enterprises above designated size, and the popularizing rate of digital R&D tools reached 74.7%. New forms and models of digital businesses also developed and innovated. The proportion of enterprises engaged in internet-based collaboration and service-oriented manufacturing reached 38.8% and 29.6%, respectively. Through internet-based and digital-driven transformation, enterprises not only improved their quality, efficiency, and effectiveness, but also gained benefits and improved their industrial competitiveness.

Next, we will continue our previous work and mainly focus on the following three aspects.

First, we will highlight key points and enhance enterprises' digital capabilities. Enterprises are the main body of digital transformation and reconstruction. At present, the digital capabilities of enterprises are generally not strong enough, which requires us to further promote and support them. We will summarize and promote a number of good technologies and practices, and issue relevant guidelines and guidance by industry and field. We will cultivate a group of high-quality system solution suppliers to provide practical and effective typical cases and methods for enterprises. Meanwhile, leading enterprises in the industry are supported to build digital empowerment platforms for the development of SMEs, and combine the optimization of industrial and supply chains, playing the role of digital transformation. By the end of this year, we will work with relevant parties to provide digital transformation services for at least 100,000 SMEs, and enable them to operate businesses on cloud platforms.

Second, we will expand applications and enrich product supply. We will continue to implement industrial internet innovation and development action plans, explore a number of typical application scenarios of "5G + Industrial Internet," and build a batch of fully 5G-connected factories. We will also accelerate the access of the industrial internet platforms to bases, industrial parks, and industrial clusters so as to connect various industries and empower enterprises and industrial parks.

Third, we will build and optimize the environment for digital transformation, which is a very important foundation for digital transformation. The standard system of transformation should be further improved. We will improve the talent training system for manufacturing transformation and further deepen the integration of industry and education and school-enterprise cooperation. At the same time, we will work with financial institutions to enrich financial products for digital transformation so as to further reduce the cost of enterprises' digital transformation. It is important to strengthen data security in digital transformation. We will actively foster the data factor market and support the establishment of data exchanges in Beijing and Shanghai. We will also strengthen industry data security supervision and formulate data catalogs to strengthen protection.

That's my answer. Thank you.

Cover News:

How do you see the outstanding performance of China's new energy vehicle industry over the last year? Will such achievements continue this year? Regarding this industry, what's China's focus for its development going forward?

Xiao Yaqing:

Thanks for your question. Mr. Xin will answer it.

Xin Guobin:

Thank you. China's new energy vehicle industry developed relatively fast during the 13th Five-Year Plan period (2016-2020). Its annual sales increased from 507,000 in 2016 to 1.367 million in 2020, with an average annual growth rate of 28%. Last year, the industry witnessed an outstanding performance. The number of its output and sales of vehicles both exceeded 3.5 million, reaching 3.545 million and 3.521 million, respectively, up 1.6 times year-on-year, ranking it first in the world for seven consecutive years, with a cumulative promotion volume of over 9 million units. Since the achievements of the new energy vehicle industry in 2021 have exceeded the predictions of some experts and institutions, the public must be concerned about whether it can maintain its encouraging development trend this year. Recently, we conducted a series of research and surveys, which showed that the development of new energy vehicle industry is in line with the direction of green and low-carbon development. It has led to the expansion of industry chains such as power batteries, electric motors, and electric controls; accelerated the application of new technologies, including intelligent cockpits, automatic driving, and intelligent networks; and promoted the transformation of logistics and transportation, which brought a new experience of green travel to consumers. The ecosystem of industrial development has been gradually improved. Judging from all aspects, China's new energy vehicle industry has entered a new stage of large-scale and rapid development. Although the development is still facing some difficulties and challenges, it is expected to maintain a high growth trend this year. Next, the MIIT will give full play to the inter-departmental joint meeting mechanism on energy saving and the new energy vehicle industry and focus on the following five aspects.

First, we will improve support policies. We will step up efforts to clarify support policies such as extending purchase tax exemptions for NEVs. We will improve the "dual-credit" policy and make it effectively dovetailed with the decline of subsidies for NEV purchases to stabilize market expectations. We will compile a roadmap for the green development of the automobile industry and provide guidance and assistance to industries and companies.

Second, we will support innovative breakthroughs. We will promote the integration of electrification and intelligent, connected technologies, improve the safety, low temperature adaptation and other performances of storage batteries, step up the technological application of 5G and the vehicle infrastructure cooperative system, and develop more functions such as leisure and entertainment, life services and autonomous driving to meet the needs of consumers. We will continue to improve the product quality and driving experience of NEVs to boost consumers' sense of gain.

Third, we will promote market expansion. We will launch the pilot project in some cities to completely electrify vehicles used in the public service sector, and step up the electrification of urban logistic vehicles, taxis and sanitation trucks. Focusing on the problem of charging in old residential areas and expressways which people urgently require solving, we will work with other departments to accelerate the construction of charging and battery swap stations and other infrastructure, and promote information sharing and unified settlement to continuously improve the convenience of charging NEVs. 

Fourth, we will strengthen the guarantee of resources. We will strive to meet the production requirements for storage batteries, moderately accelerate the development of domestic lithium resources, and crack down on unfair competition such as hoarding and price gouging. Meanwhile, we will improve the system of storage battery recycling, support high-efficiency dismantling, recycling and other technological breakthroughs to continuously improve the recycling rate and resource utilization efficiency.

Fifth, we will strengthen safety supervision. We have always emphasized that safety is the prerequisite for the development of the NEV industry and that it cannot develop without safety guarantee. Therefore, we should stick to the bottom line, and improve our capabilities to guarantee functional security, data security, and network security in a comprehensive way. We will continue to improve NEV safety and technical standards, and improve battery thermal runaway warnings and the level of safety protection. We will build a systematic, scientific and standardized NEV safety management system so that consumers can be more confident about using NEVs. Thank you.

Nikkei:

What measures has China taken in the past five years to improve the industrial chains for integrated circuits and semiconductors? How do you expect the level of China's self-sufficiency in semiconductors to improve by 2025? By approximately what percentage?

Tian Yulong:

Thank you for your questions. The integrated circuit industry has attracted global attention, and the CPC Central Committee and the State Council have attached great importance to it. In 2020, the State Council released policies on promoting the high-quality development of the integrated circuit and software industries in the new period, and put forward many important measures to develop the integrated circuit industry. The MIIT has worked with relevant departments and local governments to actively implement these policies. They have played an important role in the development of China's integrated circuit industry, especially in stabilizing the industrial and supply chains for integrated circuits. This can be seen in three aspects:

First, we have worked with other departments to release the first list of duty-free products for the integrated circuit industry and issued a circular about the conditions for companies to enjoy relevant policies. Domestic and foreign companies will enjoy the policies equally. Our purpose is to support integrated circuit companies of different ownerships to advance the development of the sector. 

Second, we have encouraged technological innovation. We have guided local governments to set up manufacturing innovation centers, improve their technology supply capacity, and speed up the transfer application and commercialization of new technologies, new processes and new equipment in particular. Meanwhile, we have set up relevant standards to promote the application and quality evaluation of integrated circuits, and further increased their application and promotion in automobiles, medical care, energy and other fields to drive the rapid development of the integrated circuit industry via applications and markets. 

Third, we have fostered a sound development environment for the integrated circuit industry. We have given full play to the role of capital in driving industrial development, and guided and encouraged social capital to invest in the integrated circuit industry. In particular, in accordance with various policy requirements, we have strengthened the protection of intellectual property rights and created a market-oriented, law-based and international business environment. The MIIT and the Ministry of Education have encouraged universities to establish the major of integrated circuits as a first-class discipline, build high-level microelectronics colleges, strengthen school-enterprise cooperation, and cultivate high-quality talents. 

The integrated circuit industry is an intelligence-intensive industry. In the future, integrated circuits will continue to be a highly globalized industry, which highlights the importance of strengthening cooperation in global industrial and supply chains. The industries of various countries should strengthen the division of labor and cooperation, so that integrated circuit technologies will continue to develop and the market will keep expanding.

China is the world's largest and fastest growing integrated circuit market, which provides broad market opportunities for the development of global enterprises. At the same time, we have been an important producer and supplier of integrated circuits, and have made continuous contributions to the global integrated circuit industry. Therefore, guaranteeing the stability of industrial and supply chains not only helps support China's self-sufficiency, but also provides resources for global development. We welcome the global integrated circuit industry to increase its investment in China, conduct various forms of cooperation, and jointly contribute to stabilizing industrial and supply chains for the global integrated circuit industry. We will continue to provide good policies and market environments for both domestic and international integrated circuit enterprises, treat all types of market entities equally, offer the same treatment for domestic and overseas investments, and especially enhance intellectual property protection. We will also jointly promote the innovation and development of the integrated circuit industry, and maintain the stability of industrial and supply chains for the global integrated circuit industry. Thank you.

Xiao Yaqing:

I would like to just add one point. As I said, the industry grew 33.3% last year, which represents relatively fast growth. This year, with the advance of industrial digitization and digital industrialization, and the 'increased demand for consumer electronics, we estimate that the industry will have relatively high growth rate among the 31 major manufacturing categories. Mr. Tian mentioned the issue of international industrial cooperation, which is very typical in this industry. We believe this is a major trend and should be adhered to. Thank you.

CNR:

SMEs have been significantly affected by the pandemic. We have noticed that a series of tax and fee reduction measures have been introduced at the national and local levels to ease their difficulties. With the support of these policies, what is the current situation of SMEs? What measures will the MIIT take to further support their development this year?

Xiao Yaqing:

Thank you for your questions. The CPC Central Committee and the State Council have always attached great importance to the development of SMEs, and have issued a series of policies and measures to help solve the difficulties faced by SMEs and stimulate their vitality. With the support of various polices, especially under the efforts made by SMEs themselves, the operating income and total profit of industrial SMEs above designated size increased last year by 19.9% and 25.6%, respectively, with average two-year growth rates of 9.9% and 16.8%. Both are higher than the levels of 2019 before the pandemic. The survey we conducted on 27,000 SMEs shows that the resumption of work after this year's Spring Festival was satisfactory. I reported on the status of the resumption of work before the Lantern Festival. At the same time, we are also aware that the economic situation at home and overseas has been severe and complex. The foundation for the development of SMEs has not yet been stabilized. In particular, disrupted by the sporadic resurgences of COVID-19, insufficient market demand, rising costs, difficulties in collecting accounts receivable, problems in recruiting workers and other issues have been quite prominent. In order to further help SMEs, we will take the following measures:

First, we will attach greater attention to implementing policies, and promote detailed implementation of policies that benefit enterprises. The central government has introduced many policies and measures to help SMEs. Since last year, 25 such policies have been promulgated at the national level, and 52 series of policy measures have been issued at the provincial level. We will strengthen overall coordination, increase policy publicity and interpretation, so that SMEs can have a better understanding of these policies, and the way to better use them. We will conduct third-party assessments into the development environment of SMEs, and jointly implement the policies of fiscal taxation, financial credit and guaranteeing stable prices, in order to ensure SMEs benefit from the policies.

Second, we will do more to provide enterprises with accurate services and help them solve problems. In response to the demands of SMEs, we will continue to provide them with accurate services in conjunction with relevant departments and regions. We will initiate a "Benefiting Enterprises Together" nationwide service action to provide public services to SMEs, and continue the SMEs Service Month campaign. We will also hold the China International SME Fair and the APEC SME Technology Exchange and Exhibition, and mobilize all sectors to serve SMEs well. We will take measures to clear arrears owed to SMEs, and protect the legitimate rights and interests of SMEs in accordance with the law. There are still many large enterprises and institutions that have defaulted on payments to SMEs, which is the focus of our rectification work this year. At the same time, we should work to ease difficulties and the high cost of financing. We need to guide financial institutions to increase support to micro, small, and medium enterprises (MSMEs), and encourage SMEs to increase the total amount of financing, expand the scope of benefits and lower financing costs. 

Third, we will encourage SMEs to focus on their specialisms in niche sectors, and support more SMEs to become suppliers of unique products and experts in complementary services. This year, there are plans to cultivate another 3,000 national-level specialized "little giant" firms, and encourage provinces to foster SMEs with specializations and to bring the number up to 50,000. According to the data, the total sales volume, profits and innovation capacity of the SMEs and "little giant" enterprises that specialize in niche sectors have significantly improved compared with ordinary ones. We will focus on supporting the development of such enterprises around the industrial chain, and better guide and encourage leading enterprises to support the development of SMEs. We will launch a campaign to promote integrated innovation among large, medium and small-sized enterprises. We will also encourage them to open up their innovative resources, including technologies, markets, standards and human resources in accordance with the market and the rule of law. Thank you.

21st Century Business Herald:

The latest data shows that the shortage of chips in the automobile industry has been eased. Has MIIT made assessments for the crunch situation this year? How will the automobile industry respond to this issue this year? What are the further plans for the chip industry?

Xin Guobin:

Thank you for your questions. Car chip has become a frequently discussed issue in our society since the outbreak of the COVID-19 pandemic. The MIIT has paid great attention to the work regarding chips, and researched with related sectors to address the issue. We set up a working group to expand and apply automotive semiconductors, and strengthened demand-supply links between car, components and chip enterprises; implemented measures in the circular to manage and facilitate services for enterprises, and promote substitute products' application; and coordinated with relevant departments to crack down on speculation and price pushing and other illegal activities, thus raising the supply capacity of chips and striving to maintain the smooth functioning of the automobile industry.

Through joint efforts, significant achievements have been made in car chip supply, with a favorable momentum emerging in monthly production and sales since the fourth quarter of last year. In 2021, 26.082 million and 26.275 million cars were produced and sold, with a year-on-year increase of 3.4% and 3.8%, respectively, ending a period of continuing reduction for three consecutive years, which was a hard-earned outcome. In January 2022, 2.422 million and 2.531 million cars were produced and sold, up 1.4% and 0.9% year-on-year, respectively. It's fair to say that the automobile industry has gotten off to a stable start this year.

Regarding the monitoring data of key car enterprises, there still exists certain chip shortages considering the demands and production plans of both car and components enterprises, although chip crunch is mitigating. Major chip enterprises worldwide have strengthened their production and supply of automotive-grade chips and will gradually release new production capacity this year. In addition, the domestic supply capacity of certain types of chip products are increasing. Therefore, chip supply's favorable momentum is expected to continue. 

Next, we will take a slew of measures to maintain the steady operation of the automobile industry, with the focus being as follows:

First, we will strengthen the demand-supply connections. We will create online link platforms for car chips based on our past efforts, provide information channels for chip production and supply, and improve the upstream and downstream cooperation mechanism of the industrial chain.

Second, we will intensify coordination efforts. We will guide car and components enterprises to improve their supply chain, make rational production plans, support each other, improve the efficiency of resource allocation, and minimize the impact of the chip crunch. Allocation efficiency is quite important. Some enterprises' products are sold fast, so the chip crunch will have a big impact on them, but some enterprises' products are not recognized by consumers, so even if they get chips, people won't buy their products, and this will result in a mismatch of resources in the industry.

Third, we will boost the capacity of chip supply. We will further support coordination and innovation among car, components and chip enterprises, so as to improve domestic chip production and supply capacity in a prudent and orderly manner. Presently, our application testing and assessment system is not sound, so we will make further efforts to remedy the deficiencies.

Fourth, we will advance international cooperation. As the automobile industry is a highly internationalized industry, we must carry out globalized development, stimulate transnational chip enterprises to increase supply to the Chinese market, intensify the distribution of domestic production capacity, and strengthen the resilience and stability of the industrial and supply chains.

Mr. Tian Yulong has just introduced the planning of the whole chip industry, and I will add some points regarding your questions.

The CPC Central Committee and the State Council issued the Measures on High-quality Development of Integrated Circuits and Software Industries in a New Era. Next, we will focus on implementing the policy. We will promote the free flow of production factors and resources, create a fair and just market environment, intensify intellectual property rights protection, and deepen international coordination, thus further improving the high-quality development of the industry. Thank you!

Hong Kong Economic Herald:

It's very nice to see you again, Mr. Xiao. The last time I interviewed you was in 2019, when ministers took questions from the media during the "two sessions." My question this year is about advanced manufacturing. Feb. 26 marks the eighth anniversary of General Secretary Xi Jinping's proposal on the coordinated development of the Beijing-Tianjin-Hebei region. What's the MIIT's take on narrowing down the gap between north and south China in developing advanced manufacturing, especially supporting Tianjin to further build itself into an R&D center for advanced manufacturing? Thank you.

Xiao Yaqing:

The manufacturing gap between the north and south is your personal opinion. China has a full-fledged industrial system. Industries classified into 41 divisions, 207 groups, and 666 classes are well allocated across China. China is the only country in the world to obtain all the divisions of industrial classification. The complete industrial system has made significant contributions to the growth of the national economy and meeting people's everyday needs.

With the development of the market economy, there are some regional differences due to the varied rates of growth and marketization. This is a common phenomenon of development. The CPC Central Committee and the State Council have introduced many measures to advance coordinated regional development. The implementation of these measures provides key guiding principles and fundamental support for the sustainable and sound development, and more effort should be made in the implementation process. 

In the meantime, we also need to know that, as a business environment that is based on market principles, governed by law, and up to international standards gradually takes shape in China, more opportunities have been offered to more enterprises, especially those with industrial foundation and advantages. As China continues to deepen reform, the leading enterprises in different industries and advantageous enterprises will emerge with renewed vitality and provide sound support to the development of these industries and enhance their core competitiveness.

We believe that, with the further implementation of the 14th Five-Year Plan and China's regional development strategies, practitioners of China's industrial sector will keep striving to improve, and the sector will see new and more promising prospects. Thank you.

People's Posts and Telecommunications News:

Over the years, mobile internet users have paid more and more attention to user experience. What efforts did the MIIT make in 2021 to protect users' rights and interests and improve relevant services? What new measures will be taken this year? Thank you.

Xiao Yaqing:

Thank you for your questions. With the rapid development of the mobile internet, people find it increasingly difficult to live and work without cellphones and mobile internet. In 2021, we played our part in the nationwide campaign which aims to bring tangible benefits to the public and worked to improve all aspects that affect user experience. We continuously enhanced the quality of services, strengthened personal information protection, and earnestly protected users' rights and interests. We mainly solved problems concerning the management of mobile apps and the senior-friendly transformation of apps and websites. In terms of mobile app management, many problems were reported. By taking a set of measures such as formulating standard testing techniques, launching special regulatory campaigns, and the self-regulation of industries, we managed to crack down on apps violating regulations regarding collecting and using personal information, as well as pop-ups and other behaviors that violate users' rights and interests. We all found it very difficult to close out pop-ups. In 2021, we tested 2.08 million mobile apps. A total of 1,549 regulation-violating apps were notified and the 514 apps that refused to make corrections were removed from app stores. After rectification, these apps will provide better services for users. In terms of elderly-friendly transformation, a total of 227 websites and apps have completed transformation and introduced functions such as font enhancer, voice guidance, and one-click customer service connection, to name a few. We also provide guidance for digital product companies and let them support the design and production of elderly-friendly digital products.

Of course, our work in this regard will not stop here, and we will continue making efforts this year.

First, we will focus on users' rights and interests and strengthen comprehensive management. We will continuously pay attention to various violations reported by users and carry out further regulatory work on mobile apps. We will implement all-around supervision on various aspects concerning mobile internet services. Our supervision work will mainly cover three fields. These include various end products such as cellphones and tablets, key participants along the accountability chain such as app stores, third-party software development kits and pre-installed apps, and the technical test of mobile apps. By doing so, we aim to comprehensively safeguard users' rights and interests.

Second, we will focus on services and meet users' expectations. We will work to enhance the capacity of personal information protection and urge major internet companies to set up customer helplines and respond to customers' requests.

Third, we will focus on key groups of users and promote the inclusiveness of information services. We will organize more mobile apps and websites and carry out elderly-friendly and barrier-free transformation and improvement, and work to introduce a group of model projects accordingly.

Fourth, we will focus on developing long-term mechanisms and form synergy among our work. Centering on key aspects such as mobile internet services and personal information protection, we will further improve both incentive and accountability mechanisms, strengthen technical methods, and encourage companies to improve their services and other capacities. Thank you.

Yicai:

Ranking first among new types of infrastructure facility, 5G is an important method to stabilize investment and economic growth. What are the MIIT's plans this year concerning the construction and application of 5G? Thank you.

Tian Yulong:

Thank you for your question. Since the commercial use of 5G technology officially kicked off, it has, as you mentioned, played a crucial and leading role in promoting new infrastructure. Due to the joint efforts of the MIIT, other government bodies, local governments, and the industrial sector, China's 5G construction and application remains world-leading. Currently, the 5G network has covered all prefecture-level cities, the urban area of all counties, as well as 87% of seats of townships and towns. The 5G coverage in China is definitely world-leading. This has played a vital role in stabilizing economic growth and investment.

This year is a critical year for the scale development of 5G applications. According to the overall plans of the Central Committee of the Communist Party of China (CPC) and the State Council, we will mainly continue our efforts for the integrated development of the network, applications, and the industry.

First, we will make solid progress in the development of the 5G network. Our goal is to build more than 600,000 5G base stations this year. As Mr. Xiao just mentioned, we now have over 1.42 million 5G base stations, so we can bring the total number to 2 million by the end of this year. We will constantly expand the scale of infrastructure building, , optimize the layout of infrastructure based on the needs, and cover more key areas such as factories of companies and industrial parks with the network. At the same time, we will improve the penetration of the network into high-speed trains, transportation hubs, shopping centers, and other densely-populated areas, and continue expanding its coverage in counties, towns, and townships.

Second, we will vigorously promote the innovative development of 5G applications. We will further implement the action plan for 5G applications dubbed "Raising the Sail," which is a key element of our effort. We will successfully hold the 5G application competition dubbed "Bloom Cup" to explore more new achievements and technologies and promote their wide application and commercialization. At the same time, guided by the needs of the industry, we will further develop demonstrative application scenarios for 5G plus industrial internet, pilot 5G plus medical and health care, and 5G plus smart education, and continue to deepen and expand our efforts in agriculture, culture, and tourism. We will launch a number of new smart terminals and apps for individual users to further improve their 5G experience.

Third, we will vigorously upgrade 5G technologies. We will intensify research and development (R&D) on key chips and core components, support relevant sectors to actively participate in formulating international standards, and aligning with them. At the same time, we will continue R&D and experiments on 5G enhancement and boost their capacity for integrating with other industrial verticals. We will increase the variety of 5G application products and motivate companies to work out more modular products of different levels and prices so as to meet the needs of different industries, different areas, and the general public for differentiated, customized, and personalized 5G products, and boost the rapid development of 5G technologies through scaled applications.

That is all I have to say. Thank you.

Bauhinia Magazine:

The industrial sector is an important sector for the goals of peaking carbon emissions and achieving carbon neutrality. Regarding this matter, what is the consideration of the ministry? And what specific measures will you take this year to make steady progress in green and low-carbon industrial transformation? Thank you.

Xiao Yaqing:

Thank you for your questions. To peak carbon emissions and achieve carbon neutrality is a major strategic decision made by the CPC Central Committee in consideration of both domestic and international dynamics. It will be a broad and profound transformation, and it is an inherent requirement and an inevitable choice for high-quality development. Energy consumption in the industrial sector accounts for about 65% of China's total energy consumption, and it is one of the major areas of energy conservation and carbon reduction efforts. We have a tight schedule to accomplish this arduous task. It is a major challenge as well as a major opportunity. Green and low-carbon industrial development will certainly bring new growth space, new innovation impetus, and new development opportunities to the industrial economy. There are many things we can do and many areas we can explore in green and low-carbon development. We will conscientiously implement the decisions and plans of the CPC Central Committee and the State Council, bear in mind the country's most fundamental interests, and adhere to a holistic view in order to handle well the relationships between development and emission reduction, the whole and the parts, long-term goals and short-term goals, and government and the market. We will make overall considerations to keep the proportion of manufacturing basically stable, ensure the security of industry chains and supply chains, and meet reasonable consumption needs. We will rationally break down goals and tasks to promote green and low-carbon industrial transformation in a steady and orderly manner.

Our work will cover the following aspects.

First, we will strengthen the top-level design of policies. We will implement the Action Plan for Carbon Dioxide Peaking Before 2030 issued by the State Council, actively take actions for peaking carbon emissions of the industrial sector, and release action plans for the industrial sector and key industries. With a focus on industries like iron and steel, building materials, petroleum chemistry, chemical industry, and nonferrous metal, we will formulate a series of categorized and targeted policies based on industry characteristics and development conditions to push for peaking carbon emissions in the industrial sector in a steady, sound, scientific and orderly manner.

Second, we will make in-depth adjustments to the industrial mix in an orderly way. We will pursue new development before ruling out the obsolete: we will deepen supply-side structural reform in key industries and build an industrial structure conducive to reducing carbon emissions; we will strictly implement production capacity swap policies in industries like iron and steel, cement, plate glass, and electrolytic aluminum; and resolutely restrict the haphazard development of projects that are energy intensive and have high emissions and low levels of production. In particular, we will strictly control the scale of energy use in key industries such as iron and steel.

Third, we will implement green and low-carbon transformation in the manufacturing sector. We will release a directory to guide key industries in green and low-carbon upgrading and transformation, and promote the innovation of low-carbon techniques and the digital transformation in key industries and sectors. We will push for sound implementation of the plan for the comprehensive utilization of industrial resources, and strengthen energy conservation monitoring and supervision and energy conservation diagnosis. We will speed up the cultivation of green data centers, give play to their demonstrative and leading role, and build public service platforms for key industries concerning peaking carbon emissions.

Fourth, we will build a supply system for green and low-carbon products. We will improve the green manufacturing system, improve the green design of products, and cultivate a number of demonstrative companies in green design. We will increase the supply of photovoltaic equipment, fans, and energy-saving motors, carry out special actions to pursue the innovative development of the smart photovoltaic industry, and improve the industry chain for wind power equipment. We will revise and improve the system for parallel administration of auto companies' fuel consumption and new energy vehicle credits. As Mr. Xin briefed just now, we will step up efforts to popularize new energy vehicles, vigorously develop green smart ships, promote the certification of green building materials products, and make moves to get rural areas access to green building materials. By increasing the supply of green and low-carbon products, we will help sectors like energy, transportation, and urban and rural development peak carbon emissions.

It is a very important task, and we need to push forward it step by step for notable outcomes. Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao, for your introduction. Thank you to all the speakers and media friends. That concludes today's press conference. See you next time.

Translated and edited by Zhang Rui, Liu Qiang, Lin Liyao, Zhou Jing, Wang Mengru, Wang Wei, Yan Xiaoqing, Li Huiru, Zhang Tingting, Chen Xia, Zhu Bochen, Liu Sitong, Zhang Jiaqi, Ma Yujia, David Ball 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:

Tang Renjian, director of the Office of the Central Rural Work Leading Group and minister of Agriculture and Rural Affairs

Liu Huanxin, deputy director of the Office of the Central Rural Work Leading Group and administrator of the National Rural Revitalization Administration

Wu Hongyao, deputy director of the Office of the Central Rural Work Leading Group and member of the CPC Leading Group of the Ministry of Agriculture and Rural Affairs

Chairperson:

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

Date: 

Feb. 23, 2022

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). On Feb. 22, the Central Committee of the Communist Party of China (CPC) and the State Council issued a document outlining key tasks to comprehensively push forward rural revitalization this year, also referred to as the "No. 1 central document," that everyone is interested in. To help people accurately understand the principles and content of the document, today we have invited Mr. Tang Renjian, director of the Office of the Central Rural Work Leading Group and minister of Agriculture and Rural Affairs to introduce and elaborate on the document and answer your questions. We also have with us Mr. Liu Huanxin, deputy director of the Office of the Central Rural Work Leading Group and administrator of the National Rural Revitalization Administration, and Wu Hongyao, deputy director of the Office of the Central Rural Work Leading Group and member of the CPC Leading Group of the Ministry of Agriculture and Rural Affairs.

Next, let's give the floor to Mr. Tang Renjian to give a brief introduction.

Tang Renjian:

Ladies and gentlemen, good morning. Spring has returned to the land and farmers are busying themselves in the fields. On Feb. 22, Xinhua News Agency was authorized to release the full text of a document issued by the CPC Central Committee and the State Council that outlines key tasks to comprehensively push forward rural revitalization this year, also referred to as the No. 1 central document. This is the 19th document in a row issued by the central government to guide the work related to agriculture, rural areas and rural people since the turn of the millennium, which shows the determination of the CPC Central Committee and the State Council to prioritize agriculture and deliver benefits to rural people. Next, I will briefly introduce the document to you.

First, the background of drafting the document.

Since last year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, in dealing with affairs related to agriculture, rural areas and rural people, we have overcome such difficulties as the COVID-19 pandemic and natural disasters and got off to a good start in implementing the 14th Five-Year Plan (2021-2025). First, we have made steady progress in agricultural production. Another bumper harvest was achieved, with the output of grain reaching 1.37 trillion jin (685 billion kg), an increase of 26.7 billion jin (13.35 billion kg). The capacity of raising hogs was restored half a year ahead of schedule, and the market supply and prices of other major agricultural products were generally stable. Second, the income of farmers maintained growth. The per capita disposable income of rural residents reached 18,931 yuan, an increase of 9.7% in real terms, and a growth rate 2.6 percentage points higher than that of their urban counterparts. Third, the gains in poverty alleviation have been consolidated and expanded. The monitoring and assistance mechanism has been continuously improved and strengthened, and the working mechanism, policy measures and institutional teams have been put in place in an orderly manner. We have maintained the bottom line of ensuring no large-scale return to poverty. Fourth, we have taken solid steps to comprehensively promote rural revitalization. The development of rural industries has accelerated, a five-year action plan on improving the rural living environment has 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 remarkable achievements in the reform and development of agriculture and rural areas have played an important role in turning a new page, responding to changes and stabilizing the overall social development.

2022 is an important year as China enters a new era of building a modern socialist country in an all-round way and strides toward its second centenary goal. At the end of last year, General Secretary Xi Jinping delivered an important speech at a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on issues related to agriculture, rural areas and farmers. He underscored factoring in the national strategic needs when responding to multiple risks and challenges, and ensuring the steady development of agriculture and rural areas. Tough measures and strong implementation are needed in dealing with affairs related to agriculture, rural areas and farmers. He also underlined and made arrangements on key issues including food security, preventing a large-scale return to poverty, and farmland protection. These provided the fundamental principles and an action plan for drafting the No. 1 central document in 2022, and doing a good job in affairs related to agriculture, rural areas and farmers at present and going forward. In response to major changes and the pandemic, both unseen in a century, and to promote the stable and healthy development of the economy and society, we must continue to comprehensively promote rural revitalization and give better play to the role of "agriculture, rural areas and farmers" as the anchor, paving the way for the 20th National Party Congress with actions.

Second, the main content of the document.

In the new era and new stage, the priority of the work related to "agriculture, rural areas and farmers" is to promote rural revitalization. Implementing the spirit of General Secretary Xi Jinping's important speeches, this year's No. 1 central document does not introduce new themes or new expressions. Instead, we have adhered to the overall goal of rural revitalization, prioritized stability and pursued progress while ensuring stability. The document outlines key tasks to advance rural revitalization in 2022. It comprises 35 articles in eight parts, and the main content can be summarized as "two bottom lines, three key areas, one reinforcement."

The "two bottom lines" refer to firmly upholding the two bottom lines of guaranteeing China's grain security and ensuring no large-scale return to poverty. It emphasizes that we will do our best to enhance grain production and the supply of vital agricultural products, strengthen protections to guard the red line of 1.8 billion mu (120 million hectares) of arable land, and ensure that the sown areas for grains remain stable and the full-year grain output stays above 1.3 trillion jin (650 billion kg). The document urges efforts to improve mechanisms for monitoring and assisting people at risk of falling back into poverty, and to promote areas that have been lifted out of poverty to consolidate and expand the achievements of poverty alleviation through development and ensure that there is no large-scale return to poverty.

"Three key areas" means to promote rural development, construction, and governance in a solid and orderly way. Regarding rural development, we will focus on the integrated development of the primary, secondary, and tertiary industries in rural areas and help farmers seek employment and raise their incomes locally or close to their homes. We will improve implementation mechanisms regarding rural construction and prioritize projects for farmers' well-being that provide universal access and meet farmers' fundamental and essential needs. As to rural governance, we will pay special attention to the construction of grassroots organizations creatively building effective platforms for cultural and ethical construction to maintain the safety and stability of rural society. 

"One reinforcement" means sticking to and reinforcing the Party's overall leadership over agriculture, rural areas, and farmers. In addition, the document emphasizes the responsibility in promoting all-round rural revitalization and scaling up policy guarantee and institutional innovation.

In summary, this year's document emphasizes the tasks, measures, and orientation for rural revitalization. It is both detailed and practical and clarifies the priorities and tasks for promoting all-round rural revitalization in 2022. 

Now, my colleagues and I are ready to answer your questions. 

Chen Wenjun:

Thank you, Mr. Tang. The floor is open. Please identify your media outlet before raising your questions. 

CCTV: 

Last year, the Central Economic Work Conference emphasized that primary products supply is a strategic issue. As grain is the most fundamental and key primary product, how should we ensure China's grain safety? Thank you. 

Tang Renjian:

Thank you for your question. General Secretary Xi Jinping has emphasized repeatedly that Chinese people should hold their rice bowls firmly in their own hands, with grains mainly produced by themselves. China's grain output has remained at 650 billion kilograms for seven consecutive years. We have ample supply and storage. China's grain prices have remained stable, and the market is steady, despite the sharp rise in grain prices globally and the impacts of the COVID-19 pandemic. This proves that China has maintained food security and that we are competent and confident to hold our rice bowls firmly in our own hands. 

However, this does not mean we can rest easy on grain security. From having enough food on one's table to eating well, from rice, flour, and oil to meat, eggs, and milk, Chinese people's consumption structure is upgraded all the time. However, the demand for food is still on the rise, and structural problems emerge constantly. Therefore, grain demand will remain in a tight balance for a long time, and the restraints in resources and the environment are increasing. Against this backdrop, we need to safeguard food security and conduct our work concretely and solidly. Therefore, we will work on the following three aspects. 

First, we will ensure that all the duties and responsibilities are fulfilled. When it comes to food security, the principles of comparative advantage and efficiency first do not always apply in China. The central government has made clear that grain-producing areas, grain-consuming areas, and areas that have a balance in grain production and consumption now have the responsibility of securing the sown areas for grains and grain output. Grain-producing areas should improve their comprehensive capacities in producing grain, grain-consuming areas should maintain and increase their self-sufficiency rates of grain, and areas that have a balance in grain production and consumption should ensure that they can realize grain sufficiency on their own. The State Council has approved this year's grain production goals, and we have done the breakdown and informed provincial (autonomous regions and municipal) governments of their respective goals. Next, we will make sure that both Party committees and governments shoulder the responsibility of ensuring food security. We will work with the related departments to formulate plans as soon as possible to evaluate the food security responsibilities of provincial Party committees and governments to make sure that they shoulder their responsibilities in this regard. 

Second, we will safeguard farmers' profits in grain production. After all, grain is produced by farmers. When farmers can make money by producing grain, the whole country's food is in safe hands. This year, we will work to improve the mechanism of guaranteeing farmers' profits in grain production and strive to make sure that farmers can break even with supportive policies and raise their income with agriculture-related businesses. On the policy front, we will reasonably raise the minimum purchase price for rice and wheat to continue implementing rice subsidy and subsidy policies for the producers of corn and soybean. We will also make sure that all rice, wheat, and corn producers in major grain-producing counties of major grain-producing provinces are covered by full-cost and income insurance. On the business front, we will focus on weak areas and vigorously develop agriculture services to raise farmers' incomes in producing grain. In all, we should make sure that farmers can make money and make as much money as possible through grain production. 

Third, we will strengthen the supporting capacity of fundamental elements. It is essential to implement the strategy of sustainable farmland use and innovative application of agricultural technology for national food security. We will firmly focus on the two key elements of seeds and farmland to consolidate the material foundation of grain production. In terms of seeds, last year, we launched a large-scale survey of agricultural germplasm resources, carried out the construction of a germplasm resource bank, and constantly strengthened the intellectual property protection of the seed industry. This year, we will make good use of policies to implement the action plan on energizing the seed industry. In the aspect of farmland, we have implemented a range of strong measures to protect the farmland. Both Party and government officials should take responsibility to ensure that the total area of China's arable land stays above 120 million hectares. We will ensure that the arable land is mainly used for the production of grain, agricultural products such as cotton, oil, sugar, and vegetables, as well as forage crops. Permanent basic farmland will be mainly used for grain production and all high-quality farmland will be used for grain production in principle. We mentioned three concepts of different levels here: arable land, permanent basic farmland, and high-quality farmland. In addition, in terms of agricultural machinery equipment, we should shore up weak links by regions and varieties and strengthen the technology and equipment support for modern agriculture. Thank you.

CRNTT:

This year is critical for pushing forward rural revitalization in an all-round way. According to the No. 1 central document, what new arrangements have been made in terms of working mechanisms and approaches to ensure that all tasks will be carried out in an active and steady manner? Thank you.

Tang Renjian:

We have completed all poverty eradication targets and tasks. We are now turning to the new goal of advancing rural revitalization in an all-round way. General Secretary Xi Jinping said that it's a historic shift of focus in the work related to agriculture, rural areas, and farmers. We have an effective experience in our poverty alleviation efforts, that is, a sound and improved working mechanism. Therefore, we will also learn from this good experience when pushing forward rural revitalization in an all-round way.

In the new era, as I mentioned at the beginning of this press conference, the focus of the work related to agriculture, rural areas, and farmers is to advance rural revitalization in an all-round way, which is also the focus of this year's No. 1 central document. In the new era, rural revitalization and the work related to agriculture, rural areas, and farmers contain similar subjects and extend over a similar range. Therefore, they should not be separated in our practical work. At present, it is crucial to be steadfast in our work, and to use strong actions.

First, we will ensure that all duties and responsibilities are fulfilled. It is a systematic project to advance rural revitalization in an all-round way, featuring integrated arrangements. It is not a specific task for a certain department or a certain sector. It needs the combined efforts of the Party and all of society, and of all departments and localities. In the next step, we will speed up formulating measures for the implementation of the rural revitalization accountability system, clarify responsibilities of the departments of the CPC Central Committee and the central government in advancing rural revitalization, and implement the specific requirements for Party secretaries at the five administrative levels of province, city, county, township, and village, to take charge of rural revitalization, so as to pool all efforts to create great synergy. This year, we will also carry out the performance evaluation on the work to promote rural revitalization strategy for provincial Party and government leadership groups and officials. Meanwhile, we will also improve the evaluation system for officials at the levels of city and county and ensure that all the duties and responsibilities are fulfilled.

Second, we will improve our mechanisms. We will use the effective experience and practice formed in poverty alleviation for promoting rural revitalization in accordance with new needs. To be specific, our work will go hand in hand with the implementation of regulations for the country's rural work issued by the CPC Central Committee and the law on the promotion of rural revitalization promulgated last year. We will make efforts to improve an all-round promotion mechanism for rural revitalization in terms of responsibility fulfilment, organization and promotion, social mobilization, factor guarantee, assessment and evaluation, work reports, and supervision and inspection, widely mobilizing the people and bringing together the resources needed.

Third, we will improve our work style. Different to poverty alleviation, rural revitalization is a prolonged campaign rather than a tough battle, and is also a career that covers all fields and all people on all fronts. We should give up the idea of accomplishing our tasks in one battle, not set unrealistic targets, avoid eagerness for quick results by going beyond the development stage, or even aiming high and going all out at random. All these won't work. We should resolutely oppose the practice of favoring form over substance in this regard. We should work in accordance with the actual situation of different places, respect the underlying trends of rural areas, and steadily promote our work with a more mature and more well-established system. We will carry out large-scale training to study General Secretary Xi Jinping's major expositions on the work related to agriculture, rural areas, and farmers. At present, there are elections for officials at different levels, including people working at the grassroots level. Some new officials have taken office. After taking up their posts, they should learn deeply and thoroughly understand major expositions by General Secretary Xi Jinping on the work related to agriculture, rural areas, and farmers, and then make practical efforts. Therefore, we will study further by carrying out large-scale training. Only in this way can we keep to the right direction of policies, effectively improve our work style, enhance the policy level of the work related to agriculture, rural areas, and farmers and improve our working ability.

Fourth, we will strengthen the building of organizations. This year's No. 1 central document emphasizes that rural work leading groups under Party committees at all levels should undertake both the duty to consolidate and extend gains in poverty alleviation, and promote all-round rural revitalization. Now at the central level, the Office of the Central Rural Work Leading Group, the Ministry of Agriculture and Rural Affairs and the National Rural Revitalization Administration are jointly promoting the all-round rural revitalization, under the leadership of the Central Rural Work Leading Group. What roles are each of these respective authorities playing? First, the Office of the Central Rural Work Leading Group is taking the lead in carrying out the strategy. Second, the Ministry of Agriculture and Rural Affairs is responsible for coordinating different departments, as enshrined in the Law on the Promotion of Rural Revitalization. Third, the National Rural Revitalization Administration is in charge of putting measures in place. While their roles may be different, there is no way to separate them from each other. We should join together to promote rural revitalization in a well-organized and systematic manner, from different perspectives and at different levels.

Thecover.cn:

Last year, China experienced repeated challenges from natural disasters and the pandemic. What achievements have been made in consolidating and extending the progress in poverty alleviation? And what measures will be taken to prevent a large number of people from falling back into poverty? Thank you.  

Liu Huanxin:

Thank you for your attention to the poverty alleviation work. General Secretary Xi Jinping attaches great importance to consolidating the achievements of poverty alleviation, stressing that this is the premise of rural revitalization, and urged continuous efforts to ensure those lifted out of poverty can live better lives. Over the past year, we have implemented the decisions and plans of the CPC Central Committee and the State Council. Solid efforts have been made in consolidating and extending the gains in poverty alleviation and coordinating them with the promotion of rural revitalization. Our work has been in the following aspects: First, we prevented risks. The dynamic monitoring mechanism to prevent people from falling back into poverty has been established in an all-round manner. The mechanism has eliminated the risks of nearly 70% of the people monitored, and the rest of them have been provided with support measures and can get rid of the risks in the future. We have provided timely support to people that have been lifted out of poverty and then affected by natural disasters, and thus prevented them from falling back into poverty because of disasters. Second, we coordinated work. Support policies that were carried out during the course to eradicate poverty have been adjusted and optimized by category to formulate 33 policies that dovetail with rural revitalization. A total of 160 counties were listed as key counties for national rural revitalization, and favorable policies have been leveraged in 14 sectors. We ramped up eastern-western collaboration, designated assistance, and follow-up support for resettled population. We completed organization of agencies for promoting rural revitalization. Evaluation work has been carried out to ensure the work to consolidate and extend gains in poverty alleviation dovetails with that of promoting rural revitalization. Such work has been promoted in an orderly manner. Third, we boosted development. The central government arranged 156.1 billion yuan in subsidies to promote rural revitalization, which is 10 billion yuan more than the previous year, with over half of the fund invested in developing industries. Some 31.45 million people lifted out of poverty found jobs, up by 1.26 million over last year, representing an increase of 4.2%. The per capita net income of people lifted out of poverty reached 12,550 yuan, an increase of 1,810 yuan or 16.9% over the previous year. In general, we have consolidated and extended poverty alleviation progress in 2021 and ensured that people do not sink back into poverty in large numbers.

Next, we will fully implement the guiding principles laid out by General Secretary Xi Jinping and the decisions and plans of the CPC Central Committee and the State Council. Solid efforts will be made to ensure departments take their responsibilities, implement policies and carry out work to consolidate and extend poverty alleviation progress. We will work to ensure that people lifted out of poverty live a better life, and ensure that people do not sink back into poverty in large numbers. Our major work will be in the following aspects:

First, efforts will be made to improve the mechanism for monitoring and assisting people at risk of falling back into poverty. Our work will be carried out using a three-pronged approach. First, we will make it more targeted. We will carefully identify the groups that need to be monitored. All rural people at risk of returning to or falling into poverty and those affected by sudden and serious difficulties should be included in the monitoring mechanism. Second, we will provide support earlier. Those experiencing serious financial difficulties arising from housing, education, employment, illness, disaster and epidemic will be provided with support and assistance in a timely manner, so the risk of them returning to or falling into poverty will be nipped in the bud. Third, we will make procedures more simplified. We will remove the barriers that hamper the flow of data among different monitoring platforms, shorten the time and improve the efficiency of the mechanism for monitoring and assisting people at risk of falling back into poverty.

Second, efforts will be made to increase the incomes of people that have been lifted out of poverty. We will focus on providing employment support. Work on consolidating and extending gains in poverty alleviation will be driven more by development. We will prioritize the transformation and upgrading of industries. We will gradually increase the proportion of the central government subsidies for rural revitalization for industrial development. We will step up efforts to address weaknesses in technology, facilities and marketing, and increase the operating income of people that have been lifted out of poverty. We will take every step possible to stabilize employment and ensure more people lifted out of poverty can find jobs through such methods as organizing labor export, boosting employment in paired-up factories, and optimizing public welfare posts for poverty alleviation.

Third, efforts will be made to provide stronger assistance in key areas. In terms of key counties for national rural revitalization, we will compile implementation plans. We will also pool resources to build a series of projects to address weaknesses and boost development in the counties so they will gain a stronger capacity for self-development and have a more solid and sustainable foundation for poverty alleviation. In terms of resettlement areas, we will continue increasing follow-up support with regard to expanding employment, infrastructure construction and public services, so as to ensure smooth resettlement, and make sure that those involved have the means to better themselves.

Fourth, we will make efforts to promote the implementation of assistance policies in regions lifted out of poverty. We can't slam on the breaks as soon as we win the battle against extreme poverty. We need to ensure that major assistance policies will remain unchanged and keep up the support intensity to give them a leg up to get them going. Therefore, we will evaluate the effectiveness of the policies this year to promote the implementation and ensure that they can achieve results, which will ultimately provide support and guarantee for consolidating and expanding the achievements in poverty alleviation. 

China Daily:

This year's No. 1 document pointed out that strong measures shall be implemented to protect the arable land. What strong measures will be adopted regarding arable land construction and protection? Thank you. 

Wu Hongyao:

This is a very important question. The arable land serves as the lifeline of grain production. General Secretary Xi Jinping has attached great importance to protecting arable land. He has made important instructions overt it on various occasions, noting that the requirements for the protection of arable land must be further clarified to ensure that China's 1.8 billion mu (120 million hectares) of farmland is a reliable figure and that all of the farmland is fertile. This year's No. 1 central document has paid more attention to the cultivation and protection of arable land, and it has rolled out a series of strong measures, which can be summarized as "ensuring quantity, improving quality, regulating the utilization and tapping into the potential."

To ensure quantity, we will firmly stick to the red line of 1.8 billion mu of arable land. Priorities lie in the following three aspects. First, we will draw redlines for designating arable land and permanent basic cropland, protecting the ecosystems and delineating boundaries for urban development. Second, we will specify the task quotas and targets that authorities at all levels need to achieve to protect arable land and permanent basic farmland, with every single piece of the land being marked with details. Third, some responsibility statements will be signed between central and local authorities, setting up specific targets for protecting arable land, which will be taken as mandatory indexes. Finally, we will ensure a stringent mechanism with a "one-vote veto" system and a lifelong accountability system. 

In terms of improving quality, we will ramp up efforts to improve the quality of arable land. First, we will continue to take high-standard farmland construction as our priorities, aiming to complete the construction of 100 million mu of high-standard farmland and 400 million mu of high-efficiency water-saving irrigation areas. Moreover, we will also step up efforts to upgrade medium-and low-yield farmland to improve the fertility of arable land. Second, we will make great efforts to protect chernozem soils and further promote national chernozem soils protection projects to adopt conservation tilling techniques on 80 million mu of chernozem soils. Third, we will strengthen the entire process of regulation over balancing the occupation and replenishment of arable land, and ensure that the replenished land can be used in a long-term and stable manner, which will ensure that the capacity of the replenished land can be equivalent to those have been occupied. 

In terms of regulating the utilization, we will strengthen the regulation over the use of arable land. First, those practices to turn the arable land into construction land shall be strictly limited. We will enhance law enforcement and regulation and punish those illegal practices of using the arable land for non-farming purposes. Second, we will hold tight control over converting arable land into other agricultural land. Third, we will ensure that the use of arable land should strictly follow specific priorities that they are supposed to be used. As Mr. Tang said, the arable land should be used primarily for the production of agricultural products such as grain, cotton, oil, sugar, and vegetables, as well as forage grass and fodder. The permanent basic farmland is mainly used for grain production, and all the high-standard farmland is theoretically used for grain production. 

We will step up efforts to tap into the land potential to increase the quantity of arable land. We will support the practices of converting those qualified saline-alkali soil and other potential land resources into arable land in a proper and orderly manner. While protecting the ecological environment, those idle land and abandoned land suitable for development can be used to develop facility agriculture to break the resource constraints in terms of arable land, light, and heat. Thank you.  

China County Times:

One of the priorities of rural revitalization is to help boost the incomes of populations through industrial development. What are the key areas and directions in this year's No. 1 central document on promoting rural industrial development? Thank you.  

Tang Renjian:

This question is crucial, as industrial revitalization stays at the top of the "five priorities" of rural revitalization. Therefore, I'd like to invite Mr. Wu to answer this question.

Wu Hongyao:

General Secretary Xi Jinping stressed that thriving business is the basis for resolving all issues facing rural areas. Therefore, industrial revitalization stays at the top of the "five priorities" of rural revitalization. This year's No. 1 central document sets out precise requirements for promoting rural development by industrial development, aiming to step up efforts in three aspects. 

First, efforts should be made to promote the integrated development of the primary, secondary, and tertiary industries in rural areas. Rural industries have their roots in agriculture. While making farming and breeding industries stronger, we will fully engage the multiple functions of agriculture, realize the multiple values of rural areas, and develop the three major industries of farm-produce processing, rural leisure tourism, and rural e-commerce. Vertically, we will build a comprehensive agricultural industry chain, facilitate the expansion of industries to the back end and downstream, and shift the focus from selling initial agricultural products to promoting brands, with the aim of increasing production values and industrial efficiency. Horizontally, we will advance the in-depth integration of agriculture with leisure, tourism, health care, ecology, culture, elderly care, and other industries to enrich the varieties of rural industries and enhance the value of the rural economy.

Second, efforts should be made to develop county-level industries that can help boost farmers' incomes. We will develop county-level industries with obvious comparative advantages which can drive agricultural and rural prosperity and create employment opportunities to ensure that every county has at least one characteristic industry. To achieve the coordinated development of county-level industries, we will scientifically arrange production, processing, sales, consumption, and other links, locate them in the most suitable places, and form a spatial industrial layout with a reasonable division of labor among counties, townships, and villages. Meanwhile, we will leverage the role of industrial parks as the platform, guide the transfer of farm-produce processing industry to counties and main production areas, and build characteristic industrial clusters featuring close coordination between urban and rural areas.

Third, efforts should be made to help farmers get jobs and increase incomes locally or in nearby regions, which is the purpose of industrial development in rural areas. We must not make business owners better off while leaving farmers in poverty. Nor should we exclude farmers from the industrial chain. We encourage industrial and commercial capital to invest in rural areas, give play to the advantages in capital, technology, management, and brand, and improve the interest linkage mechanism to help farmers gain prosperity through complementary strengths of industrial chains and an effective division of labor. We will also support commercial organizations to provide agricultural services such as contract farming, processing, logistics, and marketing so that farmers can share more benefits from the growth of industries. Thank you.

Economic Daily:

Last year, large areas of winter wheat were not planted on time due to the autumn floods. What impact will it have on this year's summer harvest? What measures will be taken to ensure stable and high yields? Thank you.

Tang Renjian:

This journalist has a keen insight. The questions involve the biggest challenge in our present work related to agriculture, rural areas, and farmers. It is also our chief concern now.

Due to abnormal autumn floods, more than 7.3 million hectares of autumn and winter wheat across Hebei, Shanxi, Shandong, Henan, and Shaanxi provinces were not planted on time. How long was the sowing date delayed? For around half a month. The delay affected one-third of the total acreage, which is a large scale never seen before. Thanks to careful cultivation, the acreage of winter wheat is as large as that of last year. However, the seedling growth becomes complicated and we still face grave challenges in reaping a bumper summer harvest. Summer harvest is the first of China's annual grain production, which accounts for more than a fifth of the annual grain output and 40% of its annual staple food production. Summer grain production is of great significance for ensuring supply, stabilizing expectations, and increasing confidence. Confronted by the complicated situation, we will make every effort with a strong determination to ensure a bumper summer harvest and get a good start for high grain yields for the whole year.

First, we will strengthen wheat field management. This is a fundamental task. Now it's around 100 days before the summer wheat harvest. Our first priority is to maximize yield recovery by adopting technologies and measures at the three key stages of wheat growth, namely green-up, stem elongation, and grain-fill. At the green-up stage, the critical measure is applying fertilizers to boost the growth of weak seedlings and increase the number of panicles; at the stem elongation stage, the critical measure is resisting drought and freezing to boost the growth and increase the number of grains; at the grain-fill stage, the critical measure is applying a variety of pesticides, germicides, and fertilizers to increase the weight of grains. We have provided relevant local governments with detailed information about the distribution of late-planted wheat based on the types of seedling growth, which will serve as a basis for targeted guidance. Recently, authorities of agriculture and rural affairs have mobilized large groups of personnel to concentrate on the frontline of wheat production and offer targeted services for designated regions. They are working hard to maximize the yields of wheat sown at the right time and prevent and minimize the reduction in the yields of late-planted wheat.

Second, we need to do a good job in disaster prevention and mitigation. For one, we need to prevent natural disasters. Due to the influence of the La Nina phenomenon, extreme weather is more likely to occur this year. We will focus on preventing disasters such as spring cold, late spring cold, summer drought, and floods that have a great impact on food production. We will further detail and materialize the plan for disaster prevention and mitigation to achieve a bumper harvest, and make material reserves and technical preparations as soon as possible. We will make full and good use of the disaster relief funds for agricultural production to help farmers take the initiative to avoid disasters, scientifically prevent disasters, and minimize disaster losses. For the other, we will make disease and insect pest control. Because there was a lot of rain last year and the soil moisture was good, there are advantages, but there are also disadvantages, including that the risk of pests and diseases is relatively high. Therefore, this year, crop diseases and insect pests are expected to appear more and more frequently. Wheat will mainly suffer from stripe rust, scab, etc. This year, there will also be stem rot, all because of the large amount of water. We will focus on prevention and control of these major pests and diseases, implement "integrated monitoring, general coordination, one-map command," (command the battle against pests and disease based on a smart map that integrates and shows all the visual information) and vigorously promote unified prevention and treatment, joint prevention and control, and emergency prevention and control so as to achieve the goal of rescuing food from insects.

Third, we need to do a good job in preparing for spring farming. Not long ago, the national work conference on spring agricultural production was held to fully deploy the spring plowing and preparation work. The central government is also currently studying the distribution of agricultural subsidies to support spring farming. We will take the implementation of grain sown acreage as the top priority of spring plowing and preparation work, consolidate the production of early rice and stabilize the acreage of autumn grain, ensure that the acreage of grain can be allocated to households and fields, and consolidate the acreage coverage foundation for a bumper grain harvest throughout the year. At the same time, we will work with relevant departments to ensure the supply of agricultural materials, and to schedule the demand for seeds, fertilizers, and medicines during spring plowing as soon as possible. We will speed up the efforts to introduce agricultural materials into stores and villages, stabilize the price of agricultural materials as much as possible, and strengthen quality supervision in order to meet the needs of spring plowing work. Thank you.

China Rural Magazine:

The fifth plenary session of the 19th CPC Central Committee proposed to implement rural development actions; put rural development in an important position in socialist modernization; optimize work, living, and ecological space; continue to improve village conditions and living environment; and build beautiful and livable countryside. Please let us know what are the new layouts and new requirements for rural development in the No. 1 central document this year? Thank you.

Liu Huanxin:

The implementation of rural development actions is a major deployment made by the fifth plenary session of the 19th CPC Central Committee, and an important carrier and key point for comprehensively promoting rural revitalization. General Secretary Xi Jinping has emphasized that rural development must be done quickly, steadily, and persistently. The rural development action plan will be released soon. This year's No. 1 central document, on the basis of summarizing the practices of various regions, put forward clearer requirements for the implementation mechanism of rural development, focusing on the "three adherences."

The first is to adhere to the focus on the improvement of people's livelihoods that is inclusive, basic, and fundamental. A basic goal of rural development is to improve rural production and living conditions, and strive to allow farmers to gradually live a modern and civilized life in their lands. It says we don't need to set the bar too high on goals and standards, while levels, standards, and grades can be adapted to actual conditions of different places, high or low. The focus is to ensure basic functions and to solve outstanding problems. It asks to strengthen infrastructure construction in key areas such as rural roads, water supply, electricity, network, and housing security, continue to improve the rural living environment. In particular, those facilities that are beneficial to both production and life, such as rural roads, storage cold chain, and logistics facilities, should be prioritized and their construction accelerated.

The second is to adhere to the understanding that we develop rural areas for farmers. To promote rural development, we must fully respect the wishes of farmers. If farmers expect something, we have to do it quickly. If farmers are willing to do something, we should lead them to do it. If they don't want to do something, we should put it off and slow down. We should fully understand the long-term and complex nature of rural development, grasp the timeliness, scale, and effects of the work, adhere to the principle of quality over quantity, and actual effects over progress – we want good quality rather than quick pace. When doing construction based on the village, we must pay attention to the protection of traditional villages; retain the original appearance, style, shape, and texture of the village; retain the green mountains and lucid waters; and retain the nostalgia. We must not blindly demolish old villages and build new ones, or not go beyond the development stage to engage in large-scale financing, large-scale development, and large-scale construction. We should strictly regulate the village-dismiss and village-merger.

The third is to adhere to bottom-up, villager autonomy, and farmers' participation. Farmers are the main part of production and life in rural areas. In rural development, targets and tasks cannot be set from the top down. The key is to mobilize and organize farmers and give full play to the main role of farmers. What farmers should do should be left to be done by farmers themselves as much as possible, especially the things that farmers do inside their households as well as in front of and behind their houses, such as rural toilet renovation, courtyard sanitation, and greening and beautification – these are mainly farmers' own things, and we can delegate and mobilize the farmer masses to do them. The government should focus on doing things that farmers can't do or can't do well, such as creating water supply security and sewage treatment for rural toilet improvement, or the collection, transfer, and centralized treatment of domestic garbage and the improvement of the public environment of the village – the government must do these things well. Thank you.

Tang Renjian:

Mr. Liu Huanxin just gave a wonderful answer to the above question. Now I would like to conclude by making two points that I think are most important and worth our attention after more than one year of practice and implementation of the rural revitalization strategy across the board.

First, in terms of working philosophy, we should uphold the principle that rural revitalization and rural development are for rural people. Second, in terms of methodology, in accordance with the instructions of General Secretary Xi Jinping, we should adopt an approach in which quantity gives way to quality, the speed of progress gives way to solid outcomes, and pursuit of quick results gives way to good results. These are the two most important points.

Farmers' Daily, farmer.com.cn:

Rural governance has always been a focus of public concerns. What are the priorities for rural governance in the No. 1 central document this year? And what measures will you take? Thank you.

Tang Renjian:

The National Rural Revitalization Administration is in charge of concrete work regarding rural development and rural governance. Let's give the floor to Mr. Liu Huanxin.

Liu Huanxin:

General Secretary Xi Jinping has attached great importance to rural governance, stressing that we should innovate the system to achieve good governance in rural areas. Rural governance is the cornerstone of China's state governance and an important part of rural revitalization. This year, the No. 1 central document outlines three priorities for rural governance.

First, we should strengthen the development of rural community-level organizations. The success of rural areas hinges on the Party, which is our biggest institutional strength. We should focus on team-building, strengthening the function of county-level Party committees in promoting Party building at township and village levels. After the elections at township and village levels, we will carry out extensive training on the theme of rural revitalization, helping resident first Party secretaries and working teams play their role to the full. We will also strengthen the leading groups, and implement a gridded management model, digitalization empowerment and refined services. We should focus on mechanism establishment, implementing in real earnest a "4+2" system. Here, "4" means four steps: proposals should be put forward by the Party branch, jointly discussed by the village committee and the Party branch, and deliberated by Party members, and resolutions should be adopted by villagers' representatives; "2" means transparency on two levels: resolutions and implementation results should be made known to the public. By doing this, we will make sure that all the important affairs and problems at village level will be studied and discussed by village Party organizations, and their leadership over various other village-level organizations will be enhanced and improved. Meanwhile, a rural governance model which combines self-governance, rule of law, and rule of virtue will be improved under the leadership of Party organizations. We should focus on supervision, carrying out extensive disciplinary inspections for city and county-level Party committees. We will strengthen communication and coordination between grassroots disciplinary inspection commissions and committees for supervision of village affairs and ensure effective dovetailing to enhance the supervision over village officials.

Second, we should promote cultural and ethical progress. The key is to explore new ways to enable the voice and call of the Party to reach thousands of rural households in a form that is more acceptable and easily understandable to rural people. Nowadays, rural areas are still underdeveloped in culture. We will enrich the cultural life of rural people, increase the supply of cultural and intellectual products, and support farmers to actively organize and participate in cultural activities and sports. Low-cost, participant-friendly, healthy, and positive recreational activities will be introduced for rural people to enjoy — although not necessarily high-end, ostentatious ones — as long as they can produce the desired effect. We will also strengthen focused efforts to tackle problems such as high bride price, cash gift competition, luxurious funerals, and lack of family support to the elderly in order to promote a positive cultural environment in civil and neighborly communities that features good family traditions and simple and honest people.

Third, we should explore new models and new platforms. In recent years, we carried out trials and demonstrations for developing a rural governance system and explored some good approaches, including using reward points and task lists. Next, we will step up efforts to promote the application of such approaches and set up clearly detailed standards, regulated procedures, and evaluation mechanisms in order to yield solid results in rural governance and deliver tangible benefits for farmers. Thank you.

Yicai:

In recent years, China's annual import volume of soybeans amounts to about 100 million metric tons. Although the figure in 2021 declined, the total amount was still huge. What measures does the No. 1 Central Document propose to enhance the production capacity of soybeans and oil plants? Thank you.

Tang Renjian:

Currently, despite of the status of tight balance between supply and demand of grain in China, people don't have to worry about not having enough food. There is a structural problem that China still experiences low self-sufficiency in soybeans and oil plants. Due to the improvement of living conditions and the growth of animal husbandry, China's demand for soybeans has increased remarkably, and its imports have seen rapid growth. As you mentioned, China's import volume of soybeans amounted to 100 million metric tons in 2020 and over 90 million metric tons in 2021. Currently, China's domestic soybeans can meet the need of food consumption. That is to say that our consumption of tofu and other soybean products is well guaranteed. Imported soybeans are mainly used to make edible vegetable oil and plant proteins for animal feed of husbandry. Looking forward, we will make full use of domestic and international markets and their resources to increase the supply of soybeans and oil plants. But more importantly, we need to focus on self-improvement and make more efforts on structural optimization. We need to be more determined in enhancing the production capacity of soybeans and oil plants and plant oil crops as much as we can in a bid to have more control over the edible oil security of Chinese people. We need to make efforts mainly in the following three aspects:

First, we need to proactively restore soybean planting areas in northeast China. As we know, the northeastern region is traditionally a major soybean-producing area. We will improve the policy on subsidizing corn and soybean production, support the region to carry out reasonable crop rotation of corn and soybeans and encourage farmers to plant soybeans this spring. In the meantime, some areas in northeast China, mainly those with the problem of groundwater overexploitation, can plant more soybeans by turning paddy fields into dry land. The northeastern region used to grow rice many years ago, but the conditions in some areas were not suitable. Thus, we can resume soybean planting in these areas.

Second, we need to proactively promote corn-soybean strip cropping. Instead of planting alternate rows of corn and soybeans, people often plant two rows of corn, alternating with four rows of soybeans in pilot zones. Thus, it is called strip cropping, and both plants can receive adequate natural sunlight to grow. The corn-soybean strip cropping has been piloted for many years, especially in southwestern regions like Sichuan province. Currently, there are over seven million mu (about 466,667 hectares) of strip cropping areas in China, and the planting model and techniques have grown mature basically. The biggest advantage of strip cropping is that it can solve the problem of exclusiveness between corn and soybeans because in the past, people could only plant one of them in the same area, but not the both. With strip cropping, we can make sure that corn yield does not decline on the whole and realize its stable production. Meanwhile, an additional 100 to 150 kilograms of soybeans can be harvested per mu every harvest season. This is pretty good news for farmers. This year, we plan to further promote this method and carry out corn-soybean strip cropping in suitable areas such as those along the Yellow River, Huai River, and Hai River, as well as southwest and northwest China. Still, because this method was only experimented in pilot areas and many regions are not familiar with it, we need to provide relevant assistance such as grain varieties, equipment, and techniques. With this in mind, the central government has allocated special subsidies to support . Additional funds will be taken from the commercial services sector and allocated to large-scale business entities that undertake relevant tasks so as to increase their willingness to promote corn-soybean strip cropping. Besides, we are also working to include strip cropping in the scope of agricultural insurance in some areas.

Third, we need to proactively enhance the production capacity of oil plants. There are many oil plants besides soybeans, such as rapeseed along the Yangtze River, peanuts in the northern and northwestern regions and North China, and camellia in the southern regions. All these need further development. In terms of rapeseed, the winter fallow in south China has huge potential. In 2021, more than five million mu of such fields were added, and we plan to expand more this year. As for peanuts, the key planting regions include areas along the Yellow River, Huai River, and Hai River and the agro-pastoral zone in the north, also known as regions along the 400 mm precipitation line. We need to promote crop rotation of corn and peanuts here and stabilize and expand the areas of land under peanuts cultivation. Regarding camellia, we need to focus on expanding its farming areas. Despite the substantial production potential, the output volume of camellia is very little nowadays, and we need to improve farmlands with a middle or low output. In addition, there are also other special oil plants such as sunflowers, flax, and sesame, and we need to promote their growth based on the actual local conditions.

In conclusion, with a variety of oil plans and diversified measures, we hope that China's self-sufficiency of soybeans and oil plants could see a comparatively huge improvement in five to 10 years. Thank you.

Chen Wenjun:

Since there are no further questions, today's press conference is hereby concluded. Thank you to all the speakers and friends from the media. Goodbye.

Translated and edited by Zhang Lulu, Ma Yujia, Zhou Jing, Huang Shan, Zhang Liying, Wang Yanfang, Zhang Rui, Wang Yiming, Li Xiao, Zhu Bochen, Wang Qian, Yuan Fang, Cui Can, Yang Xi, Gong Yingchun, 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:

Liu Kun, minister of finance

Yu Weiping, vice minister of finance

Xu Hongcai, vice minister of finance

Chairperson:

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

Date: 

Feb. 22, 2022

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to be joined by Mr. Liu Kun, minister of finance, who will introduce China's fiscal reform and development, and answer your questions. Also present at the press conference today are Mr. Yu Weiping and Mr. Xu Hongcai, both vice ministers of finance.

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

Liu Kun:

Ladies and gentlemen, friends from the media, good morning. I am glad to meet you ahead of the "two sessions." On behalf of the Ministry of Finance (MOF), I would like to express my heartfelt gratitude to friends from the media for your constant interest and support regarding China's fiscal development. Now, I will introduce the fiscal work in 2021.

2021 was a landmark year in the history of our Party and our country. Faced with complex and severe domestic and international contexts, as well as multiple risks and challenges, the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core has rallied and led the Chinese people of all ethnic groups to forge ahead, making major achievements in various undertakings of the Party and the country. The MOF has followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and borne in mind the country's most fundamental interests. In accordance with the decisions and plans of the CPC Central Committee and the State Council, we have implemented a proactive fiscal policy, taken solid steps to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and security in the six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations), and worked to achieve new progress in creating a new development dynamic and promoting high-quality development. Revenue in the national general public budget reached 20.25 trillion yuan, an increase of 10.7% over the previous year, and in line with the budget. Expenditure in the national general public budget reached 24.63 trillion yuan, an increase of 0.3% year on year, providing a solid fiscal foundation for a good start to the 14th Five-Year Plan (2021-2025) period.

First, we rolled out stronger policies to sustain steady economic recovery. General Secretary Xi Jinping emphasized that scientific macro control and effective government administration are the intrinsic requirements for exploiting the advantages of the socialist market economy system . In 2021, we enhanced cross-cycle adjustment, strengthened unified management of funds and maintained the necessary scale of government expenditure to ensure major economic indicators stayed within an appropriate range. We issued 3.65 trillion yuan of local government special purpose bonds and adjusted the pace according to economic developments, thus playing an important role in maintaining stable growth and tackling areas of weaknesses. We implemented targeted tax and fee reduction policies and made further tax and fee cuts of about 1.1 trillion yuan to help enterprises overcome difficulties and achieve development. We worked to normalize the straight transfer of funds and expand coverage of the mechanism. Funds totaling 2.8 trillion yuan went straight to primary-level governments, which in turn benefited enterprises and the people. Meanwhile, we implemented the requirement for the Party and government institutions to keep tightening their belts, continued negative growth in central government expenditure, and channeled saved funds to bolster financial support for local governments to improve the people's well-being. We improved the quality, efficiency and sustainability of the proactive fiscal policy to offset downward economic pressure and keep the fundamentals of the overall economy stable.

Second, we supported the development of science and technology and promoted the upgrading and stabilization of industrial and supply chains. General Secretary Xi Jinping emphasized that the essence of the new development dynamic is realizing a high level of self-reliance . The MOF implemented the innovation-driven development strategy. We continued to invest more in science and technology. In 2021, we spent 0.97 trillion yuan on science and technology, an increase of 7.2% over the previous year, to provide strong support for the development of integrated circuits, new energy vehicles, and other industries as well as major breakthroughs in core technologies in key fields. At the same time, we innovated and improved policies and mechanisms. We reformed and optimized the management of research funding allocated by the central government, introduced new preferential tax and fee policies, granted subsidies for small- and medium-sized enterprises (SMEs) with high growth potential, advanced technology and strong market competitive edge, and implemented an open competition mechanism to select the best candidates. These measures are aimed at stimulating the innovation and creativity of researchers and enterprises.

Third, we have increased investment in living standards, and people's sense of fulfillment, happiness, and security have been significantly enhanced. General Secretary Xi Jinping emphasized that the people are the country. As we have fought to establish and consolidate our leadership over the country, we have in fact been fighting to earn and keep the people's support and to ensure them a good life. The MOF has always adhered to the people-centered philosophy of development, coordinated the needs of the people and the possibility of financial resources, and continued to strengthen fundamental well-being for all and ensure there is a cushion in place for those most in need. In 2021, public spending on education stood at 3.76 trillion yuan, up 3.5% over the previous year.

Meanwhile, public expenditure on social security and employment amounted to 3.39 trillion yuan, up 4% over the previous year. Despite enormous public spending in 2020 due to the COVID-19 pandemic, we still ensured high spending on improving people's lives in 2021. Therefore, the scale of expenditure in 2021 was basically the same as that of the previous year, and multiple livelihood policies were effectively implemented.

Fourth, we have promoted the coordinated development of urban and rural areas and further optimized the development pattern. General Secretary Xi Jinping emphasized that coordination is the means, end, and evaluation criterion of development. The MOF firmly followed the new development philosophy and ensured that the transfer payments, fiscal and tax policies, and other instruments were given full play to improve the balance and coordination of urban and rural regional development. In 2021, the central government's transfer payments (including tax rebates) made to local governments topped 8 trillion yuan, with a priority on areas with financial difficulties and underdeveloped regions, so as to enhance the financial guarantee capability for the coordinated development of urban and rural areas. We worked to ensure the effectiveness of major assistance policies and supported consolidating and expanding the country's poverty alleviation achievements and guaranteeing a smooth transition into rural vitalization. In addition, we implemented major national regional strategies such as developing the Yangtze River Economic Belt and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and promoted coordinated regional development to a higher level and better quality.

Fifth, we have strengthened ecological protection and continue to make our skies bluer, waters clearer, and mountains greener. General Secretary Xi Jinping emphasized that lucid waters and lush mountains are both natural and economic wealth. We must keep in mind that lucid waters and lush mountains are invaluable assets. The MOF resolutely implemented Xi Jinping's Thought on Ecological Civilization, and comprehensively employed policies and measures such as fiscal fund guidance, tax adjustment, and government green procurement to support resource conservation and ecological, environmental protection, and vigorously promoted the transition and economic and social development featuring green and low carbon. In 2021, the national fiscal investment in ecological and environmental protection reached 821 billion yuan. In addition, we introduced an action plan to support the establishment of a horizontal eco-compensation mechanism in the entire Yangtze River Basin, strengthened the role of taxation in regulating the ecological environment protection, and improved government green procurement policies.

Sixth, we have deepened fiscal and tax system reforms and strengthened the supervision of fiscal management. General Secretary Xi Jinping emphasized that good fiscal and taxation systems are the institutional guarantee for improving resources allocation, maintaining market unity, promoting social equity, and realizing enduring peace and stability. Therefore, playing an active and leading role, the MOF has deepened fiscal and taxation reforms speedily and steadily and expedited the building of a modern public finance system. In 2021, we promoted tax legislation such as value-added tax, further deepened the reform of the budget management system, carried out the evaluation of transfer payment and major expenditure policies, promulgated administrative regulations on state-owned assets, and promoted the launch of integrated budget management systems in all provinces. Meanwhile, we carried out special campaigns rectifying violations in four types of activities, including the unlicensed operation of accounting firms, and the supervision of financial management was further strengthened.

Ladies and gentlemen, friends from the media, 2022 is an important year as China enters a new era of building a modern socialist country in an all-round way and strides toward the second centenary goal. The CPC will hold its 20th National Congress, and it is significant to do public finance work well. The MOF will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee's authority and its centralized, unified leadership. We will also bear in mind the country's most fundamental interests, improve the efficiency of fiscal policies, pay more attention to the precision and sustainability of policies, and exert the role of policies in advance. 

In these ways, we will contribute to sound and sustained economic development and social stability, paving the way for the 20th National Party Congress with actions.

That concludes my introduction. Next, my colleagues and I would like to answer your questions. Thank you all!

Chen Wenjun:

Thank you, Mr. Liu. Now the floor is open for questions. Please identify the news outlet your work for before raising questions.

CCTV: 

At the Central Economic Work Conference, it was noted that the proactive fiscal policy would be implemented in a more effective, targeted, and sustainable way. Therefore, would you like to elaborate on this, and explain how fiscal policy will play a role at an earlier stage? Thanks. 

Liu Kun:

Thank you for your questions. The proactive fiscal policy will be implemented in a more effective, targeted, and sustainable way, which is the major decision made by the Central Committee of the CPC and the State Council after assessing the domestic and international situations. It aligns with the new development philosophy and the general principle of prioritizing stability and pursuing progress while ensuring stability.

To implement the policy more effectively, we need to plan fiscal resources as a whole and improve budget compilation, review, expenditure, and performance-based budget management. In addition, we will work to see the evaluation results are linked to budget arrangement, strengthen the coordination with monetary policy, and ensure macro policies are stable and effective.

To implement the policy in a more targeted way, we need to focus on the high-quality development of manufacturing, easing difficulties for micro-, small- and medium-sized enterprises, scientific and technological innovations, and ramp up efforts to cut taxes and fees. We will also further improve the composition of fiscal spending and truly live on a tight budget, while at the same time working harder to provide funds for ensuring people's basic living needs, major areas, local governments, and especially the grassroots level. 

To implement the policy more sustainably, we need to arrange budget allocation based on what is necessary and possible. We must ensure and enhance public well-being in development instead of aiming too high and making the goals tantalizingly out of reach. We will keep the deficit-to-GDP ratio at safe levels and keep the debt under control scientifically to effectively prevent and defuse risks. 

You asked me how fiscal policy can play its role at an earlier stage. In fact, it means that we need to make the best use of our policies and plan such policies in advance. The sooner the policies are rolled out, the better the policies take effect. If you pay heed to financial news, you may notice that there have been several policies introduced on cutting tax and fees from the fourth quarter of last year to this January. And we will carry out work in the following aspects:

First, we will ramp up efforts to cut taxes and fees. Last year, we cut 1.1 trillion yuan of taxes and fees. Based on that, we will take more extensive measures to cut taxes and fees this year, to help market entities gain a stronger sense of accomplishment. 

Second, we will maintain an appropriate spending intensity. We will focus on achieving major scientific and technological breakthroughs, ecological and environmental protection, ensuring basic living needs, major regional strategies, modern agriculture, and major projects outlined in the 14th Five-Year Plan. We will work to see more targeted budgetary investment and avoid the money being spread too thin. 

Third, we will appropriately arrange special local government bonds. At the end of last year, we allocated 1.46 trillion yuan in advance from the country's 2022 quota for special local government bonds. In January, local governments issued 484.4 billion yuan in special bonds, accounting for a third of the advance quota. The money from the special bonds was used in infrastructure for transportation, municipal facilities and industrial parks, construction projects for affordable housing, and other key areas. In fact, some of the quota at the end of last year were saved for this year's use, so you may see that many new projects at local levels have already broken ground, and many of those projects have accessed funds from the special bonds.

Fourth, we will increase the scale of transfer payments from central to local governments. This year, we will arrange a considerable increase in the scale of transfer payments from central to local governments, especially the general transfer payments, which will continue to be weighted toward poor and less-developed areas and support grassroots governments in their efforts to ensure payment of salaries, normal operations, and the basic wellbeing of the people.

Fifth, Party and government institutions should tighten their belts. The central government will lead by example in living on a tight budget and cut non-essential and non-obligatory expenditures. Governments at local levels should also tighten their belts and advocate thrifty and frugal working. 

Sixth, we will tighten up financial discipline. We will work harder to improve financial orders at local levels and ensure that the financial discipline becomes the "red line" that cannot be crossed. 

CRNTT:

In recent years, the central government has taken the lead in living on a tight budget, and the saved money has been used to improve people's wellbeing. So what are the considerations for the central government to live on a tight budget this year? Thanks. 

Liu Kun:

You asked a question that is concerned by all. Just like you said, the government is now living on a tighter budget. Take the central government as an example. The expenditure at the central level has registered negative growth for two years in a row. In addition, the spending on official overseas visits, official vehicles, and official hospitality have been cut for successive years, declining from 8.107 billion yuan in 2019 to 5.187 billion yuan in 2021, down by 36%.

However, I want to make it clear that tightening the belt of the government is a policy that we must uphold on a long-term basis, rather than it being a short-term measure. General Secretary Xi Jinping emphasized on many occasions that the Party and the government tighten their belts to let the people live better lives — it is a move determined by the nature and the mission of the Party. To limit government spending, we should implement the instructions and demands of General Secretary Xi Jinping. Party and government departments, the central government organs, in particular, should set an example by practicing thrift and economy, and invest the money saved to improve people's livelihoods and support market entities. This policy was not adopted as a result of fiscal pressures.

Remaining committed to the instructions of General Secretary Xi Jinping, we will ensure austerity in all endeavors — taking it as kind of political awareness and political responsibility — and keep government spending low and enrich our people. 

First, we will cut expenditures in a scientific way. This year, the central government will further cut outlays on non-obligatory and non-essential items, save money that is supposed to be saved, and ensure outlays on the operation of government departments and other essential items.

Second, we will continue to live on a tight budget. We will take rigid measures to control expenditures on meetings, trips, training programs, and forums, prohibit the construction of new government buildings or the extension to such facilities, ban unnecessary meetings and projects, and cut out or reduce spending whenever and wherever possible.

Third, we will see that funds are put to better and more effective use. We will keep track of the efficiency of fund use, and carry out performance evaluations to push all departments to improve the efficiency of fund use and make every cent count. Thank you.

The Poster News APP:

Some small and medium-sized businesses have been hit hard by the COVID-19 pandemic. What specific measures has the finance ministry taken to support those enterprises? Thank you.

Liu Kun:

Vice minister Yu Weiping will answer this question. 

Yu Weiping:

Micro, small and medium-sized enterprises prop up economic and social development and play an indispensable role in creating jobs, promoting technological innovations, and improving people's livelihoods. 

Due to the impact of COVID-19, some small and medium-sized enterprises are facing difficulties with production and operation. The MOF has worked out and introduced a series of policies in accordance with the decisions and plans of the CPC Central Committee and the State Council to help them overcome difficulties, revive, and achieve better development.

First, we have reduced the tax burden on small and medium-sized enterprises. We continue to cut taxes and fees, postponing the payment of all the domestic value-added tax and corporate income tax for small and micro manufacturing enterprises, and postponing the payment of 50% of those taxes for medium-sized manufacturing enterprises. We have extended the validity period of the policies on temporarily reducing the premiums for unemployment insurance and workers' compensation insurance. We cut about 1.1 trillion yuan of taxes and fees last year, as Mr. Liu just said, and micro, small, and medium-sized enterprises benefited the most from it.

Second, we have alleviated the difficulty and high cost of financing for micro, small, and medium-sized enterprises. In 2021, the central government allocated 3 billion yuan of funds for rewards and subsidies to support the expansion of the scale of financing guarantees and the reduction of guarantee fees for small and micro enterprises . The reduction of financing guarantee fees for market entities surpassed 10 billion yuan throughout the year. We have continued offering greater financial support to subsidize interest payments on guarantee loans for business startups . In 2021, the central government made 6.34 billion yuan in funds available for subsidizing the interest payments and for rewards and subsidies, up 65.9% year on year. We have supported the construction of demonstration zones for inclusive finance to improve the financing environment for micro, small, and medium-sized enterprises.

Third, we have supported the high-quality development of those small and medium-sized enterprises which specialize in a niche market and boast cutting-edge technologies . From 2018 to 2022, the central government allocated about 9 billion yuan for innovation and entrepreneurship of small and medium-sized enterprises. In 2021, it offered funds for rewards and subsidies to support the development of small and medium-sized enterprises which specialize in a niche market and boast cutting-edge technologies, realizing the nationwide coverage of such "little giant" firms . At present, there are over 300 listed "little giant" firms. Their average growth rates of operating revenue and net profit in the past two years both exceeded 25%, about twice the average of all listed companies.

Next, the MOF will focus on helping micro, small, and medium-sized enterprises overcome difficulties and achieve better development. We will further step up tax cuts, and use financing guarantees, subsidies for interest payments on guarantee loans, and rewards and subsidies to guide and mobilize financial resources towards micro, small, and medium-sized enterprises so that they show greater vitality. Thank you.

Bloomberg:

I have three questions. I'll be very quick. Most of the provinces expect weaker revenue growth this year while spending continues to increase. What's your estimate for national income and spending this year? And what will the central government do to help regional governments meet their needs? What is your target for tax and fee cuts this year? And in the People's Daily last Friday, you wrote that transfer payments from the central government to local governments will be increased by a relatively large margin. How big do you estimate this payment will be? And how will this help offset the impact of tax and fee cuts? Thank you.

Liu Kun:

Your questions are highly specialized. I'd like to answer them. As a matter of fact, your questions involve our need to set an appropriate deficit-to-GDP ratio target, increasing spending, implementing larger tax and fee cuts, and increasing transfer payments to local governments. In view of the composition of your three questions, you may feel that some of these goals are hard to achieve, but China's socialist system has its strength. And we want to solve these problems properly and hope to achieve our goals this year. The answers I give you today may be brief, but I hope and expect you will find them in this year's budget report to the National People's Congress.

You mentioned that the regional revenue is expected to be relatively low. In fact, this is a result of our arrangement for tax and fee cuts, which is still under approval, while the overall direction is clear. That's why local governments have taken tax and fee cuts into account when they forecast their revenue. However, we will increase transfer payments from the central government to local governments to make up for the loss of local revenue.

Mr. Xu Hongcai is in charge of the budget. I'd like to invite him to provide a more detailed answer.

Xu Hongcai:

Thank you for your questions. Your questions are really important, and can be summed up below. The first question is about the imbalance between revenue and spending this year –weaker revenue growth and increased spending. This creates a contradiction between revenue and spending. The second one, or the third question you asked, relates to what the central government will do in such circumstances to increase transfer payments to local governments and ensure their spending can be guaranteed. The third question involves budget arrangements and this year's target. I will answer them one by one in this order.

Tax and fee cuts are indeed an issue of great concern to market entities. In recent years, the MOF has taken it as an important first move in stimulating the vitality of market entities, and strived to reduce government revenue for increasing corporate performance and boosting market vitality. We use tax and fee cuts to boost economic growth. As a matter of fact, tax and fee cuts appear to reduce revenue, but in fact they will bring economic growth and subsequent fiscal revenue increases. Here, I would like to share with you some data.

The first is 1.1 trillion yuan. This was the scale of tax and fee cuts nationwide in 2021, with a focus on supporting the upgrading of the manufacturing sector and the development of micro, small, and medium-sized businesses as well as self-employed individuals. The 1.1 trillion yuan in tax and fee cuts were achieved against the backdrop of continued tax and fee cuts in the last few years as well as growing pressure from fiscal imbalance. We have effectively helped market entities overcome difficulties and stimulated their vitality with solid measures.

Second, in the six years since the beginning of the 13th Five-Year Plan (2016), China reduced 8.6 trillion yuan in taxes and fees, an unprecedented scale in China's history and a relatively large scale worldwide. Through continued tax and fee cuts, the ratio of tax revenue in China's GDP also decreased from 17.5% in 2016 to 15.1% in 2021.

Now comes the third set of data. In total, there are more than 150 million market entities in China. Among them, 13.26 million were newly set up in 2021 and have engaged in tax-related activities, up 15.9% year on year. The implementation of tax and fee cuts has eased the burden of millions of market entities, strengthened economic resilience, and played an important role in meeting challenges and stabilizing economic fundamentals. 

What we wish is that businesses can sustain themselves and assure success for the future. As I mentioned just now, despite the expected sluggish revenue growth and serious budgetary constraints, our tax and fee-cutting policies will bolster economic growth and gradually boost fiscal revenue. This year, finance departments will resolutely carry out the decisions and deployments of the CPC Central Committee and conscientiously implement a combination of policies to cut taxes and fees so as to further vitalize market entities. 

First, the policies will be expanded. We will continue extending a total of 11 tax and fee reduction policies to the fields such as science and technology, employment, business start-ups, health care, and education. Some of the policies will be more preferential than before, and a slew of new measures will be adopted as soon as possible.

Second, the policies will be more targeted. In particular, we will formulate a series of supporting policies in order to boost the high-quality development of manufacturing and help micro, small, and medium-sized enterprises overcome difficulties and promote sci-tech innovation. 

Third, the policies will be well coordinated. We will coordinate tax and fee-reducing policies with other incentives such as proactive fiscal policy, monetary policy, and industrial policy so that we can lend the needy a strong hand through the synergy gains. 

Your second question, according to my understanding, is about how to guarantee local governments' fiscal expenditure as the growth of local fiscal revenue slows due to the tax and fee cuts. Mr. Liu has given the answer: The central finance will increase its transfer payments to local governments, a priority of this year's central budget. The increased transfer payments will be mainly channeled to regions in financial difficulty, underdeveloped areas, and places where revenues dramatically dropped because of tax and fee cuts. Meanwhile, we will improve incentive and constraint mechanisms, encourage local governments, at both provincial and municipal levels, to reinforce financial resources at the county level. We will further increase transfer payments, adopt related guiding policies, and support local governments' efforts in cutting taxes and fees and ensure payment of salaries, normal operations, and the basic wellbeing of the people, thus securing the sound operation of local finances. As always, certain funds will go straight to the targeted areas to meet their policy goals. 

Your third question is about this year's targets for tax and fee cuts. Mr. Liu has suggested you watch the budget report to be issued at the upcoming NPC session. It will tell you all. 

Thank you.

Science and Technology Daily:

Regarding the fifth plenary session of the 19th CPC Central Committee valued sci-tech self-reliance and self-strengthening as a strategic underpinning for national development, we noticed that the MOF had taken a number of measures to innovate research funding management and support basic research. Can you give us more details? Thank you.

Yu Weiping:

Thank you for your question, and I do appreciate your concerns. Viewing the course of human history and the country's future from a comprehensive and strategic perspective, General Secretary Xi Jinping has repeatedly emphasized that sci-tech self-reliance and self-strengthening should aways be considered a strategic support for national development, urging more efforts to build up China's strength in science and technology and strive for sci-tech self-reliance and self-strengthening at higher levels. Making sci-tech self-reliance a priority, the MOF has continuously scaled up investment, deepened management reforms, and innovated and perfected policies, steadily advancing the cause of building China into a sci-tech giant. Despite of the negative growth in its budgetary spending in 2021, the central government managed to allocate 320.554 billion yuan to the science and technology sector through adjusting its spending structure. 

First, we helped solidify the sci-tech foundation through continuously stepping up investment in basic research. In 2021, the central government's spending on basic research increased by 15.3%, mainly directed to natural science funds and basic research work of the Chinese Academy of Sciences. We also further improved the institutions and mechanisms designed to support basic research and original innovation. 

Second, we helped achieve sci-tech breakthroughs. Leveraging the new whole-nation system in a market economy, we successfully advanced the implementation of a batch of major sci-tech programs. With our financial support, an open competition mechanism was introduced to select the best candidates to lead key research projects with the aim of achieving breakthroughs in core technologies in key areas.

Third, focus on priorities. We have advanced the construction of national laboratories, supported reforms and development of research institutes, and promoted the building of high-level research-oriented universities. We have supported innovative organizations in cultivating, introducing and hiring scientific and technological talents, accelerated the construction of a major world center for professional talent and innovation, and boosted the country's strategic scientific and technological strength.

Fourth, promote development. We have boosted the principal role of enterprises in innovation, and supported enterprises to establish innovation alliances to undertake national scientific research tasks, and promoted the integration of industrial and innovation chains. We have improved the tax policies that support innovation, encouraged enterprises to increase R&D spending, and promoted close integration of science and technology with economic development. During the first three quarters of last year, the amount of R&D spending by enterprises eligible for additional tax deductions was 1.3 trillion yuan, with 330 billion yuan in tax cuts and exemptions. 

Fifth, promote reforms. We have improved the management of central government funds for scientific research, and granted greater autonomy in the management of scientific research funds. The number of budget items has been drastically reduced from more than nine to three. The three items are equipment cost, operating expenses and labor cost. The proportion of indirect expenses has been increased, and the proportion of scientific research funds spent on people reached more than 50%. Bureaucratic burdens of scientific research personnel have been reduced to create a good environment for them to devote themselves to research and make more high-quality scientific research achievements. 

If scientific and technological capabilities are strong, the country will be strong. The MOF will strengthen support of fiscal and tax policies and funds, optimize the structure of scientific research expenditure, promote the implementation of scientific research policies and ensure that science and technology, one of the country's most powerful weapons, can better serve the high-quality development and promote the building of a great modern socialist China in all respects. Thank you. 

Yicai:

Since the system of direct fiscal fund allocation was established, fiscal funds of the central government have reached local primary-level governments at a faster rate. Could you give us more details on this? What new measures will be rolled out in terms of improving the system? Thank you. 

Liu Kun:

Thank you for your questions. Just now, Mr. Xu talked about the system of direct fiscal fund allocation. I'd like to invite him to answer your questions. 

Xu Hongcai:

Thank you for your questions. Establishing the system of direct fiscal fund allocation is an important decision made by the CPC Central Committee and the State Council, and also a significant innovation in fiscal management. In 2021, the MOF joined relevant departments to regularize the system of direct fiscal fund allocation, and expand its scope. By "regularize" we mean making the direct allocation of budgetary funds to prefecture- and county-level governments during a particular period of 2020 a normal practice, and expanding the system's coverage. Based on the operations last year, the system has given full play to its advantage of directly allocating those funds to primary-level governments, and improved both management efficiency and fund efficiency. Its characteristics are as follows:

First, fast allocation. Fiscal fund allocation took the "direct train" straight to the primary level, directly benefitting businesses and people, and greatly reducing the "travel time." The operation mode of the system of direct fiscal fund allocation last year was different from that of the year before last. When compiling the budget at the beginning of last year, the central government asked provincial-level governments to allocate fiscal funds in 10-30 days, which was longer than the preceding year. Based on feedback from monitoring the direct fiscal fund allocation, most provincial-level governments completed fund allocation in around 10 days, which was really fast, and faster compared with general fund or non-direct transfer payment funds. According to statistics of direct fiscal fund allocation released at the end of last year, the rate of direct fiscal fund allocation was much faster than that of the general public budget, which shows the advantage of being fast.

Second, targeted manner. Annual statistics show 2.8 trillion yuan of direct fiscal funds, of which 2.67 trillion yuan has arrived at fund users. The directly allocated fiscal funds mainly supported local employment, people's well-being, the operation of market entities, wage payments and the normal functioning of primary-level governments. According to incomplete statistics, spending on people's well-being including elderly care services, compulsory education, basic medical services and basic housing services reached almost 2 trillion yuan, fiscal funds directly used for employment exceeded 51 billion yuan, and fiscal funds directly used for relevant enterprises exceeded 600 billion yuan, benefiting more than 1.66 million market entities, which shows that targeted measures based on specific conditions have been effective.

Third, funds directly allocated to primary-level governments and businesses are under strict supervision. We need to give better play to the role of the relevant supervision system and expose these funds to more supervisory bodies to avoid the decline in quality due to high efficiency. The supervision system covers central, provincial, city, and county-level authorities. In terms of the central government, fiscal and auditing bodies and other relevant bodies have all been connected via the internet so that everyone can have access to the flow, allocation, and spending of funds on one internet platform. The supervision efforts in this regard are stricter than that of other kinds of funds. The National Audit Office has carried out follow-up auditing work on implementing major national policies. The results show comparatively fewer violations of regulations concerning these directly-funneled funds. Funds involved in violation of regulations account for a relatively small part, and the use of these funds is more regulated. As the supervision system continues to work, problems will be timely identified and corrected.

This year, we will earnestly review existing experience and practices, further expand the scope of directly-funneled funds and improve the management system. In addition, we will strengthen supervision on these funds and make sure they are used safely and efficiently and based on regulations to give better play to their role and serve for economic and social development.

Thank you.

Xinhua News Agency:

In recent years, we have felt the continuous improvement of the environment around us, and more blue-sky days have been reported. What measures did the MOF take to help win the battle of pollution prevention and control? What are your next plans? Thank you.

Liu Kun:

Thank you. You've raised an excellent question. A fine ecological environment is the fairest public product and the most accessible welfare for the people. The government funding should provide the fairest public goods. General Secretary Xi Jinping has stressed on multiple occasions that lucid waters and lush mountains are invaluable assets and that we should protect Nature and preserve the environment like we protect our eyes and endeavor to foster a new relationship where man and Nature can both prosper and live in harmony. The MOF has thoroughly studied General Secretary Xi Jinping's views and proposals, comprehensively made use of fiscal policies, and supported the resource conservation and the protection of the ecosystem and environment to better meet people's needs for a good environment. We have mainly made efforts in the following three aspects:

First, investment has been increased. In 2021, the central government allocated 437.4 billion yuan for eco-environmental protection. In the meantime, the MOF innovated methods for fiscal administration and proactively gave full play to the leveraging role of government funds. Through the national green development fund, provincial-level funds for the prevention and control of soil pollution, and others, the MOF has encouraged private capitals to participate in eco-environmental protection and treatment.

Second, more efforts have been made on key issues. Since the 18th CPC National Congress, the central government has set up special funds to manage water, air, and soil. These funds are used to protect our blue skies, clear waters, and clean lands, with special efforts to address prominent eco-environmental issues and help significantly improve the environment. Due to financial investment and efforts of the whole society, we have seen remarkable results. Take blue skies, for an example. In 2021, the PM2.5 density of cities at or above the prefectural level decreased 9.1% over the previous year, and 87.5% of days saw good or excellent air quality. I believe that every citizen can feel the obvious improvement in this field in their daily lives.

Third, the long-term mechanism has been established. The MOF set up mechanisms for trans-regional and intra-watershed compensation for ecological conservation efforts in all river basins of the Yangtze River and the Yellow River. We have also made coordinated efforts in the systematic governance of mountains, rivers, forests, farmland, lakes, grasslands, deserts, and glaciers. We established nature reserve systems based on national parks, continuously improved green government procurement policies, and effectively promoted the green and low-carbon transformation of the economy and society.

If we do not fail Nature, Nature shall never fail us. Therefore, the MOF will firmly carry out Xi Jinping thought on eco-civilization, continuously increase investments and solve prominent environment problems as soon as possible, and help secure victory in the prolonged battle of environmental protection, in a bid to make skies bluer, mountains lusher, and waters clearer. Thank you.

Economic Daily:

In January, special bonds were issued significantly faster than during the same period last year. What were the considerations behind this? And how have the funds been put into use? Thank you.

Liu Kun:

Vice Minister Xu Hongcai and I covered the questions you raised in his answers and in my opening remarks. I'd like to invite Mr. Xu to elaborate on the matter.

Xu Hongcai:

Thank you. This is an important question. As Finance Minister Liu Kun said, in 2022 we should adopt proactive fiscal policy in advance and make full use of the policy toolbox, issue policies earlier and see results earlier, so as to let the policies be more targeted and effective.. In line with the decisions and plans of the CPC Central Committee and the State Council, the MOF has allocated 1.46 trillion yuan (about $229 billion) from its 2022 quota for local government special bonds in advance, authorized by the National People's Congress (NPC) Standing Committee and agreed upon by the State Council. 

The advance allocation is characterized by the country's proactive fiscal policy. The special bonds should be issued properly in accordance with the economic climate and macroeconomic regulation. China's economy is currently facing new downward pressure, which requires fiscal policies to be "brought forward appropriately." Set to be allocated in advance, issued and used at high speed, these special bonds are expected to encourage effective investment. As Minister Liu Kun introduced earlier, statistics show that many new projects were started and expenditures grew a lot. In January, local governments already issued 484.4 billion yuan of newly-added special bonds, accounting for 33.2%, or almost one-third, of the advanced allocation of 1.46 trillion yuan. Among the new bonds, about 30% were spent on infrastructure related to city planning and industrial parks, 20% on the construction of transportation infrastructure, 20% on fields related to social construction like education, healthcare and elderly care, and the remaining 30% was spent on other fields. We have launched this policy as part of implementing in advance the decisions and plans of the CPC Central Committee . The results in January were relatively good. In the following months, we will continue to provide guidance to local governments and help them speed up the use of funds, so as to accomplish the work as soon as possible and better promote economic growth.

Thank you.

ThePaper.cn:

Affected by the pandemic, some local pensions are in deficit. How does the MOF ensure pension funds are paid on time and in full? This year, a unified elderly-care insurance system for enterprise employees will be implemented nationwide. How is this progressing? Thank you.

Liu Kun:

I'd like to stress first and foremost that the pension funds for retired people can be paid on time and in full everywhere in China. Next, Vice Minister Yu Weiping will answer your questions with some more details.

Yu Weiping:

Pension funds are the money that Chinese people entrust to the government to use for their basic living. The public pays great attention to the running of pensions. Let me give you some statistics. Preliminary data shows that the cumulative balance of social security funds nationwide totaled 4.8 trillion yuan, which can cover payments for more than 14 months. The revenue into social security funds exceeds expenditures, and like Minister Liu Kun said, the payment of pensions is guaranteed to be on time and in full. 

We need to properly manage and use pension funds, so as to ensure that the hundreds of millions of elderly people can be well cared for. This manifests the practice of a people-centered development philosophy within finance departments. In recent years, we have adopted a series of measures to ensure the elderly across the country receive their pensions on time and in full. 

The first is to increase the central government's subsidies. Since the implementation of the unified pension fund system in 1998, the central government has been increasing subsidies to the basic pension funds for enterprise employees. In 2021, the central government arranged subsidies of more than 600 billion yuan to support local governments to ease the pressure on fund revenue and expenditure.

The second is to increase the adjustment ratio. In 2021, the central adjustment ratio of basic pension funds for enterprise employees was increased to 4.5%, and the total scale of the adjustment has reached more than 930 billion yuan. The central government focused on supporting provinces with prominent revenue and expenditure problems – so China's central and western regions, as well as provinces with old industrial bases, have benefited with more than 210 billion yuan.

The third is to transfer state-owned capital to enrich social security funds. At the central government level, a total of 1.68 trillion yuan of state-owned capital from 93 central government enterprises was transferred to the funds.

The basic pension funds for enterprise employees is coordinated, and the funds complement each other across the country, which is conducive to giving full play to the funds' scale and enhancing their support capacity. This work was officially implemented on Jan. 1 this year. At present, we are speeding up the research and formulation of relevant supporting documents, measuring the scale of fund allocation, rationally adjusting the surplus and deficit of funds between regions, strengthening the tracking and guidance for local implementation work, adjusting and improving policies and measures in a timely manner, and getting the job done earnestly. Thank you.

Chen Wenjun:

One last question.

China Daily:

The year 2021 was the first year for China to win the battle against poverty, as scheduled. I would like to ask what efforts the MOF has made in consolidating and expanding the achievements of poverty alleviation? What new plans will be taken in these aspects this year? Thank you.

Liu Kun:

Thank you for your questions. Poverty alleviation is the biggest concern of General Secretary Xi Jinping. The year 2021 was the first year of the transition period after China won the battle against poverty. The MOF has borne in mind General Secretary Xi Jinping's instruction of consolidating and extending the achievements of poverty alleviation while shifting toward, and pushing forward, all-around rural vitalization. We have maintained the overall stability of the central government's financial support policies, supported and firmly held the bottom line of preventing a large-scale return to poverty, and continued to push forward the economic and social development of poverty-alleviated regions.

First, we increased input. In 2021, the central government arranged 156.1 billion yuan of subsidies for shifting toward, and pushing forward, rural vitalization, an increase of 10 billion yuan from the central government's original poverty relief fund in 2020. We actively ensured funding for industry assistance. During the critical period of the battle against poverty, we gave transfer payments to 832 poverty-stricken counties. During the transition period, we continued to give transfer payments to poverty alleviated areas to ensure they get enough much-needed supplies to accelerate development. And we will continue to increase the funds in this regard.

Second, we highlighted precision. We promulgated the management measures for the central government's follow-up funds, which clearly defined the content of support and the negative list, meaning that this money can't be used in other aspects. We continued to delegate the approval authority for funding projects to counties. We continued to support poverty-alleviated counties to carry out pilot projects for the integration of agriculture-related funds, continued to implement policies such as tax incentives and government procurement, and provided institutional guarantees for the consolidation and follow-up work. 

Third, we tracked the effects and results. We strengthened the performance evaluation of the central government's follow-up funds, and encouraged all regions and departments to manage and use the follow-up funds well. We supported the improvement of the monitoring and assistance mechanism to prevent the return to poverty, gave priority to supporting the development of characteristic and advantageous industries in poverty-alleviated areas, and helped the poverty-alleviated people continue to increase their incomes. We also increased follow-up support for families relocated from inhospitable areas and improved work and living conditions in poverty-alleviated areas. 

With the joint efforts of all departments, positive results were achieved in consolidating and extending the achievements of poverty alleviation while effectively shifting and linking with rural vitalization, and the bottom line of preventing a large-scale return to poverty was guarded. According to the monitoring data, the income among people lifted out of poverty has continued to grow, and their per capita net income in 2021 was estimated to exceed 12,500 yuan. People's lives have been further improved.

General Secretary Xi Jinping has pointed out that the premise of rural vitalization is to consolidate the achievements of poverty alleviation, and we must continue to pay close attention to it. The central government will further strengthen the guarantee of input, and give priority to areas where the task of consolidating the achievements of poverty alleviation is heavy and the foundation to promote rural vitalization is weak. We will continue to enhance the ability of independent development in poverty-alleviated areas so that people's lives will become more and more prosperous. Thank you.

Chen Wenjun:

Thank you to Minister Liu Kun and to the two vice ministers. Also, thank you, friends from the media. That's it for today's press conference, goodbye.

Translated and edited by Zhang Liying, Wang Qian, Wang Yiming, Ma Yujia, Cui Can, Yuan Fang, He Shan, Zhang Jiaqi, Wang Wei, Duan Yaying, Huang Shan, Li Huiru, Yang Xi, Liu Qiang, Zhu Bochen, Wang Yanfang, Liu Sitong, Chen Xia, Zhang Rui, David Ball, Tom Arnstein, 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:

Wu Yanhua, vice administrator of the China National Space Administration (CNSA)

Xu Hongliang, spokesperson of the CNSA 

Liu Jizhong, director of the Lunar Exploration and Space Program Center of the CNSA

Zhao Jian, director of the Earth Observation System and Data Center of the CNSA

Chairperson:

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

Date:

Jan. 28, 2022

Xing Huina:

Ladies and gentlemen, friends from the media, good morning! Welcome to this press conference held by the State Council Information Office (SCIO). 

Today, the SCIO is holding a press conference to issue, introduce and interpret the main contents of a new white paper titled "China's Space Program: A 2021 Perspective."

Thoroughly guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the white paper introduces China's practices and achievements in realizing innovative and leapfrog space development, modernizing space governance, and actively carrying out international space exchanges and cooperation. Furthermore, the paper explains China's policies and proposals in conducting international space communication and collaboration and facilitating building a global community of shared future in outer space. Finally, the paper also looks to the vision where China will embark on a new journey towards a space power and foster a new paradigm of international space cooperation over the next five years.

At about 13,000 Chinese characters, the white paper consists of three parts: the preamble, main body, and conclusion. The main body has six parts: A New Journey Towards a Strong Space Presence, Development of Space Technology and Systems, Developing and Expanding Space Application Industry, Research on Space Science, Modernizing Space Governance, and International Cooperation. 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.  

In order to help you gain a more accurate and deep understanding of the white paper, we have invited Mr. Wu Yanhua, vice administrator of the China National Space Administration (CNSA); Mr. Xu Hongliang, spokesperson of the CNSA; Mr. Liu Jizhong, director of the Lunar Exploration and Space Program Center of the CNSA; and Mr. Zhao Jian, director of the Earth Observation System and Data Center of the CNSA, to attend today's press conference. They will introduce relevant information and answer your questions.

Now, I will give the floor to Mr. Wu Yanhua.

Wu Yanhua:

Ladies and gentlemen, good morning. I am glad to meet you and grateful for your care and support for China's space industry. Today, we are here to release China's fifth white paper on space activities — "China's Space Program: A 2021 Perspective" — to enhance your understanding of China's space development and envision the bright prospects for cooperation. China's space industry has forged ahead, secured new achievements, and made great strides in the past five years: the Chang'e lunar probes exploring the moon; the BeiDou Navigation Satellite System (BDS) starting operation; the Zhurong rover probing Mars; the Xihe satellite exploring the sun; the Tianhe space station core module traveling among the stars; and the Dark Matter Particle Explorer (also known as Wukong or Monkey King) and the Huiyan (Insight) Hard X-ray Modulation Telescope unraveling the mysteries of the universe.

The last five years have seen innovation and development for China's space industry. With the accelerated improvement of launch vehicles, the new generation of non-toxic and pollution-free launch vehicles, such as Long March-5, are now in service. The commercial carrier rockets have continued to emerge, forming a diversified launching capability covering land and sea. Over the past five years, a total of 207 launch missions have been completed, with the success rate of the Long March series carrier rockets being 96.7%. Major space programs have born rich fruit. The construction of China's space station is fully underway. Six astronauts have been stationed in two missions, starting an era of long-term presence of people in the space station. The Chang'e-4 lunar probe has performed humanity's first-ever soft landing on the moon's far side and conducting roving explorations; the Chang'e-5 lunar probe has retrieved 1,731 g of samples. The Tianwen-1 mission has left China's first mark on Mars for the first time, helping the country achieve a leap from cislunar to interplanetary exploration. The infrastructure of China's space station has been consistently improved. The BDS has been completed and put into operation. Meanwhile, the high-resolution earth observation system has built systematic capabilities. 

The last five years have seen China's space industry contributing to society. More than 500 satellites of various types are operating in orbit, extensively serving socio-economic development and playing an essential role in building a peaceful, beautiful, and digital China. Communications satellites have provided more than 140 million families in rural and remote areas with remote education, telemedicine, and rural e-commerce services. Therefore, they have contributed to poverty alleviation and rural vitalization. In addition, more than 100 million remote sensing satellite images have been distributed, effectively fulfilling the demands of weather forecasting, territorial planning, ecological protection, the marine economy, and disaster emergency management. The BeiDou system has been widely used for traveling, intelligent logistics, and precision agriculture, especially providing precise positioning and navigation services in COVID-19 prevention and control. The space technology achievements have promoted the development of emerging industries, such as new energy and materials, and facilitated the emergence of new business forms such as smart cities and unmanned driving. The development of commercial space enterprises is thriving.

Over the past five years, China's space industry has made continuous exploration and breakthroughs. It has focused on scientific topics such as the origin and evolution of the universe and the relations between the solar system and humanity. It has been supported by space science satellites and lunar exploration, Mars exploration, and manned space missions. As a result, China's space industry has carried out exploration and experimental research on space science and has made a number of innovative achievements that all humanity can share.

For example, the Huiyan Telescope successfully observed the black hole explosion process. The Wukong Explorer acquired the refined structure of the energy spectrum of cosmic rays. The satellite Zhangheng-1 built models of the global geomagnetic field, and the TANSAT satellite developed a high-precision map of the worldwide distribution of carbon dioxide. The lunar exploration missions revealed the subsurface structure of the moon's far side, confirming that there were still magmatic activities on the moon 2 billion years ago. Finally, Tianqin-1, Taiji-1, and Xihe satellites have provided new research methods regarding space gravitational waves and solar physics.

The last five years have seen enhanced cooperation and sharing in China's space industry. The Chinese space community has cooperated with international partners to help realize the United Nations 2030 Agenda for Sustainable Development goals by applying sustainable aerospace technologies. It also signed about 50 agreements or memorandums of understanding during the last five years. For example, China initiated the International Lunar Research Station project jointly with Russia and conducted extensive cooperation in manned space exploration, lunar exploration, and Mars exploration missions. In addition, it has agreed to cooperate on the BRICS Remote-Sensing Satellite Constellation and successfully launched the China-France Oceanography Satellite and the China-Italy Electromagnetic Monitoring Experiment Satellite. Furthermore, it has promoted the BeiDou standards to be included in the standard systems of several international organizations in the fields such as civil aviation and maritime affairs. Data from Gaofen-1 and Gaofen-6 satellites have been distributed freely worldwide via a cloud platform, with about 550,000 users from 158 countries and regions accessing the data. In addition, five of China's satellites and three satellite constellations have joined the mechanism of the International Charter on Space and Major Disasters, and meteorological satellite data have been used in 121 countries and regions. China has supported the space capacity building of developing countries and shared the achievements of China's space development through various means, including infrastructure construction, talent training, and data application.

In the following five years, China's space industry will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and adhere to the principles of innovation-driven, coordinated, efficient, and peaceful progress based on cooperation and sharing. Focusing on building China's strength in aerospace and developing a high-quality space industry will promote the comprehensive development of space science, space technologies, and space applications to contribute to building a great modern socialist country and to humanity's cause of peace and development.

First, we will promote the implementation of significant projects through innovation. We will build China's space station and the High-Resolution Earth Observation System, implement new major projects, including the fourth phase of the Lunar Exploration Program and planetary exploration, and promote the research and development of heavy-lift launch vehicles. We will establish near-earth asteroid impact risk response systems, develop essential programs such as the boundary exploration of the solar system, and further expand the launch vehicle family. Furthermore, we will continue to upgrade national space infrastructure and improve the ability of the space environment governance system.

Second, we will develop and expand the space application industry. We will promote the deep integration of space applications and the digital economy, enrich application scenarios, innovate business models, and deepen the comprehensive application of communications, navigation, and remote-sensing technologies. We will accelerate the transfer and transformation of space technology achievements to serve the economy and society and develop new business models of the space economy such as space travel, space biomedicine, and space breeding.

Third, we will make overall plans for research on space science. Critical areas such as space astronomy, space physics, lunar and planetary science, and space earth sciences will be systematically promoted. Space science satellites such as the satellite for space gravitational wave detection, the Einstein Probe, and an advanced space-based solar observatory will be developed. We will also use platforms including China's space station and lunar and deep space probes to continuously carry out frontier science exploration and basic research to generate more original scientific findings.

Fourth, we will create a sound environment for space industry development. The innovative systems that deeply integrate enterprises, universities, research institutes, and end-users will be improved and the fundamental capacity of the space industry will be strengthened. Regulations on managing satellite frequency, orbit resources and the BDS will be formulated. Guidelines for the development of the commercial space industry will be issued to promote the law-based governance of the space industry. China will build a high-level team of aerospace professionals and step up its efforts to become a world center for talent and innovation in space science. We will also carry out education campaigns to popularize space knowledge and culture, promote the spirit embodied in the development of China's space industry, and create a favorable environment for the whole society to develop an interest in science, to explore the unknown, and to be bold in blazing new trails.

Fifth, we will broaden and deepen international cooperation. China actively participates in the global governance of outer space and provides Chinese solutions to areas such as near-earth objects monitoring and response, planet protection, and space traffic management. In addition, China will work with other countries, international organizations, and partners to build an international research station on the moon, implement the cooperation agreements for the BRICS Remote-Sensing Satellite Constellation, and promote the global application of space information services. More extensive and diversified international mutually beneficial cooperation will also be carried out in lunar exploration, space station, planetary exploration, and the BDS.

Exploration and utilization of outer space for peaceful purposes is the shared dream of all humanity. When we look up at the stars, we are in the meantime making unremitting efforts to explore the space. As long as we join hands, we will make steady progress in space exploration. China is ready to work with the international community to accelerate the development of a high-quality and sustainable space industry that can improve people's wellbeing. In this way, China will also make new pioneering contributions to promoting the building of a community with a shared future for mankind and advancing the progress of human civilization and peaceful development.

Thank you. Now, my colleagues and I would like to answer your questions.

Xing Huina:

Thank you for your introduction, Mr. Wu. Everyone is already very enthusiastic about raising their hands for questions.

China Media Group:

Mr. Wu, we can see China's achievements in the space sector from your briefing just now, and everyone sees it. What are the anticipated highlights of China's space sector in the future, especially during the 14th Five-Year Plan period (2021-2025)? Thank you.

Wu Yanhua:

Thank you for your question. China made many shining and fruitful achievements in the space sector during the 13th Five-Year Plan period (2016-2020), yet the tasks in the 14th Five-Year Plan are particularly challenging. Simply put, they fall into the following categories.

First, we will complete and continue the operations of the major national projects launched 10 years ago, such as the manned spaceflight project, the Beidou project, and the high-resolution Earth observation system, which also includes making good use of the scientific research data, lunar soil and other samples collected from the three-step lunar exploration program of orbiting, landing, and return for scientific analysis.

Second, according to the national plan, China will launch a number of major space projects, including the fourth phase of the lunar exploration program and the planetary exploration program. We will also verify a number of major projects, such as heavy-lift launch vehicles, and implement them after approval.

Third, we will integrate and coordinate the development of space technologies and space applications, especially the construction of space infrastructure, including three types of satellites (communications, navigation, and remote-sensing). We will develop sound space infrastructure and promote the application of satellites so that they can serve the economic and social development extensively at home and the whole world.

Fourth, we will make overall plans for research on space science and launch a number of satellites for scientific verification. At the same time, we will make good use of the space station, lunar exploration, planetary exploration, and other platforms to carry out in-depth scientific research and strive for original scientific discoveries that contribute to humankind.

The last point is to further deepen the open cooperation with international peers in both major projects and other aspects like satellite research and development, satellite applications, space science, and education through the cultivation of university, middle school, and primary school students. We welcome multimodal, in-depth, and multi-dimensional cooperation among all of our international peers with China's space sector. Thank you.

CNR:

We know from the introduction just now that China has made many important achievements in the space sector in the past five years. Could you please provide a brief review? Besides, what are the key development directions for the future? Thank you.

Liu Jizhong:

Let me take your questions. Over the past five years, China has boosted the development of space science through its lunar exploration program, the Tianwen-1 Mars probe and space science programs like the Wukong and Mozi satellites. It covers the following aspects: First, from the perspective of evolutionary history, we have gained a new understanding of the evolution of the moon, especially in geological terms, by studying the moon's subsurface structure. Based on the analysis and research of lunar samples collected during the Chang'e-5 mission, we deduced that the geological activities of the moon date back to 2 billion years ago, which was previously thought to be 3 billion years ago. It means the moon is approximately 1 billion years younger. These understandings of the moon, including those of the evolution of the lunar landscape, are of crucial significance. Second, from the perspective of matter and energy, we discovered new types of lunar matter of deep-seated origin through preliminary studies and the relatively precise fine structure in the cosmic-ray energy spectrum. Third, from the perspective of the space environment, through several years of scientific research, we have a new understanding of the radiation of lunar particles and obtained new numerical values. We discovered the lunar micromagnetosphere, and established a new model and rationale for the interaction between solar wind and the moon. At the same time, we have gained a new understanding of the evolution of the Earth's plasma layer activities through the observation of the Earth from space.

Indeed, we have scored many scientific achievements as well. Meanwhile, we have established a batch of facilities for scientific research, which lays a solid foundation for future scientific research and cooperation with international peers. The implementation of these projects has further promoted scientific research. According to statistics, more than 100 colleges have set up disciplines related to space science and enrolled plenty of international students. These serve as a sound foundation for building a talent base for future space science research, which is crucial.

Scientific progress is of paramount importance to the development of human civilization. Hence, China will not cease its deep space exploration. We will focus on issues including the universe, the solar system and development of its planets, and the influence of solar activity on earth. We will roll out tasks like the fourth phase of the lunar exploration program, the planetary exploration program, space station operations, and follow-up special satellite missions such as space astronomy and space physics exploration. By carrying out these tasks and cooperating with other countries, we will bolster the development of both space science and humanity. Thank you.

Southern Metropolis Daily:

We all know that the development of China's space industry relies on the support of innovative scientists, engineers and technicians. What measures does the CNSA take to foster and attract such talents? 

Xu Hongliang:

Thank you for your question. Through its development of more than six decades, China's space industry has made remarkable achievements, formed spirits that are profound and broad, and fostered many extraordinary talents in particular. We have always put focus on standards of selecting and appointing professionals. The standards cover political conviction, moral conduct, ability, style, and honesty. As a result, we have fostered and cultivated a space talent team who stand firm in their ideals and convictions with strong patriotic enthusiasm, a great sense of responsibility, and a good mental outlook. For example, the average ages of the Chang'e team, Tianwen team, Shenzhou team, and BeiDou team are 30 to 40. The development of any cause is impossible without talent, so the development of the space industry needs new blood. At a central conference on talent-related work at the end of 2021, General Secretary Xi Jinping called on efforts to "implement the strategy on developing a quality workforce in the new era." The space industry has followed his great call and formulated relevant plans and incentive policies.

We have taken a series of measures in talent cultivation. First, through implementing the country's major projects, we have enhanced the cultivation of strategic scientists, top sci-tech leaders, young sci-tech talent, innovative teams, and national craftsmen. Second, we have strengthened the mechanism of talent exchange to standardize and guide its development. Third, we have intensified incentive mechanisms. With the economic and social development, the national support for technological talent has scaled up. For instance, some social organizations and enterprises have established individual awards, including the Qian Xuesen Top Achievement Award and the Space Contribution Award, which effectively play an incentive role. Fourth, we have strengthened discipline building and talent reserve cultivation. As Mr. Liu introduced just now, we have carried out discipline construction on space science and fostered talent for China's space industry through the joint building of colleges and disciplines. Fifth, we have extensively carried out international exchanges and cooperation and cultivated talent for some developing countries particularly. For instance, we have responded to the calls of the United Nations and established a regional center on space education to foster space talent for developing countries and facilitate their development. Thank you.

Phoenix Satellite Television:

Last October, China successfully sent solar exploration satellite Xihe into space, marking a new era of solar exploration. How has the data feedback from Xihe been, and what does the future of China hold in this field? Thank you.

Zhao Jian:

Thank you for your questions. First of all, I'd like to begin by briefly introducing Xihe—China's first solar exploration science and technology experimental satellite. It was sent successfully into space from the Taiyuan Satellite Launch Center on Oct. 14, 2021. This significant accomplishment marks China's transition into a new era of solar exploration. General Secretary Xi Jinping referred to the Xihe satellite chasing the Sun in his 2022 New Year Address, bringing the satellite greater attention.

After more than three months of in-orbit tests and experiments, the satellite has completed more than 40 technical verifications and imaged the sun more than 290 times. The satellite platform and loads continue to operate normally and stably, and its functions and performance meet general development requirements. The satellite will continue its in-orbit scientific experiments during the Spring Festival holidays.

A slew of technological and scientific progress achieved by the satellite will be officially released later this year by CNSA, and I'd like to briefly introduce some of the major achievements here:

First, it demonstrated, in orbit, the ultra-high pointing accuracy and stabilizing technology of a new kind of satellite platform with high accuracy. Compared to traditional platforms with equal inertia, the pointing and stabilizing accuracies of Xihe are two-fold. 

Second, it has captured the solar Hα spectral line in orbit, which was the first time the world has seen full-disk images of the Sun in the Hα spectrum. What is the solar Hα spectral line? It occurs when the interaction between photons and hydrogen atoms brings electrons' energy-level transition. As the brightest spectral line responding to the solar eruptions, it can directly reflect the characteristics of solar eruptions. Previously, the solar Hα spectral line could only be detected on Earth, but the data were discontinuous and unstable due to the atmospheric disturbance. Based on the satellite's high-resolution observation and imaging of the sun, scientists can more accurately obtain the temperature and velocity changes in the solar atmosphere during solar eruptions, set up a complete physical mode of energy accumulation, release and transmit from photosphere to corona, and provide key data for studying the dynamic process and the physical mechanism of solar eruptions, which could be expected to become a scientific achievement with international iinfluence.  

With solar exploration satellite Xihe into space, the lunar samples brought back by the Chang'e-5 mission, and Tianwen-1's landing and exploration of Mars, we have formed a deep-space exploration trio in one year, covering the solar system's planets and star and contributing wisdom and strength to constructing our country as a major power in space. Referring to the plan for the future solar system exploration, scientists are conducting demonstration studies, helping us further understand the structure, characteristics, mechanism, and laws of solar system to better forecast the space weather and benefit human beings. Thanks.

Beijing Youth Daily:

This white paper is the fifth of its kind published by the Chinese government on the space program. What are the characteristics and highlights of the "China's Space Program: A 2021 Perspective" compared with previous ones? Thank you.

Xu Hongliang:

Thanks for your question. As you mentioned, this is the fifth white paper on China's space program. Structurally, the white paper, with the mainline of building China into a space power, systematically introduces the mission, principles, policies, measures, and ideas of international cooperation on a new journey towards a space power. Consisting of 11 aspects, the white paper summarizes our achievements in space science, space technologies, and space applications over the past five years. Furthermore, it outlines the future development in the next five years. Specifically speaking, it has three characteristics.

First, it fully embodies the concept of high-quality development. The Chinese government has been committed to modernizing space governance. We have been proactive in formulating relevant policies and measures, given full play to a well-functioning government and an efficient market, and created a favorable environment for the growth of the high-quality space industry. In terms of innovation-driven development, we will strengthen original innovation and optimize the environment for innovation by implementing major space programs. In terms of basic capabilities, we will continue to improve its integrated and open industrial system comprising system integrators, specialized contractors, market suppliers, and public service providers, optimize the industrial structure, and further integrate industrialization with information technology. In terms of the development model, we will encourage and support the development of commercial space enterprises, optimize the distribution of the space industry in the national industrial chain, and accelerate the cost-efficient development of space. In terms of governance capacity, we will speed up the formulation of a national space law and work out relevant policies and regulations to promote law-based governance. In terms of talent cultivation, we will implement the guiding principles of the central conference on talent-related work, improve the mechanism for talent cultivation, exchange, and reward, and strengthen the foundation for talent development. In terms of cultural development, we will promote space education, communication, culture, and spirit embodied in space development in order to increase scientific knowledge among the general public.

Second, it serves the country's primary strategic needs. We all know that building a safe, healthy, beautiful, and digital China has become an essential part of China's socialist modernization. China's space industry has always supported national strategic development and continued to improve its efficiency. On the one hand, we will intensify the integration of satellite applications with the development of industries and regions, space information with information technology such as big data, cloud computing, and the Internet of Things, and boost public services with satellites. On the other hand, we will expand the application and transfer of space technology and provide more convenient and high-quality services for all industries and sectors, and the public. We will also expand China's space economy to make a significant contribution to building China's strengths in science and technology, transport, manufacturing, and cyberspace.

Third, it demonstrates a positive attitude of openness and cooperation. For the first time, the white paper proposes that we will build a community with a shared future for mankind in utilizing outer space and be more open and active in engaging in extensive international exchanges and cooperation. First, besides international onboard payload cooperation, we will expand cooperation on mission planning. Second, collaboration will be upgraded from a single product to joint development of complex systems. Third, the application will be expanded from a typical scenario to a comprehensive application in multiple fields. By doing these, space activities can better benefit humanity and promote the progress of human civilization.

That's my answer. Thank you.

Wu Yanhua:

Mr. Xu has already given a very detailed answer. I would just like to add a few points. First, our major space projects are at a juncture between two stages. First, China has developed a long-term plan for its space program. Just now, I introduced the last group of major projects, which were launched 15 years ago and have entered the phases of completion, operation, and application. The Chinese government is planning new major projects and tasks for the next 15 years. Second, as stated in the white paper, China will integrate space science, technology, and applications. In the past, China paid greater attention to space technology. In the new era, we will emphasize advancing technological innovation through space applications and new discoveries in space science to promote sustainable development. Third, we will be more open to international cooperation and collaboration with international partners and counterparts at a higher level and larger projects. For example, as I said, China and Russia will jointly launch an international lunar research station project. It will be an extensive and long-lasting international scientific cooperation project. We welcome the participation of all the countries, international organizations, scientists, and engineers interested in the project. Thanks.

Xinhua News Agency:

We know that space development requires high investment. How do you view the investment? How does China's space industry serve its economic and social development and help improve the people's well-being? Thanks.

Zhao Jian:

Thank you for your questions. Space development is the common cause of mankind. On the first China Space Day, General Secretary Xi Jinping said, "To explore the vast cosmos, develop the space industry and build China into a space power is a dream we pursue unremittingly." The space industry reflects a country's overall development of science and technology. In developing the space industry, we must "attain to the broad and great while addressing the delicate and minute." We need to promote the leap-frog development of space science and space technology and transform the achievements of scientific and technological innovation into the forces driving economic and social development.

First, China attaches great importance to space development, and the Chinese people have provided strong support. Space development indeed requires high investment. However, space development and applications can yield substantial benefits. According to preliminary statistics, the input-output ratio of the space industry can exceed 1:10. The application of new space technology has brought about tremendous changes in industrial development. The transformation and applications of space technology serve as strong forces driving economic growth and the development of smart transportation, new energy, new materials, etc. They also play an essential role in supporting the building of a moderately prosperous society in all respects. Therefore, the high investment in the space industry can produce a high output, and the overall benefit is considerable.

Second, aerospace applications have been widely used in various economic and social fields, such as land and resources surveys, environmental protection, agricultural development, forests and grasslands monitoring, disaster prevention and mitigation, weather forecasting, marine development, transportation, education, medical care, and urban and rural construction. In addition, the derived applications of new technologies from aerospace applications have also entered thousands of households. Ordinary people can also experience and feel the improvements to life created by aerospace technologies. For example, communication and broadcasting satellites can provide people with global mobile communications, live radio and television broadcasts, and high-speed broadband internet access, which greatly helped facilitate people's digital lives in the information age; satellite navigation positioning has become an indispensable assistant in people's daily lives, which has greatly facilitated people's transportation and travel and changed people's means of work and lifestyle. Meanwhile, meteorological satellites can provide accurate weather forecasts around the world and in specific regions and provide weather guarantees for people's clothing, food, housing, and transportation.

As another example, satellites are more effective for disaster prevention and mitigation. The high-definition nephograms of typhoon observations produced by high-resolution satellites can clearly observe the structure of a typhoon eye and the pattern of movement and changes, and there were no omissions for typhoons occurred throughout the year around the world. This greatly reduces the cost of disaster prevention and mitigation, and the economic and social benefits are significant. In addition, high-resolution satellites have also played a very important role in preventing forest fires and responding to floods. Recently, a volcanic eruption occurred in Tonga. The CNSA launched the Earth Observation System in an emergency capacity, mobilized more than a dozen satellites to conduct high-frequency observations, and provided relevant imagery data to international organizations in a timely manner.

Third, the development of the aerospace sector not only promotes the rapid formation of the aerospace industry chain but also empowers traditional industries, promoting industrial upgrading and improving quality and efficiency. The aerospace industry is a highly complex and large-scale aggregation, which will help vigorously promote the development of the entire industry chain. It is the same everywhere from a global perspective. A solidly founded aerospace industry is becoming fertile ground for commercial aerospace development, a highland for talents from multiple fields, and a bridgehead for new technology integration and innovation. At present, aerospace technologies are increasingly playing a role in driving growth of related industries, as the result, the latter are showing a great development momentum, and a pattern of intensive, explosive growth of industrial applications has gradually formed. New development patterns have been shaped: centrally-administered state-owned enterprises driving the development of local areas, local governments encouraging characteristic enterprises to gather and develop, and advantageous private capital participating in specialized investment. Through commercial development, these will form a synergy with government investment to further improve the efficiency of aerospace development. 

We believe that aerospace development will continuously improve people's wellbeing and vigorously promote the realization of the United Nations' Sustainable Development Goals. The further development and utilization of aerospace technologies will also help us jointly guard this blue planet and benefit the people. Thank you!

Cover News:

We have learned that China has approved the fourth phase of its lunar exploration program, including the Chang'e-6, Chang'e-7, and Chang'e-8 missions. These three missions will be launched over the next ten years. Could you brief us on the specific arrangements? How important are these missions? Thank you.

Liu Jizhong:

Thank you. China's lunar exploration program was first launched in 2004. As of 2020, when Chang'e-5 brought lunar samples back to Earth, we have completed the first three phases of the program, which were "orbiting, landing, and returning." Based on scientific principles, we have kicked off the research work on the follow-up missions of the lunar exploration program during the 13th Five-Year Plan period (2016-2020). The fourth phase consists of four missions as planned.

The first mission was the Chang'e-4 probe, which, as we know, landed on the far side of the moon and was successfully completed. There will be another three follow-up missions. The Chang'e-6 lunar probe is expected to collect samples in more valuable areas of the moon and return home. Therefore, new lunar soil and samples will be brought back to the Earth. The Chang'e-7 probe is expected to conduct scientific exploration in the moon's polar regions and give us data on the water distribution of the moon. Finally, the Chang'e-8 probe will continue to explore the polar regions and test core technologies concerning the follow-up work of the research station.

Our fundamental goal throughout the four phases of the lunar exploration program is to establish a basic model for the research station and lay the foundation for us to cooperate with other countries in establishing the ILRS. We have been in close contact with our peers around the world and will jointly conduct exploration work regarding these missions. For example, a deal agreed with Russia means that the Chang'e-7 mission will conduct joint exploration with Russia's "lunar-26" project. Based on our current R&D progress, all work involved in the Chang'e-6 and Chang'e-7 missions will be completed in 2025. The R&D of the Chang'e-8 mission will kick off in the same year, and the probe will be launched by 2030. To conclude, we are set to achieve the expected results of the fourth phase of the lunar exploration program by 2030. Thank you.

Xing Huina:

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

Global Times:

Just now, Mr. Wu and Mr. Liu mentioned the ILRS project jointly launched by China and Russia. Could you further elaborate on this project? Also, how will the follow-up work be carried out? Thank you.

Wu Yanhua:

Thank you. It was reported that in March 2021, the Chinese and Russian governments signed a memorandum of understanding on the cooperation of the ILRS. In April, China and Russia's aerospace authorities issued a joint statement. In June, the two sides jointly released a roadmap and a guide for the ILRS, inviting all interested countries, international organizations, and partners to cooperate in the project. Just now, Mr. Liu introduced that the ILRS was proposed in 2016, and many countries around the world are also responding to it. In general, like the Antarctic and Arctic research stations, we tend to build a scientific experiment base at the lunar south pole in the future and build scientific research facilities in lunar orbit and on the lunar surface that can carry out multi-disciplinary and multi-objective scientific research activities.

First, China and Russia launched the ILRS based on their respective lunar exploration plans. The goal of the fourth phase for the Chinese lunar exploration program is to build a basic model of an international lunar scientific research station. We will use the next five years to conduct exploration before setting up a lunar research station, which are the objectives of China's Chang'e-6 and Chang'e-7 missions. Russia has other relevant arrangements. It will take us another 10 years or so to complete the construction of facilities. Like building a small town, a lunar research station must be equipped with energy, communication, navigation, long-distance transportation, lunar-earth round-trip capabilities, and ground support systems. There must also be a life support system if there are to be people in the station in the future. China and Russia also welcome the participation of international counterparts. I think these systems are future-oriented, which means that our plans for 2035 will focus on these tasks. After 2035, various countries and organizations will conduct scientific expeditions on the moon in stages according to their plans.

Second, China and Russia will sign an intergovernmental agreement. We have been negotiating in full swing and reached a consensus, which is expected to be signed as soon as possible this year. The Chinese and Russian space authorities will officially release the declaration on constructing an international lunar research station and publish the construction principles and purposes to the international community. Generally speaking, at all stages, at all levels of construction, including systems, sub-systems, and facilities, and in terms of sharing research data and space-ground support system, we have set no limits and welcome the world to join in its construction. The missions led by China and Russia are also open to cooperation, providing opportunities for other countries to participate and share scientific research data.

That's all for my answer to this question. Thank you.

Xing Huina:

Due to time constraints, today's press conference is concluded here. Thanks to all speakers and journalists. 

Wu Yanhua:

Thank you, friends from the media, for your concern, encouragement, and support for China's aerospace industry, as well as your promotion of aerospace knowledge. Thank you all!

Translated and edited by Xu Xiaoxuan, Zhang Liying, He Shan, Zhou Jing, Zhang Jiaqi, Chen Xia, Liu Jianing, Wang Wei, Wang Yanfang, Li Huiru, Liu Qiang, Zhang Rui, Liu Sitong, Zhu Bochen, Yang Xi, Wang Yiming, Lin Liyao, Zhang Junmian, 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:

Guo Tingting, director general of the Comprehensive Department of the Ministry of Commerce (MOFCOM)

Xu Xingfeng, person in charge of the Department of Market Operation and Consumption Promotion of the MOFCOM

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

Chen Chunjiang, director general of the Department of Foreign Investment Administration of the MOFCOM

Chairperson:

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

Date:

Jan. 25, 2022

Xing Huina:

Friends from the media, good morning! Welcome to this press conference held by the State Council Information Office (SCIO). Today, we will introduce China's commerce development in 2021 and answer your questions. We are joined by Ms. Guo Tingting, director general of the Comprehensive Department of the Ministry of Commerce (MOFCOM), Mr. Xu Xingfeng, person in charge of the Department of Market Operation and Consumption Promotion of the MOFCOM, Mr. Li Xingqian, director general of the Department of Foreign Trade of the MOFCOM, and Mr. Chen Chunjiang, director general of the Department of Foreign Investment Administration of the MOFCOM.

Now, let's give the floor to Ms. Guo.

Guo Tingting:

Thank you. Friends from the media, good morning! Welcome to today's press conference, and thank you for your attention and concern for commerce development. Today marks the traditional Chinese Xiaonian Festival, a week before the Lunar New Year. Here, I wish everyone a happy Chinese New Year of the Tiger in advance! Next, I will introduce the general situation of commerce development.

Since the 18th National Congress of the Communist Party of China (CPC), guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the MOFCOM has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, promoted the building of a strong domestic market, advanced high-level opening up, and actively participated in global economic governance. By doing so, China has made new breakthroughs in commercial development. China has become the world's second-largest consumer economy. It has ranked first in trade in goods globally for five consecutive years. China is also the world's second-largest foreign direct investment destination, and its outbound direct investment ranks among the world's top. In addition, the country has established 21 free trade pilot zones, promoted the construction of the Hainan Free Trade Port, and signed the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement (FTA). 

In 2021, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the MOFCOM resolutely implemented the spirit of the 19th CPC National Congress and the plenary sessions of the 19th CPC Central Committee and followed the deployment of the Central Economic Work Conference and the government work report. We fully and faithfully applied the new development philosophy and promoted the fostering of a new pattern of development. We consolidated the gains in the fight against COVID-19 and social development achievements. The positioning of commerce work can be summarized in three important aspects: commerce as an important part of domestic circulation, commerce as an important link between domestic and international circulations, and commerce's important role in building a new development paradigm. With our focus on positioning in the above three important aspects, we carried out a portfolio of "5+5" key tasks. As a result, the commercial operation had a stable, sound, and better-than-expected performance. Foreign trade, foreign investment, consumption volume, and the proportion of investment in countries along the Belt and Road Initiative hit an all-time high. Furthermore, major breakthroughs were made in multilateral and bilateral cooperation. All this has put the implementation of the 14th Five-Year Plan off to a good start and made a positive contribution to the sustained recovery of the national economy.

First, domestic consumption gradually rebounded. Total annual retail sales of consumer goods rose 12.5% to 44.1 trillion yuan. Consumption has re-established itself as the key driver of economic development, accounting for 65.4% of total expenditure. First, urban and rural markets achieved recovery simultaneously. The retail sales of consumer goods in urban and rural areas increased by 12.5% and 12.1%, respectively. Second, the consumption of upgraded commodities increased significantly. The retail sales of commodities increased by 11.8%. Gold, silver, and other jewelry, sports and entertainment supplies, and cultural and office supplies of units above designated size increased by 29.8%, 22%, and 18.8%, respectively. Sales of new energy vehicles increased by 1.6 times. Third, spending on catering and other services saw an orderly recovery, with catering income rising by 18.6% from a year ago, close to the pre-epidemic level. The per capita education, culture and entertainment consumption, transportation and communication consumption, and health care consumption increased by 27.9%, 14.3%, and 14.8%, respectively. Fourth, new consumption models were further developed. China's online sales of physical goods expanded by 12% year on year to 10.8 trillion yuan in 2021, accounting for 24.5% of the total retail sales during the period. The "Online Chinese New Year Shopping Festival" and "Brand and Quality Online Shopping Festival" drove online retail sales of 1.6 trillion yuan. Offshore duty-free sales in south China's island province of Hainan increased by 83.1%.

Second, foreign trade moved up another notch. The total imports and exports of goods expanded 21.4% year on year to 39.1 trillion yuan. Exports rose 21.2%, while imports went up 21.5%, which were highlights of economic operation. First, the scale and share of foreign trade rose higher. Its volume exceeded the $5 trillion and $6 trillion thresholds over the year. The international market shares of exports and imports in the first three quarters were 15% and 12.1%, respectively, hitting record highs. Second, the vitality of the leading market players continued to increase. The number of enterprises involved in exports and imports increased by 36,000 to 567,000. The imports and exports of China's private sector registered an increase of 26.7%, accounting for 48.6% of the country's total foreign trade volume, 2 percentage points higher than the previous year. Third, the imports and exports to major trading partners maintained relatively rapid growth. Imports and exports to ASEAN, the European Union, and the United States increased by 19.7%, 19.1%, and 20.2%, respectively. Fourth, the commodity structure was further optimized. The exports of high-tech and high value-added products increased rapidly. The exports of machinery and electronic products increased by 20.4%, and the volume of new energy vehicles exports increased by 3 times. Fifth, the service trade saw faster upgrades, rising 14.7% year on year to reach 4.7 trillion yuan in the first 11 months of the year. The exports of culture and entertainment and intellectual property royalties, which are knowledge-intensive services, increased by 36.2% and 29.3%, respectively.

Third, absorption of foreign investment increased quickly. The whole year saw the actual use of foreign investment surpass 1 trillion yuan, which was its first time to reach 1.1 trillion yuan, realizing a growth of 14.9%. Newly-established foreign-funded enterprises totaled 48,000, up 23.5%. The quantity and quality of foreign investment both improved. Firstly, the structure of foreign investment continued to optimize. High-tech industries saw a 17.1% increase in foreign investment, bringing the share of the total to 30.2%. In high-tech manufacturing, the growth of foreign investment was 200% in manufacturing of equipment for electronic products manufacturing and 64.9% in general instruments and meters manufacturing. In high-tech services, the growth of foreign investment was 220% in e-commerce services and 25% in services for commercialization of scientific and research findings. Secondly, investments from major sources grew stably. Those from countries along the Belt and Road increased 29.4%. Those from Singapore and Germany grew 29.7% and 16.4%, respectively. Thirdly, the number of large projects grew quickly. The number of projects with contractual foreign investment of $50 million or more each grew 26.1%, and that with contractual foreign investment of $100 million or more grew 25.5%. Fourthly, highlands for opening-up saw remarkable results. A total of 21 pilot free trade zones (FTZs) actually utilized 213 billion yuan of foreign investment, taking up an 18.5% share of the total foreign investment.

Fourth, steady development was seen in the implementation of outward investment and cooperation and in the process of providing foreign aid. In the whole year, our direct outward investment reached 936.7 billion yuan, up 2.2%, with further structural improvements. Firstly, investment and cooperation continued to deepen in key regions such as those along the Belt and Road. Investment in BRI countries grew 7.9%, bringing the share of the total to 14.8%. Investment in the EU grew 13.4%. Secondly, fast growth was seen in investment in key industries. The investment in transportation, services for scientific research, and information technology grew 80%, 68.5%, and 5%, respectively, with the combined share of the three industries up by 3.1 percentage points. Thirdly, win-win results were achieved through cooperation. As of the end of 2021, the accumulated investment in overseas economic and trade cooperation zones stood at $50.7 billion, with a total of $6.6 billion of taxes being paid to host countries and 392,000 jobs being created locally. Fourthly, contracted projects were stable and growing. In U.S. dollar terms, the contractual value of newly-signed contracts grew 1.2%. The number of newly-signed contracts with a worth of at least $100 million each increased by 46. Fifthly, our foreign aid was carried out with high efficiency. We fully implemented the major measures regarding foreign aid announced by President Xi Jinping, and carried out more than 1,000 foreign aid projects throughout the year. We also carried out vaccine-related foreign aid to 107 countries and four international organizations with high efficiency. 

Fifth, multilateral and bilateral economic and trade relations saw new breakthroughs. Firstly, the strategy for boosting FTZs saw major progress. We made efforts for the RCEP to be enacted and implemented as scheduled. We formally applied for the membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA). We signed a protocol on upgrading our FTA with New Zealand and gained positive progress in negotiations for upgrading FTAs with South Korea and Singapore. Secondly, multilateral cooperation exerted a bigger role. We hosted the High-Level Session on the 20th Anniversary of China's Accession to the World Trade Organization (WTO) and thematic exhibitions. We completed the eighth review of the WTO on China's trade policies. We proactively participated in WTO negotiations regarding relative issues. We deepened cooperation regarding digital economy and supply chains and promoted inclusive policies in trade and investment under the mechanisms of the United Nations, Group of 20, the Asia-Pacific Economic Cooperation, the BRICS countries, and the Shanghai Cooperation Organization. Thirdly, bilateral and regional economic and trade cooperation further deepened. Remarkable results were achieved through the economic and trade cooperation between provincial-level regions in China and various states in the U.S. Trade between China and Russia reached new heights. We pushed for China and Singapore to develop the New International Land-Sea Trade Corridor together. We contrived practical measures for the eighth ministerial conference of the Forum on China-Africa Cooperation. We hosted the China-CEEC Expo. 

Also, we made solid efforts for epidemic prevention and control and ensured the supply of daily necessities. We compiled the plan for commercial development, the plan for high-quality development of foreign trade, and five special-purpose plans for the 14th Five-Year Plan period (2021-2025).

In 2022, the Ministry of Commerce will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the principles of the 19th National Congress of the Communist Party of China (CPC) and all plenary sessions of the 19th Party Central Committee in full. We will act on the principles of the Central Economic Work Conference, and carry forward the great founding spirit of the Party. We will prioritize stability while seeking progress, apply the new development philosophy completely, accurately and thoroughly, and facilitate the construction of the new development paradigm. We will advance supply-side structural reform as the main task, ensure stability on six key fronts and maintain security in six key areas, and play the three important roles of commerce-related work. We will carry out Covid-19 prevention and control and pursue commerce development in a coordinated way, ensure coordination in pursuing development and upholding security, push for the continued recovery of consumption, stabilize the fundamentals of foreign trade and foreign investment, ramp up efforts in high-level opening-up, keep commerce-related situations running within an appropriate range, and push for the high-quality development of commerce. We will better serve the big picture of socioeconomic development and welcome the successful convening of the 20th National Congress of the CPC with outstanding performances. 

Thank you all!

Xing Huina:

Thanks for Mr. Guo's introduction. Now we start taking questions. Please state the news outlet you work for before raising questions. 

CCTV:

What achievements did the MOFCOM make in promoting economic and trade cooperation under the Belt and Road Initiative (BRI) in 2021? What is the MOFCOM's work plan this year? Thank you. 

Guo Tingting:

Thank you for your questions. I'll brief you on them. Given the profound changes and the pandemic conditions not seen in a century, China continues to uphold the principle of extensive consultation, joint contribution, and shared benefits, and aims for high-standard, people-centered, and sustainable growth. We have worked with relevant parties to promote the high-quality BRI development through joint efforts. Remarkable achievements have been made, with participating countries enjoying common development and mutual benefit. The joint construction of the Belt and Road has developed into a well-received global public product and a platform for international cooperation.

In 2021, the MOFCOM implemented the decisions and plans of the CPC Central Committee and the State Council, stepped up efforts to promote the economic and trade cooperation under the BRI, and made new contributions to the high-quality BRI development. 

First, Unimpeded trade saw new progress. In 2021, total trade of goods between China and countries along the Belt and Road reached 11.6 trillion yuan, marking a new record in eight years. It registered a year-on-year increase of 23.6% and accounted for 29.7% of China's total foreign trade. Cross-border e-commerce and other new business forms developed rapidly. A lot of overseas warehouses were built and put into use. The first overseas smart logistics platform (https://ols.zjmade.cn:18084/consumer/home) was launched to match supply and demand on overseas warehouses. The number of China-Europe freight train trips surged by 22% year on year to 15,000, and a total of 1.46 million twenty-foot equivalent units of goods were handled, up 29% year on year. The New International Land-Sea Trade Corridor witnessed rapid progress. China and Singapore signed a cooperation plan, and jointly held the 2021 CCI-ILSTC International Cooperation Forum.

Second, new progress was made in investment cooperation. Direct investment to countries along the Belt and Road grew 7.9% year on year to 138.45 billion yuan in 2021, accounting for 14.8% of total outbound investment. Companies from countries along the Belt and Road have been optimistic about development opportunities in China. As such, their direct investment reached $11.25 billion (around 74.28 billion yuan), surpassing the threshold of $10 billion for the first time. Steady progress has been made in the construction of BRI projects. The accomplished turnover of contracted projects in countries along the Belt and Road totaled 578.57 billion yuan, accounting for 57.9% of the country's total. The assistance programs in poverty alleviation, healthcare, education, sports, and other areas related to people's livelihood proved to be effective, and the construction of the China-aided future headquarters of the Africa Centers for Disease Control and Prevention went smoothly. 

Third, mechanisms and platforms were well improved. We established with relevant countries eight unimpeded trade working groups and investment and economic cooperation working groups. We signed a Memorandum of Understanding (MoU) with Senegal on e-commerce cooperation, and signed MoUs with Hungary and Russia to enhance cooperation in green development and digital economy. The cooperation mechanisms, thereby, have been improved and more channels have been established to ensure better communication. Moreover, we held successfully a series of exhibitions last year, including the China International Import Expo (CIIE), the China Import and Export Fair (also known as the Canton Fair), the China International Fair for Trade in Services (CIFTIS), the China-ASEAN Expo, and the China-Africa Economic and Trade Expo, which have promoted economic and trade cooperation with relevant countries.

In November 2021, General Secretary Xi Jinping delivered an important speech at the third symposium on the Belt and Road Initiative, charting the course and providing the fundamental guiding principles for promoting the BRI through joint efforts in the new era. In 2022, the MOFCOM will implement the spirit of the important speech made by General Secretary Xi Jinping and take the economic and trade cooperation under the BRI as the priority. We will continue to reinforce the fundamentals of the cooperation and steadily expand new cooperation areas. We will ramp up efforts to build the iconic BRI projects and strengthen risk prevention and control so as to promote the high-quality development of the BRI throughout joint efforts and better serve the building of the new development paradigm. Thank you.

Phoenix TV:

My question is about consumption. As we know, in 2021, the total retail sales of consumer goods grew 12.5% year on year. How does the MOFCOM evaluate the recovery of the consumer market? Are there any features and highlights you'd like to share? Thank you.

Xu Xingfeng:

I'll answer your questions. I'm delighted to meet with the media on China's Little New Year, which falls about a week before the Lunar New Year. Thanks for your attention to the work related to consumption, and I also hope that the media will continue to keep an eye on this field.

Just now, Ms. Guo provided a comprehensive introduction to the operation of China's consumer market in 2021, and I'd like to add more information about it. Last year, in spite of the adverse impact of the epidemic, China's consumer market maintained a steady recovery, showing great vitality and resilience. We have made a good start for the 14th Five-Year Plan. The retail sales of consumer goods totaled 44.1 trillion yuan in 2021, an increase of 12.5% over 2020 and an average increase of 3.9% over the past two years. Throughout the whole year, the features and highlights are mainly reflected in the following four aspects.

First, the innovation-driven features are evident. Various new technologies and concepts have been broadly implemented in the consumption area. New business formats and new models such as curated retail have been rapidly employed. Furthermore, new scenarios like experimental, immersive, and interactive consumption continue to emerge. The integration of business, tourism, and online and offline activities has also been accelerated. Online retail sales reached 13 trillion yuan in 2021, up 14.1% from the previous year.

Second, smart consumption has increased rapidly. The retail sales value of communication equipment by enterprises above the designated size grew by 14.6% over the previous year. The shipment of 5G mobile phones reached 266 million, up 63.5%, which accounted for 76% of total mobile phone shipments in the same period. The sales volume of smart products on many e-commerce platforms, such as smart door locks, smart bathrooms, and floor-sweeping robots, increased by more than 30%.

Third, green consumption is booming. Taking the sales of automobiles as an example, the sales volume of new energy vehicles reached 3.521 million, an increase of 1.6 times over the previous year. It means that, for every 8 vehicles sold, 1 was a new energy vehicle. And the used car transaction volume, which reflects the circular economy, reached 17.585 million units, an increase of 22.6%. And the ratio of used cars sales to new vehicles sales reached 0.67 to 1.  

Fourth, ice and snow consumption continued to rise. As we all know, the Beijing Winter Olympics will be held in a couple of days. There has been a boom in ice and snow consumption in different places. While following proper epidemic prevention and control procedures, many places, such as Beijing, Jilin, Heilongjiang, Shanghai, and Hubei, have launched various kinds of ice and snow consumption activities. Meanwhile, the sales volume of ski products on several e-commerce platforms more than doubled.

These are the highlights and features of the consumption. At the same time, it has been noticed that consumption in many regions, industries, and varieties has recovered slowly due to the pandemic and other factors. Micro, small and medium-sized enterprises and self-employed individuals are still confronting difficulties in their operations. As a result, we should still make further efforts to maintain the steady development of consumption.

China News Service:

In 2021, China hit another record high on its scale of foreign investment. What are the prospects for this year? The Central Economic Work Conference proposed that national treatment should be implemented to foreign-invested enterprises to attract more investment from multinational corporations. What new measures will the Ministry of Commerce take in this regard? Thank you.

Chen Chunjiang:

Thank you for your question; I'll answer it. The world is experiencing the combined impacts of major changes and a pandemic unseen in a century. And the external environment has become more complicated. The work of stabilizing foreign investment still faces significant challenges. The United Nations Conference on Trade and Development (UNCTAD) predicts that it will be difficult to achieve rapid growth on global cross-border investment this year. The restructuring of the international industrial chain has become more nearshore, localized, and regional, and the competition for attracting investment among countries has intensified. In addition, the global epidemic has continuously affected cross-border investment promotion activities. At the same time, domestic enterprises have also been facing the pressure of rising prices for labor, land, and raw materials.

Despite these challenges, we possess the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core. We have the advantages of the socialist system with Chinese characteristics. We have maintained a leading global position in economic development and Covid-19 response. We also enjoy favorable conditions, such as a complete system of industries, improved infrastructure, and abundant human resources. And there are many super-large markets to attract foreign investment. Therefore, foreign investment in China is generally expected to be good. Reports from major foreign chambers of commerce show that China has still been one of the major investment destinations for multinational corporations. For example, the German Chamber of Commerce in China just released the 'business confidence survey 2021/22' last week. Its results show that German companies in China have confidence in the growth of the Chinese market. And 71% of companies plan to continue to increase investment in China. So, in general, we are confident we will maintain stable foreign investment in 2022.

We will fully implement the principles of the Central Economic Work Conference, adhere to the general principle of pursuing progress while ensuring stability, and focus on 'stabilizing the overall performance of foreign trade and foreign investment.' Also, we will follow the requirements of the National Business Work Conference, focus on maintaining the existing stock, explore increments, and optimize the structure. We will focus our work on the following six areas.

First, we will make continued efforts to open China to the outside world at a higher level. We should fully implement the national negative list and pilot FTZ negative list for foreign investment (2021 Edition) to ensure that the opening-up measures in automobile manufacturing and other sectors are taken effectively to attract more multinational companies to invest in China.

Second, we will ramp up efforts to improve support policies. For example, we have revised the industry catalog to boost foreign investment and fully leveraged the effect of preferential policies such as land and tax policies. This will lead to more foreign investment in sectors like advanced manufacturing, modern services, high and new technology, green and low-carbon and the digital economy, and also in China's central and western regions.

Third, we will continuously improve services. We will improve the mechanism of special working groups for key foreign-funded projects, respond quickly to and solve problems encountered by foreign-funded companies in a timely manner, and provide services to ensure the stable operation of the companies. We will ensure services for key foreign-funded projects in land, energy, environmental protection, and personnel entry and exit so as to promote the early signing, production, and fulfillment of projects.

Fourth, we will continuously leverage the role of platforms. We will make use of open platforms such as pilot FTZs, free trade ports, and comprehensive demonstration zones for expanding opening up in the service sector, align them with high-standard international economic and trade rules, and accelerate institution-based opening-up. We will implement the new assessment and evaluation methods for national economic development zones, vigorously develop an open economy, and make them major platforms for stabilizing foreign trade and foreign investment.

Fifth, we will continuously promote investment. We will run a successful 22nd China International Fair for Investment and Trade, hold various forms of investment promotion activities, and promote foreign-funded projects to communicate in key industries. We will organize multinational companies to go on trips around China so as to better support localities in attracting investment.

Sixth, we will continuously improve the business environment. We will effectively implement the Foreign Investment Law and the regulations for its implementation, and continuously improve supporting rules. We will make full use of the mechanism for handling complaints by foreign-funded companies, better protect the legitimate rights and interests of foreign investors, and ensure the national treatment of foreign-funded enterprises. We will strive to create an even better business environment and make China a popular destination for foreign investment.

That is all I have for it. Thank you.

Xinhua News Agency:

My question is about foreign trade. China's foreign trade registered a brilliant performance in the past year, but some agencies predict that it will be difficult to sustain a high growth this year. How does the Ministry of Commerce view foreign trade this year? What are your specific plans for stabilizing foreign trade? Thank you.

Li Xingqian:

Thank you. This is also a question of wide attention to all sectors of society. In general, on top of the $6.05 trillion volume and 30% growth rate last year, the foreign trade situation is grim this year, with unprecedented difficulties and pressure in maintaining steady growth.

From the perspective of demand, global external demand growth faces two big uncertainties. First, the pandemic has repeatedly delayed the recovery of the global economy. According to a new U.N. report, the global economic recovery is under great strain due to COVID-19, labor shortages, supply chain disruptions, and rising inflation. Global growth is forecast to slow from 5.5% in 2021 to 4% this year. The WTO expects growth in the volume of global trade in goods to slow from 10.8% in 2021 to 4.7%. Second, global systemic risks are rising as a result of an uneven recovery. Affected by the vaccination gap and policy differences, low-income countries and developed economies see a widening gap of recovery in between, accompanied by depreciating currencies and high inflation. The rapid withdrawal of stimulus policies in some countries may lead to shrinking demand and price fluctuations, which in turn will affect China's export in related industries.

From the perspective of supply, the global industrial chain and supply chain face two major destabilizing factors. First, the accelerated restructuring of the global supply chain and the one-sided pursuit of bringing industries back by developed economies are dividing the market and reducing the efficiency of global resource allocation. Second, disruptions and bottlenecks in the global supply chain can hardly be thoroughly alleviated in the short term. Problems such as high raw material prices, structural imbalances in shipping capacity, and shortages of essential components like chips have persisted. The overall costs of our foreign trade companies, especially small, medium, and micro foreign trade companies, have risen markedly, while their operating risks and burdens remain high. Therefore, the companies feel reluctant to accept orders even if they have orders out there, while they see no profit increase despite a rise in income.

We should face straight up these difficulties and strengthen our confidence. China's foreign trade sector boasts a solid foundation, and the fundamentals sustaining its long-term growth remain unchanged. This year, in terms of foreign trade, we will give top priority to stability and pursue progress while ensuring stability. We will pay more attention to better quality than higher quantity. With the joint efforts of various localities, departments, and foreign trade companies, we are confident that the foreign trade will get off to a good start and remain within a reasonable range throughout the year.

Based on the current situation, we have designated 2022 as a year for foreign trade to consolidate and advance, with a focus on increasing the comprehensive competitiveness of China's foreign trade. We will take four specific actions:

First, we will take cross-cyclical measures to stabilize foreign trade. We will make our policies serve intended purposes and make further use of export credit insurance, manage credit supply in the foreign trade sector well, and enhance the ability of companies to cope with exchange rate risks. We will further step up trade facilitation and effectively help companies overcome difficulties.

Second, we will adopt a diversified market approach. We will give fully play to the role of the unimpeded trade working groups, make better use of the negotiated or signed free-trade agreement and organize major expos, such as China Import and Export Fair, the CIIE and the CIFTIS, so as to help enterprises in reinforcing their traditional markets and expand emerging ones. 

Third, we will ensure the smooth supply chains for foreign trade. While cultivating various types of platforms and carriers including national industrial parks for processing and trade, demonstration zones for creative promotion of imports and foreign trade transformation and upgrade bases, we will also continue promoting the streamlined flow of goods, materials and settlements.

Fourth, we will encourage high-quality and innovative-based foreign trade. We will harness the leading role of new business forms such as cross-border e-commerce and overseas warehouses, as well as the role of new models to build leading zones for digitalization of global trade and promote the healthy development of green trade. Thank you.

Red Star News: 

China has absorbed 1,149.36 billion yuan in foreign investment in 2021, realizing a double-digit growth. What are the reasons behind this achievement?

Chen Chunjiang:

Thank you for your question. 2021 saw China's first breakthrough in absorbing foreign investment to exceed one trillion yuan, up 14.9% to reach 1,149.36 billion yuan, which equals $173.48 billion, up 20.2%; the average two-year growth was 12.1% compared with 2019, 6.4 percentage points higher than the global average. We attribute such achievements to the following five reasons:

First, the effect of China's opening-up is gradually emerging. China has been committed to opening its door wider to the world, further shortening the negative list for foreign investment, fully lifting foreign equity caps in the automotive industry and clearing barriers for the manufacturing industry in pilot free-trade zones. We have also ensured that the RCEP came into effect as scheduled, officially applied to join CPTPP and DEPA and continuously released active signals. Therefore, more foreign investors have seen more market opportunities and have intensified their investment in China – with 48,000 new enterprises being established in 2021, up 23.5% year-on-year. 

Second, the effect of stabilizing foreign investment is continuously emerging. The MOFCOM has acted with firm resolve to implement requirements made by General Secretary Xi Jinping on stabilizing the overall performance of foreign trade and foreign investment, and promulgated 22 supportive measures on stabilizing foreign investment under new development paradigm in 2021. It has also guided local authorities in issuing more than 140 policies and documents. FDI in eastern, central and western China achieved an all-round growth, increasing by 14.6%, 20.5% and 14.2% respectively, and 20 provinces registered double-digit growth, offering significant support for the stability of foreign investment nationwide.

Third, the driving effects of open platforms are increasingly demonstrated. Investment liberalization and facilitation measures on opening platforms such as free-trade zones, free-trade ports and pilot demonstrations for open services have been released and are attractive investment projects. In 2021, foreign investment rose 19% across 21 pilot free-trade zones, while Hainan Free Trade Port doubled its previous figure in foreign investment. The "1+4" open and comprehensive demonstration zones in service sectors, namely, Beijing, Tianjin, Shanghai, Hainan and Chongqing, account for 33.4% of the national total in foreign investment, exemplifying these high-level opening platforms' strong attraction for foreign investment.

Fourth, efforts in stabilizing market expectations are beginning to show results. A special working group for major foreign projects under the coordination mechanism of foreign trade and investment has strengthened their services for major foreign enterprises, including hosting 75 exchange activities for foreign enterprises, chambers of commerce and associations over the course of the year, guiding local authorities in launching over 1,800 dialogues as well as communicating with more than 40,000 foreign businesses, thus making their policies known to the public and promptly responding to concerns from the enterprises. We have coordinated and resolved more than 1,000 difficulties concerning foreign employees' entry, customs clearance for goods as well as vaccinations for staff members. All these efforts have effectively stabilized the operations of these foreign enterprises. Relevant departments actively released policies and measures targeting some common issues, such as extending preferential individual income tax policies on foreign staff and drafting measures to safeguard foreign businesses' equal access to government procurement. The foreign enterprises had more confidence in market expectations and investments when they truly felt that the Chinese government welcomes foreign investment. A recent survey conducted by the MOFCOM showed that 94.9% of enterprises are optimistic about their future business, among more than 3,000 major foreign companies surveyed.

Fifth, efforts to create a better business environment are paying off. All local authorities and departments have ramped up efforts to sort out laws, regulations, and documents, not in line with the Foreign Investment Law. More than 500 laws, regulations, and documents have been formulated, revised, and repealed. In addition, the MOFCOM has improved the complaint mechanism and related working network for foreign-invested enterprises (FIEs) and helped FIEs coordinate and settle a series of complaint matters, thus protecting the legitimate rights of foreign investment. We continue to foster a business environment based on market principles, governed by law, and up to international standards, to ensure that FIEs can access our market, gain a foothold here and thrive. 

We have successfully completed the tasks of ensuring stable foreign investment in 2021. Generally speaking, this progress is the result of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core and the joint efforts of all local authorities and all departments. Next, we will firmly implement the arrangements of the CPC Central Committee and the State Council for ensuring stability on the six fronts and maintaining security in the six areas. We will make stability our priority and pursue stable performance while making new progress. Solid measures will be taken to ensure stable foreign investment in 2022, aiming to greet the gathering of the 20th National Congress of the CPC with outstanding achievements. 

These are my answers. Thank you!

Global Times:

There have been sporadic epidemic outbreaks recently. So how does the MOFCOM view China's consumption sector this year? What specific measures will be taken to boost consumption? Thank you.

Xu Xingfeng:

Thank you for your questions. I will answer your questions. Based on a comprehensive assessment, we believe that in general, China's consumption sector will continue to restore development in 2022. Our conclusion is based on three aspects, which are as follows: 

First, despite the sporadic epidemic outbreaks, China has taken a more precisely-targeted and science-based approach in policies of regular COVID-19 prevention and control, thus stabilizing consumer expectations. 

Second, the middle-income group continues to expand, and residents' income has registered steady growth. In 2021, China's per capita GDP surpassed 12,000 US dollars, and residents' per capita disposable income reached 35,000 yuan, up by 9.1% from the previous year. So, the consumer fundamentals are secure. 

Third, the policies and measures on expanding domestic needs and boosting consumption, being put into place and producing positive results gradually, will provide strong support for consumption recovery, meaning the consumption policies are in good shape. 

We conclude through the above analysis that in general, China's consumption sector will continue to restore development.

Next, the MOFCOM will fully implement the guiding principles of the 19th National Congress of the CPC and all the plenary sessions of the 19th CPC Central Committee and put into action the arrangements of the Central Economic Work Conference. We will firmly implement the strategy of expanding domestic demand. We will make it our priority to maintain stability and pursue steady progress. We will coordinate the works on COVID-19 prevention and control and boosting consumption. We will work to promote continued recovery and upgrading of consumption, to better serve the building of a new development paradigm. Our works will focus on the following five aspects:

First, we will upgrade the traditional consumption sector. Automobiles, household appliances, furniture and catering, are the four major consumption sectors and the foundational pillars of consumption. To deepen reform on automobiles circulation, we will promote the transformation from the administration of purchase to the administration of use. We will revise the Measures for the Administration of the Circulation of Second-hand Automobiles and other related regulations to expand the circulation of second-hand automobiles. We will promote the consumption of new energy vehicles. We will also encourage household appliance and furniture replacements. Furthermore, we will push for service consumption, such as catering, to restore development.

Second, we will accelerate new types of consumption. New types of consumption are a major driving force to boost consumption. Next, we will support the development of new business forms and models and new scenarios. New types of consumption, such as smart products consumption, tailored products consumption, experience consumption, and fashion consumption, will be developed. When I answered a previous question, I gave an introduction about the characteristics of innovation-driven consumption. And these are the new types of consumption. We will promote the innovative development of time-honored brands to boost brand-based consumption. We will call for a simple, moderate, and low-carbon lifestyle to increase green consumption. We will work to better play the roles of platforms such as the CIIE and the China International Consumer Products Expo and expand the imports of quality consumer goods. These are new types of consumption, brand-based consumption, green consumption, and imports of quality consumer goods. 

Third, we will step up upgrading urban consumption. The sheer size of urban consumption makes it take up a large proportion of the consumption sector. Therefore, we will speed up fostering and building international consumption center cities, accelerate the high-quality development of pedestrian streets, and pilot the building of smart shopping districts and smart stores to provide urban residents with more quality service. We will also accelerate the development of a "15-minute community life circle" and improve the community-level business service facilities, to provide urban residents with more convenient services. 

Fourth, we will strengthen the weaknesses of rural consumption. The potential of rural consumption is enormous, and the prospects for its development are excellent. Next, we will accelerate the building of the county-level business system and improve the county-level business network and the three-tiered logistics delivery system at the village, township, and county levels. We will also expand the coverage of rural e-commerce. Thus, we will increase farmers' incomes and improve rural consumption. 

Fifth, we will launch campaigns to boost consumption. Provided that prevention and control protocols were duly observed, we will continue to launch events such as the National Consumption Promotion Month, online shopping festivals, which boost brand and quality consumption, and Chinese food festivals. We will also provide guidance for local consumption promotion campaigns that combine business, tourism, cultural, and sports sectors, adopt both online and offline measures, and connect urban and rural areas. In this way, we can keep market expectations stable and bolster consumption confidence.

ThePaper.cn:

What are the achievements and experiences that China's pilot FTZs have secured in terms of expanding opening-up in 2021? How will the MOFCOM arrange the work on pilot FTZs this year? Thank you.

Guo Tingting:

Thank you. I'll take your questions. In 2021, the MOFCOM has worked with relevant government bodies and resolutely implemented the decisions made by the CPC Central Committee and the State Council. We have been playing our part to help foster a new development paradigm. A series of new measures were introduced in pilot FTZs to expand opening-up, and new progress was made in various fields.

First, the MOFCOM released China's first negative list for cross-border trade in services at the Hainan Free Trade Port. The list outlined 70 special management measures in 11 categories and was a breakthrough of China's management model of trade in services. It is also another important measure taken by China to pursue high-level institutional opening up.

Second, the MOFCOM introduced a total of 19 reform and innovative measures concerning trade and investment facilitation and promotion in pilot FTZs. These measures cover five aspects, including the facilitation of trade, investment, international logistics, and financial services in supporting the real economy and exploring the role of the judiciary in guaranteeing trade and investment facilitation. 

Third, the MOFCOM updated the negative list for the market access of foreign investment in its 2021 edition. The number of special administrative measures applied in this edition was reduced to 27, and all measures applied to the manufacturing industry were removed. The openness of China's service industry continues to expand.

Fourth, the MOFCOM promoted the latest group of 18 "best practice cases" involved in trade and investment facilitation, financial services that support real economy, SOE reforms, environmental protection, and other fields. A total 278 achievements concerning systemic innovation were promoted on a national level, which facilitates the continuous improvement of China's business environment.

In 2021, the actual use of foreign capital of all 21 pilot FTZs in China reached 213 billion yuan, and their import and export volume hit 6.8 trillion yuan, up 19% and 29.5% year on year, respectively. With less than four-thousandths of China's land area, these 21 pilot FTZs have achieved 18.5% of the country's foreign investment and 17.3% of the foreign trade, making a great contribution to stabilizing foreign trade and investment.

Looking forward, the MOFCOM will follow the decision being made by the CPC Central Committee and the State Council, doubling the efforts to carry out planning for and promoting the high-quality development of pilot FTZs. The MOFCOM will work to dovetail the construction of pilot FTZs with fostering a new development paradigm and give full play to the exemplary and leading role of pilot FTZs in promoting reform and opening up. Specific measures are as follows:

First, we will further expand the high-level opening-up. We will pilot to align policies in the pilot FTZs where conditions permit and the free trade port with internationally high-standard economic and trade rules in a bid to promote high-level institutional opening up. We will also work to introduce a negative list for cross-border trade in services in pilot FTZs.

Second, we will further carry out deeper reforms. Focusing on key sectors, crucial links, and fundamental institutional arrangements, we will establish pilots of deeper reform, get rid of institutional barriers, and work to achieve more high-quality institutional innovation results. More economic administrative powers at the provincial level will be delegated to pilot FTZs.

Third, we will further take the lead in promoting high-quality development. We will encourage pilot FTZs to carry out integrated innovation throughout the entire industrial chain based on the actual local situation. We will also support them to attract global resources and factors of production of the industrial chain and develop featured and dominant industries in a bid to build more world-leading industrial clusters.

That concludes my response. Thank you.

Xing Huina:

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

Yicai:

We noticed that China's total imports and exports of goods exceeded $6 trillion in 2021. What is the driving force behind China's rapid foreign trade growth? What role has foreign trade played in promoting China's economic development as well as the global economic and trade recovery? Thanks.

Li Xingqian:

Thank you for your care and support for China's foreign trade. Foreign trade growth was a major highlight of China's economic performance in 2021. The fundamental reason is that the Chinese government calmly responded to various risks and challenges while maintaining its position as a global leader in economic development and COVID-19 response, thus fully leveraging its overall foreign trade advantage. There are four major driving forces behind China's rapid foreign trade growth: policies, external demand, supply and new business forms.

First, relevant policies have been prudent and effective. The Chinese government has cherished trade market entities, maintained the continuity, consistency and sustainability of its policies, and launched a series of support policies regarding tax and fee reductions, financing and credit guarantees. Meanwhile, the government has formulated a plan to promote the high-quality development of foreign trade during the 14th Five-Year Plan period (2021-2025) and opinions on accelerating the development of new business forms and models of foreign trade. It has also conducted cross-cycle adjustment. Thanks to these measures, market entities and expectations have been stabilized.

Second, external demand gradually recovered. The global economy as a whole is showing recovery momentum. The WTO estimates global trade in goods grew by 10.8% in 2021. Various countries were controlling the pandemic, resuming production and promoting consumption, which increased the direct and indirect demand for Chinese products. China's exports of intermediate goods, capital goods and consumer goods increased by 27.9%, 13.7% and 13.1%, respectively.

Third, the supply capacity is strong. China has a complete industrial system, with comprehensive supporting facilities and strong resilience within its industrial chain and supply chain. It can quickly adapt to changes in international market demand and swiftly increase supply. At the same time, China and its neighboring countries have formed a regional industrial chain of efficient cooperation, which further enhances our supply advantages.

Fourth, the business format accelerates innovation. China is a fertile ground for the vigorous growth of new business formats and new models such as cross-border e-commerce. Various platforms and merchants have given full play to their advantages in spheres such as online marketing, contactless transactions and short-distance distribution to help foreign trade show a strong momentum of expansion despite COVID-19 impacts. The scale of cross-border e-commerce imports and exports reached 1.98 trillion yuan, an increase of 15%, and market procurement trade exports increased by 32.1%. China now has more than 1,500 comprehensive foreign trade service enterprises and more than 2,000 overseas warehouses, and we've built more than 130 bonded maintenance projects.

In 2021, the achievements of China's foreign trade development were well-rounded and multi-level, which effectively served the construction of the new development pattern and made important contributions to the recovery of the global economy and trade.

From the domestic perspective, foreign trade had three major achievements: First, it has effectively driven GDP growth. Net exports of goods and services drove the annual GDP growth by 1.7 percentage points, with a contribution rate of 20.9%. Second, it promoted stable employment. There were 567,000 foreign trade enterprises with an actual import and export performance throughout the year, directly and indirectly prompting the creation of 180 million jobs. Third, it maintained the stability of the industrial chain and supply chain. It has guaranteed the supply of important resources and key components, playing an indispensable role in safeguarding domestic supplies and stable prices and promoting the smooth operation of various upstream and downstream industries.

From the international perspective, China's foreign trade made at least three major contributions: First, it actively supported the global fight against the pandemic and promoted the building of a community with a shared future for human health. China has exported anti-pandemic materials in an orderly manner and provided more than 2 billion doses of vaccines to the world, making it the world's largest provider. Second, it effectively filled the gap between global supply and demand and provided timely products and services for the production and people's livelihood in various countries. Third, we shared China's development opportunities with the world. We have successfully held important international expos such as the CIIE, the China Import and Export Fair and the CIFTIS. In the first three quarters of last year, China contributed 14.1% to global import growth. China actively advocates free, fair and green trade and deepens bilateral and multilateral economic and trade cooperation. It is the backbone of global economic and trade recovery. Thank you.

Xing Huina:

Thank you to the speakers for summarizing the commerce development in 2021 and sharing the outlook for 2022 with us. If you still have questions, the persons in charge of the press and publicity work of the Ministry of Commerce are also here, and you can continue to keep in touch with them after the press conference. That's it for today's press conference. Thanks to the four speakers, and also thanks to the media friends.

Translated and edited by Yan Xiaoqing, Liu Qiang, Zhang Jiaqi, Zhang Rui, Zhang Tingting, Li Huiru, Cui Can, Liu Sitong, Zhu Bochen, Huang Shan, Ma Yujia, Wang Qian, Wang Yiming, Wang Wei, Gong Yingchun, Yang Xi, Zhang Liying, Jay Birbeck, Drew Pittock 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:

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

Luo Junjie, director general of the Bureau of Operation Monitoring and Coordination of the MIIT

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

Chairperson:

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

Date:

Jan. 20, 2022

Chen Wenjun:

Ladies and gentlemen, good morning. 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 2021 and take your questions. We are also joined by Mr. Luo Junjie, director general of the Bureau of Operation Monitoring and Coordination of the MIIT, and Mr. Zhao Zhiguo, director general of the Bureau of Information and Communications Administration of the MIIT.

Now, let's give the floor to Mr. Tian.

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 attention and support for developing the industry and information technology sector. Next, I'll brief you on the general situation of 2021. 

Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with Comrade Xi Jinping at its core has made significant decisions to develop China into a manufacturer of quality and build the country's strength in cyberspace. Under the guidance of these decisions, China's industry and information technology sector has seen historic achievements and transformation, providing strong support for building a moderately prosperous society in all respects. In 2021 especially, against the backdrop of complex and challenging environments and multiple risks and challenges, all government bodies and departments involved in the industry and information technology followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We earnestly carried out decisions made by the CPC Central Committee and the State Council and worked hard to coordinate epidemic prevention and control with economic and social development. We forged ahead and overcame difficulties, redoubled our efforts to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations), implemented the tasks of guaranteeing stability in six areas (employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations), and thoroughly carried out the strategies of developing China into a manufacturer of quality and building the country's strength in cyberspace. As a result, China's industrial economy sustained recovery and development. Its information technology sector made positive progress, putting the implementation of the 14th Five-Year Plan off to a good start. The overall growth of industry and information technology in 2021 has the following four features:

First, the industrial economy saw sustained recovery and development. In 2021, following the requirements being made by the Central Economic Work Conference, notably safeguarding macroeconomic stability and ensuring that the economy operates within an appropriate range, we have given greater priority to promoting the stable growth of the industrial sector and taken a series of measures. Through strengthening the guiding role of planning and policies, we introduced and implemented various plans from the 14th Five-Year Plan concerning key sectors and fields of industry and information technology. We formulated a series of policies and measures that ensure the industry's stable growth. We proactively addressed the adverse impact of sporadic pandemic outbreaks, the price hikes in bulk raw materials, and the constraints on energy. We adopted coordinated policies, managed to guarantee the interests of market players, stabilize investment and foster consumption, and effectively ensured the generally balanced and stable development of industrial production. In 2021, China's added value of industries above designated size grew by 9.6% year on year, or an average two-year growth rate of 6.1%. Among them, the growth rate in the third quarter of 2021 declined. However, as our policies on revitalizing the industrial economy took effect, the declining trend was reversed, and the growth rate of the industrial economy rebounded gradually. Under the strong leadership of the CPC Central Committee and the State Council, we managed to overcome various obstacles. As a result, the development of the industrial economy in 2021 generally went well with satisfying results, and this did not come easily.

Second, industrial transformation and upgrading accelerated notably. In 2021, we focused on stabilizing the industrial and supply chain, sped up the digital and green transformation of industries, spared no effort to enhance the core competitiveness of the manufacturing industry, and strived to facilitate the transformation and upgrade of traditional industries as well as the development of emerging industries. As a result, we have accomplished achievements in three aspects. First, the digital transformation of the manufacturing sector was accelerated, and the innovative development of the industrial internet saw remarkable progress. Security systems for internet platforms were established, and the "5G+industrial internet" was applied in 20 scenarios and 10 key industries. The capacity of innovative applications ranked in the top tier globally. Second, the green and low-carbon development of industries saw positive progress. We formulated and published implementation plans concerning carbon neutrality in industrial fields and key sectors and steadily advanced the green transformation of traditional industries. The output of crude steel in 2021 decreased by 32 million metric tons compared with the previous year, down 3%. In the first 11 months of 2021, the energy consumption per unit of the added value of industries above the designated size reduced 5.5% year-on-year, which was remarkable progress. Third, emerging industries maintained a relatively fast growth, and high-tech manufacturing and equipment manufacturing grew a more vital driving force and saw rapid development. Industrial software, big data, cloud computing, artificial intelligence, and other new technologies, industries, and business forms projected a strong growth rate. The new energy vehicles (NEVs) sector, which attracted widespread attention, saw rapid development, and more than 3.5 million NEVs were produced and sold respectively in 2021, up 160% year on year. Therefore, the industrial transformation was brought onto a fast track in 2021.

Third, measures providing vital relief to small- and medium-sized enterprises (SMEs) were implemented and enhanced effectiveness. The CPC Central Committee and the State Council have attached great importance to the development of SMEs and regarded facilitating the development of SMEs as a long-term strategy for stabilizing growth and employment. Under the leadership of the State Council's working mechanism on promoting the development of SMEs, the MIIT has been working with relevant departments of the State Council and local governments to strengthen coordination, supervision, and guidance. We have been working to constantly optimize the business environment of SMEs, further protect and stimulate the vitality of market entities, provide more favorable policies and continuous services. We have also introduced policy packages that provide vital relief and benefit to SMEs and established long-term mechanisms that prevent and resolve the problem of defaults on payments to SMEs, which has proved to be effective currently. Policies such as tax and fee cuts and inclusive financing continue to take effect and significantly reduce the burden on enterprises. In the meantime, we strive to promote the rapid development of SMEs towards high growth potential, advanced technology, and a strong market competitive edge. The MIIT worked with relevant government bodies and introduced policies on developing high-quality manufacturers and improving SMEs' competitiveness. Over 40,000 enterprises in China have high growth potential, advanced technology, and a strong market competitive edge. The number of "little giant" enterprises in China amounted to 4,762, and single-product manufacturing specialists reached 848. They have become the benchmark demonstration enterprises in their respective and specialized fields, and a group of innovative enterprises and business startups continue to emerge and grow.

Fourth, the information and telecom industry made new leaps forward. Last year, by further leveraging the enabling role of the new generation of information technology, we continued improving and building new types of infrastructure, and vigorously fostered new forms of business and new applications, thus continuously enhancing our capacity to support the digital transformation of the economy and society. Here we outline the main features. First, the industry developed at an increasingly higher speed. In 2021, the revenue of the telecom business increased by 8% year on year, and that of software and information technology services grew by 17.7% year on year. The construction of "double gigabit" network infrastructure sped up, covering 300 million households with gigabit optical fiber networks. A total of 1.43 million 5G base stations were established and opened, and 512,000 administrative villages across the country got access to broadband. All those are of historic significance. What is also historic is that telecom difficulties in poor areas were addressed, a remarkable achievement even worldwide. Substantial outcomes were made in the innovative supervision of the industry, with major progress in special projects to regulate the internet industry, regulate apps infringing on users' rights and interests, and upgrade internet applications for the aged. The foundation of security was continuously consolidated, with solid progress in the prevention and combat of telecom and internet fraud, the protection of personal information, and the management of data security. At the same time, the whole industry actively participated in and served major national events. We offered sound telecom and cyber security services to the celebrations of the centenary of the founding of the Communist Party of China (CPC) last year and are going all out to ensure those services at the Winter Olympics and Paralympics. All the venues in the three competition zones in Beijing and Zhangjiakou have realized full coverage of 5G, strong support and guarantee for online broadcasting of events and a smart Winter Olympics.

Those are the main features of our work in four aspects last year. In 2022, we face a more challenging, complex, and uncertain external environment. China's industrial economy faces triple pressure from shrinking demand, supply shock, and weakening expectations, and the task of ensuring stable growth remains a challenge. We will thoroughly implement the spirit of General Secretary Xi Jinping's important addresses and the Central Economic Work Conference, continue to follow the general principle of pursuing progress while ensuring stability, and promote the high-quality development of industry and information technology. We will coordinate epidemic prevention and control and economic and social development, balance development and security imperatives, focus on our goal of building China into a manufacturer of quality and building China's strength in cyberspace, and give top priority to stabilizing industrial growth. We will do a good job in anticipatory adjustments, fine-tuning, and cross-cyclical adjustments; strive to enhance the core competitiveness of the manufacturing sector; improve the quality and efficiency of the industrial economy while promoting its stability; and keep the proportion of the manufacturing sector basically stable. We will strengthen and boost the real economy and lay a solid foundation for the economy so as to welcome the convening of the 20th CPC National Congress with outstanding achievements.

That is all I have for now. My colleagues and I are ready to answer your questions. Thank you.

Chen Wenjun:

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

CCTV:

The year 2021 marks the first year of the 14th Five-year Plan period (2021-2025) and a year of special importance in China's modernization drive. Industry is the leading part of the national economy, and a stable industry helps stabilize the economy. What is your comment on the overall performance of the industrial economy in 2021? Thank you.

Tian Yulong:

Thank you for your question. I mentioned it when briefing on the overall situation just now. In the special year 2021, we strived to overcome adversities brought by sporadic epidemic outbreaks, tighter supply of production factors, and constantly high commodity prices and adopted a slew of policies and measures to stabilize industrial growth in accordance with the decisions and plans of the CPC Central Committee and the State Council. Our efforts ensured the recovery of the industrial economy, and enabled progress in stabilizing and modernizing the industry chain and supply chains as well as even stronger internal driving forces for high-quality development. All those provided strong support for macroeconomic growth.

In general, the performance of the industrial economy last year had the following features:

First, the industrial economy sustained its recovery. It maintained an overall stable development last year, while the growth rate was relatively higher in the former quarters and lower in the latter. In the third quarter in particular, the growth rate declined month by month due to the epidemic, flooding, and the tighter supply of energy. Under the leadership of the CPC Central Committee and the State Council, the MIIT, together with other relevant departments, implemented a series of measures, including helping enterprises out of difficulties, ensuring energy supply, and stabilizing energy prices, which yielded remarkable results. The growth rate in the fourth quarter reversed the downward trend and began to pick up month by month. In 2021, China's industrial added value of industrial enterprises above designated size saw a year-on-year increase of 9.6% and a two-year average increase of 6.1%, higher than the pre-epidemic level in 2019. In particular, the value added to the manufacturing sector saw a year-on-year increase of 9.8% and a two-year average increase of 6.6%. The utilization rate of industrial capacity in 2021 was 77.5%, 3 percentage points higher than the previous year. Business performance improved significantly. In the first 11 months of last year, profits of industrial enterprises above designated size registered a year-on-year increase of 38% and a two-year average increase of 18.9%. Their operating margin reached 6.98%, a relatively high level in recent years. Industrial export maintained rapid growth, with the export delivery value of industrial enterprises above designated size logging a year-on-year increase of 17.7% and a two-year average increase of 8.3%. Export also showed a growth trend. Those altogether testify to a good and overall stable performance of our industrial economy.

Second, key industries have maintained growth. In 2021, 39 out of the 41 industrial categories continued to grow, with 15 industries registering more than double-digit growth. The added value of raw material manufacturing increased by 5% year on year, with a two-year average growth of 4.1%. Profits grew 92% year on year thanks to the raw material price rise, which contributed 60% to the profit growth of the whole industry. The raw material industry saw a sound performance last year. The added value of the equipment manufacturing industry registered a year-on-year growth of 12.9% and a two-year average growth of 9.7%, contributing over 40% to the overall industrial growth. Driven by the stay-at-home economy and overseas market demand, the electronic industry maintained a double-digit growth in its industrial added value and export delivery value. The added value of consumer goods manufacturing maintained an overall stable recovery with a year-on-year growth of 9.8% and a two-year average growth of 4.5%. In particular, driven by the demand for medical supplies to fight against COVID-19, the added value of the pharmaceutical manufacturing industry surged 24.8% year on year.

Third, the industrial structure has been constantly improved. Investment in the manufacturing sector has been adjusted and improved, recording a year-on-year growth of 13.5% in 2021, while that in high-tech manufacturing rose 22.2%. The proportion and structure of investment have also been constantly improved. Driven by investment, the added value of high-tech manufacturing grew rapidly, up 18.2% year on year. New intelligent and upgraded products also saw a rapid increase, so did the output of industrial robots, integrated circuits, and other new products. In particular, the production and sales of new energy vehicles exceeded 3.5 million, 1.6 times greater year on year. These are the highlights of manufacturing. Restructuring and replacing old growth drivers are making steady progress with remarkable effects. The 5G technology and industrial networks accelerated the digital transformation of manufacturing. Breakthroughs made in some key fundamental technologies also shored up the upgrading of manufacturing. The container production doubled, and the industry and supply chains of photovoltaic power, wind power, and ships are internationally competitive. Under the overall plan for carbon peak and carbon neutralization, we have formulated some plans, including implementation programs for the industrial sector and key industries involving non-ferrous metals and building materials. In the first 11 months of last year, the energy consumption per unit of the added value of industrial enterprises above designated size decreased by 5.5% year on year.

Fourth, small and medium-sized enterprises (SMEs) have resumed growth. We issued a series of policies to bail enterprises out, and further stimulate market players. In 2021, the revenue and profit of SMEs above designated size jumped 20.7% and 28.2% year on year, respectively, with two-year average growth of 9.8% and 17.1%, respectively, which are faster than the growth of the same period in 2019. We support SMEs to become more professional and specialized in niche sectors. A group of startups and innovative businesses are emerging. An MIIT survey of 1,185 "little giant" companies — leading SMEs — showed the profit margin for the first 11 months reached 10.9%, which is a good performance on the whole. Nevertheless, SMEs, especially small and micro businesses, are subject to market and epidemic changes and facing difficulties in their operation. We are stepping up efforts to help them.

Generally speaking, the current situation is still uncertain and complex. We are satisfied with the work in 2021 and confident to welcome 2022. We still have many favorable conditions, including fast economic growth, a sound growth momentum on the whole, China's leading role in COVID-19 response, a complete industrial system and sound supporting capacity, and a resilient economy with potential. Besides, with the implementation of both macro and micro policies, I am convinced that the overall development trend of the industry and information technology will not change in 2022, so will the fundamentals sustain China's long-term economic growth. With the implementation of these policies, we are confident of overcoming various difficulties to achieve a stable performance of the industrial economy. Thank you.

CNBC: 

I have two questions. Statistics show that chip and auto production has recovered in recent years. Does this mean that the shortage of chips will be solved soon? What's your outlook for 2022? The second question is about China's "dynamic zero-COVID-19" approach. Some foreign analysts are worried about its damage to China's supply chain. Is the MIIT concerned about the issue? What measures will be adopted to ensure stable production? Thank you.

Luo Junjie:

Thank you. The manufacturing capacity of integrated circuits continued to be strained last year, which led to a knock-on chip shortage through all sectors and significantly impacted the performance of global industries. In particular, the auto industry was hit worst. Many domestic auto producers have cut production or suspended production in the short term. According to our analysis, there are two reasons behind it. On the one hand, with upgrading social intelligence, the demand for chips – the most critical component in smart equipment – continues to grow. On the other hand, as the pandemic spreads globally, some countries are still imposing unjustified sanctions and suppression of enterprises from other countries, which has severely hit the global semiconductor supply chain. These overlapping factors have given rise to the chip shortage. As the market adjustment mechanism gradually plays its role, together with the joint efforts of governments, auto, and chip producers, the chip shortage in the auto sector is easing gradually. But we should also see that the stability of the global supply chain of integrated circuits is still facing severe challenges, and the chip supply will remain strained for a long time to come.

The integrated circuit (IC) industry is highly globalized. China has the world's largest integrated circuit market, and the Chinese government is committed to boosting close global cooperation to build sustainable and stable industrial and supply chains based on the principle of openness and development. Therefore, the MIIT has been keeping a close eye on the automobile chip shortage issue and actively responding to it by taking multiple measures to ensure chip supply and maintain the steady operation of the automobile industry. Next, we will also strengthen communication and cooperation with relevant countries and regions, encourage leading domestic and foreign enterprises to increase investment in a coordinated manner, and enhance the supply capacity of the whole chip industrial chain. In addition, we need to effectively implement the "Several Policies for Promoting High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" No. 8 document for 2020 issued by the State Council and related supporting policies. By doing so with full efforts, we aim to promote a free flow of various resources, create a fair and just market environment, achieve high-quality development of the IC industry, and help build a global industrial system featuring co-existence and win-win cooperation. Thank you. 

Tian Yulong:  

Let me answer your question about the impact of the dynamic zero-COVID-19 approach. I noted that some foreign media wrote articles on the policy's negative influence on the industrial economy. As we all know, China has been following the anti-pandemic principle of preventing inbound cases and a domestic resurgence, which has so far generated remarkable results. In accordance with the requirements of the CPC Central Committee and the State Council, China has taken the lead to bring the COVID-19 under control by putting people and their lives first. It is fair to say that China has led the world in both economic growth and pandemic prevention and control.  

As I said just now, China's economic growth, especially in the industrial sector, shows that the country's anti-pandemic policy is beneficial to the industrial and supply chains. It is by adopting the right pandemic prevention strategies that China has led the world to resume work and production and ensure the stability and security of the industrial and supply chains. As a result, China's economic development, export, and some other sectors are all growing smoothly on the whole. In my opinion, the stability of the industrial and supply chains can be attributed to our effective anti-pandemic endeavors. Of course, you may be concerned about the current multiple sporadic outbreaks in China. Some cities involved have taken control measures, which may exert temporary and small-scale influences on the industrial and supply chains of some regions. However, the short-term effects in a limited scope did not have a big impact on the macro-industrial chain. In particular, with the increasing precision of China's pandemic prevention and control policies, there will not be a big impact on the industrial and supply chains, especially on industrial enterprises, and the stability and security of the chains can still be guaranteed. Certainly, the pandemic is still spreading internationally and has yet to be effectively controlled, making the external environment of the industrial and supply chains uncertain, which will impact China's industrial and supply chains to some extent.  

I believe that by adhering to the anti-pandemic policies and taking more precise and effective measures to ensure the safety of supply and industrial chains, China's industrial and supply chains will become more resilient. We will also make greater efforts to keep the global supply chains smooth, which I deem essential to the stable operation of our industries, the production-marketing coordination, the unimpeded domestic and foreign trade, and the industrial economy's steady development this year. Coordinating pandemic prevention and control with economic and social development, especially industrial economic growth, remains a priority this year.

CNR:

According to the recently held National Work Conference on Industry and Information Technology, the industry and information technology system have successfully fulfilled the main targets and tasks for the year, realizing a good start to the 14th Five-Year Plan (2021-2025) period. Could you give us more details on the development of the information and communications industry, including 5G and the industrial internet? Thank you.

Tian Yulong:  

Thank you for your question. I would like to invite Mr. Zhao Zhiguo to answer it.  

Zhao Zhiguo:

Thank you for your question. Last year, the information and communications industry deepened efforts to implement the strategy of building China into a strong country in manufacturing and cyberspace and made new strides in accelerating the integration of information and communications technologies with diverse economic and social sectors. The annual revenue of the telecom business reached 1.47 trillion yuan with a year-on-year growth of 8%, up 4.4 percentage points year on year. The total volume of the telecom business stood at 1.7 trillion yuan, up 27.8% year on year. The measures taken are mainly as follows:

First, we have strengthened planning for the 14th Five-Year Plan period and sped up improvements to the policy planning system. We issued a development plan for the information and communications industry during the 14th Five-Year Plan period and launched five three-year (2021-2023) action plans of the coordinated development of "dual gigabit" networks, the application of 5G, the industrial internet innovation and development, the new data center development, and the IPv6 traffic increase. The plans have together constituted the policy system for the development of the information and communications industry, giving full play to the guiding role of the policies.  

Second, the construction of new types of infrastructure has achieved remarkable results, and the support capacity for digital transformation has been further enhanced. The number of new 5G base stations in the whole year reached 654,000 while the number of 5G mobile terminal connections reached 518 million. The gigabit optical networks covered 300 million households, and the first batch of 29 "gigabit cities" were built, which promoted the development of China's dual-gigabit network capability, users' quality and innovative applications, achieving good results. The industrial internet infrastructure, featuring the coordinated development of "cloud computing, networks, edge computing and terminals," has basically taken shape. "5G+industrial internet" has shaped 20 typical application scenarios, such as remote equipment control and machine-vision quality inspection, across 10 key industries, such as mining, steel and electric power. Remarkable achievements were made in empowering various industries and businesses to transform and upgrade.

Third, solid steps have been taken towards industry oversight, and supervision efficiency has continued to improve. The modernization of industry supervision has also improved. A new regulatory system based on credit is in its nascent stages, and the coordinated national regulatory pattern is being rapidly constructed. Platform governance achieved important breakthroughs. We organized special rectification actions for the internet industry as well as actions to improve user experience of information and communications services. As a result, the compliance of business operations, the openness of the industry ecology and user satisfaction have been significantly improved. We have further promoted in-depth special rectification campaigns on apps' infringements of user rights and interests. We have built a national app testing platform, with the ability to test 180,000 apps every month and carry out technical testing, which has basically solved the problems of "not being able to close pop-ups" and "unexpected redirects of pop-ups."

Fourth, the capability to safeguard cyber security has been continuously improved, and defense measures have been consolidated. We have promulgated the "Regulation on the Management of Security Loopholes of Network Products," established a national loophole management system, built a 5G application security innovation demonstration center, and improved 5G application security safeguard capabilities. We have fully implemented real-name registration management for the internet of vehicles (IoV), and the security management system of the IoV has basically been established. We further implemented the classified network security management of industrial internet enterprises, optimized the policy environment for the development of the cyber security industry, deepened the governance of the basic level of the industry, and made significant breakthroughs in preventing and controlling telecommunications and online fraud.

Fifth, deeply and practically serving people's livelihood, and making digital life more convenient. Universal telecommunications services have been steadily advanced, and we made the historic realization of "broadband access to every village" for each administrative village across the country, helping more people get on the "digital train." For special groups such as rural households alleviated from poverty, we have carried out targeted fee reduction and other related work, saving a total of 8 billion yuan for users, which has greatly reduced the cost of network usage. The first batch of 217 websites and apps closely related to elder communities have undergone age-appropriate transformations and passed the evaluation, providing more comprehensive, considerate and direct facilitation services for the elderly. 5G technology has been used to empower the "smart Winter Olympics" and create smart applications such as smart viewing, cloud broadcasting and smart venues, further enriching the spectator experience, as well as improving event services and venue operations.

In the next step, the MIIT will resolutely implement the guiding principles of the Central Economic Work Conference, focus on development as the top priority and promote steady progress, take effective measures to ensure the information and communications industry maintain stable and relatively rapid growth, continue to strengthen 5G construction and innovative applications, actively promote the upgrading of the industrial internet, accelerate the construction of an agile, accurate and efficient industry supervision system, steadily promote the innovative development of the cyber and data security industry, and ultimately promote the high-quality development of the information and communications industry. Thank you.

Hong Kong Economic Herald:

In recent years, the rapid development of the digital economy has attracted widespread attention and has become a new engine for the 14th Five-Year Plan. What major achievements did the MIIT make in promoting the development of the digital economy last year? How do you view digital economy trends in the next stage? And how can you make the digital economy operate stably and with a far reach? Thank you.

Tian Yulong:

Thank you for your questions. Let me answer them. The CPC Central Committee and the State Council attach great importance to the digital economy. General Secretary Xi Jinping has given important instructions about it on many occasions. It's fair to say that the development of the digital economy entered a "fast lane" last year. There are several features:

First, since the development of digital economy is also an integration of multiple economic fields, it primarily focuses on the innovation of key technologies. Last year, we made a series of breakthroughs in key core technology areas. Our innovation and development of big data, cloud computing and blockchain are currently at the forefront of the world. Our advantages in this regard are obvious. 5G mobile communications technology, equipment and applications are leading the world. Smartphones have also entered the world's advanced ranks. The foundation of the digital economy, in terms of integrated circuits and software, has also achieved milestones. Therefore, in terms of technological breakthroughs, the digital economy achieved gratifying results last year.

Second, in terms of overcoming difficulties in the digital industry, we have continued to strengthen the industrial economy. There are several characteristics. After the construction of new types of information infrastructure gathered speed, the comprehensive strength of our information infrastructure has reached a new level. As I mentioned just now, we have built the world's largest optical fiber network and 5G network, which lay an important foundation for realizing the digital economy. We have launched 1.425 million 5G base stations. Pushing forward the integration of our cyber industry applications has brought the development of the digital economy into a "fast lane." The resilience of the development of the digital economy is also very remarkable. Last year, business revenue from the software information technology service industry increased by 17.7%, ahead of the industry average. The development of the home economy, online economy and information development has raced through a "fast lane" due to the COVID-19 pandemic, boosting the growth of the industry and the demand.

Third, the digitalization of manufacturing picked up speed. The intelligent manufacturing equipment industry developed rapidly. Last year, the output value of industrial robot manufacturing enterprises above the designated size surged 30.8% year on year; and that of 3D printing equipment enterprises registered a year-on-year increase of 27.7%. In particular, more than 150 industrial internet platforms with national influence were established and over 2,000 "5G+industrial internet" projects are under construction. Digital technology is crucial for SMEs, especially those with high growth potential, advanced technology and a competitive edge in the market. Most of them are innovative enterprises with advantages as latecomers to the digital economy and they develop relatively fast. We believe these SMEs will perform exceptionally well in the digital economy.

Fourth, the ecology of the digital economy improved. We deepened reforms to streamline administration and delegate power, improve regulation and upgrade services. We also simplified approval procedures and optimized relevant processes. These measures supported the development of digital economy enterprises by reducing government-imposed transaction costs. In collaboration with other departments and local authorities, we built a number of digital industrial clusters which leveraged the advantages of different regions in industry, technology and talent. As you might know from news reports, local authorities across the country hosted many exhibitions, conferences and forums, centered around the digital economy last year, while working to facilitate the flow of digital economy factors and upgrade industrial clusters. In addition, we engaged more actively with international efforts through bilateral and multilateral mechanisms such as G20, participated in the formulation of digital rules and cooperated in data and cyber security, and helped more Chinese digital enterprises go global. All these have contributed to the building of a global cyber-community with a shared future. Therefore, the overall development trends of the digital economy are encouraging. Next, we will continue to follow the guidance of the plan to facilitate the development of the digital economy in the 14th Five-Year Plan period (2021-2025) issued by the State Council. We will focus on accelerating the integration of digital and real economies, promoting the development of digital information infrastructure and improving the digital economy governance system. We will take coordinated measures to promote the development of digital industries and the digital transformation of traditional industries, empowering traditional industries with next-generation information technology and fostering new industries, new businesses and new models. Under the guidance of the plan, we will mobilize forces and resources from all quarters to ensure the rapid and stable development of the digital economy. This is our goal and I believe we will achieve it. Thanks.

Yicai:

Sporadic cases have been reported in several regions, and the base number for the first quarter of last year was relatively high. In this context, what do you think of the industrial growth rate in the first quarter of this year, and what measures will be taken to boost the industrial economy? Thanks.

Tian Yulong:

That's a good question. Mr. Luo Junjie will answer it.

Luo Junjie:

Thanks. Mr. Tian has already mentioned this issue. Facing the downward pressure on the industrial economy, we have been formulating new development policies in collaboration with relevant departments since the second half of last year. In the fourth quarter, the MIIT and the National Development and Reform Commission jointly issued an implementation plan for invigorating the industrial economy and promoting high-quality industrial development. The plan, which includes 16 policy measures to stabilize industrial growth from four aspects, effectively boosted the industrial economy in the fourth quarter of last year. Currently, the industrial economy's recovery is stuttering and we have been facing significant downward pressure in the first quarter of this year due to a range of factors. Globally, there are many uncertainties about the pandemic and the world's economic growth and trade are sluggish. Domestic factors include concerns about supply constraints, weak consumption and investment demand, difficulties facing SMEs, sporadic COVID-19 outbreaks, the base effect, etc. Well aware of the situation, we made plans early and took proactive measures. At the end of last year, we made arrangements to ensure a stable start for industrial performance during the first quarter of this year. Local industry and information technology authorities were required to help enterprises organize operations during the New Year's Day and Spring Festival holidays, strengthen the supply of production factors such as raw materials and labor, and resume work and production after the Spring Festival holiday. In the next step, we will faithfully implement the guiding principles of the Central Economic Work Conference, prioritize stability and pursue progress while ensuring stability. We will continue to strictly observe virus prevention and control protocols and implement existing policies and measures. Meanwhile, we will respond to new developments and roll out more effective measures in collaboration with other departments in terms of finance and taxation, ensuring supply and price stability and supporting the development of SMEs. We will carry out anticipatory, fine-tuning, and cross-cycle adjustments. We will take a series of measures and spare no effort to ensure steady industrial growth in the first quarter, which will act as a "ballast" for the overall economic development. Specifically, we will do the following:

First, we will work hard to boost investment in the manufacturing sector. We will give play to investment's key role in stabilizing industrial growth and accelerate the launch of major projects listed in the country's 14th Five-Year Plan, as well as the corresponding five-year plan in the field of industry and information technology. We will establish a mobilization and service mechanism for major programs in collaboration with relevant departments and local governments. At the same time, we will strengthen the cooperation between industry and finance, encourage and support enterprises to increase investments and guide financial institutions to bolster their support for the digitalization and green transformation of enterprises.

Second, we will actively guide and expand consumption demand. We will seize opportunities from the shopping seasons associated with traditional festivals, such as Spring Festival and Lantern Festival, and unleash the potential of the huge domestic market and tap into residents' consumption potential. We will further implement the strategy of increasing the variety and quality of products and nurturing domestic brands, promote the upgrade of information consumption, and boost the development of the intelligent connected vehicle (ICV) industry, the smart health and senior care industry, as well as the ice and snow equipment industry. We will expand the consumption of new energy vehicles and encourage the use of green smart home appliances and green building materials in the countryside where conditions permit. 

Third, we will work to ensure the supply and coordination of energy factors. We will precisely unclog bottlenecks within industrial chains and supply chains, address chip shortage issues, container shortages and labor shortages, accelerate efforts to ensure and coordinate factors of energy, logistics and labor force, prioritize the stable operation of key industrial chains and supply chains, with an emphasis on addressing the chip shortage in the auto industry and maintaining the smooth operation of key component supply chains.

Fourth, we will boost the role of the new impetus as a growth driver. We will stimulate new dynamics of economic growth through upgrading traditional industries with digital and smart technologies and create big, strong emerging industries, improve the multi-level system of industrial internet platforms, deepen the integration and application of 5G and gigabit fiber-optic networks in the manufacturing, mines, energy, agriculture and transportation sectors to contribute to the digital transformation of those industries. We will actively expand applications for virtual reality and smart health and elderly care products, as well as foster emerging industries such as big data, artificial intelligence and Internet of Vehicles. Thank you. 

People's Post & Telecommunications News:

What results have China achieved in 5G developments and applications and what are the shortcomings? What are the MIIT's deployment and plans for future 5G development and what are the priorities? Thank you. 

Zhao Zhiguo:

Thank you. Over the past year, the MIIT has implemented decisions from the CPC Central Committee and the State Council, and mobilized forces from all industries to promote innovative 5G development all while making notable progress. 

First, we have strengthened policy guidance. The MIIT, together with nine other departments, issued a three-year action plan aimed at coordinating 5G integration and application, and fostering new drivers of economic and social development. We worked with the National Health Commission to carry out 5G plus medical health pilot programs that expand 5G applications in the medical health sector and build a model of sound development of smart medical care. We also worked with the Ministry of Education to carry out 5G plus smart education pilot programs to promote the high-quality development of 5G-enabled education. 

Second, we have achieved steady progress in 5G development. China has built the world's largest 5G network with the most advanced technologies. By the end of last year, the country had built more than 1.4 million 5G base stations, of which more than 800,000 are jointly built and shared. The 5G network covers all prefecture-level cities, urban areas of more than 98% counties and 80% townships. The breadth and width of 5G coverage continued to expand during the past year. China's 5G mobile phone shipments stood at 266 million units last year, up 63.5% year on year, showing a steady growth trend.

Third, the application innovation has been improved in both quantity and quality. We organized the fourth "Bloom Cup" 5G Application Competition, which collected more than 12,000 projects from almost 7,000 participants. The number and quality of the projects reached a new high. The application of 5G+4K/8K ultra HD video and 5G+AR/VR was applied to many scenarios last year, such as the art performance marking the 100th anniversary of the CPC's founding, live events, and housing and shopping services, bringing a new experience to consumers. 5G applications in the fields of industry, culture and tourism, energy, and transportation have also continued to expand. Take the 5G plus industrial internet as an example. Typical scenarios, including remote equipment control, machine vision inspection and production efficiency control, have been applied in-depth in key areas, such as mining, ports, iron and steel, and electricity and petrochemical sectors, which has helped enterprises improve quality, reduce costs, improve efficiency and realize green and safe development. Notable progress has also been made in this regard. 

Of course, we should also note that there are still challenges in 5G development, including the bottleneck in technology industries, immature business models and the ecological environment yet to be further optimized, which needs coordinated forces from all sectors to promote the scalable development of 5G. The year 2022 is crucial for the scalable development of 5G application, and we will continue to implement the policy decisions and plans of the CPC Central Committee and the State Council, boost the coverage of the 5G network, and advance in-depth integration of 5G and vertical industries. Our major efforts are as follows:

First, we will further consolidate the 5G industry base. We will encourage industrial sectors to make key 5G technology breakthroughs, support enterprises in actively participating in the formulation of a series of international 5G standards, encourage them to develop various 5G chips and modules in a timely manner to meet diversified demands of the industrial application, boost the growth of new end-use products, such as 5G smart mobile phones, wearable devices, virtual reality (VR) and augmented reality (AR), to enrich carriers of 5G technology applications. 

Second, we will make steady progress in 5G network development. We will take a moderately proactive approach in advancing 5G network development, further implement the principle of joint development and sharing, continue to expand 5G coverage in counties and towns, improve deep coverage level of the 5G network in crowded areas, such as high-speed trains, transportation junctions, and shopping malls, as well as key sectors of industries and medical care. 

Third, we will promote large-scale utilization of 5G. We will strive to do a good job in implementing the "Sailing" action plan for 5G application , hold the fifth "Blossom Cup" 5G application competition, and carry out related work on pilot "5G plus medical care" and "5G plus smart education" projects. We will also promote the application of 5G technology in broadcasting, travel, and other scenarios to help deliver a smart Winter Olympics. We will upgrade the "5G+industrial internet" application and tap into a batch of typical application scenarios at production lines and factories, connecting 5G technology throughout the whole process of engineering projects. We will implement a plan to improve 5G application for individuals and work to launch new types of terminals and apps in a bid to increase people's sense of accomplishment and happiness. Thanks.

Thecover.cn:

What achievements has the MIIT made in its special campaign on app governance over the past year? Will these efforts be strengthened in 2022? And what is the focus of this work? Thanks. 

Tian Yulong:

Mr. Zhao will answer your questions. 

Zhao Zhiguo:

Thank you for your questions. The mobile internet has grown rapidly in recent years. Apps are closely related to the production and life of the public. Against this backdrop, the protection of personal information has become a hot issue that hundreds of millions of users are concerned about. The MIIT takes a people-centered approach and attaches great importance to the protection of users' rights and interests. Focusing on such problems as rule-breaking access of phone users' permission and the collection of users' information beyond the normal scope, we have carried out special campaigns for app management. In 2021, we strengthened coordination with other departments, and took comprehensive measures to address a series of prominent problems, and made remarkable progress. Our work can be summarized as follows:

First, we worked to improve laws, regulations and standards to better govern in accordance with the law. App governance must prioritize laws and regulations. Last year, the Personal Information Protection Law, Data Security Law, and other laws and regulations were issued. To further specify requirements, we drafted the Provisions on the Protection and Management of Personal Information on Mobile Apps, for which we have solicited opinions and suggestions from the public. In addition, we promoted the formulation of industry standards such as ones for evaluating the minimum necessity principle in the collection and use of personal information by apps. We can say that these policies and standards have provided strong support for app governance. 

Second, we targeted hot and difficult issues and carried out special campaigns. The issues considered most urgent, difficult, worrisome and expected by users are our biggest concern and focus. We carried out campaigns on pop-ups, which appear as an app opens and are difficult to close or mislead users to another page, and effectively urged major internet companies to solve this strongly-complained problem. We conducted special assessments on apps in the travel and accommodation sectors during major festivals and holidays. Last year, we carried out 12 batches of technical assessment for apps – nearly once a month. A total of 1,549 apps were publicly criticized for violating regulations, and 514 apps were taken down for failing to correct their violations. To sum up, we continued to create a cleaner app environment. 

Third, we strengthened the application of technologies in app governance. There are now millions of apps in the app stores, and we must further strengthen our technological examination abilities. Last year, with artificial intelligence, big data, and other new technologies, the capability of automatic examination of the national platform for technological examination of apps has improved greatly. 2.08 million apps were examined, which basically covered all apps of major internet companies in China. 

Fourth, we guided businesses to strengthen self-discipline and addressed problems at the source. Businesses should take primary responsibility and strengthen their self-discipline, which is of key importance to protect users' rights and interests and push ahead the healthy development of the industry. Last year, we organized related industry associations to call meetings with internet companies on the regulation of personal information protection in apps and provided 16 trainings for nearly a thousand companies to raise their red-line awareness, constantly improve internal governance, and operate in accordance with laws and regulations, all aimed to solve the problem at the source. 

Fifth, we improved user experience of services and pursued innovation in governance. Whether our work is good or not ultimately depends on users' feelings. Last November, focusing on major issues affecting user experience, we launched a campaign to improve user experience of information and communications services. We call it the "524" campaign. We urged companies to make a "dual list" for the protection of personal information, improve privacy policies and the management of accessing of users' permission, and optimize customer services with an aim to improve both services and user experience in an interactive manner.

In 2022, we will focus on following major aspects: 

First, we will continue to pursue comprehensive measures and improve regulation throughout the chain. We will focus on the supervision of those taking major responsibilities, covering all app stores, third-party software development kits (SDK), terminal companies, and major internet companies, among others, to create a safer consumption environment in the information and communications sector. 

Second, we will deepen the "524" campaign to improve service and steadily promote related companies to implement the tasks and requirements of the campaign. We will conduct reviews on a timely basis to better consolidate our achievements and improve users' sense of accomplishment. 

Third, we will push ahead joint governance and build a long-term mechanism. We will strengthen coordination with relevant departments to form regulatory synergy and form a comprehensive system featuring government regulation, self-discipline of companies, media supervision, and participation from social organizations and users, thus creating a safer and cleaner app application environment. Thanks. 

China Electronics News:

SMEs are the main force driving national social-economic development, and the CPC Central Committee and the State Council have paid much attention to them by releasing a slew of supportive measures that help them overcome difficulties. How is the current growth of these enterprises? What measures will the MIIT take to further promote SMEs' development? 

Tian Yulong:

Thank you for your questions. The development of SMEs remains a public concern, and I have elaborated on them, however, I will add some more.

As I mentioned just now, the CPC Central Committee and the State Council have attached much attention to SMEs – the mainstay of China's social-economic development – and helped them overcome difficulties while stimulating their growth. This was our main task last year. Under the guidance of the State Council's leading group on the development of SMEs, the MIIT, in coordination with other departments and local authorities, has yielded notable results. Focusing on policy framework, services system and the development environment, we prioritized the two areas of financing and protecting SMEs' rights and interests, striving to enhance their capacity. Moreover, we adopted comprehensive policies including cutting taxes and fees, providing more financial support and better services; fostering and empowering high-quality SMEs to promote their steady and healthy development.

According to current statistical data, revenues and total profits of industrial SMEs above designated size rose 20.7% and 28.2% respectively, with average two-year growth of 9.8% and 17.1% respectively. Therefore, generally, it demonstrates a steady and healthy momentum. Big data based on monitoring small and micro businesses' power consumption also showed that from January to November of last year, the power consumption of these firms increased 9.6% year-on-year, and 49.4% of these firms registered a higher power consumption compared to the same period of the previous year, reflecting relatively high productivity. Generally speaking, the SMEs grew well, in spite of some difficulties. The micro and small businesses, in particular, are still facing problems concerning the external industrial chain, as well as pandemic prevention and control, and are in need of improvement. 

Next, we will remain focused on the development of SMEs.

First, we will ensure stability and boost the steady and healthy development of SMEs. We will draft more targeted policies and regulations, and continue carrying out the established policies and measures to help them overcome difficulties.

Second, we will promote the high-quality development of SMEs, particularly specialized, refined, characteristic and innovative SMEs. We will improve their innovative capacity and specialized level, as well as their ability to address difficulties so as to achieve sustainable development.

Third, we will strengthen services. The government should coordinate with other sectors and local authorities to implement more supportive policies and establish more service systems. Continued efforts should be made to address issues regarding offering rewards or subsidies to qualified financing guarantee agencies, promoting the targeted docking of enterprises and financial institutions, expanding financing channels, as well as mitigating difficulties faced by the SMEs in accessing affordable financing, so as to ensure the measures are targeted and effective.

Fourth, we will further improve the development environment for SMEs and take effective measures to protect their lawful rights and interests. We have issued guideline on the development of SMEs during the 14th Five-Year Plan period (2021-2025), and will continue to improve our policies by making further assessments and supervising the business environment. We will fully implement the Regulation on Ensuring Payments to Small and Medium-Sized Enterprises to protect their lawful rights and interests. We also call on people from all walks of life to protect SMEs' lawful rights and interests and further improve the long-term mechanism for preventing and resolving payment arrears to SMEs, continue taking special actions to clear arrears owed to SMEs, and ensure the actual implementation of these regulations, policies and measures to benefit the SMEs and help them grow steadily and rapidly. Thank you.

ThePaper.cn:

The Central Economic Work Conference emphasized that it is necessary to enhance the core competitiveness of the manufacturing industry. During a State Council executive meeting, the shifts from medium- and low-end manufacturing to medium- and high-end manufacturing were also underlined. What progress has the MIIT made in enhancing the core competitiveness of the manufacturing industry? Are there further plans? Thank you. 

Tian Yulong:

Thank you for your concern and support to MIIT. Improving the core competitiveness of the manufacturing industry is a requirement put forward during this year's Central Economic Work Conference. This is also a primary task for us in this year and beyond. While ensuring the stability and security of the supply chain and industrial chain in the early stage, we will further enhance the core competitiveness of the manufacturing industry in the next step.

The stability and security of the industrial chain and supply chain are vital to the core competitiveness of the manufacturing industry. Overall, the industrial economy restored growth in the past year. In the first three quarters, the manufacturing value-added in GDP increased to 27.4%. The proportion of the manufacturing industry remained stable. The efficiency of enterprises has also improved significantly. In the first 11 months of last year, profits from industrial enterprises above the designated size increased by 38% year-on-year and 41.3% compared with the same period in 2019. The overall development of the manufacturing industry is relatively fast, and the efficiency improvement is also reasonably noticeable. This is mainly because the resilience of the industrial chain and supply chain has been secured, significantly improving our entire manufacturing industry, especially in some primary and critical areas. The overall capacity has been improved. In particular, the enhancement is reflected in equipment manufacturing, including containers, photovoltaics, wind power, energy, and electricity. International competitiveness has also been enhanced. These are the specific reflections of the improvement of core competitiveness. Last year, the high-tech and equipment manufacturing industries' added value increased by 18.2% and 12.9% year-on-year, respectively. Considering the negative impact of the COVID-19, this growth rate is awe-inspiring. 

The improvement of the core competitiveness of the manufacturing industry is our main task. Therefore, I summarize the target using the term "3+3." This means three foundations and three focuses. To enhance our core competitiveness, we must lay solid foundations in the following three aspects:

First, we should improve the foundation of industrial technologies. The development of the manufacturing industry hinges on core and key technologies. In this regard, we will make great efforts to launch special projects on developing the key technologies, the lack of which will restrict the improvement of the core competitiveness of the manufacturing industry. Furthermore, we will establish several manufacturing innovation centers. In particular, we will jointly build several centers with local governments to promote the formation of industrial clusters and industrial chain aggregation and enable the coordinated development of upstream and downstream of the manufacturing industry.

Second, we will enhance the technological innovation of the industry. Industrial foundations underpin technology. Six foundations, including essential components, parts, materials, software, basic techniques and industrial technologies, are crucial to improving the manufacturing industry's core competitiveness. We will further accelerate the implementation of projects aiming to reinforce the industrial foundation to enhance the core competitiveness of the industry further.

Third, we will further increase the resilience of the industrial chain and supply chain. We will settle problems arising in the industrial chain and supply chain, increase the advantages, and strengthen weak links. We will upgrade the industry, improve quality, and increase efficiency. We will increase efforts to boost investment in the manufacturing industry comprehensively improve the completeness, resilience and standard of the industrial chain, and accelerate technological upgrades and equipment renewal. 

The following will be three focuses. The first is to underline the development of enterprises with high growth potential, advanced technology, and a strong market competitive edge. Therefore, we will launch a series of policies such as fee and tax reduction to promote the development of enterprises with high growth potential, advanced technology, and strong market competitive edge, making them players of improving core competitiveness of the manufacturing industry and a significant driving force of the industrial chain and supply chain.

The second is to improve intelligent manufacturing significantly. With digital and information technologies, we will accelerate the digital transformation and upgrading of the manufacturing industry to maintain the leading position of the equipment manufacturing industry and high-tech manufacturing industry, particularly in manufacturing some high-level components and applications of "5G+industrial internet". To improve the capability, intelligent manufacturing should be our priority for investing our efforts and making breakthroughs.

The third is implementing carbon peaking actions in the industrial sector to achieve green manufacturing. Efforts should be made to accelerate the peaking of carbon emissions in key industries and key areas. We will vigorously develop green manufacturing, leading the upgrades and transformation of the technologies of the manufacturing industry. We will carry out green and low-carbon technology application and product development and implement industrial energy efficiency and water efficiency improvement plans. Low-carbon and green manufacturing is an important driving force for the transformation and upgrading of the manufacturing industry, as well as for its innovation and development. We must also curb the reckless development of high-energy intensity and highly pollutive projects.

With these six measures, the core competitiveness of the manufacturing industry will be significantly improved. Therefore, these will be our focuses in 2022 and the 14th Five-Year Plan (2021-25) period. That's all for my answer to this question. Thank you.

Chen Wenjun:

Thank you to all the speakers and friends from the media. Today's press conference is concluded.

Translated and edited by Zhang Jiaqi, Liu Sitong, Duan Yaying, Liu Qiang, Xu Xiaoxuan, Wang Yiming, Zhang Rui, Chen Xia, Zhang Liying, Wang Yanfang, Yang Xi, Li Huiru, Zhang Tingting, Huang Shan, Wang Qian, Zhu Bochen, Yuan Fang, Cui Can, Jay Birbeck, Drew Pittock 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:

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

Sun Guofeng, director general of the Monetary Policy Department at the PBC

Zou Lan, director general of the Financial Market Department at the PBC

Ruan Jianhong, director general of the Statistics and Analysis Department at the PBC

Chairperson:

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

Date: 

Jan. 18, 2022

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. Liu Guoqiang, deputy governor of the People's Bank of China (PBC), to brief you on China's financial statistics in 2021 and answer your questions. We are also joined by Mr. Sun Guofeng, director general of the Monetary Policy Department at the PBC; Mr. Zou Lan, director general of the Financial Market Department at the PBC; and Ms. Ruan Jianhong, director general of the Statistics and Analysis Department at the PBC.

Next, let's give the floor to Mr. Liu for a brief introduction.

Liu Guoqiang:

Friends from the media, good afternoon. It is a pleasure for me to attend this press conference. I will first make a brief opening introduction on the financial work in the past year and our plans for the next step.

Since the 18th National Congress of the Communist Party of China (CPC), guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the PBC has implemented the decisions and plans of the CPC Central Committee and the State Council, followed the overall arrangement of the Financial Stability and Development Committee under the State Council, remained committed to the general principle of pursuing progress while ensuring stability, and implemented a prudent monetary policy, which have contributed to China's decisive victory in building a moderately prosperous society in all respects. In recent years in particular, monetary policy has continuously helped improve the quality and efficiency of serving the real economy and promoted China to lead globally in economic development.

In 2021, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the PBC resolutely implemented the decisions of the CPC Central Committee and the State Council and enhanced cross-cycle adjustments in light of China's economic conditions. In the first half of the year, there were many positive factors in the operation of the domestic economy. The PBC maintained reasonable and ample liquidity, made good use of relending and two direct tools, that is, the inclusive loan repayment extension support tool and inclusive credit loans to micro and small businesses (MSBs), optimized the supervision of deposit interest rates, and raised the reserve requirement ratio (RRR) for foreign currency deposits by 2 percentage points. While guiding credit growth back to normal, efforts have also been made to optimize the credit structure and reduce financing costs. In the second half of last year, domestic economic development faced triple pressures of shrinking demand, supply shocks and weakening expectations. The PBC coordinated cross-year policies to give full play to the dual functions of monetary policy tools in terms of volume and structure. In July, the RRR was cut by 0.5 percentage point across the board, releasing 1 trillion yuan in long-term liquidity, helping to bolster the real economy and paving the way for a sustained and stable economic recovery in the second half of the year. In August, a symposium analyzing monetary and credit conditions was held to guide financial institutions to enhance the stability of total credit growth. In September, the PBC raised the quota of special central bank lending by 300 billion yuan to support locally incorporated banks to increase loans to MSBs and self-employed businesses. In November, carbon emission reduction support instruments and a special relending facility worth 200 billion yuan was launched to increase the overall energy supply capacity and promote the clean and efficient use of coal. In December, we cut the RRR by another 0.5 percentage point, releasing about 1.2 trillion yuan in long-term funds. The two RRR cuts in the middle and at the end of the year released a total of 2.2 trillion yuan in long-term funds; symposiums analyzing monetary and credit conditions of financial institutions were held to guide financial institutions to make cross-cycle credit arrangements for the end of the year and the beginning of next year; the PBC also lowered the interest rate of the relending program for the agricultural sector and small businesses by 0.25 percentage point and the one-year loan prime rate (LPR) was lowered by 0.05 percentage point, which helped the comprehensive financing costs of businesses remain stable and fall moderately; the PBC converted two direct tools into market-based policy tools to support micro and small business and support financing of micro, small and medium-sized enterprises (MSMEs); the PBC raised the RRR for foreign currency deposits of financial institutions by 2 percentage points and maintained the basic stability of the yuan exchange rate at a reasonable and balanced level. In the past year, we had a busy schedule but remained organized. Every month, we made arrangements with the clear purposes of promoting steady growth while taking into account structural optimization, in particular, in the second half of the year. 

In general, the 2021 monetary policy was flexible, accurate, proper and moderate. It was more forward-looking, stable, targeted, effective and self- directed. China's major financial indicators maintained strong growth on top of the high base of 2020. The financial system operated steadily and the financial support for the real economy was solid. In 2021, new yuan loans reached 19.95 trillion yuan, a year-on-year increase of 315 billion yuan. By the end of 2021, the M2 and aggregate financing increased by 9% and 10.3% year-on-year, respectively, basically matching the nominal economic growth rate. On the two-year average, the M2 and aggregate financing grew by 9.5% and 11.8%, respectively, which basically matched and were slightly higher than the average nominal economic growth rates in 2020 and 2021. By the end of 2021, the macro leverage ratio was 272.5%, down 7.7 percentage points from the end of the previous year, and remained basically stable. The interest rates for corporate loans in 2021 stood at 4.61%, a decrease of 0.1 percentage point from 2020 and a decrease of 0.69 percentage point from 2019, which was the lowest level since reform and opening up began. By the end of 2021, the balance of medium and long-term loans to the manufacturing sector increased by 31.8% year-on-year, 20.2 percentage points higher than the growth rate of all loans. By the end of 2021, the balance of inclusive loans to micro and small business increased by 27.3% year-on-year, benefiting more than 44 million MSBs. The weighted average interest rate of newly issued inclusive loans to MSBs in November was 4.98%, 0.1 percentage point lower than that of December 2020. 

In 2022, the PBC will implement the spirit of the Central Economic Work Conference, prioritize stability, and pursue progress while ensuring stability. We will maintain a prudent monetary policy that is flexible and appropriate, step up cross-cycle adjustment, and give full play to the dual functions of monetary policy instruments both in terms of volume and structure. We will be more proactive and enterprising, enhance our policy predictability and guide financial institutions to increase support for the real economy — especially for small and micro businesses, scientific and technological innovation, and green development, so as to ensure stable operation of the macro economy, as well as foster an appropriate monetary and financial environment for high-quality economic development

Specifically, the PBC's work will focus on the following aspects:

First, maintaining stable credit growth. We will use multiple monetary policy tools to maintain liquidity at a reasonable and ample level, ensure stable credit growth, and guide financial institutions to increase the credit supply so as to ensure the money supply and social financing expansion will basically match the nominal economic growth rate.

Second, steadily improving the credit structure. We will broaden the use of structural monetary policy instruments, implement market-based policy tools to support small and micro businesses, and make good use of the supporting tools for carbon reduction and special reloans for the clean and efficient use of coal. Financial institutions will be guided to increase the credit supply to areas where credit growth is slow and improve the credit structure. Targeted measures will be adopted to increase credit support for key areas and weak links.

Third, steadily reducing overall financing costs for enterprises. We will improve the market-based interest rate mechanism and transmission mechanism, give play to the reform of the LPR mechanism, and stabilize the costs of bank debt, so as to steadily reduce enterprises' overall financing costs and encourage the financial system to transfer profits to the real economy.

Fourth, keeping the yuan exchange rate generally stable at an appropriate and balanced level. We should let market supply and demand play a decisive role in the formation of the yuan exchange rate, and give full play to the exchange rate's role as an automatic stabilizer in adjusting the macro economy and international payments. There are many factors affecting the exchange rate. The exchange rate's uncertainty is inevitable, while its two-way fluctuations are normal. Enterprises and financial institutions should establish the concept of "risk-neutral." Financial institutions should actively provide exchange-rate risk-management services for MSMEs, in order to reduce their costs of hedging exchange-rate risks. Our goal is to keep the yuan exchange rate generally stable at an appropriate and balanced level. Although the exchange rate may deviate from the equilibrium level in the short term, market and policy factors will correct the deviation in the mid- and long-term. Thank you.

Xing Huina:

Thanks for the introduction from Mr. Liu. Now the floor is open to questions. Please indicate the media organization you work for before raising a question.

CCTV:

My question is, in order to prioritize stability, how will the PBC implement the spirit of the Central Economic Work Conference to enhance policy predictability when exerting the role of monetary policies? Thank you.

Liu Guoqiang:

In 2021, we maintained a prudent monetary policy that was flexible, precise, reasonable and appropriate, and took initiative measures in the second half of the year. We cut the RRR by 0.5 percentage point in July, responding early to downward pressure on the economy and paving the way for sustained and steady economic recovery in the second half of 2021 and in the first quarter of 2022. The Central Economic Work Conference proposed that policy efforts should be appropriately advanced. Following the deployments of the CPC Central Committee and the State Council, the PBC launched a series of measures in December 2021, especially after the Central Economic Work Conference. We cut the RRR by 0.5 percentage point, convened a symposium on analyzing the monetary and credit situation for financial institutions, cut off 25 basis points in the interest rates of the re-lending facility supporting agricultural and small businesses, lowered the one-year LPR by 5 basis points, and transferred the "two direct tools" to market-based policy tools for supporting small and micro enterprises. One of the direct tools is the inclusive loan extension support tool. During the special period of the epidemic, we asked financial institutions to extend their loans to enterprises eligible for relative policies and simultaneously provided certain policy incentives. The other tool is the inclusive credit loan support program. At present, China has entered a new normal in economic development while epidemic prevention and control are being conducted on an ongoing basis. Therefore, the two direct tools should be transferred to market-based policy tools. In the past, the policy was based on requirement and policy incentives; whereas now, it's based on a voluntary and incentive mechanism. Financial institutions and enterprises are encouraged to communicate on their own. If the financial institution would like to extend its loans, we will provide certain policy incentives. We will step up cross-cycle adjustment to support economic growth in 2022.

Currently, the economy faces three kinds of pressure. Therefore, maintaining stability is the biggest progress. Before fundamentally easing the economic downward pressure, progress should serve stability. We will not roll out policies that aren't beneficial to stability but release policies that are conducive to stability so that progress can promote stability. Simply put, the priority goal of our current work is stability, and policy support should be redoubled. How to redouble policy support? I think efforts can be made in the following three aspects. First, ample support. The monetary policy tool kits should be further opened to maintain stable aggregates and avoid credit collapse. Second, targeted support. We should attain to the broad and great while addressing the delicate and minute. The financial sector should not only passively wait for clients at their doorsteps, but need to go out and actively look for good projects, which is an effective way of optimizing economic structures, in line with the requirements of the new development philosophy. Third, proactive support. Though it is still the beginning of the year, we should lose no time and act proactively as a year is short. We should stay ahead of the market curve, and respond to common market concerns in a timely manner. We should not procrastinate. Otherwise, market concerns will fall through and go away. If that happened, it would be a difficult situation. Therefore, we should act in advance and promptly respond to common market concerns. 

Under the strong leadership of the CPC Central Committee and the State Council, all parties are making efforts. I believe that we will also find a year quite long and the downward pressure of the economy will become a story of the past within several months. What efforts will be made?

First, maintain stable growth of the aggregate. We will use comprehensive monetary policy instruments to keep liquidity adequate at a reasonable level. Money and credit aggregates will grow at a more stable pace to ensure the increases in money supply and aggregate financing are generally in step with economic growth in nominal terms.

Second, promote steady structure improvements. We should innovate and give good play to structural monetary policy instruments and ramp up credit support for MSBs, technological innovation and green development. 

Third, promote steady decline of the financing costs for enterprises. We will continue to unleash the benefits of the LPR reform, maintain fair competition in the deposit market and stabilize bank liability costs. It is important to maintain orderly competition within the deposit market. If the competition in the deposit market is disorderly, the deposit interest rate will be very high. Low-quality banks and those that perform poorly usually find it hard to attract deposits, so they attempt to lure depositors with high deposit interest rates. Other banks will have to follow. This way, the order of the deposit market and the deposit interest rates will be misguided by those poorly-performing banks. Therefore, deposit order is crucial. Besides, if the deposit interest rate was too high, it would be hard to reduce the loan interest rate and the financing costs of enterprises. That is why we make great efforts to maintain the order of the deposit market, stabilize bank liability costs and promote a steady decline of the overall financing costs for enterprises, especially MSBs.

The Paper.cn:

The PBC and other financial management authorities have taken some measures in response to new situations and new changes in the real estate market. What about the effects? Thank you. 

Zou Lan:

In the second half of 2021, the risks of individual real estate enterprises such as China Evergrande Group appeared. Affected by that, all kinds of real estate market entities tended to avoid risks and financial institutions demonstrated short-term stress responses. According to the arrangements of the CPC Central Committee and the State Council, the financial management departments took swift actions and carried out the following work. First, upholding law-based and market-based principles, we cooperated with the Guangdong provincial government, as well as relevant departments and local governments to defuse the risks of those enterprises. Second, we instructed financial institutions in the banking industry to get a precise understanding of, and comply with, the prudential management system of real estate financing. The banking industry should maintain an orderly and stable supply of real estate credits and meet the reasonable financing needs of the real estate market. Third, the PBC released its Notice on Financial Services for Mergers and Acquisitions of Risk Disposal Projects of Major Real Estate Enterprises to guide financial institutions to support risk dissolution and industry clearing in market-based manners. 

Through the concerted efforts of all parties, recently, real estate sales, land purchases and financing, among other areas, have gradually returned to normal. The market expectations have steadily improved. According to statistics, at the end of 2021, outstanding real estate loans nationwide were 52.2 trillion yuan, up by 7.9% year on year, a growth rate 0.3 percentage points higher than at the end of September. Specifically, new real estate loans in the fourth quarter last year hit 773.4 billion yuan, an increase of 202 billion yuan year on year, and 157.8 billion yuan over the third quarter. 

Going forward, the PBC will firmly implement the decisions and arrangements of the CPC Central Committee and the State Council, follow the principles of the Central Economic Work Conference, and act on the principle that housing is for living in, not for speculation. Following the requirements to explore a new development model, we will put in place a long-term mechanism for the real estate industry and maintain the continuity, consistency and stability of real estate financial policies. The PBC will continue to implement the prudential management system of real estate finance, ramp up financial support for rental housing and adopt city-specific policies to ensure a virtuous cycle and healthy development of the real estate sector. Thank you. 

South China Morning Post:

The PBC on Monday unexpectedly cut the interest rates of its medium-term lending facility (MLF) loans and the open market reverse repo rate. Does this mean a new round of easing cycle is unfolding? Will it be followed by a corresponding LPR cut within the week? Meanwhile, the Federal Reserve hinted at quicker tapering and interest rate hikes. Is the PBC worried about the impacts brought by the monetary policy divergence between China and the U.S., including capital outflow or yuan depreciation? Is there any detailed arrangement for China-U.S. macro-policy coordination? Thank you.

Sun Guofeng:

This year, the PBC has strengthened cross-cyclical adjustments and stepped up liquidity injection. On Jan. 17, the PBC cut the interest rates of its one-year MLF loans and seven-day open market operations by 10 basis points, which was followed by corresponding reductions to the interest rates in the money market and the bond market. Before the new LPR was disclosed, quotation banks gave comprehensive consideration to factors such as capital costs, risk premiums and the market supply and demand, so that the LPR would promptly and fully reflect interest rate changes in the market, encourage financial institutions to lower their interest rates on loans for enterprises and promote a reduction in overall financing costs for enterprises. We have noticed the recent monetary policy adjustments by major developed economies, and the market expects that the Fed will raise interest rates and shrink its balance sheet. China's macro-economy is big and highly resilient. We have been implementing normal monetary policies since the outbreak of the pandemic. Instead of using a deluge of stimulus policies, we properly organized cross-cyclical regulation, kept liquidity reasonably ample and provided solid financial support for the real economy. China's financial system has become more stable and domestically driven. The yuan exchange rate expectations are also stable. All of this will help mitigate and respond to external risks. In general, policy adjustments by major developed economies will have a limited effect on our economy.

Next, the PBC will prioritize stability and work according to China's conditions. We will implement prudent monetary policies with the proper force and pace based on domestic situations, while increasing the yuan exchange rate's resilience to give full play to the role of the exchange rate as an automatic stabilizer capable of adjusting the macro-economy and the balance of payments. We will also encourage market entities to establish a "risk-neutral" attitude, strengthen the macro and prudent management of cross-border capital flow, better manage expectations, maintain basic stability in the yuan exchange rate, and respond to monetary policy adjustments by major developed economies in a proactive and prudent manner. Thank you.

21st Century Business Herald:

What were the structural features of total social financing (TSF) in 2021? What's your forecast for the TSF and credit increase in 2022? Thank you.

Ruan Jianhong:

I will answer your questions. In 2021, total new social financing reached 31.35 trillion yuan, a reduction of 3.44 trillion yuan from the 2020 level and an increase of 5.68 trillion yuan from the 2019 level. The figures reflect that finance still played a big role in supporting the real economy. By the end of 2021, total outstanding social financing had risen 10.3% year on year, which is consistent with the nominal GDP growth.

In terms of the TSF structure, the first feature is that loans from financial institutions to the real economy remained stable. In 2021, loans in yuan and foreign currencies to the real economy increased by 20.11 trillion yuan, roughly in line with the 2020 level and an increase of 3.36 trillion yuan from the 2019 level.

Second, bond financing returned to normal level and stock financing saw accelerated growth. In 2021, government bond financing reached 7.02 trillion yuan, a reduction of 1.31 trillion yuan from the 2020 level. This was because the government had issued one trillion yuan of special anti-pandemic bonds in 2020, while in 2021, the bond issuance returned to normal conditions. Bond financing by non-financial companies reached 3.29 trillion yuan, down by 1.09 trillion yuan from the 2020 level. Domestic stock financing by non-financial companies reached 1.24 trillion yuan, up by 343.4 billion yuan from the 2020 level.

Third, off-balance-sheet financing declined notably. In 2021, off-balance-sheet financing, including entrusted loans, trust loans, and undiscounted bankers' acceptances, declined by 2.67 trillion yuan, 1.35 trillion yuan more than 2020's decrement.

In 2022, the PBC will fully implement the principles of the Central Economic Work Conference and maintain a prudent monetary policy that is flexible and moderate. We will also maintain reasonable and ample liquidity, and ensure that the growth of TSF is basically in keeping with GDP growth in nominal terms. Thank you.

Economic Daily:

My question is – just yesterday, the PBC cut interest rates for reverse repo operations and MLF by 10 basis points, so I'm curious what this cut is for? And what will the effect be after lowering interest rates? Thank you. 

Sun Guofeng:

The MLF and open market reverse repurchase are carried out by market-based bidding. The winning interest rate is generated by participating bidding institutions, and the interest rate level depends on various factors such as the liquidity of the banking system, financial institutions' demand for central bank funds and market expectations. Since the beginning of this year, the PBC has implemented the spirit of the Central Economic Work Conference, strengthened cross-cycle adjustment and increased liquidity delivery. On Jan. 17, the PBC launched a 700 billion yuan one-year MLF operation and conducted 100-billion-yuan seven-day open market reverse repo operations to increase liquidity supply, and to hedge against the impact of short-term factors such as the peak of the tax period in January, accelerated issuance of government bonds and cash injection before Spring Festival, in order to maintain reasonable and sufficient liquidity. So the PBC promoted the MLF and open market reverse repurchase bid rates, which both fell by 10 basis points. Specifically, the winning bid interest rate for the one-year MLF dropped from 2.95% to 2.85%, and the winning bid rate for the seven-day open market reverse repurchase operation dropped from 2.2% to 2.1%.

These recent cuts in interest rates for the MLF and open market reverse repo operations reflect actions by the monetary policy proactively pushing things forward, which is conducive to boosting market confidence. The operations would reduce corporate loan interest rates through the LPR conductivity, facilitate the decline in bond interest rates and promote comprehensive financing costs of enterprises to be stable with a decline. This will help stimulate the financing needs of market entities, enhance the stability of total credit growth, support the issuance of government bonds and local government bonds, stabilize the broader economy and maintain a balance between internal and external equilibrium. Thank you.

Yicai:

Recently, the financial data released by the central bank has shown a rapid decline in the growth rate of social financing. We have paid attention to the research reports issued by some securities companies, in which they believe that financing should be properly stimulated next year to resume growth. In your opinion, is the leverage ratio likely to stabilize and pick up next year? Thank you.

Liu Guoqiang:

Let me answer this question. In 2021, against the backdrop of scientific and effective pandemic prevention, remarkable results were achieved in stabilizing leverage and promoting growth. In 2021, China's macro leverage ratio was 272.5%, 7.7 percentage points lower than that at the end of 2020. If viewed from a quarterly perspective, the leverage ratio has declined for five consecutive quarters. There are both numerator and denominator factors that affect the macro leverage ratio. The numerator is the total debt, and the denominator is the gross domestic product (GDP). That is to say, the macro leverage ratio is total debt divided by GDP. In terms of the numerator, the total debt level was generally stable last year, while in terms of GDP as the denominator, it expanded significantly last year, and the growth rate is relatively fast. Especially compared with 2020, the GDP growth rate has accelerated significantly, which has a very prominent effect on reducing leverage. China's pandemic prevention and control are effective, the national economy continues to recover and development resilience continues to increase. When these factors are brought into play, GDP growth will be faster, the denominator will be larger and the macro leverage ratio will drop.

It is expected that the macro leverage ratio will remain basically stable in 2022. According to the Central Economic Work Conference, the economic work for 2022 should prioritize stability and seek progress while maintaining stability. Macroeconomic policies must be stable and effective to enhance developing the endogenous driving force. The current macro leverage ratio continues to decline, creating space for the financial system to increase support for MSBs, technological innovation and green development in the future. The decline in macro leverage over the five consecutive quarters has created room for future monetary policies, and, the lower the leverage, the greater the room. From an international perspective, China's pandemic prevention and control situation is relatively good, and economic growth is relatively resilient. It is expected that China's economic growth this year will still be faster than that of major developed economies. In this case, the denominator will remain relatively large, which will create conditions for better maintaining the macro leverage ratio in the future. We will adhere to systematic thinking, overall planning and coordination, base ourselves on serving high-quality economic development and implement cross-cycle monetary policy. Thank you.

CNBC:

I have two questions. First, what are the favorable policies for housing purchase and loans? Second, what progress has been made in digital RMB piloting programs and research and development? For example, is there any information on the daily transactions and active users to share? What new application scenarios will digital RMB have for consumption among others? More foreigners will come to China during the Beijing 2022 Winter Olympics, and will there be any attempt to employ it then? Thank you.

Zou Lan:  

I will answer the second question first. At present, the PBC has launched pilot digital RMB programs in places including Shenzhen, Suzhou, Xiongan New Area, Chengdu, Shanghai, Hainan, Changsha, Xi'an, Qingdao, and Dalian, and built pilot scenarios for the Beijing 2022 Winter Olympics, basically covering the Yangtze River Delta, the Pearl River Delta, and Beijing-Tianjin-Hebei region as well as central, western, northeastern, and northwestern China. As of December 31, 2021, the number of digital RMB pilot scenarios had exceeded 8.0851 million, and individual wallets had totaled 261 million, with 87.565 billion yuan in transactions. The pilot programs have effectively verified the business technical design, system stability, easy use of products, and scenario applicability of digital RMB, and helped the public better understand its design concept.  

Next, the PBC will act in accordance with the 14th Five-Year Plan (2021-2025), continue to steadily pilot digital RMB R&D, and further deepen the pilot use of digital RMB in retail transactions, household payments, government services, and other scenarios. The PBC will guide the pilot R&D of digital RMB to serve the real economy and people's lives so as to make more enterprises and individuals recognize the value of digital RMB and fully stimulate the enthusiasm of industrial players.  

Your first question is about the housing purchase policy. Being region-based is one of the core features of the real estate. Under the management framework of long-term real estate mechanisms, it is more important for municipal governments to assume their responsibilities and conduct city-specific real estate regulations based on the local markets. Therefore, you can ask the municipal governments for more information about the home purchase policy. As for the home loans policy, as I said before, we will still act on the principle that houses are for living in, not for speculation, and maintain basic stability in line with the long-term mechanism. We will stabilize land prices, housing prices and expectations – the priority of stabilizing expectations is to keep policy expectations steady. Indeed, as I mentioned before, various parties, especially some financial institutions, reacted to market changes based on their judgment of market trends and risk evolution in the second half of last year. As a result, since September last year, the PBC has, along with other financial management departments, strengthened communication with related financial institutions to help them accurately understand and assess market situations and better implement prudent financial regulation of the real estate so as to meet the reasonable financing needs of the real estate market. Thank you.  

Phoenix TV:  

I also want to focus on monetary policy. Yesterday, the PBC cut the interest rates. How does the PBC view the possibility of a further RRR cut? Specifically, is it possible to further cut the RRR in January? Is there any room to cut interest rates in the first quarter? Thank you.

Liu Guoqiang:

Thank you for your question, I will answer it. Regarding interest rates, with the steady progress of market-based interest rates reforms, especially since the LPR reform in 2019, China has gradually improved the formation, regulation, and transmission mechanisms of market-oriented interest rates. There are two perspectives to view the state of interest rates next. One is to look at the actual changes in interest rates of loans, which means just looking at the results. Since 2021, the PBC has continued to optimize the LPR reform, improved the transmission mechanism of monetary policy, and enhanced the competitiveness of the credit market. As a result, the actual interest rates of loans have decreased while maintaining stability on the basis of a substantial decline in the previous year. Throughout 2021, the interest rates of loans for enterprises stood at 4.61%, the lowest level since the reform and opening-up more than 40 years ago.  

The other angle is to look at factors affecting interest rates or to analyze the reasons behind the changes. LPR is the market-quoted interest rate for loans that banks charge their prime customers. Factors like funding cost, market supply and demand, and risk premium may affect LPR, while the interest rate of open market operations, MLF rate, and the regulation of deposit interest rate may affect funding cost. Since 2021, the PBC has strengthened cross-cyclical adjustment, cutting down the RRR twice, in July and December, to maintain liquidity at a reasonably sufficient level. We improved self-discipline management of deposit interest rates in June, and cut interest rates for relending in the agriculture sector and small enterprises by 0.25 percentage point in December. These policies have effectively lowered funding costs for banks and driven the one-year LPR of last December down by 5 basis points. The rationale is that the reduction of funding costs for banks would lead to a decrease in interest rates for loans. On Jan. 17 this year, the PBC increased liquidity, bringing down the bid rate of both the seven-day open market operations and the one-year MLF by 10 basis points. Interest rates in the monetary market and the bond market have thus fallen. In two days, on Jan. 20, commercial banks will offer their best interest rates for loans. Sensitive to factors such as funding costs, the banks will do so by making timely references to their latest changes.

I would like to take this opportunity to make some explanations about LPR. It is a general term, and there is no LPR by industry. There are two types: one-year and five-year. Financial institutions generally refer to one-year LPR in terms of extending liquidity loans, or short-term loans, to businesses, and refer to five-year LPR in issuing medium- to long-term loans, such as loans to the manufacturing sector, fixed asset investment loans, and loans for individual home purchases, and other loans with relatively long terms, which is the bases for which their interest rates are quoted. As a macro variable, LPR does not change in an industry-specific manner. In other words, it affects all industries instead of targeting individuals, and it is a general and inclusive term, rather than being tailored for any single person, but its fluctuations affect everyone. That is why it is inclusive rather than targeting any specific industry or individual.

As for the RRR, the PBC cut it by 0.5 percentage point in July and December 2021, freeing up 2.2 trillion yuan of long-term funds. The funds improved the funding structure of financial institutions and demonstrated the financial sector's capacity to serve the real economy. After cutting the RRR, the current average RRR for financial institutions stands at 8.4%. It is no longer high compared to other developing economies or China's historical figures and leaves less room for further adjustment going forward. Yet from another point of view, there is still a certain amount of space, though it is narrower, which we can make use of in light of economic and financial performance as well as macro regulation needs. Thank you.

Bloomberg:

I have two questions. My first question is, what will be the impact of divergence in interest rates between the U.S. and China, as the federal reserve starts to rise? Will monetary policy divergence have an effect on the exchange rate and how will you deal with that? My second question is, do you think corporate borrowing demand is weak based on the December data? We saw a lot of very short-term loans being made between banks and banks making very short-term loans to companies. Do you think the company loan demand is fundamentally weak? Thank you.

Sun Guofeng:

Let me take these two questions. Regarding your first question, China adopts a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Future yuan exchange rates are subject to many factors, including market supply and demand and international market trends, with the former playing a decisive role in forming the exchange rate. Fluctuations in the exchange rate are mainly determined by the market and make the yuan either appreciate or depreciate. With its enhanced elasticity and two-way fluctuations, the yuan exchange rate serves as an automatic stabilizer of the macro-economy and the international balance of payment and contributes to the balance between the internal and external equilibrium. Cross-border flows of funds may fluctuate to some extent with changes in the international financial market, but China's super-large economy sustains a sound domestic economy, which provides a good foundation for maintaining the internal and external equilibrium.

Generally, cross-border financial flows would maintain a dynamic equilibrium. Next, the PBC will prioritize stability and pursue a prudent monetary policy that is flexible and modest. We will place our situation at the center, and give play to the role of yuan exchange rates adjusting the macroeconomy and acting as the automatic stabilizer for international payment balance. We will strengthen macro-prudential management of the cross-border flow of capital, intensify expectation management, guide enterprises and financial institutions in cultivating a "risk-neutral" concept, balance the domestic and international equilibrium and keep the yuan exchange rates basically stable at a reasonable and balanced level. 

Now I rely to the second question. Since 2021, we have adopted a prudent monetary policy that is flexible, precisely-targeted, reasonable and modest. In the face of downward pressure from contracted demands, supply shock and diminished expectations, the PBC – beginning in the second half of 2021 – has enacted forward-looking measures including cutting the RRR, increasing the reloan quota for small financial institutions, rolling out supportive tools for carbon reduction and offering reloans to promote clean and efficient use of coal, so as to intensify the financial support for real economy. Since December, in line with the arrangements of the Central Economic Work Conference, the PBC has further intensified cross-cycle adjustments to ensure the policy cohesion between two years. We have cut the RRR by 0.5 percentage points again and guided financial institutions in increasing the stability of growth in the volume of loans. The PBC has lowered its one-year LPR by five basis points, and actively leveraged structural monetary policy tools to do a good job of "addition," and carried out the extension and transformation of two direct tools. These measures have been beneficial to the stabilization of the credit supply and the optimization of the credit structure in 2021 and ensuring a steady start in 2022. The volume of new loans stood at 19.95 trillion yuan in 2021, up 315 billion yuan year-on-year. This was a further growth considering that the volume of new loans had increased by 2.8 trillion yuan year-on-year from 2019 to 2020 and this showed that the financial support for real economy has continued to intensify. The volume of loans had increased significantly from 2019 to 2020 on a year-on-year basis, so the increase in 2021 was a further growth from that. In December 2021, new loans of the month reached 1.13 trillion yuan, rising slightly on a year-on-year basis, mainly due to the fact that financial institutions had expanded their credit supplies to fight against COVID-19 in 2020 and thus created a relatively high base. Historically, the amount of loans in December is often small, and the average volume of new loans was less than 1 trillion yuan in December from 2016 to 2019. So, the loans in December 2021 still increased compared with the years before the outbreak of COVID-19, showing the results achieved by introducing relevant policies at an early stage. Since the beginning of this year, the PBC has strengthened cross-cycle adjustment, increased liquidity, lowered the median interest rate by 10 basis points for the MLF and open market operations, helping spur financing needs of market entities and increase the stability of credit growth. 

Next, the PBC will prioritize stability and pursue a prudent monetary policy that is flexible and modest. We will increase the intensity of cross-cycle adjustments, better play monetary policies' role in volume and structure regulation, maintain reasonably adequate liquidity and guide financial institutions in effectively increasing credit availability. With the effects of a variety of policies adopted by the PBC emerging and accumulating, financial institutions will increase loans to the real economy. Growth of credit supplies will be more stable, while more credit resources will be channeled to key areas and weak links such as small and micro enterprises, scientific and technological innovation, and green development, among others, so as to ensure that money supply and social financing are generally in step with the economic growth in nominal terms. Thank you!

Ruan Jianhong:

I will add some data for the second question. The amount of outstanding domestic and foreign currency loans to enterprises and institutions increased 11 percent at the end of last year, 1.4 percentage points lower than the previous year, but 0.5 percentage points higher than in 2019. The amount of new loans to enterprises and institutions added 12.14 trillion yuan for the whole year and was roughly the same as the previous year. The amount of medium and long-term loans added 9.24 trillion yuan, up 464.2 billion yuan year-on-year. 

In terms of the actual flow of medium- and long-term loans, the scale of support provided by financial institutions to key sectors is still consistent and stable, which is reflected in the following aspects:

First, the manufacturing industry's medium- and long-term loans maintained rapid growth. As of the end of 2021, the manufacturing industry's medium- and long-term loans grew 31.8%, 18.1 percentage points higher than the growth rate of such loans for all industries. In 2021, loans for the manufacturing industry increased by 1.67 trillion yuan, 300.5 billion yuan more than the previous year. Specifically, the growth rate of medium- and long-term loans for the high-tech manufacturing industry was 32.8% in 2021, 364.3 billion yuan more than the previous year.

Second, the industrial sector's medium- and long-term loans saw a relatively high growth rate. As of the end of 2021, the industrial sector's medium- and long-term loans increased 22.6%, 2.6 percentage points higher than the previous year's end. The sector saw 2.49 trillion more medium- and long-term loans in 2021, increasing 650.3 billion yuan year-on-year.

Third, the infrastructure sector's medium- and long-term loans sustained a steady and robust growth rate. As of the end of 2021, this growth rate was 15.3%, 1.1 percentage points higher than the previous year's end. A total of 3.82 trillion yuan of medium- and long-term loans was added to the infrastructure sector in 2021, increasing 734.6 billion yuan year-on-year.

Fourth, the service industry's medium- and long-term loans, excluding the real estate sector, have kept growing fast. Its growth rate reached 15.4% as of the end of 2021, 1.7 percentage points higher than the growth rate of such loans for all industries. A total of 5 trillion yuan of medium- and long-term loans was added to this industry in 2021, 261.8 billion yuan more than the previous year. Thank you.

Liu Guoqiang:

Regarding the first question on the exchange rate, I would like to make a few more points for your reference. Observing the trend of the exchange rate is getting tougher and tougher nowadays. In the past, the exchange rate fluctuations between the yuan and the U.S. dollar were rather regular, as they sat on the opposite ends of a seesaw. This meant that when the U.S. dollar appreciated, the yuan would be devalued relatively. Still, there were several cases in 2021 when the U.S. dollars appreciated while the yuan showed a stronger trend. This seems unreasonable and makes short-term observation even more difficult. However, it can still make sense. For instance, China's economy posted fast growth last year with a relatively high trade surplus, and the expectations for China's economy were rather promising at the early stage. Therefore, the yuan appreciated, which led to a situation where the U.S. dollar appreciated while the yuan got even stronger. Nevertheless, if we look at the longer span of time, the situation will make more sense, and the fluctuations are still reasonable, balanced, and reciprocal. Thus, the exchange rate fluctuations remain consistent and stable, and relevant rules haven't changed in the long run, only that the calculation and forecast in the short term have become difficult. 

In addition, China is one of the major countries in the world. A continued unilateral appreciation or devaluation rarely occurs in big countries, and it will never happen in China. This is due to our sound macro regulation. Instead of flooding China's economy with liquidity, we have been following economic rules, and our micro-market mechanism proves to be effective. As a result, although there may be some interferences, the exchange rate fluctuations between the yuan and the U.S. dollar are generally reasonable, balanced, and stable on the whole. Thank you.

Xing Huina:

Thank you to today's speakers for their professional and detailed response and introduction. Today's press conference is at this moment concluded. Thank you to all our friends from the media.

Translated and edited by Lin Liyao, Wang Wei, Li Xiao, Li Huiru, Zhang Rui, Liu Qiang, Zhang Tingting, Liu Sitong, Zhu Bochen, Wang Yiming, He Shan, Xu Xiaoxuan, Zhang Jiaqi, Wang Qian, Yuan Fang, Liu Jianing, David Ball, Jay Birbeck, Drew Pittock 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:

Ning Jizhe, commissioner of the National Bureau of Statistics

Chairperson:

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

Date: 

Jan. 17, 2022

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Ning Jizhe, commissioner of the National Bureau of Statistics (NBS), to introduce China's economic performance in 2021, and answer your questions. Now, I would like to give the floor to Mr. Ning.

Ning Jizhe:

Friends from the media, good morning. In 2021, faced with multiple challenges including a grave and complex international environment and sporadic outbreaks of the pandemic 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 fully implemented the policy decisions and plans of the CPC Central Committee and the State Council, adhered to the general working guideline of making progress while maintaining stability, coordinated epidemic prevention and control work with socio-economic development, took solid steps to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and security in the six areas (employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations), strengthened the macro polices for cross-cyclical adjustment, and increased the support to the real economy. As a result, national economic recovery and development were sustained, reform and opening-up and innovation were further advanced, people's livelihoods were strongly and effectively safeguarded, new strides were made in building a new development pattern, and new achievements were secured in high-quality development, thus kicking off a good start for the 14th Five-Year Plan.

According to preliminary estimates, the gross domestic product (GDP) was 114.37 trillion yuan in 2021, an increase of 8.1% over the previous year at constant prices with average two-year growth of 5.1%. By quarter, the GDP for the first quarter went up by 18.3% year on year, up by 7.9% for the second quarter, 4.9% for the third quarter and 4% for the fourth quarter. By industries, the value added of the primary industry was 8.31 trillion yuan, up by 7.1% over the previous year, that of the secondary industry was 45.1 trillion yuan, up by 8.2% and that of the tertiary industry was 60.97 trillion yuan, up by 8.2%.

First, grain output reached a new high and production of animal husbandry grew steadily.

The total output of grain in 2021 was 682.85 million metric tons, an increase of 13.36 million metric tons, or up by 2% over the previous year. Of this total, the output of summer grain was 145.96 million metric tons, up by 2.2%, and that of early rice was 28.02 million metric tons, up by 2.7%. The output of autumn grain reached 508.88 million metric tons, up by 1.9%. By crop variety, the output of rice was 212.84 million metric tons, up by 0.5%; wheat, 136.95 million metric tons, up by 2%; corn, 272.55 million metric tons, up by 4.6%; and soybean, 16.4 million metric tons, down by 16.4%. The total output of pork, beef, mutton and poultry in 2021 was 88.87 million metric tons, up by 16.3% over the previous year. Of this total, the output of pork was 52.96 million metric tons, up by 28.8%; beef, 6.98 million metric tons, up by 3.7%; mutton, 5.14 million metric tons, up by 4.4%; poultry, 23.8 million metric tons, up by 0.8%; milk, 36.83 million metric tons, up by 7.1%; and eggs, 34.09 million metric tons, down by 1.7%. At the end of 2021, pigs and breeding sows registered in stock were up by 10.5% and 4%, respectively, compared with the end of 2020.

Second, industrial production experienced sustained development and high-tech manufacturing and equipment manufacturing enjoyed fast growth.

The total value added of industrial enterprises above designated size increased by 9.6% over the previous year, with average two-year growth of 6.1%. In terms of sectors, the value added of mining was up by 5.3%, that of manufacturing was up by 9.8% and that of production and supply of electricity, thermal power, gas and water was up by 11.4%. The value added of high-tech manufacturing and equipment manufacturing went up by 18.2% and 12.9%, respectively, or 8.6 percentage points and 3.3 percentage points faster than that of industrial enterprises above designated size. By products, the production of new energy vehicles, industrial robots, integrated circuits, and micro computer equipment grew by 145.6%, 44.9%, 33.3% and 22.3%, respectively. In terms of ownership, the value added of state holding enterprises grew by 8%, that of share-holding enterprises was up by 9.8%, that of enterprises funded by foreign investors and investors from Hong Kong, Macao and Taiwan was up by 8.9% and that of private enterprises was up by 10.2%. In December, the total value added of industrial enterprises above designated size grew by 4.3% year on year with an increase of 0.42% month on month. The Manufacturing Purchasing Managers' Index was 50.3%, 0.2 percentage points higher than that of the previous month. In 2021, the national industrial capacity utilization rate reached 77.5%, 3 percentage points higher than that of the previous year.

In the first eleven months of last year, the total profits made by industrial enterprises above designated size were 7.98 trillion yuan, up by 38% year on year with an average two-year growth of 18.9%. The profit rate of the business revenue of industrial enterprises above designated size was 6.98%, up by 0.9 percentage points year on year.

Third, the service sector witnessed sustained recovery with modern service industries demonstrating sound growth momentum.

The tertiary industry experienced fast growth in 2021. In terms of industries, the value added of the information transmission, software and information technology services, accommodation and catering services, and transportation, storage and postal services grew by 17.2%, 14.5% and 12.1% over the previous year respectively, maintaining the restorative growth. In 2021, the Index of Services Production grew by 13.1% compared with that of the previous year with an average two-year growth of 6%. In December, the Index of Services Production grew by 3% year on year. In the first eleven months of last year, business revenue of service enterprises above designated size grew by 20.7% year on year with average two-year growth of 10.8%. In December, the Business Activity Index for services was 52%, 0.9 percentage points higher than that of the previous month. Specifically, the Business Activity Index for sectors like telecommunication, broadcast, television and satellite transmission services, monetary and financial services, and capital market services stayed within the high expansion range of 60% and above.

Fourth, market sales expanded with sales of basic living goods and upgraded consumer goods growing fast.

In 2021, the total retail sales of consumer goods reached 44.08 trillion yuan, up by 12.5% over the previous year with an average two-year growth of 3.9%. Analyzed by different areas, retail sales in urban areas reached 38.16 trillion yuan, up by 12.5%; and retail sales in rural areas stood at 5.93 trillion yuan, up by 12.1%. Grouped by consumption patterns, the retail sales of goods were 39.39 trillion yuan, up by 11.8%; and the income from catering was 4.69 trillion yuan, up by 18.6%. The basic living consumption sustained good momentum of growth, with the retail sales of beverages and grain, oil and food by enterprises above designated size growing by 20.4% and 10.8% over the previous year. The demand for upgraded consumer goods continued to be unleashed, with the retail sales of gold, silver and jewelry and that of cultural and office supplies by enterprises above designated size growing by 29.8% and 18.8%, respectively. In December, the total retail sales of consumer goods grew by 1.7% year on year, or down by 0.18% month on month. In 2021, national online retail sales reached 13.09 trillion yuan, growing by 14.1% over the previous year. Specifically, the online retail sales of physical goods were 10.8 trillion yuan, up by 12%, accounting for 24.5% of the total retail sales of consumer goods.

Fifth, investment in fixed assets continued to increase and investment in manufacturing and high-tech industries maintained a good growth momentum.

In 2021, the investment in fixed assets (excluding rural households) reached 54.45 trillion yuan, up by 4.9% over the previous year with an average two-year growth of 3.9%. Specifically, investment in infrastructure rose by 0.4%, manufacturing was up by 13.5% and real estate development was up by 4.4%. The floor space of commercial buildings sold reached 1.79 billion square meters, up by 1.9%. The total sales of commercial buildings were 18.19 trillion yuan, up by 4.8%. In terms of industries, investment in the primary industry went up by 9.1%; that in the secondary industry was up by 11.3%; and that in the tertiary industry was up by 2.1%. Private investment was 30.77 trillion yuan, up by 7%, accounting for 56.5% of the total investment. The investment in high-tech industries grew by 17.1%, 12.2 percentage points faster than the total investment, of which the investment in high-tech manufacturing and high-tech services grew by 22.2% and 7.9%, respectively. In terms of high-tech manufacturing, the investment in electronics and communication equipment manufacturing and in manufacturing of computers and office equipment grew by 25.8% and 21.1%, respectively. In terms of high-tech services, the investment in e-commerce services and services for transformation of scientific and technological achievements grew by 60.3% and 16%, respectively. Investment in the social sector went up by 10.7% over the previous year. Specifically, the investment in the health sector and education sector went up by 24.5% and 11.7%, respectively. In December, the investment in fixed assets grew by 0.22% month on month.

Sixth, the import and export of goods registered fast growth and the trade structure continues to optimize.

The total value of imports and exports of goods in 2021 amounted to 39.1 trillion yuan, up 21.4% year on year. Specifically, the total value of exports reached 21.73 trillion yuan, up by 21.2%; and that of imports was 17.37 trillion yuan, up by 21.5%. The trade balance was 4.37 trillion yuan in surplus. The imports and exports of general trade grew by 24.7%, accounting for 61.6% of the total value of foreign trade, an increase of 1.6 percentage points over the previous year. Imports and exports from private enterprises grew by 26.7%, accounting for 48.6% of the total value of foreign trade, two percentage points higher than that of the previous year. In December, the total value of imports and exports of goods was 3.75 trillion yuan, up by 16.7% year on year. Specifically, the total value of exports in December was 2.18 trillion yuan, up by 17.3%; and that of imports was 1.57 trillion yuan, up by 16%. The trade balance was 604.7 billion yuan in surplus.

Ning Jizhe:

Seventh, consumer prices grew moderately and the growth of producer prices for industrial products decreased from high levels.

The consumer price index (CPI) in 2021 went up by 0.9% over the previous year. Specifically, the CPI went up by 1% in urban areas and 0.7% in rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went down by 0.3%; clothing up by 0.3%; housing up by 0.8%; articles and services for daily use up by 0.4%; transportation and communication up by 4.1%; education, culture and recreation up by 1.9%; medical services and health care up by 0.4%; and other articles and services down by 1.3%. In terms of food, tobacco and alcohol, prices for grain went up by 1.1%, fresh vegetables up by 5.6%; and pork down by 30.3%. Core CPI excluding the prices of food and energy went up by 0.8%. The CPI in December went up by 1.5% year on year, 0.8 percentage points lower compared with the previous month, and down by 0.3% month on month. In 2021, the producer prices for industrial products went up by 8.1% over the previous year. The figure in December went up by 10.3% year on year, 2.6 percentage points lower than the previous month, and down 1.2% month on month. In 2021, the purchasing prices for industrial producers went up by 11% over the previous year. The figure in December went up by 14.2% year on year and down 1.3% month on month.

Eighth, employment was generally stable and surveyed unemployment rates in urban areas declined.

In 2021, the number of new jobs created in urban areas totaled 12.69 million, 0.83 million more than the previous year. The surveyed unemployment rate in urban areas in 2021 averaged 5.1%, 0.5 percentage points lower than the average of the previous year. In December, the surveyed unemployment rate in urban areas was 5.1%, 0.1 percentage points lower than the same period of the previous year. Specifically, the surveyed unemployment rate of population with local household registration was 5.1% and that of population with non-local household registration was 4.9%. The surveyed unemployment rate of population aged 16 to 24 was 14.3%, and that of population aged 25 to 59 was 4.4%. In December, the surveyed unemployment rate in 31 major cities was 5.1%. The employees of enterprises worked 47.8 hours per week on average. In 2021, the number of rural migrant workers reached 292.51 million, 6.91 million more than that of the previous year, or up by 2.4%. Specifically, local migrant workers totaled 120.79 million, up by 4.1%; migrant workers working away from their hometown totaled 171.72 million, up by 1.3%. The average monthly income of migrant workers was 4,432 yuan, up by 8.8% over the previous year.

Ninth, resident income grew basically in step with economic growth while the urban-rural per capita income ratio narrowed.

In 2021, the nationwide per capita disposable income of residents was 35,128 yuan, a nominal increase of 9.1% over that of the previous year and an average two-year nominal growth of 6.9%; the real growth after deducting price factors was 8.1%, and an average two-year growth of 5.1%, which was basically in step with the growth of the economy. In terms of permanent residence, the per capita disposable income of urban residents was 47,412 yuan, a nominal increase of 8.2% compared with the previous year and real growth of 7.1% after deducting price factors. That of rural households was 18,931 yuan, a nominal growth of 10.5% compared with the previous year and real growth of 9.7% after deducting price factors. The per capita disposable income of urban residents was 2.5 times that of rural households, 0.06 less than the ratio of the previous year. The median nationwide per capita disposable income was 29,975 yuan, a nominal growth of 8.8% over that of the previous year. Taking the per capita disposable income of nationwide residents by income quintile, that of the low-income group reached 8,333 yuan, the lower-middle-income group 18,446 yuan, the middle-income group 29,053 yuan, the upper-middle-income group 44,949 yuan, and the high-income group 85,836 yuan. In 2021, the nationwide per capita consumption expenditure was 24,100 yuan, a nominal increase of 13.6% over the previous year, and an average two-year nominal growth of 5.7%; the real growth was 12.6%, and an average two-year growth of 4% after deducting price factors.

Tenth, the total population increased and urbanization rates continued to grow.

By the end of 2021, China's population on the mainland was 1.4126 billion (not excluding residents of Hong Kong, Macao and Taiwan and foreigners living in the mainland's 31 provinces, autonomous regions and municipalities), an increase of 0.48 million over that at the end of the previous year. In 2021, the number of births was 10.62 million and the birth rate was 7.52 per thousand; the number of deaths was 10.14 million and the death rate 7.18 per thousand; the natural growth rate was 0.34 per thousand. In terms of gender, the male population was 723.11 million and the female population was 689.49 million; the sex ratio was 104.88 (the female is 100). In terms of age structures, the working-age population from 16 to 59 was 882.22 million, accounting for 62.5% of the total population; the population aged 60 and over was 267.36 million, accounting for 18.9% of the total population; the population aged 65 and over was 200.56 million, accounting for 14.2% of the total population. In terms of urban-rural structure, the permanent residents in urban areas were 914.25 million, an increase of 12.05 million over the end of the previous year; and the permanent residents in rural areas were 498.35 million, a decrease of 11.57 million. The urban population share in the total population (urbanization rate) was 64.72%, 0.83 percentage points higher than that at the end of the previous year. The population residing in areas other than their household registration places (refers to the population whose residence and household registration place are not in the same towns or streets and who have been away from their household registration place for over six months) reached 504.29 million, which was 11.53 million more than the previous year. Among them, the floating population stood at 384.67 million, or 8.85 million more than the previous year.

Generally speaking, in 2021, China sustained a continuous and steady recovery of the national economy and maintained a leading position in economic growth and epidemic prevention and control in the world, with major indicators reaching expected targets. However, we must be aware that the external environment is more complicated, severe and uncertain, and the domestic economy is under the pressure of demand contraction, supply shock and weakening expectations. At the next stage, we must continue to take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, and implement the guiding principles of the 19th CPC National Congress, the plenary sessions of the 19th Central Committee of the CPC and the Central Economic Work Conference. We must adhere to the general working guidelines of making progress while maintaining stability, fully and faithfully implement the new development philosophy on all fronts, accelerate the pace to foster a new development paradigm and promote high-quality development. We must coordinate the efforts of epidemic prevention and control as well as economic and social development, continue to ensure stability on six fronts and security in six areas, work hard to stabilize the macro-economy, keep the economy performing within a reasonable range, and ensure social stability so as to greet the opening of the 20th CPC National Congress with practical actions.

That concludes my introduction. Thank you.

Chen Wenjun:

Thank you, Mr. Ning. Now the floor is open for questions. Please identify the news outlet your work for before raising questions.

CCTV:

The year 2021 marks the beginning of the 14th Five-Year Plan. In 2021, China achieved remarkable achievements in coordinating economic development and pandemic prevention and control and maintained stable economic and social development. My questions are for Mr. Ning. What factors played important roles? What do you think of the economy in 2021? 

Ning Jizhe:

The year 2021 was a milestone in the history of our Party and our country and was a year of crucial importance for China's modernization progress. In 2021, we solemnly celebrated the centenary of the founding of the Communist Party of China. We realized the first centenary goal of building a moderately prosperous society in all respects through eliminating absolute poverty. We have embarked on a new journey towards the second centenary goal of making China into a great modern socialist country in all respects. In 2021, facing complex domestics and international landscapes and all kinds of risks and challenges, the CPC Central Committee with Comrade Xi Jinping at its core oversaw the general situation and responded with calm. Our country has been in the lead position in both economic development and Covid-19 response through concerted efforts across China, keeping economic performance within an appropriate range. The major tasks and targets of 2021 were completed. We have made new progress in building a new development paradigm and scored new achievements in high-quality development. The 14th Five-Year Plan was off to a good start. The achievements were mainly the six following aspects. 

First, China's economic growth has been in the lead worldwide, with notably increased economic strength. China's economic growth ranked among the top in major economies worldwide, with the GDP of 2021 growing by 8.1% year-on-year. Its GDP reached 114.4 trillion yuan, exceeding 110 trillion yuan. That was US$17.7 trillion at the yearly average exchange rate, which ranked second globally and was estimated to account for more than 18% of the global economy. The per capita GDP was 80,976 yuan and US$12,551, at the yearly average exchange rate exceeding US$12,000 . At the end of 2021, China's foreign exchange reserves stood at US$3.2502 trillion, the largest in the world. 

Second, the national economy has continued to recover, meeting all major projected goals. In March 2021, the Government Work Report passed by the Fourth Session of the 13th National People's Congress proposed major projected targets for economic and social development in 2021. According to the statistics, the economy grew quite fast. In 2021, the GDP growth rate was 8.1%, higher than the projected target of 6%. The economy increased by 18.3%, 7.9%, 4.9%, and 4.0% in the first, second, third, and fourth quarter, respectively, year-on-year, with an average two-year growth of 4.9%, 5.5%, 4.9%, and 5.2% respectively. The two-year average growth rate of the fourth quarter was higher than that of the third quarter, which demonstrated stable economic performance and employment. In 2021, 12.69 million urban jobs were added, meeting the expected target of more than 11 million. The surveyed urban unemployment rate was 5.1%, lower than the target of around 5.5%. The consumption price rose mildly. The CPI in 2021 increased by 0.9% year-on-year, lower than the target of around 3%.

A basic equilibrium in the balance of payments was maintained. The surplus of the imports and exports of goods expanded 20.4% year-on-year in 2021, achieving steady increases in both the volume and quality of imports and exports. By the end of 2021, the foreign exchange reserves had exceeded US$3.2 trillion for 8 consecutive months. The growth of resident income was basically in line with the economic expansion. The per capita disposable income of Chinese citizens rose 8.1% from the previous year and a two-year average growth of 5.1%, which kept pace with the economic growth, meeting the target of scoring a steady increase in personal income. The energy consumption per unit of GDP dropped. According to preliminary estimates, the energy consumption per unit of GDP in 2021 decreased by 2.7% year-on-year, very close to the target of around 3%. The grain output reached a record high. Last year's total grain output was 682.85 million tons, achieving the target of more than 650 million tons. 

Third, the innovation momentum has been intensified with the rapid growth of the industrial manufacturing industry. In 2021, the national spending on R&D increased by 14.2%, 4 percentage points higher than the growth rate last year, maintaining a two-digit growth since the 13th Five-Year Plan period (2016-2020). The spending on R&D accounted for 2.44% of the GDP, up 0.03 percentage points than last year. Specifically, the basic research spending grew by 15.6% year-on-year, accounting for 6.09% of the total R&D spending, up by 0.08 percentage points than last year. In 2021, the total value-added by industrial enterprises rose by 9.6%, 1.5 percentage points higher than the growth rate of GDP. Specifically, the value-added by the manufacturing industry increased by 9.8%, 0.2 percentage points higher than that of all industries. The equipment manufacturing industry above designated size surged 12.9%, 3.3 percentage points higher than all industries above designated size.

Fourth, foreign trade and investment have grown rapidly, and opening up has been continuously expanded. As a result, the volume and quality of trade goods have increased. In 2021, China's total goods imports and exports expanded 21.4% year-on-year to 39.1 trillion yuan, scoring a two-year average growth of 11.3%. Counted by US dollars, the trade volume was US$6.05 trillion, accounting for a larger proportion in the global market. The imports and exports of general trade made up 61.6% of the total trade volume, up by 1.6 percentage points year-on-year. Trade in services has continued to recover. From January to November 2021, the total trade in services increased by 14.7% year-on-year, with services exports up by 31.5%. The investment attracted set a new record. The actual utilized foreign capital in 2021 was 1.1494 trillion yuan, up by 14.9%. 

Fifth, the reform on the economic system has continued to deepen, further unleashing development vitality. Market entities increased a lot. Reforms to streamline administration, delegate powers, improve regulation, and upgrade services continued apace. At the end of 2021, the total number of market entities in China exceeded 150 million, with more than 40 million enterprises and more than 100 million self-employed businesses. Diverse forms of ownership have developed side by side. Among the industries above designated size in 2021, value-added by enterprises with state-held controlling stakes, corporate enterprises, private enterprises, and foreign, Hong Kong, Macao, and Taiwan invested enterprises increased by 8.0%, 9.8%, 10.2%, and 8.9%, respectively, all rising at a similar pace. Rapid growth has been made in new industries, new business forms, and new models. In 2021, the value-added by high-tech manufacturing enterprises above designated size increased by 18.2% year-on-year, 8.6 percentage points higher than that of the industries above designated size. The online retail sales of physical goods increased by 12%, accounting for 24.5% of the total retail sales of consumer goods.

Sixth, efforts to ensure people's livelihoods have been firm and effective, increasing people's sense of fulfillment. As a result, people's income has increased at a fast pace. In 2021, Chinese citizens' net income from wages and salaries, net business income, and net property income grew by 9.6%, 11.0%, and 10.2%, respectively. As a result, the urban-rural income gap has been narrowed. The urban-rural per capita disposable income ratio of 2021 was 2.5, which was 0.06 percentage points lower than 2020. The production and sales of basic consumption goods in 2021 have seen steady growth. The value-added by the consumer goods manufacturing industry above designated size increased by 9.8% year-on-year. The retail sales of grain, oil and foodstuff, beverages, and daily necessities by enterprises above designated size all registered a two-digit growth. The investment to improve living standards has expanded. The investment in social sectors increased by 10.7% year-on-year. Specifically, education and public health investment grew by 11.7% and 24.5%, respectively. Thank you. 

Phoenix TV:

What were the contribution rates of the fourth quarter's economic growth and the “troika” (investment, consumption and exports) to the overall economic growth of 2021? On the basis of the data, what progress has been made in the construction of a new development paradigm? In addition, in the face of the complex economic situation, how do you think the impetus of economic growth will shift? Thank you.

Ning Jizhe:

The impetus of economic growth can be measured from the perspective of supply, or in other words, the three industries. It can also be measured from the perspective of demand, or in other words, the “troika.” So, your question is very targeted. The year 2021 is the starting year for our country in forming a new development paradigm. In the face of multiple tests like the complex and severe international environment, and frequent and sporadic domestic outbreaks of the pandemic, China has taken advantage of its super large-scale market, continued to deepen reform and opening up, proactively boosted the domestic and global economy, and made strides toward establishing a new development paradigm. This was shown in four main aspects:

First, during the whole year, three key demands all made contributions to economic growth. In 2021, the final consumption expenditure, the gross capital formation, and the net export of commodities and services drove the economy to grow by 5.3, 1.1 and 1.7 percentage points, respectively, and their contribution rates to economic growth were 65.4%, 13.7% and 20.9%, respectively. In the fourth quarter, the final consumption expenditure, the gross capital formation, and the net export of commodities and services drove the economy to grow by 3.4, -0.5 and 1.0 percentage points, respectively, and their contribution rates to economic growth were 85.3%, -11.6% and 26.4%, respectively. Although the contribution rate of the gross capital formation to economic growth was negative, fixed assets investment rose after a fall in December. During the whole year, the planned gross investment of new projects grew by 3.3% year on year, rising consecutively in November and December with signs of rising from a fall.

Second, the principal role of domestic circulation was enhanced. We have further implemented the strategy of expanding domestic demand. The leading role of domestic circulation in economic development has been greatly enhanced. In 2021, the total retail sales of consumer goods in China exceeded 40 trillion yuan, up by 12.5% year on year. The fixed assets investment exceeded 50 trillion yuan, up by 4.9%. The contribution rate of domestic demand to economic growth reached 79.1%, growing by 4.4 percentage points compared with the previous year. Economic growth was mainly driven by domestic demand.

Third, domestic and international circulations reinforced each other. The advantage of a super large-scale market was displayed, and the expansion of domestic demand propelled imports. The advantages of complete industrial system and stable production capacity were given full play, and the expansion of external demand promoted exports. In 2021, China's total import and export volume reached a record high. Import and export volume grew by 21.5% and 21.2%, respectively, year on year. Both the domestic and external demands played important roles and interacted with each other.

Fourth, the cycle of production, distribution, circulation and consumption was improved. In the production link, the expansion of production laid a foundation for improving the cycle. In 2021, the added value of industrial enterprises with annual revenue of 20 million yuan or more grew by 9.6% year on year. Growth was seen in 95.1% of the industrial sector and 73.4% of products, respectively. In the distribution link, the growth of business income, salaries and profits were the main sources of the primary distribution. From January to November in 2021, the business income of 41 major industrial categories achieved growth year on year. Growth was seen in 100% of industries. The profits of 31 industries realized growth year on year. Growth was seen in over 80% of industries. The salaries of employees also increased. The revenue in national general public budget grew by 12.8% year on year, maintaining double-digit growth. In the circulation link, the smooth freight transport ensured the economic recovery and foreign trade. In 2021, China's freight transport volume and cargo throughput at ports increased by 12.4% and 6.8% over last year, respectively. In the consumption link, the expansion of employment and growth of incomes propped up the recovery in consumption growth. In 2021, China's per capita consumption expenditure grew by 12.6% in real terms year on year. Due to the impact of the year before last, the average growth rate of the past two years reached 4.0%.

In the face of the complex and severe economic situation, the fundamentals sustaining China's long-term economic growth and the advantages of forming a new development paradigm remain unchanged, and new drivers of economic growth will continue to emerge. In the next phase, the impetus of economic growth will come from not only the pull of the “troika,” but also the propelling of supply; not only the expansion of domestic demand, but also that of external demand; not only the increase of consumption, but also that of investment; and not only the promotion of reform, but also that of innovation. We have the confidence, strength, capacity and conditions to realize steady and sound economic development. Thank you.

Yicai:

In 2021, the growth of fixed assets investment was sluggish. This year, with the acceleration of the issue of special bonds and the launch of a batch of key projects, will the growth of investment pick up? Thank you.

Ning Jizhe: 

The fixed assets investment is one important carrier of the “troika” I mentioned just now. The statistics of fixed assets investment for the whole year were just released, and now I will elaborate on the overall investment situation.

Generally, investment maintained its recovery momentum in 2021. During the past year, the continuous expansion of investment scale and the improvement of the structure have played important roles in optimizing supply structure, enhancing supply quality, and reinforcing weak links.

First, the investment scale continued to expand. In 2021, the fixed assets investment (excluding rural households) exceeded 50 trillion yuan and reached 54.5 trillion yuan, up by 4.9% over last year, with an average growth rate of 3.9% in the past two years. The average two-year growth rate rose by 0.1 percentage point compared with the first three quarters.

Second, investment in the manufacturing industry improved. In 2021, investment in the manufacturing industry grew by 13.5% year on year, with the average two-year growth rate reaching 4.8%, 0.9 percentage point higher than that of the whole investment. Investment in technological upgrading in the manufacturing industry increased by 13.6% year on year, continuously higher than the general growth rate of manufacturing investment. 

Third, investment in the high-tech industries enjoyed good momentum. In 2021, investment in high-tech industries increased by 17.1% year on year, with the average two-year growth rate reaching 13.8%, 9.9 percentage points higher than that of the total investment.

Fourth, investment in the social domain grew swiftly. In 2021, the growth rate of investment in the social domain was 5.8 percentage points higher than that of the total investment. 

The investment growth trend in the next phase has attracted a lot of attention. Currently, the international environment is complicated and severe, and the pandemic continues to have great impact, hindering investment growth to some extent. However, from the perspective of China's development phase, there is potential, space and impetus for expanding effective investment.

First, investment in promoting development has great potential. China is still the world's largest developing country. The per capita GDP is less than one fifth of that of the United States and one third of that of Japan. The infrastructure capital stock per capita is only 20%-30% of that of developed countries. Promoting high-quality development and building a modern socialist country still requires the continuous expansion of effective investment.

Second, there is a broad investment space to make up for weaknesses. The issue of unbalanced and inadequate development is still prominent, and there is still a large gap between the development of urban and rural areas. Many weak links still exist in infrastructure and areas related to people's livelihoods. The per capita input for public facilities of farmers is only about one-fifth of that of urban residents. There is a broad investment space to make up for weaknesses.

Third, there has been sufficient motivation for innovation investment. With the increasing driving role of innovation, industrial upgrading remains a steady development. Enterprises have been continuously increasing innovation investment, boosting innovation development, and fostering a new development paradigm, which will be a huge investment push. This year, we will introduce a series of policies and measures which will be conducive to investment in manufacturing, R&D, and technological upgrading. Last year, investment in high-tech industries increased by 17.1% year on year. In terms of capital, China has a high total national savings rate, and social funds are generally adequate. China has also been able to provide good supporting conditions for production and construction. China has both the needs and favorable conditions for expanding effective investment.

Fourth, policies such as adopting an appropriate forward-thinking plan for infrastructure are gaining momentum. Since the second half of last year, the issuance of special bonds by local governments has been accelerated, and investment from the central government budget has also been accelerated. 102 key projects in the 14th Five-Year Plan have been launched continuously. We have launched projects concerning new infrastructure and new urbanization initiatives as well as major transportation and water conservancy projects in an orderly manner. Enhanced policy support, which includes fiscal and monetary investment, has been conducive to the steady recovery of fixed-asset investment. In terms of leading indicators for investment, from January to December 2021, 287,760 new projects were launched, 36,767 more than the period from January to November. The planned gross investment of new projects grew by 3.3% year on year, 0.6 percentage point faster than the growth rate of the January-November period, and has risen consecutively in the last two months. Since the beginning of this year, a batch of key projects have been launched in different regions as planned, and these projects come with the potential for investment growth. Thanks.

Economic Daily:

Hello, Mr. Ning, you have just introduced that China's GDP exceeded 110 trillion yuan in 2021, and its share in global GDP has continued to increase. The per capita GDP is projected to exceed $12,000, which is close to the World Bank's threshold for high-income countries. What does the National Bureau of Statistics say about this? What do these changes mean? Thanks.

Ning Jizhe:

China's GDP reached 110 trillion yuan, which is indeed a landmark event, and the per capita GDP has also increased accordingly. Last year, both the size of China's economy and its per capita level continued to grow. It means that China's comprehensive national strength, social productivity, and people's living standards have been further improved. It also means that China has a firmer foundation, better conditions, and stronger driving force for development and is contributing to the global development as well.

First, this means that China's comprehensive national strength has been further enhanced. Our economy has further expanded. In 2021, China's GDP exceeded 110 trillion yuan, ranking second in the world. Last year, nominal GDP rose from 101 trillion yuan to 114 trillion yuan, an increase of about 13 trillion yuan. This increase, converted at an average annual exchange rate, amounts to $2 trillion, which is equal to the annual economic aggregate of a quite large major economy. If the exchange rate factor was considered, the increase would be more than $2 trillion. According to the statistics released earlier, China's GDP is equal to $17.7 trillion this year, and it was $14.7 trillion last year. Due to the appreciation of the RMB last year, the calculated increment is $3 trillion. The total size of the economy and the amount of economic growth have not come easily. At the same time, the added values of the total industry and the manufacturing industry were 37.3 trillion yuan and 31.4 trillion yuan, respectively, ranking first in the world for more than 10 consecutive years. China's total trade in goods and foreign exchange reserves both rank first in the world. And there is no doubt that China ranks second in the areas of trade in services, outbound investment, and domestic consumption market, even though figures for several countries have not yet been made available. China's per capita GDP exceeded 80,000 yuan, which is equal to $12,551 at the average annual exchange rate. Although it has not yet reached the lower limit of the per capita level of high-income countries, it is approaching. In 2021, China exceeded the global average per capita GDP. According to preliminary estimates, the global average per capita GDP will be about $12,100, while China's is $12,500.

Second, this means that China's social productivity has further improved. The output of major industrial and agricultural products continued to rank among the top in the world. In 2021, China's total grain output exceeded 1.3 trillion jin (650 million metric tons). According to global statistics, China ranks first in total grain output in the world. The outputs of seed cotton, peanuts (one of the main oil crops), meat, tea, and fruit all rank first in the world. These outputs are real and comparable. In the past, grain was taken as the top priority in agriculture, and steel was taken as the top priority of industry. Now, the output of crude steel was 1.03 billion metric tons, and power generation reached 8.1 trillion kWh. Meanwhile, fertilizer output was 54.46 million metric tons, cloth output was 39.6 billion meters, and automobile output was 26.53 million. The output of microcomputer equipment was 470 million units, and the output of mobile phones was 1.66 billion units. These all rank first in the world. China also leads the world in the output of more than 220 major products, and in fact, it is more than this, and it indicates social productivity has increased. At the same time, China's scientific and technological strength has also improved significantly. Currently, the full-time equivalent of research and development personnel in China exceeds 5 million person-years. By the end of 2021, the number of in-force patents issued in China was 3.597 million, and the number of high-value invention patents per 10,000 people reached 7.5, an increase of 1.2 over the previous year.

Third, it also means the living standards of the Chinese people further improved. Employment continued to expand. In 2021, more than 12 million new jobs were created. Residents' income and consumption maintained rapid growth. China's per capita disposable income stood at 35,000 yuan in 2021, up 8.1% year on year in real terms. The nationwide per capita consumption expenditure reached 24,000 yuan, up 12.6% in real terms. The Engel coefficient, which reflects the consumption structure, states that the percentage of income allocated for food expenditure decreases as income rises. In 2021, the Engel coefficient was 29.8%, 0.4 percentage point lower than the previous year.

Fourth, it means that China's international influence has further expanded. China's economy has maintained rapid growth, which has driven global economic growth. In 2020, the world economy saw negative growth, while China's economy grew positively, playing a significant role in driving economic recovery globally. In 2021, China's contribution rate to the world's GDP growth was expected to reach about 25%, making it an important force leading the world's economic recovery. This can only be forecast because data from around the world has not yet been collected. At the same time, China's coordinated fight against the epidemic has made a huge contribution to the global anti-pandemic development. Over the past year or so, sticking to the approach of “preventing the coronavirus from entering the country and stem its domestic resurgence,” China has taken the lead in bringing the epidemic under control on its home soil, ensuring the health and safety of its 1.4 billion people. This in itself is a major contribution to the world's anti-pandemic efforts. By the end of last year, China had provided 372 billion masks, more than 4.2 billion protective suits, 8.4 billion test reagents, and more than 2 billion doses of COVID-19 vaccine to more than 120 countries and international organizations, making China the largest supplier of COVID-19 vaccines.

At the same time, we should be soberly aware that China remains a upper-middle-income country and its per capita GDP has not reached the threshold for high-income countries, and there is still a big gap between China and developed countries. China remains the largest developing country in the world. Its basic national condition remains unchanged, and it will remain in the primary stage of socialism for a long time. Right now, China is facing the triple pressures of shrinking demand, supply shock, and weakening expectations. Based on the new stage of development, we need to fully, accurately, and comprehensively implement the new vision of development. We need to work hard and tirelessly to speed up the building of a new development paradigm, keep the economy operating within a proper range, promote high-quality development, and further enhance China's overall national strength, social productivity, and people's living standards. Thank you.

CNBC:

I have two questions. The first one is about employment. Are there any data where we can see if the proportion of young people in urban and rural areas has changed? And the second: In the growth of the secondary and tertiary industries in the fourth quarter, there are some obvious differences from that of the whole of last year. For example, the secondary industry grew by 2.5% in the fourth quarter and 8.2% for the whole year. The tertiary industry grew by 4.6% in the fourth quarter and 8.2% for the whole year. What are the main reasons for this gap? With the enhanced epidemic prevention measures in January, are there any insights into how we can predict economic growth this year? Thank you.

Ning Jizhe:

I will focus on the first of your two questions. The first one is about industry and industrial employment. You also mentioned the employment in urban and rural areas. In the data I just released, there is already information about newly-created jobs in urban areas. The national surveyed urban unemployment rate and the surveyed unemployment rate for big cities were also released. Your question focuses on the performance of certain industries. The situation in some of the industries might be different. It is fair to say that in the past year, the increase of new urban employment and the surveyed unemployment rate remained stable in China. Both have achieved their expected goals, or we can say the surveyed unemployment rate is lower than expected. The main reasons are as follows:

First, the continuous recovery and development of the economy has created new jobs and laid the foundation for employment. China's GDP grew by 8.1% in 2021. The economic output in the fourth quarter slowed to 4% year-on-year, but in terms of the two-year average, though the GDP in the fourth quarter of 2020 grew relatively faster at 6.4%, after been revising down from the previous 6.5%, the two-year average growth in the fourth quarter of 2021 registered 5.2%, 0.3 percentage points faster than the 4.9% in the third quarter. The steady economic growth has provided an important foundation for employment. When we observe economic growth, we should look not only at the year-on-year data but also the month-on-month data and the average data of two years. In fact, it also offered some tips to your second question.

Second, the policy of prioritizing employment has produced remarkable results. A series of policies that were designed to help enterprises and stabilize jobs have played a positive role in the employment of college graduates, rural migrant workers, and other key groups. The total number of migrant workers in 2021 was 292.51 million, an increase of 6.91 million over 2020. The number in 2020 is lower than that in 2019. The number in 2021 has already exceeded the level of 2019 before the COVID-19 epidemic. Please pay attention to this. At the same time, the surveyed unemployment rate of migrant agricultural residents has remained at a low of less than 5% since the second half of last year.

Third, new forms of employment are flourishing. China's new industries, new forms of business, and new models continued to develop rapidly last year, with various flexible employment models absorbing a lot of the labor force. At present, there are about 200 million people working flexible jobs in China, with food deliverymen accounting for about 4 million and online broadcasters and related employees accounting for more than 1.6 million on some platforms, nearly three times that of last year.

Fourth, employment in some industries increased considerably. Although the number of employees in some service industries, manufacturing, and construction has dropped, the number in other industries has increased, underpinning the overall stability of employment. From November to December in 2021, the number of workers in the wholesale and retail industry; transportation, warehousing, and postal industries; residential service industry; and commercial service industry rose by 1.81 million, 410,000, 330,000, and 280,000, respectively, which has offset the declines in employment in other sectors.

Fifth, the surveyed unemployment rate shows that some people have temporarily withdrawn from the labor market. While the surveyed urban unemployment rate focuses on the urban labor market, we have also carried out surveys in rural areas. The national surveyed unemployment rate is generally lower than that of urban areas. However, from the perspective of urban and rural areas, if a migrant worker returns to the countryside, then the person no longer belongs to the urban labor market, and should be included in the labor force survey in the countryside. In addition, from the perspective of the city itself, some people are counted as “not in the labor force” due to reasons like seasonal business closures, or to take care of their families, health, education, and training. For example, workers in agriculture or construction will temporarily withdraw from the labor force in winter.

Your second question is about the gap between the service sector and the industrial sector. Thanks to a series of policies and measures supporting the industrial sector as well as the joint efforts of enterprises, the industrial sector and manufacturing sector maintained recovery momentum in the fourth quarter. You just mentioned statistics of the service sector. The service sector, which contains many industries, grew rapidly in general. The annual growth rate of both the service sector and industrial sector reached 8.2%. The impact of the service sector on employment should be reviewed based on different industries. It has exerted a greater impact on some industries, such as high-contact service industries and those with a high-density work environment, and has had a lesser impact on industries supporting freight transport, logistics, and industrial chains. So we must stabilize and promote the growth of those industries that ensure normal life and work, and follow routine, targeted COVID-19 protocols to ensure a good environment for economic and social development.  

Because this year's first-quarter statistics are expected to be released in April, we have to take some targeted measures according to the situation last year to ensure employment and reasonable economic growth. Thank you. 

Reuters:

Would you please preview the development prospects in 2022 and what are the main downward pressures and risks of China's economic growth this year? Will China scale up stabilizing economic growth to keep the major economic indicators within an appropriate range? Will China relax its policies to regulate and control the real estate market? Thank you.

Ning Jizhe:

You have raised several questions. The first two are relatively similar and involve this year's economic growth. This year marks the gradual recovery of China's economy, but the current external environment is grave and made complex by many uncertainties, and as you can see, domestic development is also under pressure. Despite these risks and challenges, taken overall, the momentum of sustained economic recovery, factors that keep the major economic indicators within an appropriate range, and conditions that support high-quality development all remain unchanged. The economy is expected to make progress while maintaining stability throughout the entire year.

First, China has been at the global forefront in terms of regularized pandemic control and made notable progress in coordinating epidemic control with economic and social development. The order of life and work is generally stable in the country, which has promoted sustained economic growth and ensured overall social stability. Up to now, China has reported the smallest number of confirmed COVID-19 cases and the lowest death toll among the world's major economies. China has administered 2.93 billion doses of COVID-19 vaccines, and a total of 1.22 billion people have been fully vaccinated – the most among the major economies of the world – providing a general line of defense for economic growth. 

Second, China's industrial supply system is complete. As we have mentioned many times, our country features every industrial category, with a complete industrial system and supporting system. In addition, the industrial and supply chains are resilient and can quickly adapt to the changes in demands of the market and thus boost the increase in supply. For example, the market suffered from a shortage of chips and containers last year. In addition to imports, China's own output of integrated circuits increased by 33.3%, and thus quickly increased supply. Facing a shortage of metal containers, China's output of containers grew 110.6%, allowing the shortage of chips and containers to be slightly alleviated. Amid the pandemic, the demand for office supplies for working at home boomed domestically and abroad. Some products might not otherwise sell well, but they have become popular after people needed them to work at home. The output of microcomputer equipment has not risen at such a fast rate for a long time, increasing by 22.3% in 2021. Meanwhile, the total output of smartphones last year was 1.7 billion, increasing by 9%, all of which indicates that there is a sizable demand. Working at home has also boosted the demand for eating at home, with fresh and frozen meat output increasing 24.5% and beverage output increasing 12%. All these examples indicate that we can produce what the market needs. It is the same for this year. As long as the media reports the world's demands, we will have market entities make efforts to produce and provide supplies, which will naturally promote economic growth, expand employment, and increase income. 

Third, the space for growth is large for China's super-large scale market. Our country has more than 1.4 billion people, with more than 400 million middle-income earners, which is the foundation for us to cope with various risks and challenges and build a strong domestic market. Due to the impact of the pandemic, retail sales of consumer goods decreased in 2020. But it grew back in 2021, reaching 44 trillion yuan. Although the growth rate was relatively low, it was not easy to achieve. The 44 trillion yuan in consumer goods sales represents a new milestone. The total investment was huge – the contribution rate of domestic demand to economic growth was 79.1% for the whole year – and final consumption was 65.4%, which highlights the significant role of the domestic market. 

Fourth, we also have the dividends of reform and opening-up. Diverse forms of ownership develop together. According to statistics, the value-added industrial growth of private enterprises scored double-digit growth. China's imports and exports to its major trade partners maintained rapid growth last year, according to statistics released by the General Administration of Customs a few days ago. Meanwhile, China is a major trade partner of more than 120 countries around the world. Up to the end of last year, China has signed BRI cooperation documents with 145 countries, and its total import and export volume with countries involved in the Belt and Road rose by more than 20%.

Fifth, China has outstanding economic governance capability. In recent years, China has continued to make fresh innovations in macro-control. We have enhanced targeted, well-timed, and precise regulation on the basis of range-based control, accumulating rich regulation experience and contributing to stable economic development. Since 2020, facing the spread of pandemic around the world, we have maintained strategic focus. Instead of resorting to massive stimulus measures, we put into place assistance policies based on market entities, which has promoted economic recovery and achieved remarkable results. At present, China's inflation rate and government debt are low. There is space for monetary policies, and we have at our disposal a fairly substantial toolkit for macro-control, which enables China to maintain stable economic performance.

Regarding quarterly growth, first, let us review the quarterly data over the past year. Just now, I announced the year-on-year growth rate and two-year average growth rate. Now, let us look at the quarter-on-quarter growth rate, that is, comparing each quarter with the previous quarter. The first quarter of 2021 saw a 0.3% increase in economic aggregate, rising a little compared with the fourth quarter of 2020; the second quarter of 2021 grew 1.3% from the first; the third quarter rose 0.7% compared with the second; and the fourth quarter increased 1.6% from the third. These figures show that China's economic aggregate kept expanding quarterly last year. The fourth quarter saw an increase of 3.43 trillion yuan over the third, with the quarter-on-quarter growth rate up 0.9 percentage point. Therefore, the Chinese economy is showing an increasingly stable development momentum.

Issues in the real estate industry are also quite important. The just-released data shows that our real estate market was generally stable in 2021. We adhered to the principle that housing is for living in rather than for speculation and actively implemented a long-term mechanism. We did not take real estate as a tool and means to stimulate short-term economic growth but made efforts to stabilize the price of land and houses, and the expectations, actively preventing potential risks. The real estate market remained generally stable.

First, real estate sales kept rising, and real estate transactions logged an overall increase. In 2021, the floor area of sold commercial housing nationwide reached 1.8 billion square meters, up 1.9% compared with the previous year, and the sales hit 18.19 trillion yuan, increasing 4.8% over the previous year.

Second, investment in real estate kept expanding. In 2021, the investment in real estate development was 14.76 trillion yuan, up 4.4% year on year, and residential investment rose 6.4%, 2 percentage points higher than the total investment in the industry. 

Third, real estate prices were generally stable. In December 2021, among 70 large and medium-sized cities, the prices of newly built commercial housing in first-tier, second-tier, and third-tier cities rose 4.4%, 2.8%, and 0.9%, respectively, year on year. 

Fourth, the development of government-subsidized housing continued to be pushed forward. From January to November 2021, China renovated about 1.94 million housing units in rundown urban areas and began the construction of 86,000 public rental housing units, with an investment of 913.1 billion yuan and 17.8 billion yuan, respectively.

The statistics showed that investment in real estate is expected to see stable and healthy development in 2022. Some of the just-released data is related to demand in the industry, which would be steadily unleashed. 

First, China's urbanization rate of permanent residents continued to increase last year, but the country is still in the development stage of urbanization. At the end of 2021, permanent residents in urban areas increased by 12.05 million year on year. Those people needed housing in cities while mostly maintaining their rural homes. In particular, the migrant population — defined by people who move a relatively long distance — reached 384.67 million, 8.85 million more than the previous year. The population who resided in areas other than where their household registration was registered was larger than the migrant population. All of these factors have brought about a new demand for housing. With the advancement of a new model of urbanization, residents' desire for normal housing consumption will turn into a reality. Then, with the support of financial and other policies, the urban housing needs, especially for improved housing, will continue to be released.

Moreover, the market supply of the real estate industry is gradually optimizing. With the steady advancement of real estate regulation policies, real estate developing enterprises maintain sound growth, and the industry is heading in an intensive, highly-efficient, long-term, healthy, and stable direction. As we see, the 2021 data showed that the added value of the real estate industry saw a negative growth in the fourth quarter, but the total added value reached 7.76 trillion yuan for the whole year. The added value of the construction industry amounted to 8 trillion yuan. The two together accounted for 14% of the country's GDP. We encouraged both the rental and purchase of housing, accelerated the development of the long-term rental housing market, promoted the development of government-subsidized housing, and ensured that the commercial housing market could better meet the rational demand of house purchasers. In this way, we are speeding up the establishment of a multi-tiered housing system including commercial housing and government-subsidized housing. The real estate market supply pattern will also be gradually put in place, featuring multi-suppliers, multi-channel guarantee, and a two-pronged approach of rental and commercial housing. From January to November 2021, a total of 120.5 billion yuan was invested to build 860,000 rental housing units across the country. 

Third, city-specific policies have helped promote a virtuous circle for the real estate industry. It is very important to develop the real estate industry according to local conditions. We have always kept in mind the principle that houses are for living in, not for speculation, and have maintained a stable housing price, stable land price, and stable expectations. To regulate the real estate market, we have implemented various policies in different cities. This is beneficial to both the smooth operation of the real estate market and ensuring the fulfillment of people's normal housing needs. In recent years, we have supported the renovation of buildings where middle- and low-income groups lived as well as old residential communities, boosting the healthy development of the industry. From January to November 2021, we began the renovation of 54,700 old urban residential communities, exceeding the annual targets.

Lastly, the growth of the real estate industry has driven the economic growth overall. In 2021, the added value of the real estate industry rose 5.2% year on year, adding 0.4 percentage point to overall economic growth; the added value of the construction industry increased 2.1%, boosting overall economic growth by 0.2 percentage point. From the perspective of industry expectations, in December 2021, the commercial activity index of the construction industry was 56.3%, maintaining a relatively high range of over 55% for 10 consecutive months. As the long-term mechanism of the real estate industry keeps improving and the effects of city-specific policies continue to emerge, the industry is expected to maintain a smooth running in 2022. Thank you!

ThePaper.cn:

In 2021, the number of newborns nationwide hit a new low for recent years. How will this affect China's economy? When will China enter a negative population growth phase? In addition, how will the three-child policy impact future population growth? Thank you.

Ning Jizhe:

At the request of the SCIO, the National Bureau of Statistics and the seventh national census office released census data last year. Based on the data I just presented, your questions make a lot of sense. In 2021, China's population maintained steady growth. 

First, the total population continued to grow. By the end of 2021, China had a population of 1.413 billion. The number of births totaled 10.62 million, and the number of deaths reached 10 million for the first time, registering a net increase of 480,000 and a natural growth rate of 0.34 per thousand.  

Second, the working-age population remained relatively stable. By the end of 2021, the working-age population, or those between 16 and 59 was 882 million, accounting for 62.5% of the total. The population aged 60 and over was 267 million, among whom 200 million were aged 65 and above, making up 18.9% and 14.2%, respectively, of the total population.  

Third, the urban population increased considerably. By the end of 2021, permanent residents in urban areas reached 914 million, an increase of more than 12 million over the end of the previous year, while permanent residents in rural areas were nearly 500 million. The urbanization rate of permanent residents registered 64.72%, 0.83 percentage points higher than the end of the previous year. 

Fourth, the floating population grew significantly. By the end of 2021, the population who resided in areas other than their household registration reached 504 million, which was 11.53 million more than the previous year. Specifically, the floating population stood at 385 million, 8.85 million more than the previous year.

The birth decline you are concerned about resulted from multiple factors. The slowdown in population growth is an objective result stemming from China's economy, especially industrialization and urbanization, developing into a certain stage. Aging and fewer children are also common problems faced by developed countries and even some emerging economies. In 2021, China had fewer births than in the previous year, which led to a lower birth rate. The main reasons for this are as follows:

First, the number of women of childbearing age continued to decrease. In 2021, there were about 5 million fewer women of childbearing age – from 15 to 49 – than in the previous year; the number of those in their prime of childbearing age – from 21 to 35 – dropped by about 3 million.

Second, the fertility rate continued to fall. In recent years, shifting thoughts about childbearing and people delaying marriage and starting a family, coupled with factors involving the cost of childbearing, have made young people less willing to have a baby.  

Third, to some extent, COVID-19 has also delayed the marriage and childbearing plans of young people. Multiple international studies found that fertility rates have decreased in many countries and regions since the outbreak of the pandemic. In 2020, both Japan and South Korea saw fewer births than in the previous year.  

China's population will remain above 1.4 billion for some time to come.  

First, the total number of women of childbearing age is relatively large. China has a large population base with more than 300 million women of childbearing age, and we are able to sustain over 10 million births every year. The total population will maintain a certain level of growth.

Second, the three-child policy will gradually generate effects. Over the past decade, policies including the two-child policy for couples in which either the husband or wife is from a single-child family, and the universal two-child policy have positively increased births. According to the seventh national census data, the number of children aged 0-14 in 2020 was over 30 million more than that in 2010, and the proportion of children rose by 1.35 percentage points, which was mainly driven by the two "two-child" polices. Among the births, the proportion of second children rose from about 30% in 2013 to about 43% in 2021. In May 2021, the Political Bureau of the CPC Central Committee proposed further optimizing the birth policy by allowing a couple to have three children and adopting supporting measures. Specific implementation schemes have been formulated in localities and the policy will gradually play its role. 

Third, life expectancy has continued to rise. Significant progress in medical and health conditions, as well as continuous improvements to living standards, have led to a consistently rising life expectancy, and the fact that the number of deaths in China has been less than the number of births helps the total population maintain its growth trend. The potential of some delayed births will continue to be released in the future. All these factors will play a positive role in keeping the total population basically stable. Thank you.  

Chen Wenjun:  

The press conference has been going on for 85 minutes and the journalists are still eager to raise questions. We will take the last three questions.  

CNR:

We have also noted that China's grain output hit a new high in 2021. Will China's agricultural production be consolidated amid new developments in 2022 and what are the main reasons? In addition, we also see that international grain prices rose sharply in 2021 and many countries faced significant inflation. How has China's food security been affected? Can we guarantee the food supply? Thank you. 

Ning Jizhe:

Agriculture is the foundation of every industry and food is the basis of our survival. The statistics just released show that grain output in 2021 reached a new level and we had a bumper harvest of agricultural production. Regarding the complicated and changing situation in 2022, such as the rising international prices of some grains you mentioned just now, relevant departments have conducted careful analyses in this regard, the CPC Central Committee has made clear arrangements, and the State Council has introduced related policies as well. As long as the Party continues to prioritize addressing issues related to agriculture, rural areas and rural people, as well as gaining control over our own food supply, we can consolidate the fundamental position of agriculture and ensure the food supply.  

In 2021, China's grain and agricultural production gained momentum and the features were as follows:  

First, the output of summer grain, early rice and autumn grain increased to 291.9 billion jin (1 kg=2 jin), 56 billion jin and 1,017.8 billion jin, respectively, up 6.2 billion jin, 1.4 billion jin and 19.1 billion jin. This helped total annual grain output reach 1,365.7 billion jin, an increase of 26.7 billion jin over the previous year.  

Second, the yield of rice, wheat, corn and tuber rose to 425.7 billion jin, 273.9 billion jin, 545.1 billion jin and 60.9 billion jin, respectively, up 2 billion jin, 5.4 billion jin, 23.8 billion jin and 1.1 billion jin over the previous year. 

Third, both sown areas and per unit yields increased. China's total sown grain area hit 1.764 billion mu (117.6 million hectares) in 2021, an increase of 12.95 million mu over the previous year, signaling two consecutive years of growth. Per unit yields of grain reached 387 kilograms per mu, an increase of 4.8 kilograms over the previous year, up 1.2% year on year.

Fourth, the primary, secondary and tertiary industries in rural areas as well as the industries of farming, forestry, animal husbandry and fishery were comprehensively developed. In 2021, the value added from farming, forestry, animal husbandry and fishery industries reached 8.7 trillion yuan, up 7.1% year on year. The National Bureau of Statistics and the Ministry of Agriculture and Rural Affairs released the first set of statistics for value added from agriculture and related industries. According to the data, in 2020, the value added of agriculture and related industries hit 16.69 trillion yuan, accounting for 16.47% of the national GDP. The figure is nearly twice that of the farming, forestry, animal husbandry and fishery industries. Many enterprises representing secondary and tertiary industries provide services directly to the agricultural sector. For instance, specialized plant protection services and seed services have been categorized in the service industry. Therefore, we decided to work with the Ministry of Agriculture and Rural Affairs to conduct a relevant statistical monitoring project.

This year's grain supplies can be guaranteed, based on the following factors.

First, successive years of increased production have laid a solid foundation. We have seen bumper grain harvests for 18 years in a row. The annual total grain output exceeded 500 billion kg, 550 billion kg, and 600 billion kg between 2007 and 2009, 2010 and 2011, and 2012 and 2014, respectively. This figure has remained above 650 billion kg for seven consecutive years beginning 2015, ensuring basic supplies for the grain market.

Second, we have an adequate stock of grain. At present, the country has sufficient grain reserves, with the two major staples of wheat and rice accounting for more than 70% of the total inventory. The stock of wheat can meet consumption demands for a year and a half. As the inventory of commodities noticeably grew, the stock of wheat and rice increased by more than 50% year on year.

Third, the sown area has likewise expanded in consecutive years. As part of the efforts to enlarge acreage, we have implemented stringent measures to protect farmland and safeguard the "red line" of 1.8 billion mu (120 million hectares) of farmland, strengthened control and regulation of purposes for arable land, and curbed non-agricultural or non-grain-related use of farmland. The sown area of grain across the country in 2021 went up by 0.7% compared to 2020, signaling two consecutive years of growth. In 2020, the multiple cropping index was 1.31. As the double cropping system keeps improving, the efficient utilization of farmland has increased accordingly.

Fourth, per unit yield enjoy huge potential. Although there is still some way to go compared with agriculturally advanced countries, the constant development of agricultural technologies represented by breeding techniques means there is enormous potential for China to increase its per unit yield. According to the survey conducted in 2019, farmland with medium- and low-yield accounted for more than two-thirds of the total. By implementing a strategy of sustainable farmland use and innovative application of agricultural technology, promoting the transformation of farmland with medium- and low-yield, accelerating the cultivation of high-quality farmland and stepping up efforts to develop protected agriculture, our per unit yield will enjoy even greater potential.   

Fifth, we have established solid policy mechanisms. The central rural work conference has affirmed the active role of the system in which both CPC committees and governments assume responsibility for safeguarding grain security, and emphasized the importance of ensuring acreage and output in main grain producing and marketing areas,, as well as areas with a balance between production and marketing. With more agricultural-specific policies delivered, farmers are growing more enthusiastic about production. Noticeably, these efforts will help us better respond to various risks and changes at home and abroad. International commodity prices will affect China's domestic markets in the form of imported inflation through the import and export of grain and other raw materials. Additionally, global natural disasters will impact the output, prices and markets as well. The top priority is to run our own affairs well, hold our rice bowls firmly in our own hands and take concrete measures to ensure food security. Thank you.

China Daily:

What were the new progress and breakthroughs in China's high-quality development for 2021? What aspects should be given more attention when pursuing high-quality development this year? And what about coordinating the relationship between the stable operation of the macro-economy and high-quality development? Thank you.

Ning Jizhe:

High-quality development is a prominent feature of China's 14th Five-Year Plan. In the past year, all regions and departments across the country thoroughly implemented the new development philosophy and promoted the stability and recovery of the economy while stepping up efforts to deepen reforms, expand opening-up, encourage innovation and accelerate reforms in quality, efficiency and drivers. We have made new achievements in high-quality development which were mainly demonstrated in the following five aspects.

First, innovation-driven development yielded new results. High-tech industries rapidly developed. In 2021, the value added from pharmaceutical, aerospace and equipment manufacturing industries, as well as electronic and communication device manufacturing, and computer and office equipment manufacturing industries above the designated size grew by 24.7%, 17%, 18.3% and 18% from the previous year, respectively. All of the above are high-tech industrial manufacturing industries. The valued added of information transmission, software and information technology services industries increased 17.2% year on year. China continued to enhance its national strategic strength in science and technology, witnessing the successful launch of Tianwen 1 Mars probe, the completion of Shenzhou 12 and Shenzhou 13, the operation of the national space laboratory, and other missions accomplished., 

Second, the coordinated development has made new progress. Industrial structures continued adjusting and optimizing. Over the past year, there were two important figures. In 2021, the value added of the manufacturing industry accounted for 27.4% of China's GDP, an increase of 1.1 percentage points from the previous year. At the same time, the value added of the service industry accounted for 53.3% of the national GDP, with its contribution rate to economic growth reaching 54.9%, 16.5 percentage points higher than the secondary industry. It's not an easy target for manufacturing and service industries to achieve. The demand structure has steadily improved. In 2021, the domestic demand's contribution rate to economic growth was close to 80%, signaling a growth of 4.4 percentage points over the previous year. The urbanization level has constantly improved. At the end of 2021, the urbanization rate among permanent resident populations grew by 0.83 percentage point compared to the same period of 2020.

Third, green and low-carbon development has made new achievements. We have made solid progress in energy conservation. In 2021, China's energy consumption per unit GDP dropped by 2.7% from the previous year, a big step forward compared to 2020. The statistic in 2020 remained the same as the previous year since the economy was heavily hampered by the epidemic. Clean energy consumption developed rapidly. According to preliminary calculation, the consumption of clean energies such as natural gas, hydropower, nuclear, wind, and solar accounted for 25.3% of the total energy consumption, one percentage point higher than the previous year. The output of green products has seen rapid growth as well. In 2021, the output of new energy vehicles and solar batteries grew by 145.6% and 42.1% compared to 2020, respectively. All of the figures listed above are extraordinary and suggest that the market enjoys tremendous prospects. The air quality constantly improved as well.

Fourth, we have drawn momentum from opening up to promote high-quality development and realize new breakthroughs. In the past year, China's total import and export of goods increased by 30% to 6 trillion U.S. dollars for the first time, hitting a new high. In addition, the growth rate also reached a record high since 2011; actualized use of foreign investment reached 1.1 trillion yuan, and China's trade volume with economies involved in the Belt and Road Initiative reached 11.6 trillion yuan; and the number of China-Europe freight train trips surged by 22% year on year to 15,000. In particular, at the beginning of this year, the Regional Comprehensive Economic Partnership (RCEP) officially entered into force, marking the largest free trade zone by far in terms of participating population, trade volume, and development potential. It is certain to promote the development of foreign trade, mutual investment, international trade, and international investment.

Fifth, new progress has been made in sharing the results of development. The income of urban and rural residents continued to grow. In 2021, the per capita disposable income of urban residents rose by 7.1% in real terms, and the per capita disposable income of rural residents rose by 9.7% in real terms. Spending on people's well-being also increased. From January to November, among the expenditure in the national general public budget, expenditures on housing security, education, social security and employment increased by 7.4%, 5.1% and 4.9% year-on-year, respectively.

At present, China's economy has shifted away from high-speed growth to high-quality development, and high-quality development is the theme for China's economic and social development in the 14th Five-Year Plan (2021-2025) period. To promote high-quality development, we must follow the general principle of pursuing progress while ensuring stability, focus on development as the top priority, promote reform and innovation, and pursue supply-side structural reform as our main task. Now, it is necessary to put stable growth in a prominent position, see that the economy operates within an appropriate range, maintain macroeconomic stability, promote high-quality development and the stable operation of the national economy at the same time, and coordinate the reasonable economic growth in volume and stable improvement in quality to ensure stable, sustained, and sound development of China's economy. Thank you. 

Cover News:

Increasing residents' income is an important part of securing people's livelihood. In 2021, what were the features of residents' income growth? Were the income gaps among different groups narrowed? What problems are now left to be resolved? Next, in what areas should we step up our efforts? Thank you. 

Ning Jizhe:

In 2021, as China's economy continued to recover, the employment situation was generally stable, the business efficiency of enterprises was improved, and people's basic living needs were effectively secured. All of these promoted the rebound of residents' income and narrowed the income gap. Details are mainly in the following aspects:

First, residents' income grew generally at the same pace as the economic growth. In 2021, the nationwide per capita disposable income of residents was 35,128 yuan, a nominal increase of 9.1% over that of the previous year. The real growth after deducting price factors was 8.1%, an average two-year growth of 5.1%, which was generally at the same pace as the growth of the economy.

Second, all types of incomes achieved overall growth. In 2021, driven by factors such as the deepening reforms to streamline administration and delegate power, improve regulation, and upgrade services and scaled efforts in helping businesses to get through challenges, the per capita net operating income of residents grew the fastest among all types of incomes, with a nominal increase of 11% over the previous year. This marks a change in the operating income of the previous year when COVID-19 took a higher toll on the growth of residents' net income. The policy of reducing burdens, stabilizing jobs, and expanding employment continued in the past year, and the targeted employment assistance for key groups was implemented, which boosted the income growth, with the per capita salary-based incomes of residents up 9.6% in nominal terms over the previous year, and the average monthly income of migrant workers up 8.8%. With the deepening of reforms in the capital market, market-based interest rate, and housing rental market, the per capita net property income of residents increased by 10.2% over the previous year. As the country secured people's livelihoods, with pension benefits being paid on time and in full, and efforts to provide temporary assistance being accelerated, residents' per capita net transfer income increased by 5.8% in nominal terms over the previous year, with an average two-year growth of 7.2%. All types of incomes rose across the board.

Third, the income gap between urban and rural residents continued to narrow. With the deepening of rural vitalization and a focus on agriculture, the income growth among rural residents was significantly faster than that of urban residents. In 2021, the nominal growth and real growth of the per capita disposable income of rural residents stood at 10.5% and 9.7%, respectively, both 2 percentage points faster than that of urban residents. Meanwhile, the per capita disposable income ratio of urban and rural residents was 2.5, down 0.06 percentage point from the previous year. The gap has continued to narrow over the years.

Fourth, the income of residents in the central and western regions grew at a faster pace. As the country implemented major regional strategies and coordinated development strategies, income growth of residents in the central and western regions has been faster than the average rate of the country. In 2021, the per capita disposable income of residents in the central region rose by 9.2%, and that of residents in the western region rose by 9.4%, 0.1 and 0.3 percentage point faster than the national average.

Fifth, the household income of middle- and low-income residents grew faster than that of the whole population. Speaking in terms of China's five income bands, in 2021, the per capita disposable income of people in the lower-income bracket (accounting for 20% of the total population) and in the lower-middle-income bracket (accounting for 20% of the total population) increased by 9.8% over the previous year. The growth rate of the per capita disposable income of the 40% least-wealthy residents was 0.7 percentage point faster than the national average. The per capita disposable income of people in the middle-income bracket (accounting for 20% of the total population) increased by 10.7%, 1.6 percentage points faster than the national average growth rate.

The income issues you are concerned about can be illustrated by specific figures. At the same time, we are soberly aware of the fact that the current downward pressure on China's economy is still relatively large, and the growth of residents' employment and income remains restricted. Though the income distribution gap between urban and rural areas, among regions, and different groups narrowed last year, the overall gap still exists. Next, we will focus on development as the top priority, pursue the people-centered development philosophy, advocate an employment-first strategy, and launch measures to promote income growth. We will also build a basic institution for the coordinated arrangement of primary distribution, redistribution, and third distribution; continue to equalize access to basic public services; gradually narrow the income distribution gap; and take solid steps to promote common prosperity. Thank you.

Chen Wenjun:

Thank you, Mr. Ning, and thanks to friends from the media. Today's press conference concludes here. Goodbye!

Translated and edited by Liu Jianing, Liu Qiang, Mi Xingang, Chen Xia, Yan Xiaoqing, Huang Shan, Xiang Bin, Li Huiru, Yang Xi, Zhang Rui, Zhang Tingting, Wang Wei, Xu Xiaoxuan, Qin Qi, Zhang Junmian, Wang Qian, Zhang Liying, Yuan Fang, Zhu Bochen, Wang Yiming, David Ball, Jay Birbeck, Drew Pittock 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:

Li Kuiwen, spokesperson of the General Administration of Customs (GACC) and director general of the GACC's Department of Statistics & Analysis

Chairperson:

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

Date:

Jan. 14, 2022

Xing Huina:

Ladies and gentlemen, good morning! Welcome to this press conference held by the State Council Information Office (SCIO). The SCIO will be hosting a series of press conferences on China's annual economic data. The first press conference being held today will focus on China's import and export performance in 2021. We are delighted to be joined by Mr. Li Kuiwen, spokesperson of the General Administration of Customs (GACC) and director of the GACC's Department of Statistics & Analysis, who will introduce the situation 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! Welcome to today's press conference. It's a great pleasure to meet with you again. Next, I'll begin by introducing China's import and export performance for 2021, and then answer your questions.

In 2021, with the world experiencing the combined impacts of major changes and a pandemic both unseen in a century, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, China has used high-level opening-up to promote deeper reform and stimulate high-quality growth. China has stayed ahead globally in terms of economic development and pandemic response, and maintained rapid growth in foreign trade, which registered a record high in volume and steady progress in quality. According to statistics from the GACC, China's total foreign trade of goods expanded 21.4% year on year to 39.1 trillion yuan in 2021. Exports grew by 21.2% to 21.73 trillion yuan and imports increased by 21.5% to 17.37 trillion yuan. Compared with the same period in 2019, China's foreign trade, exports and imports increased by 23.9%, 26.1% and 21.2%, respectively. In 2021, there were five main features which I will now outline: 

First, China's foreign trade moved up another notch in 2021 by exceeding $6 trillion for the first time. The total goods trade amounted to $6.05 trillion. China first reached $4 trillion in foreign trade in 2013. In the following eight years, it crossed the thresholds of $5 trillion, and then $6 trillion in 2021, reaching a record high. The increase in foreign trade this year reached $1.4 trillion.

Second, China's trade with its main trading partners maintained sound growth. China's trade with countries along the Belt and Road rose at a faster speed. In 2021, China's trade with its top five trading partners, the ASEAN, the European Union, the United States, Japan and the Republic of Korea, stood at 5.67 trillion yuan, 5.35 trillion yuan, 4.88 trillion yuan, 2.4 trillion yuan and 2.34 trillion yuan, respectively, up 19.7%, 19.1%, 20.2%, 9.4% and 18.4%, respectively. During the same period, China's trade with countries along the Belt and Road rose by 23.6%, 2.2 percentage points higher than the overall growth rate.

Third, the trade models have been further optimized, with general trade accounting for more than 60%. In 2021, China's general trade increased by 24.7% to 24.08 trillion yuan, accounting for 61.6% of the total foreign trade volume, up 1.6 percentage points; among general trade, exports rose by 24.4% to 13.24 trillion yuan and imports rose 25% to 10.84 trillion yuan. During the same period, processing trade increased by 11.1% to 8.5 trillion yuan, accounting for 21.7% of the total foreign trade volume.

Fourth, foreign trade entities have been further energized, with the private sector playing a more important role. In 2021, the number of enterprises involved in exports and imports increased by 36,000 to 567,000. China's private sector registered 19 trillion yuan in imports and exports, an increase of 26.7%, accounting for 48.6% of the country's total foreign trade volume and 2 percentage points higher than the previous year. Meanwhile, foreign-invested enterprises marked 14.03 trillion yuan in foreign trade, up by 12.7%; and state-owned enterprises accumulated 5.94 trillion yuan, up by 27.7%. 

Fifth, exports and imports of electromechanical products maintained sound growth. In 2021, China's exports of electromechanical products increased by 20.4% to 12.83 trillion yuan, making up 59% of the country's total exports. Exports of automatic data processing equipment and its parts, cellphones, and automobiles increased by 12.9%, 9.3% and 104.6%, respectively. Meanwhile, imports of electromechanical products increased by 12.2% to 7.37 trillion yuan, accounting for 42.4% of total imports. The imports of integrated circuits increased by 15.4%.

2021 marked a milestone year in the history of the CPC and the country. Amid challenges and difficulties posed by the pandemic, China 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, China's customs have followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, kept firmly in mind the need to maintain political integrity, think in big-picture terms, follow the leadership core and keep in alignment. We have also strengthened our confidence in the path, theory, system and culture of socialism with Chinese characteristics, and resolutely upheld General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely upheld the Party Central Committee's authority and its centralized, unified leadership. We have fully implemented major policy decisions and plans of the Party Central Committee and the State Council and got things done in a timely manner. Coordinated efforts have been made to prevent the pandemic at ports and promote the steady growth of foreign trade. Supervision has been strengthened and services have been optimized. With all these efforts, we have effectively promoted the steady growth in the volume and quality of foreign trade.

In general, our foreign trade has gotten off to a good start in the 14th Five-year Plan period (2021-2025). Looking ahead throughout this year, it will face more uncertainties, instability, and imbalance. The Chinese economy faces pressure from the three aspects of demand contraction, supply shock, and weakening expectations. As the global COVID-19 situation remains grim, the external environment is prone to be more complex, graver, and more uncertain, with the recovery of international demand slowing down. In addition, because of the high foreign trade base in 2021, it will continue to face certain pressure in 2022. While facing these difficulties and challenges, we must also see that the Chinese economy is resilient and that the fundamentals sustaining China's steady and long-term economic growth remain unchanged. We must have firm confidence in stabilizing the fundamentals of foreign trade.

Next, customs will uphold the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the 19th CPC National Congress and the plenary sessions of the 19th CPC Central Committee, and earnestly implement the decisions and plans of the Central Economic Work Conference. Customs will continue to follow the general principle of pursuing progress while ensuring stability, fully and faithfully apply the new development philosophy, accelerate the fostering of a new pattern of development, and continue to ensure stability on the six fronts and security in the six areas. Customs will coordinate development and security, coordinate the pandemic prevention and control at ports and efforts to achieve a steady foreign trade growth, strengthen supervision and improve services, and continue to optimize the business environment at ports to better serve high-level openness and high-quality development. Customs will also do a good job in cross-cycle adjustment and promote the stable development of foreign trade to welcome the convening of the 20th CPC National Congress with excellent performance.

Now, I would like to take your questions.

Xing Huina:

Thank you, Mr. Li, for your introduction. Now, it is time for questions. Please indicate the media organization you work for before raising questions.

China Daily:

China's foreign trade volume maintained double-digit growth in 2021, hitting a record high. What are the main driving factors? What are your expectations for foreign trade this year? Thank you.

Li Kuiwen:

Thank you for your questions. China's foreign trade achieved rapid growth in 2021. Its volume exceeded the $5 trillion and $6 trillion thresholds over the year, setting new highs while its quality improved steadily. It has gotten off to a good start in the 14th Five-year Plan period. In our view, the main factors driving the growth are as follows:

First, China maintained a globally leading position in economic development and pandemic control. In 2021, the Chinese economy continued to recover. The country took new steps to build a new development pattern, made new progress in high-quality development, and maintained rapid growth in its major economic indicators. The Chinese economy is resilient, and the fundamentals sustaining China's steady and long-term economic growth remain unchanged. Domestic production and consumption demand provided strong support for the steady growth of foreign trade. According to customs statistics, in 2021, China's import and export of intermediate products rose by 24.9% and 28.6%, respectively, while the import of consumer goods increased by 9.9%.

Second, the global economy remained on a trajectory toward recovery. The global economy showed a recovery trend in general in 2021. The World Bank and the International Monetary Fund both predicted that the global economy would grow by over 5%, and the World Trade Organization predicted that the global trade of goods would go up by 10.8%. In 2021, China's export to the EU and Africa both grew by over 20%, and its export to Latin America increased by over 40%. From a product perspective, on top of the high growth in 2020, China's export of products related to the stay-at-home economy, such as laptops, tablets, and household appliances, increased by 13.2% in 2021, while its export of medical and medicinal materials as well as medicines grew by 101.2% – strong support of the global fight against COVID-19.

Third, policies and measures to stabilize growth continued to work. Since last year, China has introduced a series of policies and measures to stabilize market entities and the market as well as to ensure a stable and smooth industrial chain and supply chain of foreign trade. Examples are maintaining reasonable and sufficient liquidity, extending and improving some tax and fee cuts, implementing new structural tax cuts; increasing financing support for micro, small, and medium companies and manufacturing businesses; deepening reforms to streamline administration and delegate power, improve regulation, and upgrade services; continuously optimizing the business environment, accelerating the development of new forms and models of business in foreign trade; further deepening the reform of cross-border trade facilitation; and promoting the reform and innovation in trade and investment facilitation in pilot free-trade zones. Their sound implementation ensured continuous effects, helping foreign trade companies out of difficulties and greatly stimulating the vitality of market entities. They served as an important support for the steady growth of foreign trade.

Regarding the trend of China's foreign trade, as I mentioned earlier, as the COVID-19 pandemic is still undergoing many twists and turns, China faces a more complicated, severe, and uncertain international environment, and the comparative advantage and cardinal effect that the Chinese economy can depend on to take the lead to recover may weaken. All the above bring more uncertainties, destabilizing factors, and imbalances to the development of China's foreign trade in 2022. However, we should understand that the fundamentals sustaining China's steady and long-term economic growth remain unchanged, which will provide powerful support for maintaining stability in foreign trade. Thank you.

CCTV:

China's import and export to countries along the Belt and Road's routes outpaced the global average over the past year. Were there any highlights you'd like to share? What new measures have China's customs taken in jointly building the Belt and Road Initiative? Thank you.

Li Kuiwen:

Thank you for your questions. Last year marked the eighth anniversary of the Belt and Road Initiative (BRI). Since the BRI was put into action, the trade relationship between China and BRI-participating countries has been increasingly close. Data from China's customs showed that in 2021, China's import and export to countries along the routes reached 11.6 trillion yuan, up 23.6%, 2.2 percentage points higher than the overall growth rate of China's foreign trade in the same period. Of this, exports reached 6.59 trillion yuan, up 21.5%; imports totaled 5.01 trillion yuan, up 26.4%. That growth is mainly down to the following aspects.

First, the trade volume has grown steadily. From 2013 to 2021, China's total import and export volume with countries along the routes increased from 6.46 trillion yuan to 11.6 trillion yuan, with an average annual growth rate of 7.5%, and its share in China's total foreign trade increased from 25% to 29.7% in the same period.  

Second, the cooperation of the industrial and supply chains has tightened. From 2013 to 2021, the proportion of intermediate products in China's exports to BRI-participating countries increased from 49.8% in 2013 to 56.2% in 2021. The export of auto parts, textiles, and lithium electronic batteries increased by 26.7%, 14.1%, and 50.4%, respectively, in 2021.

Third, the cooperation in energy, agriculture, and mineral resources has gained momentum. In 2021, China imported 1.18 trillion yuan of crude oil from countries along the routes, an increase of 44%; 326.55 billion yuan in agricultural products, up 26.1%; 212.77 billion yuan in metal ores, up 24.9%; and 185.45 billion yuan in natural gas, up 38.9%.

Fourth, private enterprises have been active. In 2021, the import and export of private enterprises to BRI-participating countries reached 6.21 trillion yuan, an increase of 25.6%, accounting for 53.5% of China's overall import and export to those countries during the same period, an increase of 0.8 percentage point.

Last year, we mainly did the following work to jointly promote high-quality BRI cooperation.

First, we have stepped up efforts to promote the "Smart Customs, Smart Borders, and Smart Connectivity" Initiative. Chinese President Xi Jinping called for deepening customs cooperation to ensure trade security and faster clearance and exploring cooperation on a pilot basis under the "Smart Customs, Smart Borders, and Smart Connectivity" Initiative while hosting the China-CEEC Summit on Feb. 9, 2021. China's customs have resolutely implemented the important instructions of President Xi and promoted reform and development of the customs service fully in line with the initiative. A guideline has been formulated and implemented to strongly combine the initiative and high-quality BRI development, so as to realize "one plus one is greater than two." Until now, we have launched 78 global cooperation projects, most of which involve countries along the routes.

Second, we have formulated a work plan to promote the high-quality development of the BRI cooperation during the 14th Five-Year Plan period (2021-2025). The year 2021 was the inaugural year of China's 14th Five-Year Plan. To accomplish the work for the year in a scientific and effective way, the GACC has formulated this plan by adopting a problem-oriented and objective-oriented approach. We have achieved coordinated development with a focus on the key countries, sectors, and projects. Under the "Smart Customs, Smart Borders, and Smart Connectivity" Initiative, we have ramped up efforts to promote the joint development of the BRI cooperation, thereby offering wisdom and strengths to the modernization of the national governance system and capabilities. 

Third, we pragmatically pushed forward key projects. We have made every effort to promote "Authorized Economic Operator" (AEO) mutual recognition and cooperation with countries that are willing to jointly build the Belt and Road. In 2021, we overcame the impact of the pandemic and signed AEO mutual recognition agreements with five countries jointly building the Belt and Road — Serbia, Chile, Iran, Uganda, and South Africa. By the end of 2021, China customs had signed AEO mutual recognition agreements with 31 countries jointly building the Belt and Road. In addition, we pragmatically promoted the "Customs-Train Operators Partnership for Secure and Expedited Clearance of CR Express Carried Goods (C-TOP)," and signed cooperation documents with Kazakhstan and Belarus on the C-TOP program to support the development of China-Europe freight trains, further expand connectivity and cooperation, and promote unimpeded trade. Thank you.

Beijing Youth Daily:

The Beijing Winter Olympics and Paralympics will open soon. What services and guarantees does the customs system provide for the smooth running of the Winter Olympics and Paralympics? Thank you.

Li Kuiwen:

Thank you for your question. The Beijing Winter Olympics is a major landmark event at an important historical time in China. The GACC resolutely implements the spirit of General Secretary Xi Jinping's important instructions on the COVID-19 prevention and control at ports and the preparation for the Winter Olympics and Paralympics, strengthens supervision, and optimizes services. We will unremittingly implement port pandemic prevention and control in a scientific and targeted manner, ensure high-quality and efficient services for the health quarantine of inbound personnel, and carry out material customs clearance for the Winter Olympic and Paralympic Games. The GACC will make due contributions to safeguarding the security of the Chinese capital city and ensuring the smooth holding of the Winter Olympics and Paralympics. Our work is mainly as follows:

First, we will implement port pandemic prevention and control in a scientific and targeted manner and provide services for the arrival and departure of Olympic-related personnel while resolutely curbing the spread of the pandemic through the port. We will strengthen communication with the arrival and departure center of the Beijing 2022 organizing committee and other departments, learn about the information of inbound and outbound personnel in advance, continue to refine the customs clearance guarantee plan, and implement the "one flight, one policy" for all Winter Olympics-related flights so as to achieve strict supervision, targeted quarantine, and efficient services. For example, in order to reduce the time people stay at the port, we have specifically compiled the Instructions for Health Declaration of Inbound Winter Olympics Charter Flights and translated it into multiple languages so that Olympic-related personnel can fill in health declaration cards in advance before boarding. The efficiency of customs clearance will then be improved. In accordance with the requirement that "the prescribed routines must be done 100%; even the 99% is unqualified," we strictly standardize all measures in aspects of health declaration card verification, temperature monitoring, medical inspection, sampling and testing, handover and transfer, and information reporting for inbound personnel. We have paid close attention to the pandemic prevention and control work at the port and resolutely curb the spread of the pandemic through the port. As of Jan. 10, 2022, Beijing customs has monitored and handled a total of 196 Olympic-related flights, involving 5,958 Olympic-related personnel.

Second, we continue to optimize our services to ensure the efficient customs clearance of the Winter Olympics materials. We have issued the Notice on Customs Clearance for the Beijing 2022 Winter Olympic and Winter Paralympic Games in advance to provide detailed guidelines for inbound and outbound materials and personnel for the Winter Olympics in eight aspects, including information registration and filing, tax guarantees for temporarily imported materials, pre-entry filing and approval, customs clearance of imported materials, supervision of personnel and personal items, and customs clearance of journalists' interview equipment. At the same time, we have set up special customs channels and special windows for inbound and outbound Winter Olympics materials and personnel, relied on the Winter Olympics' paperless customs clearance management system to simplify the declaration, and implemented the "5+2" (5 working days + 2 weekend days) reservation clearance system in order to ensure that Winter Olympics materials are available for inspection 24 hours a day. In addition, we have worked hard to supervise imported food related to the Olympics and ensure the safe and smooth supply of imported food for the Beijing Winter Olympics and Paralympics. As of Jan. 10, 2022, Beijing customs has monitored, handled, inspected, and released 637 shipments of inbound materials for the Winter Olympics, with a value of approximately 1.499 billion yuan.

Third, we strengthen investment in technology and personnel to provide strong support for the Winter Olympics with high-quality and efficient customs supervision services. Beijing customs, as the competent customs office for the 2022 Beijing Winter Olympics and Winter Paralympics, has been promoting the transformation of the special achievements of the high-tech Winter Olympics. It has deployed and applied 10 kinds of equipment and facilities such as the nuclear radiation holographic positioning system, universal disinfection cabinets, trace odor detectors, and intelligent inspection robots at the port, in a bid to improve the intelligence and informatization level of supervision and clearance for the Winter Olympics. Beijing customs keeps improving the "horizontal + vertical" human resources echelon working mechanism. It has established a support echelon, including more than 1,000 front-line and reserve personnel and more than 400 emergency support personnel, to provide all-around backup support for Olympic-related personnel during the peak period for their entry, according to the actual needs of the Winter Olympics customs clearance work. Thank you.

Phoenix TV:

China just celebrated the 20th anniversary of its accession to the World Trade Organization (WTO) last month. What are the characteristics of China's import and export of goods over the past 20 years? Thank you.

Li Kuiwen:

Thank you for your question. The year 2021 marked the 20th anniversary of China's accession to the WTO. Customs data showed that the total volume of China's imports and exports increased from 4.22 trillion yuan in 2001 to 39.1 trillion yuan in 2021, up by an annual average rate of 12.2%. Customs data are official figures from China's import and export of goods. The statistics reflect the leap-forward development of our trade in goods over the past 20 years.

First, the total import and export of goods have increased by more than eight times, making China the world's largest trader in goods. The total value of China's imported and exported goods was 4.22 trillion yuan in 2001, and exceeded 10 trillion yuan, 20 trillion yuan, and 30 trillion yuan in 2005, 2010, and 2018, respectively. The figure approached 40 trillion yuan in 2021, registering an increase of 8.3 times in 20 years. In particular, the total value rose from 24.4 trillion yuan to 39.1 trillion yuan in the past 10 years, with an increment of 14.7 trillion yuan, equivalent to China's import and export of goods in 2009. This has epitomized China's achievements in reform and opening-up in the new era. What's more, China's import and export of goods accounted for only 4% of the world's total in 2001, and its share jumped to 13.5% in the first three quarters of 2021. In 2013, China became the world's largest trader of goods. In 2021, the total value of US dollar-denominated imports and exports exceeded 6 trillion yuan for the first time in history.

Second, the structure of exports has changed significantly, with machinery and electronic products now accounting for nearly 60% of all exports. Over the past 20 years, China's export of goods has grown at an average annual rate of 12.5%. Machinery and electronic products have become the most exported products, accounting for 59% of the total in 2021. It is worth mentioning that since the outbreak of COVID-19, China has actively promoted international anti-pandemic cooperation and provided hundreds of millions of masks, protective suits, test kits, vaccines, and other materials to the international community, thus contributing to the global COVID-19 response and economic recovery.

Third, imports have continuously expanded, and the import of high-tech and resource products has grown steadily. Over the past 20 years, China's import of goods has increased at an average annual rate of 11.8%. In 2009, China became the world's second-largest importer. In the first three quarters of 2021, China's imports accounted for 12.1% of the international market. A more open Chinese market has enabled the rest of the world to better share in the dividends brought by its economic growth and booming consumption. Over the past 20 years, China's import of high-tech products has risen steadily at an average annual rate of 14%, promoting the transformation and upgrading of the industrial structure. The import of resource products has expanded in an orderly manner. The import of metal ore, crude oil, coal, natural gas, and other resource products has increased at an average annual rate of 18%, providing a strong supply to ensure steady domestic economic growth.

Fourth, China has diversified its trading partners, with ASEAN becoming our largest trading partner. Over the past 20 years, we have maintained stable trade relations with traditional markets, including the European Union, the United States, Japan, and South Korea, which together accounted for 38.3% of China's total foreign trade in 2021. At the same time, we have actively explored emerging markets such as ASEAN, Africa, Latin America, Russia, and India. These partners accounted for 16% of China's total foreign trade in 2001, but the figure increased to 30.7% in 2021. Among them, ASEAN became China's largest trading partner in 2020, and it remained so in 2021, accounting for 14.5% of China's total foreign trade. It is worth noting that China has continued to deepen trade relations with countries along the Belt and Road, expand trade scale and further promote the balanced and mutually beneficial development of trade. 

Fifth, the number of foreign trade entities multiplied, with private enterprises taking up the largest share of all business entities in foreign trade. In 2021, 567,000 Chinese enterprises actually engaged in import and export business, 6.3 times more than that in 2001. In 2019, private enterprises took up a 42.7% share in the gross value of imports and exports of China, increasing significantly from 6.1% in 2001. In 2021, their share grew to 48.6%. Over the past 20 years, private enterprises have taken up the largest share of all foreign trade entities in China. Meanwhile, the number of foreign-invested enterprises actually engaging in import and export business also further increased to reach 82,000 in 2021, an increase of 21,000 compared with that in 2001, with the average annual import and export scale of the enterprises reaching 170 million yuan, increasing by 4.8 times compared with 2001.

Sixth, in foreign trade, new driving forces have been constantly stimulated, and new business modes have emerged one after another. Customs statistics show that in 2021, imports and exports in China's comprehensive bonded zones, pilot free-trade zones, and the Hainan Free Trade Port increased by 24.3%, 26.4%, and 57.7%, respectively, demonstrating a strong development momentum. In terms of the new trade modes, the scale of cross-border e-commerce and market procurement trade expanded rapidly. In 2021, the import and export volume of China's cross-border e-commerce reached 1.98 trillion yuan, up 15%, and market procurement trade's exports increased by 32.1%. Thank you.

ThePaper.cn:

The RCEP deal came into force on Jan. 1, 2022. Could you briefly introduce China's trade with RCEP member countries as it stood last year? What have customs done to promote the implementation of the RCEP deal? Thank you.

Li Kuiwen:

Thanks for your question. On Jan. 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) agreement came into force in six ASEAN countries, namely Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam, as well as China, Japan, New Zealand, and Australia, marking the start of the world's largest free trade zone so far. Customs statistics show that in 2021, China's imports from and exports to the other 14 RCEP member countries reached 12.07 trillion yuan, up 18.1%, and accounting for 30.9% of China's total foreign trade. Of this, exports reached 5.64 trillion yuan, up 16.8%, while imports reached 6.43 trillion yuan, up 19.2%.

Among the 701 binding obligations of the RCEP agreement, the GACC is responsible for 174 items solely or jointly, accounting for 24.8% of the total. At present, relevant work has been done comprehensively. The GACC's main work in promoting the implementation of the RCEP agreement can be seen in the following three aspects:

First, in the aspect of rules of origin and tariff concessions. The GACC issued two relevant regulations, namely measures on the administration of origin of goods imported and exported under the RCEP and measures for the administration of approved exporters, along with four supporting normative documents. In response to RCEP's tariff concession model and requirements for implementation of the rules of origin, we upgraded the informationization system for customs origin of goods management, realized the shared use of visa data and customs clearance data, and built a three-dimensional customs supervision and service network, which combines origin of goods management, enterprises management, and commodity management. We completed the consultations on the transposition of product-specific rules as well as the consultations on the guidance for the implementation of the rules of origin. We shared China's approach with other members for a consensus to be reached and overcame obstacles for the implementation of the RCEP deal.

Second, in the aspect of customs procedures and trade facilitation. Focusing on the RCEP trade facilitation rules, we continued to perfect customs clearance procedures, improve customs clearance efficiency, and reduce customs clearance costs, aiming to accelerate the building of a market-oriented, law-based, and international business environment at ports. The RCEP members were encouraged to optimize their own workflows, and standardize and simplify customs regulatory procedures. We jointly reviewed customs procedures with other RCEP members. We formulated the plan to promote the mutual recognition of AEO between China and other RCEP members and its implementation. So far, China has signed mutual recognition arrangements with five of the 10 RCEP members with the AEO system. Relevant measures have been piloted at comprehensive bonded zones in the free trade zones in Shanghai, Guangdong, Tianjin, and Fujian, such as clarifying the range of acceptable "minor discrepancies or errors" for certificates of origin under preferential trade agreements.

Third, in terms of animal and plant quarantine, food security, and import and export commodity inspection, we leveraged China's highly complementary cooperation with RCEP members in animal and plant quarantine, comprehensively straightened the access mechanisms for imported agricultural products, and promoted the export of China's high-quality agricultural products. We strengthened animal and plant epidemic information sharing with RCEP members, advanced international epidemic surveillance collaboration, and launched the upgraded version of China-ASEAN animal and plant quarantine and food security cooperation information website. We paid more attention to and strengthened studies on relevant technical trade measures taken by RCEP members, raised our trade concerns, and actively negotiated with foreign members through bilateral and multilateral channels so as to safeguard the legitimate rights and interests of China's export enterprises. 

At the same time, we worked hard to publicize and interpret the policies on RCEP customs business. In particular, we organized nearly one thousand training programs regarding rules of origin in various forms and through diverse platforms to help acquaint enterprises with these rules, conventional tariff rates, and related requirements of favored customs clearance for import and export goods, the application for certificates of origin and independent statement issuance, among others. Thank you.  

People's Daily:  

The Central Economic Work Conference proposed that the micro-economy should continue to stimulate the vitality of market entities. How was the import and export performance of foreign trade market players last year? What measures did the GACC introduce to galvanize the foreign trade enterprises? Thank you. 

Li Kuiwen:  

Thank you for your question. In 2021, China's foreign trade businesses continued to gain momentum, which strongly supported the steady growth of foreign trade. The number of enterprises with substantive import and export achievements increased by 36,000 to 567,000. Among them, private enterprises remained the largest foreign trade entity in China, with imports and exports totaling 19 trillion yuan, up 26.7% and accounting for 48.6% of the country's total foreign trade. Imports and exports of foreign-invested companies remained stable at 14.03 trillion yuan, up 12.7%, and those of state-owned enterprises accelerated and rose by 27.7% to 5.94 trillion yuan.  

To stimulate the vitality of foreign trade market players, the administration made efforts in the main following aspects in 2021:

First, we implemented the reforms to streamline administration and delegate power, improve regulation, and upgrade services, and enabled the filing of customs declaration entities to be addressed online in the whole process and anywhere across the country. We further deepened the reforms mentioned above, actively promoted the transformation from approval to filing of all the customs declaration entities, and introduced measures for the convenience and benefits of the people and enterprises, including the whole process of online filing anywhere nationwide. Under these measures, enterprises can log in the "China International Trade Single Window" or the "Online Customs" websites for filing across the country, and print the filing receipt after the local customs' review, moving the whole process online and making it paperless. If enterprises happen to choose the wrong local customs, the customs that receives the application should be responsible for handling the application, thus enabling enterprises to apply at any site nationwide and settle documentation all at once without any cost or travel. 

Second, we have sped up the international mutual recognition and cooperation of AEOs to help enterprises enjoy convenience further afield. In doing this, we focused on Belt and Road countries, RCEP members, Central and Eastern European countries, and other major trading countries. Since 2021, China has completed AEO mutual recognition with Serbia, Chile, Uganda, Iran, and South Africa. To date, China has signed AEO mutual recognition agreements with 21 economies, including the European Union and Singapore, covering 47 countries and regions — the most in the world. Among them, 31 are Belt and Road countries, five are RCEP members, and 13 are Central and Eastern European countries. When China's AEO enterprises export goods to countries and regions with mutual recognition, they can enjoy the convenient measures offered by local customs, including reduced inspection, priority handling, the appointment of liaison officers, and prioritization of customs clearance during emergencies so as to reduce trade costs and enhance enterprises' vitality.  

Third, we have strengthened intellectual property protection and boosted companies' innovation. We took stringent measures to crack down on intellectual property infringement and carried out a series of campaigns, including comprehensive intellectual property protection, intellectual property protection in shipping and delivery channels, and intellectual property protection for export transshipment goods. We also formulated a knowledge graph centering on intellectual property customs protection and developed and piloted a new-generation inspection management system featuring the use of intelligent identification of intellectual property and trademarks on mobile devices. We provided guidance and services regarding company-specific intellectual property protection and strengthened companies' awareness and capability in intellectual property protection. We continued to enhance law-enforcement cooperation across different departments, customs zones, and borders and cemented whole chain of intellectual property protection so as to better serve the innovative development of companies. 

Next, the GACC will follow the requirements of boosting the confidence of foreign trade entities and deepen the reforms of streamlining administration and delegating power, improving regulation, and upgrading services. We will also improve the business environment at ports, help companies to address their difficulties and resume development, and further stimulate the vitality and growth momentum of foreign trade entities. 

Global Times: 

The pandemic has dealt a severe blow to the traditional way of trade, while new business forms and models such as cross-border e-commerce have played a vital role in ensuring orders, markets, and market shares. Can you please tell us more about new modes of foreign trade in 2021? Thank you. 

Li Kuiwen:

Thank you for your question. New business forms and models such as cross-border e-commerce and market procurement are an important part of China's foreign trade, and they also reflect a key trend in international trade development. Since the COVID-19 pandemic, China's cross-border e-commerce has unleashed its strength in online marketing, online transaction, and contactless delivery, grown its new strength in international cooperation and competition, and has thus registered rapid and sustained growth in foreign trade. 

First, in terms of cross-border e-commerce, B2B export pilot programs have been expanded, and the China-Europe freight trains have developed in tandem with new business forms such as goods consolidation and transit trade. In order to help export enterprises engaged in cross-border e-commerce to better tap into the international market, the B2B export supervision pilot program regarding cross-border e-commerce was expanded to customs across China in the latter half of 2021, with supporting policies being constantly improved. Meanwhile, cross-border e-commerce railways, including those from the China-SCO cooperation demo area to Minsk in Belarus, from Yiwu and Suzhou to Europe, and from Hefei to Hamburg and Wilhelmshaven in Germany, opened and began regular operations, resulting in the integrated development of China-Europe freight train and cross-border e-commerce. Data shows that cross-border e-commerce registered a trade volume of 1.98 trillion yuan in 2021, increasing 15% year on year. Exports of cross-border e-commerce reached 1.44 trillion yuan, rising 24.5% year on year. 

Second, the export volume through market procurement trade has exceeded 900 billion yuan. As China expands its national market procurement pilots, the figure in 2021 amounted to 930.4 billion yuan, up 32.1%, accounting for 4.3% of the total export of the same period and driving exports growth by 1.3 percentage points. Thank you.

Xing Huina:

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

China News Service:

As we know, China's foreign trade aimed to remain stable in size and achieve high-quality development in 2021. In terms of improving quality, what were the new development and features of China's imports and exports last year? Thank you.

Li Kuiwen:

Thank you for your question. In 2021, China's foreign trade achieved new heights in size and saw new progress in quality. We believe this is reflected in the following aspects:

First, China's foreign trade took an increased share in the international market. According to the latest statistics, in the first three quarters of 2021, China's exports accounted for 14.9% of the global market share, up 0.6 percentage point year on year and 3.9 percentage points higher than that of 2012. This increment equals the global market share of China's export in 2000. In the meantime, since China's imports accounted for over 10% of the global market share for the first time in 2013, this figure has increased steadily. The global market share of China's imports reached 12.1% in the first three quarters of 2021, up 0.5 percentage point year on year. This showcases the great achievements we have made as we enter a new era of reform and opening-up.

Second, new business forms saw even more rapid development. In 2021, the export volume in cross-border e-commerce sector increased 24.5% year on year, and its exports through market procurement trade grew 32.1%. The policies and measures China adopted to promote the healthy, sustained, and innovative development of new business forms and models of foreign trade continue to deliver effect.

Third, platforms for opening-up played a larger role. In 2021, the foreign trade of the comprehensive bonded zones across China increased 24.3%, and that of pilot free trade zones grew by 26.4%. The foreign trade of the Hainan free-trade port surged 57.7%.

Fourth, the vitality of China's market entities grew stronger. In 2021, the number of foreign trade enterprises with actual import and export business performance reached 567,000, 36,000 more than the previous year. Among them, private enterprises have contributed to 58.2% of the growth of the country's foreign trade.

Fifth, the structure of China's foreign trade was further optimized. In terms of the trade structure, the share of general trade increased by 1.6 percentage points in 2021. Nearly 60% of goods exported were electronic products. In terms of regional development, the foreign trade of China's central and western regions amounted to 6.93 trillion yuan, up 22.8%, and 1.4 percentage points higher than the growth rate of China's overall foreign trade of the same period. In terms of trading partners, China's foreign trade with major economies such as EU, the U.S., and Japan increased 17.5%, and trade with Latin America and Africa surged 31.6% and 26.3%, respectively. China and its trading partners jointly safeguarded the stability of global industrial and supply chains and propped up the world's economic recovery.

I would also like to take this opportunity to introduce the efforts being made by Chinese customs in coordinating pandemic prevention and control in port areas and facilitating the growth of foreign trade.

In 2021, despite the fallout from the COVID-19 pandemic, China's foreign trade made remarkable achievements and became a highlight of China's economy. While demonstrating the sector's strong resilience, this also speaks volumes about the unremitting efforts of Chinese customs.

Over the past year, customs departments across China followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, took firm and swift actions based on the guiding principles of General Secretary Xi Jinping's important instructions, thoroughly grasped the new features and requirements of the new stage of development, and implemented the new development philosophy in a complete, accurate, and comprehensive manner. The 14th Five-Year Plan for customs development and that for the development of port areas were introduced and implemented, embarking on a new journey toward socialist modernization in terms of customs development.

In the past year, customs authorities around the country coordinated development and security, strengthened supervision and improved services; enhanced their regulatory capacity; implemented stringent, science-based, and targeted epidemic prevention and control measures at the port; maintained a tough stance against smuggling; vigorously created a more business-friendly environment at the port; and effectively promoted the steady and quality growth of foreign trade.

Over the past year, customs authorities around the country adopted a holistic approach and actively integrated into the overall process of national development, supporting the implementation of major national strategies, including the coordinated development of the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt, the Guangdong-Hong Kong-Macao Great Bay Area, and the integrated development of Yangtze River Delta. They also served the pilot free trade zones and the construction of Hainan Free Trade Port, promoted high-quality development of the Belt and Road Initiative through joint efforts, expanded the mutual recognition of AEOs, advanced the initiative of "Smart Customs, Smart Borders and Smart Connectivity," completed preparatory work for the RCEP implementation ahead of schedule, and promoted China to open wider at a high standard.

I will report some concrete work as follows:

First, efforts were made in epidemic prevention and control in a science-based and targeted way at points of entry and exit. Since 2021, the customs has taken resolute, rapid, and strong measures to implement science-based, targeted, and strict regulations in epidemic response and strengthened quarantine inspection at points of entry and exit.

Step one, strengthening assessment of pandemic situation. We have strictly observed the principle of early detection, reporting, quarantine and treatment, and closely monitored and assessed the pandemic situation overseas and the situations of the virus mutation, and changing prevention and control measures, on a daily basis; and required the customs at the land border crossings to implement the principle of "targeted plan for each land border crossing," and further improved and refined their working plans and emergency responses so as to strictly prevent the virus from entering the country through the land border crossings.

Step two, tightening up border quarantine. The customs tightened checks on transportation vehicles before they entered China, and took a series of checking measures for people entering the country, including taking temperatures twice, checking their Health Declaration Forms, medical screening, and sampling testing to fully intercept any potential risks brought by inbound travelers. We have also strengthened the response mechanism of joint prevention and control with relevant local departments in order to transfer all inbound travelers and to have them report the relevant information, achieving seamless and closed-loop management. 

Step three, we adhered to the principle of "virus-prevention amidst people, goods, and the environment." The GACC, according to the working plan of the State Council's inter-agency task force, launched nucleic acid monitoring and testing at points of entry and preventive disinfection and supervision for imported cold-chain food and imported non-cold chain container goods from high-risk areas. They also supervised airlines to ensure they stringently disinfected their aircraft according to the requirements of the State Council's inter-agency task force.

Step four, personal protection has been strengthened. Chinese customs made efforts to implement a safety protection system and supervision system, enhanced training and assessment, and strictly regulated personal protective procedures. Rigorous closed-loop management was applied to people working in high-risk sectors. All the front-line workers at the port were covered by complete vaccination against COVID-19. The authority also accelerated the coverage of booster vaccinations, stressing that personal protective standards and measures should remain the same after the vaccination.

Second, we have spared no effort to promote the steady growth of foreign trade. In 2021, focusing on the concern of market entities, Chinese customs made concerted efforts to pursue high-level opening-up. We actively implemented all policies and measures stabilizing foreign trade and inbound investment to help maintain the momentum of steady and robust growth of imports and exports.

The first effort was to keep improving the business environment at our ports. Except for some exceptional cases, all 38 customs supervision documents involved in imports and exports can be processed at a single window. In addition, the expansion of pilot financial services through the "Single Window System" benefited more than 230,000 foreign-trade companies, consolidating the progress in reducing the customs clearance time for imports and exports. As a result, in December 2021, the average time for customs clearance was reduced to 32.97 hours for imports and 1.23 hours for exports, which was cut by 66.14% and 89.98%, respectively, compared with that in 2017.

Secondly, customs clearance costs have been effectively reduced. We have significantly brought down government-imposed transaction costs by implementing institutional innovation. In 2021, we completed business filing procedures online for 183,000 companies in a simplified and speedy manner. In addition, we have advanced the pilot reform of customs surety insurance. By the end of 2021, the bond insurance has guaranteed a total of 534.02 billion yuan in duties and tax payments by 3,775 companies, helping them reduce costs and increase efficiency. 

Thirdly, we have made great efforts to develop new forms of trade. Measures to reform cross-border e-commerce B2B export supervision have been improving. Since July 1, 2021, customs authorities nationwide have applied a new supervision model to cross-border e-commerce B2B direct export and export to overseas warehouses, enabling companies to better develop the international market. We have supported the expansion of the market procurement trade pilot program and worked with related departments to evaluate new marketplaces covered by the pilot program. Up to now, a total of 31 marketplaces have been included in the market procurement trade pilot scheme.

Finally, we have actively supported the development of new pacesetters of opening-up. We have promoted the high-quality development of comprehensive bonded zones, and supported qualified regions that have demand for such zones to open new ones. In 2021, eight new comprehensive bonded zones were built. Up to now, there are 168 special customs supervision areas nationwide. In addition, we have given full play to the role of pilot free trade zones as the "testing ground." In 2021, we filed and approved preliminary trials on 25 innovative measures to help high-level opening-up. Thank you.

Xing Huina:

Thank you, Mr. Li. Today's press conference is at this moment concluded. Those news organizations that didn't get a chance to raise questions today may continue to keep in contact with us after the press conference. Thanks to friends from the media. Goodbye.

Translated and edited by Zhang Jiaqi, Wang Yiming, Ma Yujia, Chen Xia, Zhang Rui, Wang Wei, Zhang Liying, Li Huiru, Lin Liyao, Liu Sitong, Xu Xiaoxuan, Liu Qiang, Zhang Lulu, Huang Shan, Li Xiao, Zhang Tingting, He Shan, Zhu Bochen, Wang Qian, 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:

Li Sen, director general of the General Planning Department of the Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games (BOCOG)

Yan Jiarong, spokesperson of the BOCOG

Liu Yumin, director general of the Planning and Construction Department of the BOCOG

Yu Bo, chief of Yanqing District of Beijing Municipality

Liu Haifeng, deputy mayor of the Zhangjiakou Municipal People's Government, Hebei province, and deputy director of the Zhangjiakou Municipal Office for the 2022 Olympic and Paralympic Winter Games

Chairperson:

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

Date:

Jan. 13, 2022

Chen Wenjun:

Good morning, ladies and gentlemen. Welcome to today's press conference. The Beijing 2022 Olympic and Paralympic Winter Games are in place and will kick off in three weeks. Everyone is very concerned about how the green Olympics initiative has been implemented throughout the preparation process and what a green Olympics will look like. Today, we have invited relevant officials to attend the press conference to introduce the situation and take your questions. They are Mr. Li Sen, director general of the General Planning Department of the Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games (BOCOG); Ms. Yan Jiarong, spokesperson of the BOCOG; Mr. Liu Yumin, director general of the Planning and Construction Department of the BOCOG; Mr. Yu Bo, chief of Yanqing District of Beijing Municipality; and Mr. Liu Haifeng, deputy mayor of the Zhangjiakou Municipal People's Government, Hebei province, and deputy director of the Zhangjiakou Municipal Office for the 2022 Olympic and Paralympic Winter Games. Next, I would like to ask Mr. Li Sen to introduce the topic.

Li Sen:

Good morning, friends from the media. It is my great pleasure to introduce to you how China is delivering on its application promise of hosting a green Olympics. Here, I would also like to express my gratitude to our media friends for their attention and support to the preparations and sustainability of the Beijing Winter Olympics!

Now, everything is in place for the upcoming Beijing Winter Olympics. The venues and infrastructure have all met the requirements for hosting the competition, the venue-based operational model has been fully implemented, the service guarantees for the competition have been in place, and efforts of publicity have been boosted. In particular, a series of international test competitions have been successfully held, proving that the preparations are adequate. On Jan. 4, General Secretary Xi Jinping visited the Beijing competition zone to inspect the preparations, cordially encouraged the front-line personnel working at the venues, and gave important instructions for the preparation of the Olympics. His visit boosted our morale. As a result, we have strengthened our confidence and determination to hold the competition on schedule, safely, and successfully. We will go all out in the final stage according to the requirements of the general secretary to ensure a simple, safe and splendid 2022 Olympic and Paralympic Winter Games.

Sustainable development is China's national strategy and one of the three pillars of the Olympic Agenda 2020. Since preparing for the 2022 Winter Games, the BOCOG has stayed committed to hosting the Games in a green, sharing, open and clean manner. The BOCOG, the Beijing Municipal Government, the Hebei Provincial Government, and related parties have jointly formulated the Beijing 2022 Olympic and Paralympic Winter Games Sustainability Plan and proposed the vision of sustainability for the future and established the objective of creating a new example for staging events and regional sustainability. A working framework, including 12 actions, 37 tasks, and 119 specific measures, is constructed from three aspects: positive environmental impact, a new development for the region, and a better life for the people.

Over the past six years in preparing for the Games, we have worked hard to implement the green Olympics initiative in the whole process of preparations. We have closely integrated the preparations of the Games with the development of cities and regions, promoting the improvement of the regional ecological environment, economic development, and social progress and producing results of sustainability. I can summarize our work into the following five aspects:

First, we have established a sustainable management system. The preparation of the Winter Olympics is a complex project that requires standardized and systematic management. For the first time in the history of the Olympic Games, we have integrated three international standards. These are the sustainability management system for large-scale events, environmental management system, and social responsibility guidelines. In addition, we have established BOCOG's sustainable management system. As a result, we have effectively managed sustainable work in major venues and more than 50 work areas.

Second, we have created ecological competition zones. Given that the snow events will be mainly held in mountainous areas, measures have been taken to reduce the impact on the environment since we designed the venues. Before planning and designing, baseline surveys on the types and distribution of plants and environmental impact assessments were conducted. Protection measures were determined in terms of avoidance, mitigation, restoration, and compensation. The in-situ, near-situ, and ex-situ conservation measures have been taken for plants in the competition zones. We have employed multiple measures to reduce the impact on the animals in the competition zones, including setting up wildlife corridors, laying out artificial bird nests, and standardizing construction behaviors. At the same time, we have carried out ecological restoration. We have employed multiple ways to collect, store and recycle rainwater and snowmelt water to use water resources efficiently. The green mountains and clear waters of the competition zones have been protected through various measures. The goal of building venues surrounded by mountains and forests and hosting an ecological Winter Olympics has been realized.

Third, we have strictly implemented low-carbon management. We have made full use of the Beijing Olympic venues to reduce carbon emissions from the source. At the same time, we have built low-carbon stadiums, all of which have met the green building standards. Four ice stadiums have used new carbon dioxide refrigerants, making an ultra-low-energy project of more than 50,000 square meters. Low-carbon energy is fully utilized, and all the venues will be wholly powered by green energy. More than 80% of the vehicles during the Games will be energy-saving and clean energy vehicles to build a low-carbon transportation system. In addition, we have explored ways for carbon offsetting. The governments of Beijing and Hebei province contributed significant amounts of carbon sinks in the forestry industry. PetroChina, State Grid, and China Three Gorges Corporation sponsored carbon-neutral products for the Beijing Winter Olympics. With these efforts, we will make the Games carbon neutral.

Fourth, we have promoted urban and regional development. The six-year preparations for the Beijing Winter Olympics have witnessed Beijing and Zhangjiakou's rapid development. The preparations for the Winter Olympics have contributed to the development of the two places. The Beijing-Zhangjiakou high-speed railway and Beijing-Chongli Expressway were completed and went into services, the road network system was improved, and the transportation facilities were connected; the two places have coordinated in desertification control, water management, and gas management, and the regional environment has been significantly improved, realizing joint prevention and control of the regional environment; the construction of public facilities has been accelerated, and public services have been improved as a whole, realizing the joint development and sharing of public services. Several influential enterprises have settled in Yanqing and Zhangjiakou, and the development industries such as ice and snow and green energy have been accelerated and mutually reinforced. The Shougang Park in Beijing will become a "new landmark of urban revival," Yanqing will turn into a "most beautiful Winter Olympic City," and Zhangjiakou will be an "Asian ice and snow vacation destination." These three regions have become models of high-quality urban development promoted by the Winter Olympics.

Fifth, all preparations for the Games are aimed at benefiting the people. Raising people's living standards is an important part of sustainable development and also a natural result of the Winter Olympics. Over the past six years, seizing the development opportunities brought by the Games, Beijing and Zhangjiakou have accelerated the development of their infrastructure and facilities while fully improving public services. Industries related to winter sports have created more jobs for residents, made their lives easier and provided more development opportunities, thus improving people's sense of happiness and fulfillment. The promotion of winter sports has encouraged people to engage in sports and embrace a healthy lifestyle. Accessibility has been improved and a more inclusive society is quickly taking shape, helping people with disabilities to better integrate into society. Volunteer services are increasingly popular, which in turn contributes to a more civilized society.

Today, we would like to use this platform to release the Beijing 2022 Pre-Games Sustainability Report. The report summarizes our progress made on sustainability in preparation for the Games. The full text of the report is now available to download from the official website of Beijing's organizing committee. We hope you will check it out. The International Olympic Committee (IOC) and International Paralympic Committee (IPC) attached great importance and spoke highly of the report on sustainable development. President Thomas Bach and President Andrew Parsons have both sent congratulatory videos for the report.

That is the introduction. Thank you. 

Chen Wenjun:

Thank you, Mr. Li. Please watch the video by President Thomas Bach and President Andrew Parsons.

China.org.cn:

(Video playing)

Chen Wenjun:

We would like to thank President Thomas Bach and President Andrew Parsons for their heartwarming messages. Now the floor is open to questions. Please indicate the media organization you work for before raising a question. 

Asahi Shimbun:

After China won the bid to hold the Games, the number of people engaged in skiing began to rise, as did the number of ski resorts. To ensure the effective use of ski resorts, it is necessary to maintain the number of skiers. So after the Winter Paralympics, how will China continue to promote skiing? Thank you. 

Li Sen:

Thank you for your question. Promoting winter sports in China was one of the major goals for bidding and hosting the Winter Olympics and Winter Paralympics. Using the Games as a point of departure, China's winter sports have been growing rapidly in recent years. I'm not sure whether you have seen the latest statistics released by the General Administration of Sport of China, which show that 346 million people now participate in winter sports. By the end of 2020, China had built 654 standard ice rinks and 803 ski resorts of various kinds, both indoors and outdoors. The goal of "getting 300 million people involved in winter sports" has become a reality. Promoting winter sports is a long-term activity, not a short-term one. China has a huge population. Based on the population and development needs, the number of venues for winter sports is not that large. After the Games, such efforts will be strengthened and not be stopped. There will be ever greater achievements. Our most significant efforts are as follows:

First, policy guarantee. After we won the bid to host the Games, and since we started preparations for the Games, the policy environment for developing winter sports at the national and local level has been improving. There are a series of policies and measures. You may know that, at the national level, we released documents like the "Opinions on Vigorously Developing Winter Sports" and the "Opinions on Carrying out Healthy China Initiative," in which we outlined specific policies. At the local level, there are also some specific policies that a total of 26 provinces, autonomous regions and municipalities have now implemented. Take Beijing for example. The city released guidelines on promoting winter sports and seven supporting documents in terms of venue construction and popularization. Such policies will not come to an end after the Games. They are long-term policies and will be sustained well into the future. 

Second, cultivating young people. Young people are always the foundation and future of winter sports. Since we began preparations for the Games, with the joint efforts of education and sports authorities, we carried out activities that encourage millions of young people to participate in winter sports as well as the plan for winter sports on campus, which brings winter sports directly onto school campuses. This work is fundamental, as it integrates knowledge about winter sports into physical education curriculums. We formulated and implemented teaching plans for winter sports. Such measures will continue to be implemented at primary and middle schools. By 2020, we had 2,062 schools featuring winter sports and that number will reach 5,000 by 2025.

Third, venue and facility construction. Over the years, we have seen great progress in developing facilities across the country. After the Games, we will continue to promote the construction of venues and facilities, while also encouraging temporary facilities for winter sports in parks and urban squares, in line with local conditions. And we will also upgrade facilities and venues for winter sports, particularly the ski resorts that you have mentioned. We will improve the quality and service to meet people's varied needs for winter sports.

Fourth, winter sports activities. You may know that China has carried out a lot of winter sports activities in recent years, such as the National Public Ice and Snow Season and National Public Happy Ice and Snow Week. Many provinces and cities also have their own brand activities for winter sports, such as Beijing's "Happy Ice and Snow Season" and Zhangjiakou's public winter sports festivals. All these activities have become brand events for winter sports. These activities will not only continue after the Games but get even better.

Fifth, professional talent training. To meet the general public's needs for winter sports, local sports authorities are stepping up training for social sports instructors, or coaches for winter sports at the grassroots level. Beijing now has 23,000 instructors, while Zhangjiakou has more than 20,000. They have played an important part in promoting winter sports. After the Games, the number of such instructors will continue to grow, and they will provide more guidance in promoting winter sports.

All these measures will continue to promote the development of China's winter sports and meet the general public's needs for winter sports. Thank you.

CCTV:

In previous Olympics, there have been issues regarding post-Games use of the stadiums and venues and the use of unrenewable energy. What measures have been taken so that the 2022 Beijing Winter Olympics can tackle these issues? Thank you.

Li Sen:

Thank you for your good question. The utilization of venues after grand sporting events has been a difficulty across the globe. In this regard, we have been trying our best to deal with this problem throughout the process of bidding and preparation, and we will continue to do so after the Games are open. Six venues originally constructed for the 2008 Beijing Summer Olympic Games will be reused for the upcoming Winter Olympics. Based on the existing experience, we have made plans for using all newly-constructed venues after the Games. We have taken the post-Games use of venues into full consideration while planning and designing them. The costs can be reduced with coordinated planning and synchronized design. These arrangements can be summarized in the following aspects:

First, we will bid for and hold high-level sporting events at these venues and stadiums. The Beijing Winter Olympics will be held in world-class venues and stadiums. In preparing for the Games, the local sports authorities and the venue owners have established mechanisms to better communicate and cooperate with international winter sports organizations, which will enable us to continue to bid for and hold high-level international and domestic sporting events after the Winter Olympics, so as to boost stadium operations and promote the development of ice and snow sports.

Second, we will ensure that all those stadiums and venues are open to the public. They will not only hold competitive sporting events but also serve as places for the public to do physical activities. At the beginning of the planning and design of all the new Olympic stadiums and venues, we have given thorough consideration to their availability for the public after the Games. For example, the National Speed Skating Oval in Beijing, also known as the "Ice Ribbon," is an iconic venue with an ice surface of about 12,000 square meters. This is designed for the public's use in the future, as mainly the 400-meter outer track will be used in the long track speed skating. Moreover, its central part can be divided into two standard ice rinks and this is an innovation. The venue will allow 2,000 people to skate at any given time after the Games. Let's take another example, the National Bobsleigh and Tobogganing Center in Yanqing district, which hosts the world's 17th track for bobsleigh and tobogganing. These niche sports are relatively high-risk. So, we designed a special area in the lower region where the slope is gentler, making it possible for the public to experience this sport after the Games.

Third, we make efforts to ensure that the venues can be open year-round. Winter sports are sensitive to the seasons. Seasonality is not that obvious when it comes to ice sports, as most ice rinks are built indoors, and artificial ice is available all year round. In this regard, they can be open to the public or be used to hold grand sports events and leisure activities year-round. However, except in winter, it would be difficult to experience snow sports or hold such sports events in the snow sports venues in Yanqing and Zhangjiakou competition zones. Eyeing this, by taking advantages of their natural ecological conditions, we have made the venues that are located in the mountainous areas suitable for outdoor sports, such as jogging, cross country running, mountain biking, mountaineering and rock climbing. We have also stepped up efforts to boost the development of tourism, mountain resorts and the outdoor sports industry by making use of local cultural and historical advantages. Perhaps you've already been to the competition zone in Zhangjiakou. As a matter of fact, the Genting Snow Park there receives more visitors in spring, summer and autumn for leisure seeking than in winter for snow skiing.

Fourth, we make efforts to ensure the joint development of the venues and regions. The post-Games use of venues is not about the operation of a certain venue but to integrate its development with the development of local areas, which should be planned and materialized in an overall program. Take the Yanqing competition zone as an example, as the home of Winter Olympic venues, Beijing Expo Park and the Great Wall, it ramps up efforts to develop distinctive sports and cultural tourism, with developing integrated tourism as the main approach. Likewise, the Olympic venues in the Zhangjiakou competition zone are used in developing Zhangjiakou into a "Sports City" and a tourism destination in Asia for ice-and-snow tourism and resorts that receives visitors year-round and adopts an integrated approach in developing tourism. Moreover, we also step up efforts to promote synergies among the Olympic venues and winter sports resources in the three competition zones, and integrate them with the public ice and snow facilities and sports facilities, as well as the natural and cultural resources for tourism along the areas between Beijing and Zhangjiakou, so as to boost the development of the Beijing-Zhangjiakou sports and cultural tourism belt with the help of the Beijing-Zhangjiakou high-speed railway and the Beijing-Chongli Expressway, driving high-quality development of the surrounding areas. Such development synergies will thereby ensure that the Olympic venues will be used in a long-term, comprehensive and sustainable manner. Thank you.

TBS (Japan):

I have two questions. First, how much electric power is expected to be consumed during the Winter Olympics? Second, how much has been invested to make sure all energy consumed during the Winter Olympics are clean energy? Thank you.

Liu Yumin:

Thanks for your attention to the construction of the clean energy [system]. China has been contributing to building a community with a shared future for mankind and striving for sustainable development. We have made peak carbon emissions and carbon neutrality part of the overall development plans for an ecological civilization. We have followed the green Olympics ideas in the preparations. We utilize the host cities' advantages in terms of resources, and ensure power supplies for the Beijing Winter Olympics through the existing municipal power grids in the cities. In accordance with the national green power market trading rules, we have ensured that all venues are supplied with green power supported by the green power trading mechanism. By utilizing existing and previously planned power grids, we don't need to build new electric power facilities except for those transformer equipment and power distribution facilities which are necessary for the venues.

According to the calculations, all venues in Beijing, Yanqing and Zhangjiakou competition zones are expected to consume 400 million kWh of green electricity from June 2019 when the first green electricity transaction took place until the conclusion of the Paralympics. That will help save 128,000 tons of standard coal and reduce carbon dioxide emissions by 320,000 tons. 

Thank you.

Global Times:

Some Western media hype recently questioned if Beijing 2022 can meet green standards, alleging that it is hard to verify the green promises made for the Winter Games. What's your opinion on this? Thank you.

Yan Jiarong:

Thank you. As for the green standards you mentioned, I'd like to say that the Beijing Winter Olympics adheres to the standards set by the International Olympic Committee (IOC), as well as the sustainable standards set by the United Nations (UN). Beijing 2022 is the first Games that have implemented the Olympic Agenda 2020 throughout its bidding, preparing and hosting. It also plays an active role in meeting the UN Sustainable Development Goals. Upholding the principle to host a green Olympics, we strive to stage a sustainable Winter Games. There are many highlights in our efforts for Beijing's green Olympics, as Mr. Li Sen and Mr. Liu Yumin have just introduced. I'd like to add some more points. 

First, we have strengthened our strategic plans. Many foreign friends would say "you Chinese are good at long-term planning." The sustainability plan released by the organizing committee of Beijing 2022 and the IOC sets out a sustainable vision known as "Sustainability for the Future," and formulated 119 specific measures for positive environmental impact, new development for the region and better life for the people.

Second, we have adopted double-Olympic venues. As the other speakers said just now, we have made the best use of existing venues and facilities, which is another highlight in preparing for Beijing 2022. The National Stadium, dubbed the "Bird's Nest," will stage the opening and closing ceremonies of the Winter Games. The National Aquatics Center, known as the "Water Cube" during the 2008 Olympics, has become an "Ice Cube." The Wukesong Sports Center will be transformed for ice hockey events from a basketball stadium.

Third, we have implemented low-carbon emissions. Beijing 2022 has adopted multiple measures like low-carbon venues, low-carbon energy and low-carbon transportation to cut carbon emissions in preparing for and hosting the events, and achieve the ambitious goal of neutralizing all the carbon emissions generated during Beijing 2022.

Fourth, we have issued demonstrative standards. Beijing and Hebei province have jointly worked out the Evaluation Standards for Green Snow Venues as the green building standards for Winter Olympic snow venues, filling the gap at home and abroad. The sustainability management system of Beijing 2022 is unique to the Winter Olympics by integrating international standards including ISO20121, ISO4001 and ISO26000, making it the first of its kind in Olympic history to cover all the fields and scope in preparation for the Games. I believe it will set a good example for big events like the Olympics in the future. Thank you.

BRTV:

Reusing legacy venues from the Summer Olympics is a big characteristic of the Beijing 2022 Winter Olympics and Paralympics. Could you introduce how Beijing is making use of the venues from the Beijing 2008 Summer Olympics? Thank you.

Liu Yumin:

Thank you for your question. Beijing 2022 has made the most of the venue legacies from Beijing 2008. As Ms. Yan put it just now, the National Stadium, a venue for the opening and closing ceremonies of the Beijing 2008 Summer Olympics, will be reused to stage the opening and closing ceremonies of the 2022 Winter Olympics and Paralympics. The National Aquatics Center, also known as the "Water Cube," will become the "Ice Cube" for curling and wheelchair curling competitions. The National Indoor Stadium and the Wukesong Sports Center, two venues from Beijing 2008, will be reused for ice hockey competitions during the Winter Olympics. In addition to reusing these venues, we also have some legacy land from Beijing 2008. For example, we have transformed a temporary hockey field from the 2008 Games into a speed skating venue for the Winter Olympics. The lands for the Beijing Winter Olympic Village and the major media center were reserved in 2008. Moreover, regarding urban infrastructure, we have used a great deal of legacy infrastructure from Beijing 2008, including subway line 8 and line 10 as well as the corresponding power transformation and distribution facilities and water plants, to guarantee the Winter Olympics.

These reuses, especially the transformation of existing venues, are not a simple functional change. In fact, we still retained their original functions while injecting new functions for winter events. For example, the "Water Cube" can still be used as a swimming center after the Games, and the curling venue can be converted from ice to water in a few days. The reuse of venues, I think, is not a simple repetition, but rather to expand their functions, which is also a highlight of reusing the existing facilities. Thank you.

CAN:

I have two questions. There have been some concerns raised about large amounts of artificial snow being used for the Games and the impact this will have on water resources and energy as well. What is your response to this? My second question is also, given that there are many environmental initiatives are being tested at the Olympics, what steps are being taken to ensure these measures are not just short-term but to yield long-term results? Thank you.

Yan Jiarong:

Firstly, I'd like to answer your question about artificial snow in two aspects. The leader of Zhangjiakou will elaborate on the city's situation later. Regarding your second question about the environment and how to ensure the sustainable measures we adopted are a medium and long-term action instead of short-term efforts, I believe one of the directors general may give you a better answer.

As for the artificial snow, first of all, I would tell you that judging from the water consumption for the artificial snow, Yanqing and Chongli mountain area where the snow events for the Beijing Winter Olympics are mainly situated have abundant natural snowfall due to their unique climate conditions. In November 2021, there was large-scale snowfall in these two places that reached categorical blizzard levels, providing a prerequisite for cutting the amount of water used for artificial snow. In terms of actual water consumption, the water demand in the Yanqing competition zone during the Games accounts for 1.6 percent of the current total local water consumption, and 0.4 percent of local water resources. The water demand in the Zhangjiakou competition zone during the Games accounts for 9.8 percent of Chongli District's total water consumption and 2.8 percent of its water resources. Moreover, we have worked out measures to ensure water supply security, sewage treatment and water conversation so as to improve the carrying capacity of the competition zones' water resources and water environment. The ski fields also give priority to using collected and reserved natural rainfall and overland runoff as their water source for artificial snow. Our artificial snow system has adopted the world's most advanced efficient water-saving equipment and intelligent snowmaking system, which can maintain an optimal snowmaking efficiency subject to the dynamic external environment, to effectively avoid the waste of water resources. On the whole, artificial snow requires limited water and will not affect the local water security and ecological environment.

On the other hand, I want to point out that snowmaking is not entirely an emergency measure to cope with weather conditions. It is an objective requirement to ensure the quality of snow used in major international competitions. If we look at snow sports events around the world, snowmaking is adopted in almost all major international competitions to ensure the quality of snow. It is because compared with natural snow, the particle size, the water content, and the hardness of artificial snow can be changed. This way, it helps fit the needs of different competition venues and has more stable properties than natural snow. It is easier to make trails with consistent conditions after being compacted, smoothed and injected with water. Such courses can ensure fairer games to some extent.

Thank you.

Liu Haifeng:

Thank you for your attention to and care for snowmaking and water consumption in the Zhangjiakou competition zone. Let me add some words to it. Like Ms. Yan said just now, snowmaking is an important, fundamental work to ensure stable trails and fair competition conditions for athletes no matter in what order they will start. According to international practice, no matter what the weather is like in the host place, snowmaking is needed to make trails fit competition venues' technical specifications and requirements. According to searchable records, Lake Placid, Vancouver, Sochi, and Pyeongchang Winter Olympics used lots of artificial snow. Up to 90% of the snow used in the 2018 Pyeongchang Winter Olympics was artificial. Not long ago, we held the freestyle skiing and snowboard cross events of the 2021/22 FIS World Cup in Zhangjiakou, and up to 60% of the snow used in the trails in the Genting Snow Park was artificial. In a review after the events, the quality of the courses during the events was extensively recognized and praised by athletes from all countries.

To ensure snow services during the Beijing Winter Olympics, the Zhangjiakou competition zone has taken multiple precautionary measures and started preparing for snowmaking early. By collecting surface runoff and snowmelt, we have made advancements in water usage for snowmaking and eco-environment protection. Our efforts have been mainly embodied in three aspects: water conservation, water storage, and water-saving. In terms of water conservation, we have advanced eco-environment development in preparation for the Winter Olympics, with significant efforts in vigorous afforestation. As a result, the forest coverage of Chongli district has increased from 52.38% when the preparation started in 2015 to 71.53% today. The rate is already as high as 81.02% in the core area of the competition zone. Therefore, it can be said that our efforts have effectively conserved water. In terms of water storage, because of the excellent eco-environment and rich surface runoff in the Zhangjiakou competition zone, we have built 11 open reservoirs, underground snowmelt pools, and little landscape lakes among venues in the Genting Snow Park and Guyanshu venue clusters, totaling 530,000 cubic meters of water storage. These measures provide vital support in supplying water to make snow.

In terms of water saving, the two-venue clusters have adopted efficient, intelligent, and water-saving snowmaking systems and equipment that can dynamically maintain the most appropriate efficiency along with the changes of external environment. With this equipment, facilities, and smart system, we can save approximately 20% water. The reality has proven that all these measures have worked well and can fully meet the water needs for the snowmaking of all the Winter Olympic venues. Thank you.

Li Sen:

Your second question is how green technologies in staging Olympic events have been made more sustainable in practice. Green and environmentally friendly technologies have been widely used in the Winter Olympics, and there are many highlights in this respect. The previous speakers have briefed on it just now from various aspects, including the building of low-carbon venues, the adoption of carbon dioxide refrigeration technology in four ice rinks, and the construction of over-50,000-square-meter projects with ultra-low energy consumption—all these set good examples for developing low-carbon buildings to some extent.

We have realized the low-carbon energy supply. In other words, we have established the pilot demonstration project of Zhangbei renewable energy flexible DC power grid, which has ensured the integrated delivery of clean energy to the outside and ensured that the regular electricity demand of all the Winter Olympic venues is met by renewable energy. We have developed a low-carbon transportation system, which will ensure the use of clean energy vehicles during the games. In terms of competition zone protection, Ms. Yan mentioned the standards just now. All these are highlights of our innovative measures in terms of Winter Olympic technology, which will make immediate contributions to our urban and regional development and people's lives in the future, and has long-term benefits and promotional value. Some existing technologies that can be directly used for urban development, the Zhangbei flexible DC power grid, for example, will transmit renewable power resources to Beijing and its Yanqing district, and as a result, increase the proportion of renewable power resources used in Beijing and help China reduce carbon emissions and achieve peak carbon emissions and carbon neutrality. We use many clean energy vehicles, such as hydrogen and electric ones. These have boosted the development of relevant industries and will continue to be promoted and used after the games in our cities. Another point is the commercialization of scientific and technological achievements. We have many significant scientific and technological gains in our preparations for the Winter Olympics, especially in the construction of venues. For example, there are many innovative outcomes in green building, which will be applied to other venues and infrastructure in the future. Carbon dioxide refrigeration technology is one of them. It can be used in venues for ice sports and some large refrigeration facilities in the future in a safe, stable, reliable, and energy-efficient way.

We set long-term standards because there were no green building standards for snow sports venues before, be it in China or abroad. Therefore, to build more environmentally friendly and more sustainable venues for snow sports, Beijing, Hebei, and Tianjin have brought together their planning and construction and other relevant authorities to establish the standards for evaluating green snow sports venues. As a result, the standards have become a local yardstick in these three localities and will serve as a regulative guide for the future construction of snow sports venues. As for the sustainability management system for major events mentioned by Ms. Yan just now, we have worked with relevant departments in Beijing to transform it into a guide for assessing the sustainability of major events. Turned into a local guiding criterion, it will offer a regulative guide to hosting major events and competitions.

Thank you.

Beijing Youth Daily:

My question is about urban and regional development. Since China won the bid to host the 2022 Winter Olympic Games in 2015, many villages around the competition zones, such as Yanqing district in Beijing and Chongli district in Zhangjiakou, have boomed thanks to the Winter Olympics. With the construction of significant infrastructure, hotels, and venues, many changes have been made in these villages as well as to the life of their inhabitants. Are these changes sustainable? How can you demonstrate this? Thank you.

Yu Bo:

Thank you for your question and your concern about the work of the Yanqing competition zone. The Winter Olympic Games have indeed brought great changes to and played a driving role in the development of the surrounding areas, promoting Yanqing to speed up the construction of the most beautiful Winter Olympic City. In terms of achievements, Yanqing has made notable progress in the construction of infrastructure. The Beijing-Chongli Expressway and Yanqing branch line of the Beijing-Zhangjiakou high-speed railway have been completed and opened to traffic. Yanqing has completely broken transport bottlenecks through three expressways and a high-speed railway. Meanwhile, the energy structure of Yanqing district has also undergone profound changes through leapfrogging development of power infrastructure and the construction of its first gas pipeline. Notable progress has been made in industrial development. Yanqing has built world-class Olympic venues and pooled abundant ice and snow resources. Yanqing also has built many international brand hotels, with 18 star-rated hotels and nearly 12,000 beds. Meanwhile, Yanqing has created a homestay brand named "Yanqing Household" with more than 500 courtyard homestays and more than 1,000 star-ranked homestays managed in an orderly manner. The ice-snow tourism industry has grown significantly. Houheilongmiao Village, in the surrounding area of Yanqing district, has grown from a typical low-income village into a national key village for rural tourism. Employment has boomed, and income has increased significantly. We have provided training programs for 100,000 people, helping over 7,000 people find better quality jobs in the local area. We set up the Haituo Farmer Ski Team, with most of its members coming from Zhangshanying village near the competition zone. It now has nearly 100 farmer-turned ski members, of which more than 30 have obtained qualification certificates recognized by professional organizations and become professional ski coaches, referees, and athletes. This enabled local farmers to truly take ice and snow sports as a career, making a good start for local employment and income increases.

In terms of sustainable development, we have formulated the implementation plan and task list of post-competition utilization and industrial development with a high starting point and high standard, and all works have been conducted in an orderly manner. The Yanqing Olympic Zone has been officially approved by the International Olympic Committee (IOC) and will open to the general public in May 2022. The Yanqing Haituo Mountain area has been selected as one of the first national ski vacation destinations. We will continue to speed up the construction of the most beautiful Winter Olympics City, ensure development dividends brought by the Winter Olympics will benefit the people of Yanqing, and make efforts to build Yanqing into a paragon in Winter Olympics heritage utilization. Thank you.

Liu Haifeng:

Thank you for your question. Let me introduce the details of Zhangjiakou city. As you have mentioned, the Winter Olympics has brought about earth-shaking changes to the lives and work of the local people. This is mainly manifested in the following three aspects:

In terms of the living environment, the ecological environment has continued to improve. The Beijing-Zhangjiakou high-speed railway and the Beijing-Chongli Expressway have opened to traffic. Municipal facilities and the appearance of urban and rural areas have also been comprehensively upgraded. Chongli has witnessed tremendous changes and greatly enhanced people's sense of gain.

In terms of living standards, according to incomplete statistics, one out of every five people in Chongli is currently engaged in ice and snow-related work, and more than 30,000 people are participating in the ice and snow and tourism industry directly or indirectly, ensuring that people get a stable job and has greatly improved their quality of life.  

On a spiritual level, Chongli, as a city of the Winter Olympics, has become more and more closely connected with the international community, enabling people to have a stronger sense of pride and honor. It has created a positive atmosphere in which people participate spontaneously in building their beautiful hometown and actively serving the Winter Olympics. To make the dividends of the Winter Olympics benefit more people in a sustainable way is also the goal and direction of our work. In the next step, we will fully utilize the resources of the Winter Olympics.

First, we will take the initiative to plan the use of the venues after the Winter Olympics. The Zhangjiakou municipal government has identified 2022 as the year to promote the Olympic economy. We will implement a number of iconic, leading, and influential conventions, exhibitions, and forums with the aim of building Chongli into an international ice and snow tourism destination and high-end convention and exhibition center. At present, the "three venues and one Olympic Village" have signed cooperation agreements with relevant enterprises. We will hold more than 30 sports events and exhibitions throughout the year. Taizicheng Ice and Snow Town has also reached a cooperation intention on convention and exhibition with the relevant institutions in Beijing. We will hold high-level forums such as the "Arc of Ice and Snow" Chongli Summit this year. We will strive to turn the Olympic effects into economic benefits by vigorously developing new forms of business such as sports events, exhibitions, and forums. 

Second, we will vigorously enhance the role of snow and ice sports. We will continue to give full play to the leading role of the Winter Olympics cities. While making full preparations for various events, including the fourth Ice and Snow Games in Zhangjiakou, we will introduce a number of high-level domestic events to gather resources and popularity. We will further improve the development system of snow and ice sports, promote the popularization of snow and ice sports, and ensure that more than 2 million people participate in snow and ice sports during the whole snow season.  

Third, we will actively cultivate new business forms, which can increase people's income. We will adhere to integrated development guided by sports, empowered by culture, and driven by tourism. We will create a number of representative and influential tourism routes for the purposes of sports and leisure, study and team building, and health and wellness, promoting the integrated development of sports, culture, and tourism industries. This year, we will focus on improving leisure consumption infrastructure. We will actively introduce a number of chain stores and specialty restaurants, vigorously promote Olympic licensed products and Chongli's menu of Winter Olympics delicacies, and promote new forms of rural tourism such as characteristic homestays and specialty restaurants. We will strive to ensure that people have more stable jobs, increase income and become richer. Thank you.

Beijing Daily:

All venues will be powered by green electricity during the 2022 Winter Olympics, the first time in Olympic history. Where does the green electricity come from? How to ensure the safety and stability of green electricity? What technological breakthroughs have been made, and what is the current state of power operations? Thank you.  

Liu Yumin:

Thank you for your interest in green power. Green power is also known as green electricity, which refers to electricity converted from renewable energy by means of wind, hydropower and solar photovoltaic. During Beijing 2022, all venues will be powered by green electricity. The realization of green electricity is largely thanks to three aspects:

First, in terms of clean energy distribution, the green power supply for the Beijing Winter Olympics benefit from the coordinated development of the Beijing-Tianjin-Hebei region. Among the three competition zones, Zhangjiakou and Yanqing have abundant clean energy reserves. When visiting, you can see that there are many big windmills around the Guanting Reservoir in Yanqing, as well as in Zhangjiakou. These are wind power generation facilities that were built more than 10 years ago. In 2008, the Guanting Reservoir wind farm achieved a wind power generation breakthrough in Beijing for the first time. According to our calculations and estimates, Zhangjiakou's exploitable wind energy reserves exceed 40 million kilowatts and the exploitable solar energy resources reach 30 million kilowatts. In addition, the annual output of biomass resources is more than 2 million metric tons. So the reserves of renewable energy are very sufficient, which guarantees the supply of green electricity for the Winter Olympic venues.

Second, regarding the infrastructure integration, Mr. Li Sen just mentioned that the 500 kV flexible DC power grid in the Beijing-Tianjin-Hebei region has adopted many new, world-class technologies, as well as pioneered various other technologies. The DC grid network boasts the highest voltage level and the largest transmission capacity in the world. Through this power grid, we can transmit the green power from Zhangbei county to every venue across the three competition zones with minimal loss.

Third, during the operational processes, we have also achieved a complementary and coordinated system based on multiple energy sources. The surplus electric energy on the DC grid will be transported to the Fengning Pumped Storage Power Station constructed by the State Grid, one of its existing power facilities. When the demand for electricity becomes high, Fengning Pumped Storage Power Station will send the stored electricity to the grid, which is akin to backing up a large "power bank" for the entire network. Through energy complementation and coordination work, the power security of the Winter Olympic venues is guaranteed. Thank you.

Cover News:

The Yanqing competition zone has a special environment and is ecologically sensitive. As such, balancing the relationship between the construction of venues and the natural ecology poses a challenge for sustainable development. How can the Yanqing competition zone protect its ecology while undergoing construction? Likewise, ecological restoration work has been going on in the Yanqing competition zone. What is its current progress? Thank you.

Yu Bo:

You raised a very good question, and this is also a problem that we've been working to solve. The highest elevation within the core area of the Yanqing competition zone for the Winter Olympics is 2,198 meters above sea level while the lowest elevation is more than 300 meters. In the early stage of construction, the core area of the Yanqing competition zone was a mountainous area with no roads, no water, no electricity and no communication facilities. Transportation relied entirely on manpower, mules and horses. It was the most difficult to build among the three major zones of the Beijing Winter Olympics. In order to ensure sustainable development, the Yanqing competition zone has always adhered to the concept of "green Olympics," and the concept that lucid waters and lush mountains are invaluable assets throughout the entire process of venue construction. Ecological protection and the construction of the Winter Olympic projects have moved forward together. The construction took six years, however, the core design concept of "venues built among mountains and forest for an ecological Winter Olympics" became a reality from that blueprint.

First, we have completed the ecological restoration of the competition zone with a high standard. We hired an advisory group including 18 experts and professors from Tsinghua University and Beijing Forestry University, which is headed by Qian Yi, an academician at the Chinese Academy of Engineering. The group is divided into three panels: one for vegetation and landscape restoration, one for geological disasters and soil and water conservation, and another for hydrology and water environment. They conducted a baseline survey on flora and fauna resources in the competition zone as well as the 2,000-hectare surrounding area, and supervised and guided the ensuing ecological restoration work in the Yanqing competition zone. At present, the ecological restoration of the 2.16 million square meters of the Yanqing competition zone has been completed. The native trees have settled in their original place, the pristine subalpine meadows have returned, the wildlife corridors have been effectively established and the ecological environment of the competition zone has been wholly restored.

Second, animals and plants are well protected. In terms of plant protection, the venue construction adheres to the principle of "avoidance." We tried our best to protect and preserve the existing native trees on the site, and make way for natural secondary forests in the design of ropeways; in the case that the construction couldn't avoid the native plants, we resorted to near-situ and ex-situ conservation measures. In the competition zone, a total of five in-situ conservation areas were built, and 313 trees were preserved; two near-situ conservation areas were built, and 11,000 shrubs and grasses were transplanted there; an ex-situ conservation base of 300 mu and the Winter Olympic Forest Park covering an area of 480 mu were built, with 24,000 trees transplanted there. The survival rate of the transplanted trees is 90.7%. At the same time, we carried out topsoil stripping across 81,000 cubic meters. After construction was completed, the sites were covered by the original soil and the original appearance has been restored, so as to preserve the seed bank to the greatest extent and reduce the risk of biological invasion. In terms of animal protection, during the construction process, we established or left open wildlife corridors, reduced nighttime construction, installed artificial nests, and restored and rebuilt animal habitats. If we found newborn or injured wild animals, we took care of them in a timely manner. Since 2019, wild animals such as boars, badgers and gorals have been spotted many times around the competition zone, and in 2021, infrared cameras captured more than 14,000 valid photos and videos, monitoring and spotting 11 species of mammals – an increase of one species from 2019 – and 18 species of birds – an increase of six species from 2019. At present, there are 452 species of terrestrial wild animals from 95 families of 30 orders, which are distributed throughout Yanqing district, including 392 species of birds, 38 species of mammals, and 22 species of amphibians and reptiles. The ecological environment continues to improve, becoming the home of various wild animals and plants.

Third, we have promoted green and low-carbon recycling. All venues in the competition zone meet the three-star standard for green buildings. We promoted low-carbon management. For the first time in the history of the Olympic Games, all venues will be powered by green electricity. We promoted green transportation for the venues and more than 200 hydrogen energy buses have been delivered for use and will be put in the transportation service during the Games. We promoted the recycling of water resources so that reclaimed water that meets the standards after treatment can be used for road watering, green irrigation, toilet flushing, etc., which significantly improves the efficiency of water resource use. The Yanqing competition zone fully embodies the concept of "green Winter Olympics" and "low-carbon Winter Olympics."

Thank you.

China Arab TV:

Beijing has implemented environmentally-friendly technologies in transportation, electricity supply, and water and waste management to ensure a green Olympic Games, all of which set a big example for foreign countries to follow. What are the major challenges facing all of these preparations? Thank you.

Li Sen:

Thank you for your question. As you've mentioned, the "Green Olympics" is one of the four concepts that we are following to host the Winter Games. We have adopted many related technologies in terms of transportation, electricity supply, and water and waste management. My colleagues also spoke about this topic just now.

For example, we have managed to achieve low-carbon transportation. Beijing's competition zone is situated in the plains region, and vehicles there are either fully electric or powered by natural gas. Meanwhile, those in the Yanqing and Zhangjiakou competition zones are mainly powered by hydrogen fuel to meet the transport conditions of mountainous regions. Almost all passenger cars and nearly 80% of all vehicles are energy efficient or powered by clean energy. In terms of electricity supply, Mr. Liu made a detailed introduction just now. We managed to realize a 100% renewable electricity supply by transmitting renewable energy to the competition zones in Yanqing, and other competition zones in Beijing. This has also improved the local region's capacity for utilizing renewable energy.

In terms of water, we use surface water for snowmaking in Yanqing and Zhangjiakou competition zones, and the water is collected by harvesting rain and melting snow. Both of these competition zones are equipped with high-standard domestic sewage treatment facilities which will comprehensively collect and process sewage, then it can be reused.

As for waste management, following the principle of reducing waste at the source, recycling waste into resources and managing waste in a unified way, we have implemented unified management measures and garbage sorting. In fact, the management of waste is based on different stages. For example, for waste issues that occurred during the construction process, some of the rocks in the mountainous area in Yanqing could be directly used to make gabion walls and pave roads. Likewise, several once-deserted pile heads produced during the construction of the National Speed Skating Oval were reused as raw materials to build the stands of the Oval. As for recycling waste during the Games, we will follow the unified standard for waste management and strictly enforce garbage sorting. The collection, transportation, sorting and processing of waste will be conducted in a standardized manner.

All these eco-friendly measures for Beijing 2022 not only meet the requirements of hosting a "Green Olympics" and ensure a high-standard Games but also play a proactive role in future developments, including the development of cities and industries as well as people's wellbeing.

Today marks the 22-day countdown to Beijing 2022, and all preparation work is put in place. Regarding your question about the challenges, we believe that we have the capacity to host the Games as planned. We launched a domestic test series of snow and ice sports last February and April respectively and hosted a total of 10 test events for global athletes from last October to December. These test events are a testament to our eco-friendly measures including green energy vehicles, renewable electricity supply, water recycling and waste management, and prove that our technologies are very stable and reliable and meet the standards of hosting the competition. Thank you.

Chen Wenjun:

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

Southern Metropolis Daily:

We've learned that Beijing adhered to the principles of low-carbon and energy-efficient in constructing the Winter Olympic Village, and all the residential buildings have been certificated as three-stars green buildings. How were these buildings created? Were their construction costs high? Will the technologies be applied to other public facilities? Thank you.

Liu Yumin:

Thank you for your questions. A green building is a building that saves resources, protects the environment, and reduces pollution during its whole life cycle while providing people with healthy, suitable, and efficient space to realize the harmonious co-existence between man and nature to the most significant extent. A green building has characteristics of safety and durability, health and comfort, convenience, resource conservation and livability. Therefore, it is an essential measure for peak carbon and carbon neutrality in the construction industry.

In China, three stars are awarded to the highest-rated green buildings. China attaches great importance to developing green buildings and vigorously promotes green building practices. As with many other countries, China has included green building requirements into the general requirements for urban construction. Though standards differ among countries, the construction costs of the green buildings in the Winter Olympic Village all fall within a reasonable range. Therefore, the buildings are economical and meet the requirements for sustainable development.

We coordinated the construction of venues for Beijing 2022 throughout all procedures, including site selection, design and material selection, to fulfill the criteria of being both economical and effective. As a result, as Mr. Li Sen mentioned, all the newly-built indoor venues for the Games have met China's standards of three-stars green buildings.

Whether in China or other countries, most green building standards are formulated for indoor buildings. However, many Winter Olympic venues are outdoor buildings, including those constructed on snow. Therefore, we organized experts to develop a green building standard for sports venues on snow in Beijing, Tianjin, and Hebei province in the early construction process. Up to now, all the venues have met the standard. This regional standard has promoted the construction of green buildings for the Games and contributed to the development of the Winter Olympics in China and relevant international standards. It will also become a legacy of the Beijing Winter Olympics.

The Winter Olympic Village in Beijing has adopted many new green technologies. For example, the main residential building in the village adopts a prefabricated steel structure. This aseismic structure is light, environmentally friendly, and quick to build. It is also easy to control its quality.

A polyclinic needs to be set up inside the village according to the requirements. Therefore, this medical facility adopts a building envelope with greater thermal insulation and airtightness as a demonstration project of ultra-low energy-consuming buildings. In addition, highly efficient fresh air heat recovery technology helps minimize the need for heating and cooling the building while making good use of renewable energy.

The sound insulation and air quality of the interior spaces such as bedrooms and living rooms have been optimized to create a healthy and comfortable environment.

The roof of the building can host various outdoor activities. It helps improve the microclimate and offers the "Fifth Façade" for the urban environment. At the same time, solar panels installed on the roof can supply more than 70% of residential hot water.

We pay special attention to controlling carbon emissions during the construction and operation of the venues. We selected low-carbon materials and equipment through Building Information Modeling (BIM) analytics. With the help of an energy consumption monitoring platform, we coordinated carbon emission information across the village.

It is fair to say that the Winter Olympic Village has become a model living environment project, which is green, healthy, livable, intelligent, and sustainable. It can provide a healthy and comfortable living environment for athletes from all over the world and set an example for the development of the construction industry. The above-mentioned green building requirements have become part of the general requirements of China's construction industry. The technologies I mentioned just now will continue to be used in urban construction. As technologies mature and upgrade, I believe green buildings will play a bigger role in improving venues and urban construction.

Thank you.

Chen Wenjun:

Thank you to friends from the media and all our speakers. Today's press conference is with this concluded.

Translated and edited by Cui Can, Chen Xia, Gong Yingchun, Liu Sitong, Dong Qingpei, Zhang Junmian, Zhang Rui, Huang Shan, Zhu Bochen, Wang Yanfang, Zhang Liying, Li Huiru, Wang Qian, Wang Yiming, Yuan Fang, Duan Yaying, Yang Xi, Zhang Jiaqi, David Ball, Jay Birbeck, Tom Arnstein and Drew Pittock. 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:

Hu Wenhui, deputy commissioner and spokesperson of the China National Intellectual Property Administration (CNIPA), and director general of the CNIPA's General Affairs Office

Ge Shu, director general of the Strategic Planning Department of the CNIPA

Zhang Zhicheng, director general of the Intellectual Property Protection Department of the CNIPA

Lei Xiaoyun, director general of the Intellectual Property Utilization and Promotion Department of the CNIPA

Chairperson:

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

Date:

Jan. 12, 2022

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we will brief you on statistics concerning intellectual property and take your questions. At this press conference, we are joined by Mr. Hu Wenhui, deputy commissioner and spokesperson of the China National Intellectual Property Administration (CNIPA), and director general of the CNIPA's General Affairs Office; Mr. Ge Shu, director general of the CNIPA's Strategic Planning Department; Mr. Zhang Zhicheng, director general of the CNIPA's Intellectual Property Protection Department; and Ms. Lei Xiaoyun, director general of the CNIPA's Intellectual Property Utilization and Promotion Department.

Now, let's give the floor to Mr. Hu for a brief introduction.

Hu Wenhui:

Friends from the media, good morning. Thank you for your consistent attention and support for the work concerning intellectual property.

In 2021, all government bodies and departments involved in intellectual property work across China followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the guiding principles of the 19th National Congress of the Communist Party of China (CPC) and all plenary sessions of the 19th CPC Central Committee, and earnestly carried out the CPC Central Committee and the State Council's decisions on building China's strength in intellectual property as well as the 14th Five-Year Plan. We strive to pursue progress while ensuring stability and continue advancing reform and innovation. As a result, China's intellectual property work in 2021 has improved in terms of both quality and quantity, and all tasks and targets in the sector have been fully accomplished, providing strong support for people's pursuit of a better life. Based on all categories of statistics, our work in 2021 has the following four characteristics:

First, the innovation capacity and vitality of market entities have been further stimulated. As of the end of 2021, the number of domestic enterprises with valid invention patents amounted to 298,000, an increase of 52,000 over the previous year. These domestic enterprises had a total of 1.91 million valid invention patents, up 22.6% year on year, 5 percentage points higher than the national average growth rate. Specifically, valid invention patents held by high-tech enterprises reached 1.21 million, accounting for 63.6% of the total held by domestic firms. This reflects the growing creativity and innovation capacity of China's market entities.

Second, the pledge financing of patents and trademarks has seen a further increase in scale and become even more inclusive. The total amount of patent and trademark pledge financing in 2021 amounted to 309.8 billion yuan, and the number of financing projects in the field reached 17,000, benefitting a total of 15,000 enterprises. All three factors have increased about 42% year on year. Specifically, inclusive loans under the 10-million-yuan limit have benefitted 11,000 enterprises, accounting for 71.8% of the total firms benefitted. This fully demonstrates the inclusiveness of patent and trademark pledge financing in helping micro-, small- and medium-sized enterprises. 

Third, patent reserve in digital economy and medical sector has been further improved. Among the 35 fields of technology classified by the World Intellectual Property Organization (WIPO), IT methods for management, computer technology and medical technology rank as the top three fields in China with the fastest growth rate of the number of valid patents, up 100.3%, 32.7% and 28.7%, respectively, year on year. This shows China's growing capacity in patent reserve of core technologies, which will provide stronger support for the country's industrial upgrading and better benefit people's health and daily life.

Fourth, foreign enterprises have stronger confidence in China's protection of intellectual property. In 2021, a total of 110,000 invention patents were approved and authorized for overseas applicants in China, up 23% year on year. Overseas applicants registered a total 194,000 trademarks in China, up 5.2% year on year. Among them, authorized invention patents and registered trademarks applied for by U.S. enterprises increased by 32.1% and 17.3%, respectively. The number of intellectual properties held by overseas applicants in China keeps growing fast, indicating overseas enterprises' strong confidence in China's intellectual property protection and business environment.

These are the four characteristics of data on intellectual property in 2021. Specifically, the overall statistics on the creation, protection, utilization and relevant services of intellectual property in the aspects of patents, trademarks, geographical indications, and layout designs of integrated circuits by the end of 2021 are as follows:

First, patent. The number of valid invention patents from China reached 3.597 million, while the number on the Chinese mainland stood at 2.704 million. The number of high-value invention patents per 10,000 people reached 7.5, up by 1.2 from the previous year.

In 2021, the number of international patent applications filed in China via the Patent Cooperation Treaty (PCT) hit 73,000, while the number on the Chinese mainland reached 68,000. A total of 54,000 patent reexamination cases and 7,100 declarations of invalidation cases were closed. 

Second, trademark. The number of valid registered trademarks reached 37.24 million.

In 2021, China received 5,928 international trademark applications using the Madrid System. China has reviewed 164,000 trademark opposition cases, as well as 383,000 trademark review cases. 

Third, geographical indication (GI). China has approved 2,490 GI products and has seen 6,562 GIs registered as collective trademarks and certification trademarks. 

Fourth, integrated circuit layout design. A total of 52,000 integrated circuit layout designs were certificated.

Fifth, intellectual property application, protection and services. To date, China has established 57 intellectual property protection centers and 30 fast intellectual property service centers. The National Advisory Center for Overseas Intellectual Property Dispute Settlement has been established, with a total of 22 branch centers at the local level. 

In 2021, a total of four batches of 815,000 abnormal patent applications were identified. The withdrawal rate of the first three batches reached 97%. China has cracked down on 482,000 filings of malicious trademark registration.

Statistics show that, before excluding the price factor, the added-value of China's patent-intensive industries reached 12.13 trillion yuan in 2020, a year-on-year increase of 5.8%, accounting for 11.97% of GDP, 0.35 percentage points higher than last year.

By the end of 2021, the "one window" system for patent and trademark business was made available in all 31 provinces (autonomous regions and municipalities). The number of intellectual property information public service institutions at the provincial level reached 52, and that of city-level comprehensive intellectual property information public service institutions reached 104.

That is all for my introduction. We would now like to answer your questions. Thanks. 

Xing Huina:

Thank you, Mr. Hu, for your introduction. Now it is time for questions. Please indicate the media organization you work for before raising a question. 

CCTV:

In recent years, China has strengthened its work on patent and trademark pledge financing to support small- and medium-sized enterprises (SMEs). SMEs represent the "capillaries" of the national economy, and they have been under tremendous pressure amid the COVID-19 pandemic. We would like to know, over the past year, what work has the CNIPA done to support SMEs? Thanks.

Hu Wenhui:

Thank you, I will answer your question. To support SMEs and mitigate their difficulties, CNIPA has worked with related departments to issue, promote and implement a series of policies and measures, which provide strong support for the innovative development of SMEs in terms of cultivating entities, financing, transfer and application and improving services. These works are as follows:

First, we have expanded the intellectual property pledge financing work to mitigate the difficulties SMEs have faced in accessing financing. CNIPA, the China Banking and Insurance Regulatory Commission, and the National Development and Reform Commission launched the three-year campaign entitled, "Intellectual Property Pledge Financing to Benefit Enterprises in Industrial Parks," promoting intellectual property pledge financing services to benefit more SMEs, with an aim to cover "100 industrial parks and 10,000 enterprises." As I just mentioned, in 2021, China's patent and trademark pledge financing reached 309.8 billion yuan. Inclusive loans worth less than 10 million yuan have been issued to 11,000 enterprises, accounting for 71.8% of the total enterprises benefiting from the policies.

Second, we jointly launched a patent transfer plan to support patent technology transfers for SMEs. We worked with the Ministry of Finance to organize and implement a three-year special plan for patent transfers, in a bid to promote innovations from universities and institutions to transfer and utilize in SMEs. So far, a total of 30 provinces have launched the special plan to further promote the policies and measures that benefit more SMEs, among which eight provinces have received the first batch of subsidies and rewards.

Third, we have stepped up efforts to foster SMEs and increase their capacity for intellectual property management. We have encouraged SMEs to implement the national standard of enterprises intellectual property management and further optimize intellectual property management systems. We have scaled up our efforts to foster demonstration enterprises with advantages in intellectual property among SMEs. Among the total 5,729 national demonstration enterprises, the number of SMEs accounted for more than 76%. The research and development investment, the average number of in-force patents, and other indicators of those SMEs are higher than the national average. 

Fourth, we have enhanced intellectual property service to support the innovative development of SMEs. We have guided the construction of patent navigation service bases and promoted applying a series of national standards like the Patent Navigation Guidelines. We have pushed forward the establishment of the decision-making mechanism in patent navigation, thus effectively serving the innovative development of SMEs. By establishing trademarks and brands guidance stations, we have provided SMEs with convenient and high-quality guidance and services on trademarks and brands. Meanwhile, we have launched a campaign to "provide intellectual property services in a tour of ten thousand miles." With the critical tasks of attracting employment and entrepreneurship to the intellectual property service industry, supporting rural vitalization with geographical indications, and benefiting and helping enterprises, we have guided and supported nearly 10,000 local online and on-site activities, benefiting more than 15,000 market entities, mainly SMEs. In addition, we have sped up the building of the comprehensive intellectual property service window, providing all intellectual property services through the window. 

Going forward, we will continue to implement the decisions and arrangements of the CPC Central Committee and the State Council, launch the SMEs intellectual property strategic promotion project, and take multiple measures to bolster the innovative development of SMEs. Thank you. 

Tianmu News:

The quality of patent applications has drawn much attention. Mr. Hu just mentioned the statistics of combating irregular patent applications. What has been done in this regard? What about the achievements and plans?

Hu Wenhui：

Thank you for your question about cracking down on irregular patent applications. Let us invite Mr. Zhang to answer this question. 

Zhang Zhicheng:

Thank you for your question. To thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council, and take concrete actions to turn China from a country relying on imported intellectual property into one with solid innovative ability, and from quantity-orientation into quality-orientation, the CNIPA has continued to carry out patent quality promotion projects in recent years. It has scored outstanding achievements in firmly taking actions against irregular patent applications with no intent to protect innovation. In general, we have delivered in the four following aspects. 

First, we have actively instructed local governments to improve intellectual property policies and promote high-quality development by canceling subsidies and rewards for applying. 

Second, we have strengthened examination efforts at an early phase. Through combined manners of computer-assisted screening and manual checking, we have strictly examined and prudently confirmed cases suspected as irregular patent applications. 

Third, we promptly notified local authorities of the patent applications confirmed as irregular and requested local intellectual property management authorities to inspect the applications, and the applicants to withdraw them. We also protect the legitimate rights and interests of applicants in accordance with laws during the process. 

Fourth, we have intensified positive publicity and guidance to foster a sound environment for high-quality development, instructed applicants to apply for patents correctly and promoted quality.

As Mr. Hu just said, the CNIPA has organized a special campaign to crack down on irregular patent applications last year and notified local governments across China about a total of 815,000 irregular patent applications in four batches. By the end of last year, 97% of the notified irregular patent applications of the first three batches were withdrawn. Meanwhile, the CNIPA has intensified regulation in the patent agent industry. In the "Blue Sky" special campaign, we have heavily punished nine agent institutions dealing with irregular patent applications by qualifications revocation and agency suspension. As for 84 agencies whose cases per agent consistently exceeded five times the average level, we have organized intellectual property management departments in relevant provinces to conduct critical inspections. We have urged the local governments to impose an administrative penalty on 29 institutions with severe cases. 

Last week, the national meeting attended by heads of the country's intellectual property departments was held. In accordance with the deployment of the meeting, we will continue to crack down on abnormal patent applications. Next, we will continue working with local intellectual property management departments to improve the standardized working mechanism for cracking down on abnormal patent applications, promote the synergy between upper and lower levels of collaborative governance, increase efforts to crack down on abnormal patent applications, improve the quality of patent applications and accelerate efforts to build China into a country that is strong on intellectual property. Thanks. 

Economic Daily:

According to recently published statistics, in 2021, the amount of national patent and trademark pledge financing exceeded 300 billion yuan for the first time. How do you comment on this and what specific measures have been carried out? Thanks. 

Hu Wenhui:

Thank you for your question. Regarding pledge financing, we will invite Ms. Lei to answer the question.  

Lei Xiaoyun:

Thank you for your question. Mr. Hu just introduced the overall situation for national patent and trademark pledge financing in 2021. Last year, the amount of national patent and trademark pledge financing exceeded 300 billion yuan for the first time, and financial inclusion was also improved. It was the result of superimposing multiple factors including policies, measures, market environment and business demands, as well as giving full play to the initiatives of both central and local governments. 

First, the central government has attached great importance to intellectual property pledge financing. General Secretary Xi Jinping has repeatedly pointed out the necessity of increasing financial support for micro, small and medium-sized enterprises. The Fifth Plenary Session of the 19th CPC Central Committee proposed improving the financial support innovation system. The Central Economic Work Conference emphasized guiding financial institutions to increase support for the real economy, especially the technological innovation of small and micro-sized enterprises. The Outline for Building China's Strength in Intellectual Property and the 14th Five-Year Plan proposed developing intellectual property finance in an active and steady manner. The executive meeting of the State Council discussed and made arrangements for intellectual property pledge financing. 

Second, the financing demands of technology-based micro, small and medium-sized enterprises have been increasing. Micro, small and medium-sized enterprises have been an important force for stabilizing growth, promoting employment and safeguarding people's livelihood. Against the backdrop of COVID-19, micro, small and medium-sized enterprises have been under enormous pressure and faced many difficulties. Particularly, many technology-based enterprises in the start-up stage, which have strong innovation capacity and solid growth potential, have been eager to obtain financial support with "light assets" such as patents and trademarks to achieve better development.

Third, we should implement multiple measures, combine details, analyze the overall situation and make joint efforts. In terms of policy guidance, we should follow the deployment of the State Council. The CNIPA has joined the China Banking and Insurance Regulatory Commission (CBIRC) and the National Copyright Administration in issuing the Notice on Further Strengthening Intellectual Property Pledged Financing. The Notice establishes specific measures such as separate credit plans, specialized evaluations and incentive mechanisms, as well as loosening non-performing loan ratios. The Notice on Promoting and Regulating the Operation of Intellectual Property Rights, which prioritizes strengthening financial services for intellectual property rights, has also been issued. The CNIPA, the CBIRC and the National Development and Reform Commission (NDRC) have jointly launched a three-year campaign entitled, "Intellectual Property Pledge Financing to Benefit Enterprises in Industrial Parks," and provided guidance to local authorities for bank-enterprise matchmaking activities. In terms of optimizing services, the Measures for Registration of Pledge of Patent Right has been revised, providing online registration of intellectual property pledges for financial institutions on a trial basis. We have jointly provided guidance with relevant departments for building a national intellectual property pledge information platform to gather information on patent and trademark pledges and financial products. In terms of bank-enterprise cooperation, we have conducted strategic cooperation with Bank of China and China Construction Bank to guide the development of special products for intellectual property pledges.  

Next, in accordance with arrangements made by the central government, we will continue to promote intellectual property pledge financing to provide better services for innovative small and medium-sized enterprises and provide support for the high-quality development of the real economy. 

Thanks.

China Intellectual Property News:

The establishment of an open licensing system has been added to the newly amended patent law. Why did the authorities create such a system? What positive outcomes have been achieved since the system took effect more than six months ago?

Hu Wenhui:

Thanks for your questions. I'd like to take the question regarding the open licensing system. As you said, it was revised according to China's national realities while also learning from the experience of foreign countries. The open licensing system was set up to promote the enforcement and application of patents, and it works in the following three aspects: 

First, it facilitates the transmission of patent license information. The CNIPA announcements regarding the patent licensing act as a bridge between patentees and licensees, making it easier for both parties to reach each other.

Second, it ensures patent licensing negotiations are more efficient. The removal of complicated negotiations makes it easier for patentees and licensees to reach an agreement over patent licenses, thereby lowering the patent licensing costs. 

Third, it reduces the risks amid patent license transactions. There are mechanisms to disclose patent license information and handle patent disputes in the open licensing system, allowing the licensees to comprehensively understand the licensing conditions and other information in advance.

The open licensing system has drawn the broad attention of the patentees and people from all walks of life over the past more than a half year. According to our statistics, the CNIPA has received 608 open patent license statements, 572 of which are invention patents filed by 110 patentees from 24 provinces and equivalent administrative units .

To ensure the implementation of the patent licensing system, the CNIPA has also made efforts such as releasing statistical data of the patent royalties and developing assessment criteria, laying a solid foundation for the smooth operation of the system.

Going forward, we will continue to promote the enforcement and application of patents and ramp up efforts in the following three aspects: First, we will ensure that services in terms of license statement submission, information disclosure, and filing will become more convenient. Second, we will improve the services regarding the pricing of patent royalties and the transfer of patent licenses under the framework of the special plan to promotes the application of patents, thereby encouraging more people to make better use of the system and patents. Third, we will strengthen regulation and supervision and crackdown on the practices of counterfeiting licenses to avoid or reduce the annual fees in accordance with the laws and regulations. Moreover, we will fulfill the duty of handling the patent disputes to create a favorable environment. Thank you. 

ThePaper.cn:

In December of last year, the United States Patent and Trademark Office (USPTO) imposed sanctions against a trademark agency in Shenzhen, invalidating more than 15,000 trademarks the agent filed. What is your comment on the U.S. sanctions? Is there any problem with the agency? What measures have the CNIPA taken to respond to the issue? Thank you.

Hu Wenhui:

Thank you for your questions. I'd like to invite Ms. Lei to answer it.

Lei Xiaoyun:

Thank you for your questions. We've learned about the U.S. announcement. Media outlets and experts have made objective analyses on the steady growth of trademark applications in the United States from Chinese applicants. Most of them believe that the rapid increase in trademark applications in foreign countries is mainly because that the rapid development of China's cross-border e-commerce, which has pushed more Chinese products to meet the sales requirements of Amazon and other e-commerce platforms in the United States. 

As Chinese companies have become increasingly global in recent years, market entities' demand for intellectual property services has also surged, which therefore triggered rapid development of the intellectual property agency sector. In order to ensure the rights and interests of the applicants, we have stepped up efforts in the "Blue Sky" campaigns among other multiple measures to tighten regulation on trademark agents.

First, we launched a self-examination and rectification campaign and collected integrity commitments. Approximately 23,000 trademark registration agencies completed self-examination of key rectification issues and submitted their reports.

Second, we cracked down on malicious trademark registration activities in a timely manner. More than 130 such cases were investigated and punished.

Third, we strengthened supervision of major trademark registration cases and severely cracked down on acts that disrupted industry order. Three trademark registration agencies were ordered to cease related operations.

Fourth, we regulated platform-based trademark registration agencies and trading behavior through multiple means, such as offering administrative guidance, making regulatory talks for self-correction, suspending operations for self-rectification, and giving administrative penalties. The trading of 2.07 million trademarks suspected of being registered with malicious intention was withdrawn.

As for the Shenzhen-based agency you just mentioned, during a special crackdown campaign last year, the trademark law enforcing department imposed administrative penalties on the agency and its person in charge for false advertising and using illegal means to solicit business in China.

Next, we will fiercely crack down on violations of laws and regulations within trademark registration agencies, continue to improve the order of trademark agency industry and stimulate the vitality of trademark agency services, so as to provide strong support for comprehensively strengthening the protection and utilization of intellectual property. Thank you.

China Daily:

In China's 14th Five-Year Plan (2021-2025) and the Long-Range Objectives Through the Year 2035, the "number of high-quality invention patents per 10,000 people" was set as a major social and economic development goal for the first time. How is the goal achieved now? What does it indicate? Thank you.

Hu Wenhui:

Thank you for your questions. I would like to invite Mr. Ge Shu to answer the questions on high-value invention patents per 10,000 people.

Ge Shu:

Thank you for your questions. As Mr. Hu just noted, by the end of 2021, the average ownership of high-value invention patents on the Chinese mainland reached 7.5 patents per 10,000 people, up 1.2 over the previous year. The number of high-value invention patents per 10,000 people aims to objectively evaluate China's innovative development and guide the transformation of intellectual property work to become an quality-oriented one. The number is an anticipatory goal. How it is achieved primarily depends on how market entities play their role. According to statistics of 2021, China's scale of high-value invention patents expanded steadily, and the structure of high-value invention patents was further optimized. This ensured a good start to the 14th Five-Year Plan (2021-2025). It can be shown in the following aspects:  

First, the reserve of patents for high-tech and strategic emerging sectors was continuously strengthened. By the end of 2021, the number of invention patents for high-tech and strategic emerging sectors was 792,000 in China (excluding Hong Kong, Macao and Taiwan), up 114,000 over the end of the 13th Five-Year Plan period (2016-2020). Industries' independent innovation capacity strengthened continuously.

Second, the number of valid invention patents effective for a long period of time increased rapidly. By the end of 2021, the number of valid invention patents effective for more than 10 years was 323,000 in China (excluding Hong Kong, Macao and Taiwan), an increase of 27.7% over the previous year, contributing 11.9% of the national GDP, up 0.6 percent point over the end of the 13th Five-Year Plan period (2016-2020).

Third, innovators' capability of going global improved continuously. By the end of 2021, the number of China's valid invention patents possessing overseas patent family rights was 83,000, an increase of 21.8% over the previous year. Enterprises were the main innovators and owned nearly 90% of them.

Next, the CNIPA will focus on implementing the plan of building a major intellectual property country and implementing the 14th Five-Year Plan (2021-2025), make our targets more quality-oriented and value-oriented, fully unleash the creativity of the society, and vigorously strengthen the quality of intellectual property creation, so as to use high-quality intellectual properties to facilitate high-quality economic and social development.

Thank you.

Ta Kung Pao and Wen Wei Po:

We have noted that the CNIPA has issued data on intellectual property services in its annual statistics for the first time. What are the considerations behind this data release? What progress has China made in providing intellectual property public services over the past year? Thank you.  

Hu Wenhui:

Thank you for your question and your long-term interest in intellectual property-related work. Indeed, this is the first time we have officially released data on intellectual property public services in our annual statistics. So let me brief you on this. 

In recent years, according to decisions and arrangements of the CPC Central Committee and the State Council on reforms to streamline administration and delegate power, improve regulation, and upgrade services, the NIPA has strengthened intellectual property public services and issued a guideline in 2021 on deepening the reforms mentioned above in the intellectual property field. This guideline includes 16 reform measures of six aspects to promote comprehensive progress in this regard.

First, we have deepened reforms to facilitate patent and trademark registration applications. As I mentioned earlier, the "one-window" service for patent and trademark business is now provided in 31 provinces (autonomous regions and municipalities). At the same time, we continued to promote the online completion of the whole process of patent pledge registration. Furthermore, we have advocated the notification and promise principle in the process of patent and trademark exclusive right pledge registration. The measures of reform on notification-promise mechanism for licensing and approving agencies' operations have been replicated and applied nationwide. In addition, in terms of the review cycle, in 2021, the review cycle of high-value invention patents was reduced to 13.3 months, the average review cycle of invention patents was decreased to 18.5 months, the average review cycle of trademark registration remained stable at 4 months, and the general trademark registration cycle was reduced to 7 months.  

Second, we have made intellectual property public services more standardized, equitable, and accessible. Not long ago, the NIPA issued a list of intellectual property public services, which includes the online and offline access paths for 49 services in three categories of intellectual property application, management, and information. As a result, the intellectual property public service requests can be accepted without discrimination and processed with the same standard based on the list.  

Third, we have accelerated the establishment of an intellectual property public service system that is convenient for and beneficial to the people. As I mentioned earlier, in 2021, China's intellectual property information service institutions achieved full coverage at the provincial level, with 52 provincial-level institutes and 104 prefecture-level comprehensive institutes. At the same time, we have jointly set up 101 technology and innovation support centers with the World Intellectual Property Organization, built 80 national intellectual property information service centers in universities with the Ministry of Education, and filed the first batch of 88 national intellectual property information public service entities.  

Fourth, we have enhanced infrastructure construction for IT-based and intelligent intellectual property. We have further optimized the functions of the intellectual property public service network and advanced its connection with websites of governments at all levels, including the CNIPA's official website, as well as the technology and innovation support centers and the websites of the intellectual property information service centers in universities mentioned above and other resource platforms. We have cooperated with the National Development and Reform Commission and other departments to guide the establishment of the intellectual property pledge information platform, achieving "one-stop inquiry" and "one-window display."

Fifth, we have beefed up efforts to open and share intellectual property data resources. We opened 10 additional types of intellectual property data to the public. We provided the data of China's layout-designs of integrated circuits for the first time, realizing batch downloading of the data of 45 kinds of Chinese and foreign patents, trademarks, and layout-designs of integrated circuits. The European Union Trademark Search System was also launched to provide the public with foreign trademark information search services for the first time.  

A few days ago, the CNIPA issued the 14th Five-Year Plan for intellectual property public services, the first five-year plan in this field. The plan will render the intellectual property public services more accessible and convenient and comprehensively support and efficiently serve the building of a strong country for intellectual property rights. Thank you. 

Cover News:

Trademark squatting with "Lake Changjin" and "Quan Hongchan" received significant attention. Data on the fight against malicious trademark registrations last year was also mentioned just now. What measures were taken in the previous year to combat malicious trademark squatting and what progress was achieved?

Hu Wenhui:

Thank you for your questions. Mr. Zhang Zhicheng will answer them.

Zhang Zhicheng:

Thank you for your questions. As you mentioned, incidents involving malicious trademark applications received much public attention. The CNIPA has attached great importance to solving the problem and taken multiple measures, such as improving regulations, setting up lexicons as examination guides, dealing with applications by type, and launching special actions, to crack down on trademark squatting and build a market environment featuring good faith. In 2019, we formulated and issued Several Provisions on Regulating Trademark Registration Applications. The regulation stipulates that a bad-faith application for trademark registration shall be rejected and invalidated according to the law and that the applicant shall be given administrative punishment such as warnings and fines based on the circumstances by the market regulatory department at or above the county level at the place where the applicant is located or where the violation occurs.

In early 2021, the CNIPA issued the Special Action Plan for Combating Malicious Trademark Squatting. The plan identified ten acts targeted during the special action, including maliciously squatting the names of public figures, well-known works, or character names with a relatively high reputation. Relevant case clues would be transferred to local intellectual property offices. As Mr. Hu mentioned, the CNIPA combated 482,000 malicious trademark registration applications throughout last year and rejected 1,111 applications involving trademark squatting with names including "Lake Changjin" and "Quan Hongchan." The CNIPA also announced 1,635 registered trademarks invalid and transferred 1,062 clues of cases involving suspected significant adverse consequences and malicious trademark registration to local authorities. Thanks to the measures, a tough position has been adopted across society in cracking down on malicious trademark registration.

In addition, as Ms. Lei mentioned, the CNIPA has intensified efforts in combating malicious squatting by trademark agents. For example, we organized local authorities to investigate 24 cases where trademark agents attempted to snatch buzzwords for the Olympic Games as trademarks maliciously and imposed administrative punishment on 13 cases. For two trademark agents involved in major severe squatting cases, we directly imposed an administrative penalty and stopped their business. In addition, we summoned 13 platform-based trademark agents for talks, guiding them to establish mechanisms for screening malicious trademark squatting and preventing the act and other violations of laws and regulations.

In the near future, the CNIPA will publish some typical cases of malicious trademark squatting on its official website and WeChat account to maintain long-term deterrence and ensure market and legal environments featuring fair competition and good faith for all market entities.

Thank you.

China Economic Information Service (CEIS, affiliated with Xinhua News Agency):

China's patent-intensive industries have made relatively fast progress against the backdrop of COVID-19. Could you elaborate on their features and current status based on the just-released data?

Hu Wenhui: 

Thank you for your question. I'd like to invite Mr. Ge Shu to answer.

Ge Shu: 

Thank you for your question. Globally, patent-intensive industries, featuring outstanding innovative capacity and strong market competitiveness, have provided strong support for high-quality socio-economic development in innovation-oriented countries. Cultivating and expanding these industries is a significant measure to push forward the integration of intellectual property into innovative development and promote high-quality economic development.

In order to better monitor the growth of patent-intensive industries, the NIPA and the National Bureau of Statistics jointly established a mechanism for the accounting and release of the added value for these industries. Statistical data shows that the growth characteristics of patent-intensive industries are as follows:

First, patent-intensive industries have strongly driven China's economic growth. Data released by Mr. Hu just now shows that China's overall added value of these industries exceeded 12 trillion yuan, up 5.8% year on year (without deducting the price factors), contributing 24.6% to GDP growth. Its proportion in GDP rose 0.35 percentage point compared with last year.

Second, patent-intensive industries show a strong capacity for risk resistance and robust resilience in development. In spite of the big socio-economic impact of the COVID-19 pandemic in 2020, the added value of the information and communication technology service industry, medical and pharmaceutical industry, as well as R&D, design and technology service industry rose 15.7%, 10.1% and 5.9% respectively year on year, becoming new engines of growth.

Third, patent-intensive industries boast strong innovative capacity and rapid growth in patent reserve. The authorized invention patents in the information and communication technology service industry and medical and pharmaceutical industry increased around 50% year on year. The fast growth of patent reserves in digital economy and medical sectors, among others, has strongly supported the rapid development of relevant industries.

The 14th Five-Year Plan for Protection and Application of Intellectual Property Rights proposed the task of cultivating patent-intensive industries. By the end of 2025, the added value of patent-intensive industries is expected to account for 13% of GDP. Next, with focus on the implementation of the task, the CNIPA will continue to cultivate and expand patent-intensive industries and push forward the deep integration of intellectual property with industries, thus promoting the transformation of intellectual property into real productivity and reinforcing the new engines of high-quality economic development. Thank you.

CNR:

With the 2022 Winter Olympics and Paralympics approaching, what has the CNIPA done to protect intellectual property associated with the Olympic Games? Thank you.

Hu Wenhui:

Thanks for your question. I will answer this question. General Secretary Xi Jinping emphasized that the Beijing Winter Olympics and Paralympics are major events for the Party and the country. Furthermore, a successful Beijing 2022 is China's solemn commitment to the international community. Therefore, making good preparations for the Beijing Winter Olympics and Paralympics is an honor and an important mission. The CNIPA has thoroughly implemented the guiding principles of General Secretary Xi Jinping's important instructions, attached great importance to the protection of intellectual property associated with the Olympics, actively deployed and implemented relevant work, and strived to provide a solid guarantee for a wonderful, extraordinary, and outstanding Olympic Games. I will briefly introduce our work in four main areas:

First, we have consolidated the foundation of work and promoted complete protection. We have announced the protection of 63 Olympic symbols submitted by the Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games, including the emblem, name, abbreviation, mascot, and slogan. At the same time, we have strengthened the protection of patents and trademarks for the emblems and torch designs of the Beijing Winter Olympic and Paralympic Games, providing complete protection of intellectual property associated with the Games.

Second, we have highlighted the key points of protection and enhanced the effectiveness of regulation and crackdown on intellectual property infringement. On the one hand, following the Regulations on the Protection of Olympic Symbols, we have promoted the timely release of information on licensees of the protected Olympic symbols, effectively supporting the enforcement of administrative law. On the other hand, together with the State Administration for Market Regulation (SAMR), we have issued a special action plan for protecting the intellectual property associated with the Olympic Symbols of the Beijing 2022 Winter Olympics and Paralympics, according to which a special nationwide campaign has been ongoing since mid-October last year to June this year.

Third, we have strengthened supervision to see responsibilities fulfilled locally. In collaboration with the SAMR, we have conducted special investigations in the Beijing and Zhangjiakou competition zones and various venues. For example, not long ago, some officials of the CNIPA went to Chongli district and conducted a special investigation on the intellectual property protection associated with the Olympics to ensure that the relevant protection work was practical and to provide guarantees for the smooth development of the Beijing Winter Olympics and Paralympics.

Fourth, we have underlined the publicity and training of intellectual property protection to improve the ability of relevant staff. For example, in 2020 and 2021, we held special training sessions, organized in both online and offline format, on the improvement of abilities to protect intellectual property associated with the Olympics for a total of 1,100 people, which effectively improved the professional capacity of personnel who are responsible for intellectual property protection and further publicized relevant knowledge.

Next, the CNIPA will organize all localities to strengthen further the protection of intellectual property associated with the Olympics, strictly crack down on infringement before the competition, enhance the coordination during the competition, and maintain a tough stance against intellectual property infringement. We will help ensure a successful Winter Olympic and Paralympic Games with these efforts.

Thank you. 

Brazilian newspaper O Globo:

Could you talk a little bit about China's position on intellectual property on public health issues, especially on COVID measures, not only vaccines but the testing for example. 

Hu Wenhui:

Thanks for your question. As many are concerned, we have attached importance to intellectual property related to the COVID-19. The CNIPA has launched a special green channel for quick review of patent applications related to the COVID-19. For intellectual property information services related to the COVID-19, we have also specially set up a professional service website for the public and professionals to inquire about relevant information. In this way, we have done our part to support the development of vaccines and the prevention and control of the pandemic. That's all I have to say in regards to that topic. Thank you.

Xing Huina:

Thank you, Mr. Hu, and thanks to the other three speakers. Today's press conference is now concluded. Thank you, journalists from the media. Goodbye, everyone.

Translated and edited by Cui Can, Liu Qiang, Liu Jianing, Zhang Rui, Gong Yingchun, Li Huiru, Wang Mengru, Chen Xia, Xu Xiaoxuan, Huang Shan, Wang Yiming, Yan Xiaoqing, Zhou Jing, Wang Qian, Zhu Bochen, Yuan Fang, Zhang Liying, David Ball, Jay Birbeck, and Drew Pittock. 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:

Wang Zhenmin, professor in the School of Law and director of the Center for Hong Kong and Macao Studies at Tsinghua University, and deputy head of the Chinese Association of Hong Kong and Macao Studies

Han Dayuan, professor in the Law School at Renmin University of China, and member of the Hong Kong Basic Law Committee of the Standing Committee of the National People’s Congress

Zhi Zhenfeng, researcher with the Institute of Law and the Center for Taiwan, Hong Kong and Macao Studies at the Chinese Academy of Social Sciences

Chairperson:

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

Date:

Dec. 27, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press briefing being held by the State Council Information Office (SCIO). Recently, the SCIO has issued a new white paper titled "Hong Kong: Democratic Progress Under the Framework of One Country, Two Systems." Today, we are very glad to have invited three experts to introduce relevant information and answer your questions. They are Mr. Wang Zhenmin, professor in the School of Law and director of the Center for Hong Kong and Macao Studies at Tsinghua University, and deputy head of the Chinese Association of Hong Kong and Macao Studies; Mr. Han Dayuan, professor in the Law School at Renmin University of China, and member of the Hong Kong Basic Law Committee of the Standing Committee of the National People's Congress (NPC); and Mr. Zhi Zhenfeng, researcher with the Institute of Law and the Center for Taiwan, Hong Kong and Macao Studies at the Chinese Academy of Social Sciences.

Now, I will give the floor to Mr. Wang Zhenmin.

Wang Zhenmin:

Friends from the media, ladies and gentlemen, good morning. I am very glad to be here at today's press briefing. The word "press briefing" is "chuifeng" in Mandarin, similar to "chuishui" in Cantonese. "Chuifeng" and "chuishui" can be combined into "chui feng shui," which implies that we have good feng shui. This March, the NPC and its standing committee improved Hong Kong's electoral system and formed a new democratic electoral system. Under the new system, the subsector general election for the Hong Kong Election Committee and the election of the seventh-term Legislative Council (LegCo) were held this year. On the day after the LegCo election, the SCIO issued a white paper titled "Hong Kong: Democratic Progress Under the Framework of One Country, Two Systems." The other two speakers and I have studied the Hong Kong question for a long time. Many experts and scholars studying the development of Hong Kong's political system have carefully read this white paper. It's my great pleasure to have the opportunity today to share with you our understanding of the white paper and relevant questions, and exchange views with you on Hong Kong's democratic progress.

The white paper, which focuses on Hong Kong's democratic progress, is the second to be issued by the Chinese government on the Hong Kong question. It comes at an opportune time and has great significance and far-reaching impact. The document offers a panoramic overview of the development of Hong Kong's political system over the past 180 years since British troops occupied Hong Kong Island in 1841, and particularly over the past 40 years. Full of facts and reasoning, the white paper presents both narration and comments, and combines explanation and argumentation. The document organically connects many seemingly isolated historical events and stories, and clarifies the historical and logical threads running through them, thus enabling readers to temporarily put aside current affairs at the time and review the extremely bumpy and complicated development process of Hong Kong's political system from a historical viewpoint. The white paper helps uncover the thick layers of history and dispel the long-lingering clouds of lies and rumors, so that readers can find the essence through phenomena, and grasp the truth and the whole picture of events. I believe that the document will truly help the public understand the merits of relevant matters, and make more objective, fair and fact-based judgments on Hong Kong's democratic progress under the framework of One Country, Two Systems. The white paper tackles problems at their roots, reveals the truth, and differentiates right from wrong, thus giving people inspiration and confidence.

In preparation for today's conference, I talked to some Hong Kong youth who are living in Beijing, asking them about their views on the white paper. Some of my Hong Kong friends also called me to share their ideas. It can be said that they have the best say in this regard. They said that in the past, they felt Britain was so good, as Britain and the United States were more democratic and seemed to be helping Hong Kong. After reading the white paper, they understand that the colonial rule was, in essence, dictatorship and had nothing to do with democracy. Over a long period, Britain hadn't exercised democratic rule in Hong Kong. But the British government rushed to "develop democracy" in Hong Kong in the very short remaining period of the colonial rule. What was the intention? Whose benefit was it for? The purpose was obvious to everyone and could deceive nobody. The white paper has revealed their hidden story. Those who didn't exercise democracy now in turn blame those who develop democracy, finding fault with the latter's practice. Is that logic? Certain countries have always taken the Sino-British Joint Declaration as a tool to meddle in Hong Kong affairs. I bring the text of the joint declaration with me. After repeatedly reading the text, I can't find wording such as "democracy" or "universal suffrage." China has been criticized for violating the joint declaration. But there's no mention of universal suffrage or democracy in the joint declaration. The joint declaration is not a document determining what electoral system would be implemented and what kind of democracy would be practiced in Hong Kong after its return to the motherland. It only specified that the government of the United Kingdom would restore Hong Kong to China, as simple as that. After the handover, what political system and electoral system would be implemented in Hong Kong are purely China's internal affairs. No country will discuss with other countries what kind of political system or what kind of electoral system would be implemented. I also read the Hong Kong Letters Patent and Hong Kong Royal Instructions promulgated during British rule and couldn't find anything relevant to democracy. We can find in those two documents that the LegCo members were appointed or removed by the governor with the approval of the British government and should hold their offices at the authority's pleasure. How could that be democracy? The system of democracy in Hong Kong was established after its return to the motherland in accordance with China's Constitution and the Basic Law of the HKSAR. That's the fact and truth. If you are interested, you may study the above-mentioned documents related to Hong Kong.

Even if in terms of human rights and the rule of law, the relevant situation is much better in Hong Kong after its return than in those countries which point the finger at it. Hong Kong ranks higher than those countries on the rankings of democracy and the rule of law. Their blames totally fly in the face of facts. The white paper reveals where Hong Kong's democracy comes from and the path it's heading for as well as its development process. It also reveals who had undermined democracy and who saved it; who has created, promoted, restored, and defended Hong Kong's democracy, while who has undermined and disrupted democracy in Hong Kong. The Communist Party of China (CPC), the Chinese government, and the Chinese people, including 7.5 million Hong Kong residents, hold 100% of intellectual property right on Hong Kong's democracy. The white paper also discloses what democratic system is good and what is fake democracy that impairs Hong Kong. What has happened proves that the Western model doesn't work in Hong Kong, and Hong Kong must have its own democratic system under the framework of One Country, Two Systems. The white paper also gives answers to what such a democracy should look like, what environment and conditions are needed to develop it, what's Hong Kong's democracy after improving its electoral system, and what is Hong Kong's future.

Only after reading the white paper can we realize that Hong Kong's democracy is so open and inclusive. Permanent residents of the HKSAR who are not of Chinese nationality also enjoy the right to vote and the right to stand for election, which I think is unique in the world – just think which country or place allows foreigners to vote and be elected in its territory. Chinese citizens who are permanent residents of the HKSAR even have dual rights: the right to participate in the governance of both Hong Kong and the country as empowered by law. Under the One Country, Two Systems policy, Hong Kong treats foreign companies and individuals friendly and as equals. Hong Kong is the place in the world with the least discrimination against foreign investment and the highest degree of equal protection for investors' interests. China supports Hong Kong's integration into the overall national development and vigorously backs Hong Kong in exchanges and cooperation with other countries, and Hong Kong will be more open to the world. 

Not until we read the white paper can we be aware of the central authorities' unwavering commitment to the One Country, Two Systems principle, with great resolve, confidence, and patience remaining unchanged. This is also true for the central authorities' motherly trust in the Hong Kong people, including the youth. There was a time when the One Country, Two Systems policy was severely disrupted and distorted, and the Hong Kong people fretted that the central authorities would be irritated to change its policy towards Hong Kong. Now, the white paper makes it clear that the central authorities will continue to implement the basic policy of One Country, Two Systems fully and faithfully. The One Country, Two Systems principle is back on track and functions well with vitality, debunking various kinds of lies and rumors. 

The white paper shows us who Hong Kong's family is and who truly loves Hong Kong and cares about the suffering of every person in Hong Kong. The affectionate words in the white paper reflect the motherland's selfless love and intense expectations. In the past two years, everything the central authorities have done is to save Hong Kong and its youth, democracy, and the One Country, Two Systems principle; everything has been for the benefit of Hong Kong and served the fundamental interests of all people who regard Hong Kong as their home. Always remember, rich or poor, diseased or healthy, in good times or in bad times, the motherland will always be with Hong Kong and provide the strongest backing. There were once many misunderstandings and misinterpretations of the motherland. In fact, only the motherland sincerely loves and protects Hong Kong, and has been providing it with practical and substantial support, making copious endeavors to promote its democratic and economic development. In order to ensure the long-term implementation of the One Country, Two Systems principle, the motherland has struggled against the anti-China agitators extensively, an effort, however, that was always distorted and smeared. How hard for the motherland! 

The white paper explains that only by standing firmly with its family and motherland can Hong Kong have a bright future, prosperity, and real high-quality democracy. The Western politicians hypocritically declared that they would "stand with Hong Kong people." However, young people from Hong Kong responded by saying "forget it" and "stay away from me." They will never fall for it again, nor will they be fooled again to let others actualize "mutual destruction" at their home of Hong Kong and exploit Hong Kong to mess up the happy life of over 1.4 billion Chinese people.  

In a nutshell, only after reading the white paper will we recognize the great significance of the recent LegCo election, which has opened a brand-new chapter for Hong Kong's democracy, with its advanced nature and strengths beyond doubt. Hong Kong must resolutely follow its own path and establish a new capitalist democratic system under the One Country, Two Systems principle.  

Now, we would like to take your questions. Thank you.

Shou Xiaoli: 

Thank you, Mr. Wang, for your introduction. Now the floor is open for questions. Please identify the news outlet you work for before raising questions.

CCTV:

The white paper is titled "Hong Kong: Democratic Progress Under the Framework of One Country, Two Systems." What's the relation between the One Country, Two Systems policy and Hong Kong's democratic development? Thank you. 

Han Dayuan:

The title of this white paper, which was just mentioned, is worth your full attention. The core idea of a white paper is reflected in its title. This white paper is entitled Hong Kong: Democratic Progress Under the Framework of One Country, Two Systems. As we know, the word "under" signifies that the One Country, Two Systems framework and Hong Kong's democratic progress are not parallel. Rather, the framework constitutes the premise of and fundamental guarantee for Hong Kong's democratic progress, and One Country is a prerequisite for Hong Kong's democracy. The political system of Hong Kong applies locally. The election held in Hong Kong under the framework of One Country, Two Systems is a local one. The word "under" in the title helps clarify many fundamental and underlying problems. The white paper has pointed out clearly that the principle of One Country, Two Systems provides the fundamental guarantee for the development of democracy in Hong Kong. How should we understand this "fundamental guarantee"? Actually, it has shown the relationship between One Country and Two Systems. One Country is the prerequisite and basis for the Two Systems. The Two Systems are subordinate to and derive from One Country, and are an inherent part of One Country. The socialist system practiced on the mainland, the main body of the country, and the capitalist system in Hong Kong, run in parallel. However, the fact that the latter is subordinate to the former is not to be challenged. According to the white paper, the leadership by the CPC is the defining feature of Chinese socialism, and it is at the core of the order established by the Constitution. As such, it must be truly respected and upheld in Hong Kong. To determine the system of democracy in Hong Kong reflects the nature of the relationship between the central authorities and the HKSAR, and affects the region's stability and prosperity. In accordance with the Constitution and the HKSAR Basic Law, the central authorities have the final say in steering the development of democracy in Hong Kong. Only under central guidance can Hong Kong expect its democracy to make healthy progress. 

Some may be interested in the relationship between China's democracy and the democracy practiced in the HKSAR. In fact, the white paper has given clear answers in this regard. In accordance with the Constitution and the Basic Law, the system of democracy in Hong Kong is a component of the national democracy of the People's Republic of China, as Hong Kong's return to China signifies the region's reintegration into China's national governance. With the establishment of the constitutional order in Hong Kong, the system of democracy in the region has been reintegrated into the constitutional order underpinned by the Constitution and the Basic Law. Therefore, the system of democracy in Hong Kong is part of the national democracy. Both of them reflect the same philosophy, which is that the Chinese people, including the 7.5 million Hong Kong compatriots, run their own country. In the meantime, the state has, through the Basic Law, stipulated the main content, procedures, and basic principles of the system of democracy in the HKSAR. Thanks to the policy of One Country, Two Systems, Hong Kong can develop its democratic system with its own characteristics in accordance with the law and in light of the region's actual conditions, a system that applies locally and is different from that of the mainland.

According to the white paper, China's state and political systems determined that Hong Kong would establish a system of democracy after its return to China. The Chinese government remains committed to developing democracy in the HKSAR. As a special administrative region directly under the Central People's Government, its government should be organized on the basis of democratic principles stipulated by the Constitution and the Basic Law, as are its functions. The white paper also clarifies the interplay between the development of democracy and the rule of law in Hong Kong. The development of democracy should be based on the rule of law, and the constitutional order determined by the Constitution and the Basic Law should be upheld. As we all know, no democratic system in the world can be free of any checks. Democracy must be run under the framework of the rule of law. The development of democracy in Hong Kong cannot break the limits of the Constitution and the Basic Law, let alone undermine China's national security. Without national security, there would be no prospect of implementing democracy. Democracy, freedom, and human rights are the common values of humanity, to which the CPC and the Chinese people remain committed. Democracy is the right of the people, not the patent held by a small number of countries. The white paper – China: Democracy That Works – recently released by the Chinese government has encapsulated China's achievements in the development of democracy and championed the new concept of "whole-process people's democracy." This has provided Chinese thoughts, wisdom, and experience for global democracy laid the groundwork for developing democracy in Hong Kong under the framework of One Country, Two Systems, and provided a rule-of-law guarantee for developing democracy with Hong Kong's characteristics.

Therefore, Hong Kong citizens need to understand and pay attention to our country's democratic progress. Through practice, especially after experiencing turmoil in 2019, we have realized the limitation of the Western democracy and decided to firmly advance democracy with Hong Kong characteristics under the policy of One Country, Two Systems. 

Hong Kong Sing Tao Daily: 

The release of the white paper coincides with the first day after the Hong Kong LegCo election. May I ask what the considerations were in choosing the timing of its release? Thank you.

Wang Zhenmin:

As for the timing for the release of the white paper, there are many comments. In my view, two elements are of much concern to its debut soon after the LegCo election. First, the new electoral system of Hong Kong has twice experienced test practices: one with the elections of the Election Committee and the other with the LegCo. It is timely to summarize the new electoral system of Hong Kong. After all, the two significant practices have proved that it's a good system. The only test for truth is practice. We speak with facts. It's a good time to summarize the new electoral system in the HKSAR and its practical experience, elaborate on the core principles of the new electoral system and democracy, make a panoramic scanning of the democratic progress of Hong Kong, and extract the experience, lessons, and basic rules. I think it's appropriate. Second, some Western countries and politicians always observe China and everything in Hong Kong with self-imposed bias and resort to all kinds of means to attack and smear democracy in Hong Kong. The release of the white paper is timely to clarify facts, uncover the truth, fight against the attack on the democracy and new electoral system of the HKSAR, and manifest the principles and position of the Chinese government on the democratic progress of Hong Kong. I think the timing is very appropriate. Thank you. 

Hong Kong Commercial Daily: 

With the implementation of the Hong Kong National Security Law and the improvement of the electoral system, the situation of Hong Kong patriots governing Hong Kong has become consolidated. My question is for the experts: how will the government of HKSAR improve the business environment and accelerate the development of Hong Kong? Thank you.

Zhi Zhenfeng:

A good business environment is the hallmark of Hong Kong. In fact, the policy of One Country, Two Systems is the fundamental guarantee for the business environment in Hong Kong. People around the world are concerned with the business environment in Hong Kong. Being an international financial, shipping, and trade center, Hong Kong is a bridge of China for international communication and an attractive place for foreign investment. The Chinese government always firmly supports the government of HKSAR to improve the business environment of Hong Kong and protect the interests of investors. 

The rule of law underpins the best business environment. Since the return of Hong Kong to China, we have noticed that the business environment in Hong Kong continues to improve and is in a leading global position. The policy of One Country, Two Systems guarantees democracy and the rule of law in Hong Kong. According to the World Bank's Doing Business reports, Hong Kong is always at the forefront of various indicators. Why? The reason is that the high level of the rule of law ensures a good business environment. The policy of One Country, Two Systems has been successfully practiced in Hong Kong. Hong Kong now enjoys a stable political situation, good order, effective governance, high-level rule of law, a buoyant market economy, and an amiable business environment. 

Anti-China forces both inside and outside the region are saboteurs of Hong Kong's business environment. In recent years, anti-China agitators in Hong Kong and foreign territories have been trying to undermine the rule of law in Hong Kong, causing serious social damage, confrontation and conflict, and harming Hong Kong's business environment. We can see that foreign countries such as the U.K. and the United States continue to smear, suppress and bad-mouth Hong Kong. In June last year, the United States ended its special treatment of Hong Kong. In April this year, U.S. Secretary of State Blinken reaffirmed the cancellation of U.S. perks for Hong Kong's autonomous trade and finance. In July, the U.S. trumped up business warnings regarding Hong Kong to directly intimidate enterprises and individuals in Hong Kong, and even imposed illegal so-called sanctions on HKSAR and mainland officials. Within Hong Kong, anti-China agitators launched an illegal "Occupy Central" movement in 2014, later especially during the 2019 turmoil, they obstructed traffic, destroyed facilities, set fires, smashed shops, looted amid the chaos, attacked people, and even privately manufactured arms and weapons, and occupied universities. For a period of time, they turned Hong Kong from one of the world's safest cities into a turbulent city, which caused investors to lose their sense of security and discouraged tourists from visiting.

At critical moments, the central authority is the strongest backing for safeguarding Hong Kong's business environment. With the introduction of a series of measures by the state to address both the symptoms and root causes, such as the enforcement of the Hong Kong National Security Law and the improvements to the electoral system of Hong Kong, relying on the strong support of the central authorities and the vast development hinterland of the Greater Bay Area, Hong Kong's society has gone from chaos to stability, the business environment has been continuously optimized, and the economy has rebounded rapidly, providing huge market space for foreign investors. Here are some examples and data: In 2020, Hong Kong's IPO funds raised exceeded HK$500 billion, an increase of more than 50% year on year, allowing it to remain the second largest IPO market in the world. A recent report issued by the International Monetary Fund (IMF) also reaffirmed Hong Kong's status as an international center. Hong Kong ranks as the sixth largest trading entity in goods in the world in terms of the total value of trade in goods. According to a report by the U.N. Conference on Trade and Development, Hong Kong ranks as the third largest destination for foreign direct investment in the world. And, in the latest 2021 World Digital Competitiveness Ranking, Hong Kong ranks first in Asia and second in the world.

The HKSAR government is very clear and understands that financial trade and commerce are important pillars of Hong Kong's economic prosperity. The principle of Hong Kong patriots governing Hong Kong can guarantee a better business environment in Hong Kong. The HKSAR is now entering a new stage of restored order, thriving society and further prosperity. Therefore, the HKSAR government must seize the development opportunities brought about by the country's comprehensive deepening of reform and opening-up, actively participate in the significant national construction strategies such as building the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative, accelerate integration into the overall national development, inject new momentum into Hong Kong's economic development, work hard to resolve various deep-seated problems that have plagued Hong Kong for a long time, and further optimize and enhance the business environment. Thank you.

Bloomberg News:

Can we ask, is there a timeline for the universal suffrage for the chief executive? Thank you.

Wang Zhenmin:

Allow me to first discuss some points of view. The white paper reiterated the principle and position on the issue of democratic development in Hong Kong. The goals of dual universal suffrage laid down in the Basic Law of the HKSAR have not changed. Future amendments to the two methods for the elections of the chief executive and the LegCo will still be in accordance with the Constitution and the Basic Law of HKSAR, especially the newly revised Basic Law Annex I and Annex II, and will proceed from the realities of Hong Kong. Over the years, the central government has spent a lot of time, energy and resources on the democratic development of Hong Kong. Hong Kong's society has also made tremendous efforts in this regard, which has even caused serious political turmoil. The economy and people's livelihoods were interfered with because of politics. Now that we have a good democratic election system, it can be said that it has not come easily. We have all paid high prices in exchange for today's new democratic system. I think it should be cherished and consolidated. After such a long period of social turbulence and turmoil in Hong Kong, my own feeling is that people are longing for stability, it is necessary to allow the society to recuperate, and spend more energy and resources on developing the economy, improving people's livelihoods, and creating better lives, so as to lay a solid economic and social foundation for the healthy development of Hong Kong's democracy. I think this is what the residents of Hong Kong expect.

The white paper also reiterated in the first section of Part VI the central government's basic policies for Hong Kong. This section clearly states that we must continue to abide by a set of key principles: One Country, Two Systems, Hong Kong governed by the people of Hong Kong, and a high degree of autonomy for the region; and make sure that the policy of One Country, Two Systems will remain unchanged and that it is implemented faithfully. This is the fundamental guarantee for the development of democracy in the HKSAR. More specifically, in recent years, we've often heard about the notion of promoting HK's integration into national development, however, it is important to note that the white paper clearly points out the Chinese government supports Hong Kong in extensive exchanges and cooperation with other countries and areas, and attaches great importance to protecting the legitimate interests of foreign investors in Hong Kong. Hong Kong belongs to China, yet it is also an international economic, trade and financial platform, a platform benefiting not only China but also other countries in the world. Therefore, China is willing to share this platform with other countries and share the dividends brought by China's development. For many years, many international assessment agencies have believed that Hong Kong was, is, and will be the world's freest, friendliest, most open, and most dynamic free port and international financial center. This will only be strengthened and will not be changed. Thanks.

China Daily:

The white paper mentions that having Hong Kong patriots govern Hong Kong does not exclude people with different political views or ideas, nor will criticism of the government be suppressed. Democracy in the HKSAR allows ample room for different opinions and political groups, and there will be a plurality of voices in the government. All those who love the country and Hong Kong should stand together to form the most extensive united front, and expand it and make it more inclusive under the framework of One Country, Two Systems. The head of the Hong Kong and Macao Affairs Office of China's State Council also pointed out earlier that there was a diverse range of candidates for the LegCo election. Did the recently concluded LegCo election reflect this nature? Thanks.

Han Dayuan:

Thank you for your question. Since the changes and improvements were made to Hong Kong's electoral system, a total of 90 LegCo members have been elected. People are very concerned about how political inclusion is manifested. Among the questions of concern, I found that political inclusion and diversity of the electoral system are the terms that appear most frequently. As a scholar, I have some thoughts to share with you in this regard.

First of all, we must set a basic premise when talking about political inclusion, as I have mentioned earlier. The name of this white paper is "Hong Kong: Democratic Progress Under the Framework of One Country, Two Systems." The policy of One Country, Two Systems itself is one of China's greatest and most unique contributions to the political civilization of mankind. Its essence lies in the peaceful coexistence of two distinct systems within a sovereign country, each exerting respective advantages within the scope of a country. Therefore, the establishment and development of this system itself embodies the greatest political inclusion and greatest political courage, which is also one of China's contributions to world civilization. We have seen that though some countries or politicians criticize China's policy of One Country, Two Systems, they all recognize its contribution. In the history of human political civilization over the past 100 years, we cannot find similar institutional arrangements. In the socialist country of China, the policy of One Country, Two Systems is used to solve problems leftover from history. The political inclusion is embodied in the commitment and basic philosophy of China's government to the principle of One Country, Two Systems. The democratic development of Hong Kong under the policy of One Country, Two Systems, including the reform of the electoral system, reflects the greatest political inclusion, which in itself demonstrates the philosophy of the policy of One Country, Two Systems.

The white paper emphasized the inclusiveness and diversity of democracy in many aspects. Notably, it highlighted how to ensure the inclusiveness of the election. For example, the white paper summarized four characteristics of the electoral system. First, it is broadly representative. The electoral system has attracted an impressive range of candidates from diverse backgrounds, which shows its diversity. Second, it is politically inclusive. Candidates for the LegCo, from different points on the political spectrum, are all equal, no matter what political philosophies and opinions they hold. It's normal that they have different political views or opinions. Hong Kong patriots governing Hong Kong is the fundamental principle for improving the region's electoral system and the foundation for promoting its democratic progress. Hong Kong patriots must govern Hong Kong, but this principle doesn't mean disallowing different voices. Any Hong Kong residents can stand for election and participate in governing Hong Kong in accordance with the law, as long as they love the country and Hong Kong and are not involved in activities that undermine national sovereignty, security, and development interests or jeopardize Hong Kong's prosperity and stability. Therefore, it does not exclude people with different political views or ideas, nor will criticism of the government be suppressed, as said by some Western countries. Political inclusiveness and diversity are essential to implementing the principle of Hong Kong patriots governing Hong Kong. As you know, Hong Kong itself is a diverse society. Usually, people hold different views, opinions, or even sharp criticisms concerning the formulation of public policies and laws and significant issues. However, the Basic Law stipulates that Hong Kong residents shall have freedom of speech, press, assembly, and procession. These are all fundamental rights and freedoms safeguarded by the Basic Law. Hence, the central government clarifies that no instigator of disorder should be allowed into the governing body of the HKSAR, which doesn't mean that no other voices are allowed in the LegCo. During this election, 153 candidates were vying for 90 LegCo seats, which indicates that the electoral system is broadly representative and ensures balanced participation. From the perspective of social background, these LegCo members include clergy, school principals, university professors, lawyers, doctors, and community workers, and such broad representation reflects political inclusiveness and diversity. Among the 90 LegCo members, 56 are new faces, accounting for 62% of the total. Hopefully, you will notice an essential idea in the white paper: All those who love the country and Hong Kong should stand together to form the most extensive united front, expand it, and make it more inclusive under the One Country, Two Systems framework. The extensive united front means that we do not differentiate between political groups based on their political views, backgrounds, or ideas; our sole criterion is to see who serves the people of Hong Kong and safeguards the prosperity and stability of Hong Kong. In this way, we have formed a consensus among Hong Kong society to the most significant extent.

As a scholar, I would especially like to emphasize that since Hong Kong's return to China, since 2005 in particular, some regular expressions took shape in Hong Kong society, such as "pro-establishment camp," "opposition camp," and "pro-democracy camp." Democracy is a very noble and great term. It is understandable to form such habitual expressions as the "pro-democracy camp" label at times, or other labels, in a certain period after its return, but such a phrase, or a way of thinking, cannot objectively demonstrate the diverse interests in Hong Kong society, and is not beneficial for building a diverse and inclusive political and cultural atmosphere. It is apt to, by labeling people who love the country and Hong Kong but hold different political views, artificially divide patriotic people into various factions, which I think is not conducive to uniting people from all sectors of society or building social consensus. The white paper emphasizes forming the most extensive united front under One Country, Two Systems. I believe it is a very important concept because the core of democracy lies in enhancing people's sense of identity and gaining in system implementation. The key to the issue lies in how LegCo members genuinely serve the people after the election. Due to the COVID-19 pandemic and the anti-extradition turmoil, Hong Kong society, especially the Hong Kong people, faces many challenges and issues concerning livelihood, such as housing and employment, which are expected to be addressed through the new LegCo. In my view, being elected to the LegCo is just an exam admission ticket given by the Hong Kong people, and it remains to be seen whether the 90 members elected will genuinely serve the Hong Kong people in the next four years and whether they will be able to obtain their "graduation certificates." The Hong Kong people are in the best position to say whether or not to give them the "graduation certificates," and I particularly look forward to seeing them respond to the most urgent expectations of the Hong Kong people after being sworn in. Thank you.

Kyodo News:

It is reported that the voter turnout in this Hong Kong LegCo election was a record low. Some European and American organizations, therefore, criticized it as unrepresentative. What is the comment on the Chinese side? Thank you.

Han Dayuan:

As a professor of constitutional law, I also study electoral law. The question brought up by the Japanese journalist is also what you all pay great attention to. After the election, I often heard some friends, including some foreign friends, discuss about the voter turnout. The question you raised is of wide attention, and there are also some analyses in Hong Kong society. I would like to share my observations and opinions just as a scholar.

To interpret the voter turnout, we should take an objective and comprehensive look at the election results. According to statistics, in this LegCo election, the voter turnout was 30.2% in geographical constituencies, 32.22% in functional constituencies, and 98.48% in the Election Committee constituency. The election is divided into three parts: geographical constituency election, functional constituency election, and Election Committee election. Therefore, to evaluate the election results, we should not just look at any one of the three election types but take a comprehensive view. That's my first basic idea.

Second, according to my understanding of the rule of law and democratic theory and some views from the international community, turnout is not directly equal to democracy, and the turnout figures do not necessarily indicate the level of democracy and legitimacy of elections. To directly link turnout with democracy and legitimacy or equate turnout with democracy and legitimacy, in my opinion, is at least not in accordance with the rule of law and democratic theory. We should not take turnout as the sole criterion when we observe the election results. Turnout matters because it is an expression of voters' free will, but it is not the only one. We only use it as one of the indicators of voters' engagement in the expression of political intention. We should not only look at how many people have voted, but also who the elected are, and whether they can serve every sector of society, the development of society, and especially the interests of Hong Kong as a whole and its people. As I said earlier, the elections in Hong Kong are local. As we have observed, in recent years, local elections in some Western countries have seen different levels of voter turnout. For example, the turnout in local elections in cities like New York and Los Angeles was sometimes only around 20%, and that of London Assembly elections was between 30% and 40%, which also varies. I have done some research on it. The voter turnout in this year's Tokyo metropolitan assembly election was around 42%, and that in the European Parliament elections was about 20%. Therefore, the voter turnout in different countries and regions is affected by a combination of factors, so we should not just look at the turnout.

Besides, the reform of the electoral system this time, from designing to practical implementation, was under a tight schedule, as the central government had to make a general plan, and the HKSAR needed to implement the plan well. Therefore, all involved parties needed time to adjust to and comprehend the new system. Notably, the electoral procedures and rules of the new system are indeed complex, so it is understandable that some voters are still getting familiar with the system or looking on. The key to the electoral system lies in its inclusiveness and balance. Given that the reform was carried out against the backdrop of the disordered and chaotic HKSAR LegCo, we should fully respect voters as they take time to comprehend the transformation from an old electoral system to a new one. It is normal that some voters are looking on, and some might even be dissatisfied. We should show respect whether they voted or not and whoever they voted for. The common wish of the electorate is an orderly, prosperous, and steady Hong Kong. The voters will reach a consensus on the new electoral system over time. About the voter turnout this time, there are three points we need to make clear and hope you will notice. First, the Hong Kong elections in the past were highly politicalized, so there were more political issues and less issues about people's livelihood. The most significant change and highlight of the elections this time was that the candidates paid much attention to issues about people's livelihood and the economy. Therefore, the electoral culture is changing from an unhealthy one caused by political rifts in the past to one with people's livelihood as its core, which is a gradual process. Second, we noticed disruption from some anti-China forces from the West, including instigators of disorder in Hong Kong. For instance, some of those forces called for no voting, and some so-called poll organizations in Hong Kong disturbed the free choices of voters by polls. One more thing is that the meeting mechanism between Hong Kong's electorate and the candidates is flexible, but due to the pandemic, no more activities were arranged this time. Voter turnout is under the comprehensive influence of various factors, and we should take an objective and comprehensive approach to analyze it.  

Despite different views, the most significant success of the reform is the sound implementation of a good electoral system. Therefore, we should have objective evaluations. Thank you. 

Wang Zhenmin:

I want to add one point. I paid particular attention to the New York City elections last month, the voter turnout of which was 24%. NYC has a population of 8 million, while Hong Kong has a population of 7.5 million. The electorate of NYC is more than that of Hong Kong, but only 1.3 million people voted in the NYC elections, in contrast to the 1.35 million in the Hong Kong elections. Voter turnout is not the critical point. Besides, there is a phenomenon in the US that the voter turnouts of state-, city- and county-level elections are lower than that of the federal elections. However, many public opinion polls suggested that American people may trust local governments more. A survey indicates that voter turnout is like drawing blood, which is intended to examine if the body has problems, but you don't have to draw too much and one tube of blood is enough. The Republican Party and the Democratic Party severely struggle with each other on voter turnout. The Democratic Party wants to make it high, while the Republican Party wants to keep it low, believing if the Democratic Party has a high voter turnout, the Republican Party can never win. So, voter turnout in this case is not an issue truly reflecting democracy but an issue affecting election victory, which is the fundamental concern. Thank you. 

Phoenix TV:

We can see that the white paper covers a very long time span of 180 years from the colonial times to nowadays. Why does the white paper travel such a long time into the past and adopt a historical perspective? Thank you. 

Zhi Zhenfeng:

I will answer this question. The essence of the question is how democracy has been created and developed in Hong Kong. Though a basic fact, the answer has been distorted on purpose for a long time. There is a widespread hearsay or myth that the democracy in Hong Kong was bestowed and initiated by the British. It is truly a hearsay or rumor. To say that the British colonists bestowed democracy on Hong Kong is to fabricate a lie deliberately. Only by exposing the lie can we reveal the real picture from the very beginning. 

One of the important functions of the white paper is to help clarify facts and set the record straight. Over the years, the Hong Kong agitators have colluded with external anti-China forces to manipulate facts. As a result, many people, including some Hong Kong compatriots, have got a vague or even misinformed understanding of the origin and development of democracy in Hong Kong. This allowed anti-China agitators to foment considerable trouble. Over the years, they have confused truth and falsehood, instigated and abetted illegal activities, incited masked rioters to violence and caused social unrest. Again and again, democracy in Hong Kong was held back by them. History is the best textbook. Therefore, the white paper covers a long history in order to clarify historical facts and set the record straight.

The white paper presents basic facts about the origin and development of democracy in Hong Kong. On one hand, it exposes the lies fabricated by the U.S. and the U.K. about Hong Kong's democracy. During more than a century of British colonial rule, the U.K. had constantly undermined, disrupted and obstructed the development of democracy in Hong Kong. Simply put, under British colonial rule, there was no democracy in Hong Kong. As Alexander Grantham, the 22nd governor of Hong Kong appointed by the British government, wrote in his memoir, "In a crown colony the Governor is next to the Almighty." At the end of its colonial rule, the British government rushed through the so-called "electoral reform" in Hong Kong, which violated the Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China on the Question of Hong Kong (Sino-British Joint Declaration). It also violated the principle of aligning Hong Kong's future political system with the Basic Law, as well as previous agreements and understandings reached between the two sides. Known as the "Three Violations," these were imposed in Hong Kong against the basic rules of democratic development. Instead of bringing democracy to Hong Kong, its ulterior motives for doing so were to pervert the democratic system designed by the Basic Law and turn Hong Kong into a de facto independent or semi-independent political entity against the region's due constitutional status. The vicious intention of the U.K. was to undermine China's full governance over Hong Kong after the country resumed its sovereignty over the region, and extend British political influence after Hong Kong's return to China. In fact, this was part of a British attempt to portray their withdrawal as somehow "honorable" at the end of colonial rule.

On the other hand, the white paper says the CPC and the Chinese government designed, created, safeguarded and advanced Hong Kong's system of democracy. It makes clear where democracy in Hong Kong came from, that is, "the return of Hong Kong to China ushered in a new era for democracy." First, China's state system determined that Hong Kong would establish a system of democracy after its return to China. People's democracy is the life of socialism, a brilliant banner that has always been held high by the CPC, and an ideal that has always been cherished by the CPC and the Chinese people. Hence, Hong Kong would definitely establish a system of democracy after its return to China. Second, the central government has remained committed to the policy of One Country, Two Systems and to the Basic Law of the HKSAR, fully supporting the orderly development of democracy in Hong Kong in accordance with the law. Also, the central government has taken significant steps to advance democracy in Hong Kong, including giving the approval to amend election methods for the Chief Executive and the LegCo, setting a timetable for universal suffrage, drawing up a roadmap for electing the Chief Executive by universal suffrage and so on. In response to the obstruction and disruption by anti-China agitators and those external groups behind them, the central government has taken a series of decisive measures that addressed both the symptoms and root causes of the unrest to restore order to Hong Kong, bringing its democratic progress that underpins One Country, Two Systems back on track.

Therefore, we have reasons to believe that by gradually implementing the principle of Hong Kong patriots governing Hong Kong, combined with continued progress in promoting the new electoral system, Hong Kong's democratic development will steadily advance in accordance with the One Country, Two Systems principle and the realities in Hong Kong. To sum up, the future of Hong Kong's democracy is unlimited and bright. Thank you.

CRNTT: 

The white paper stressed that the system of democracy in Hong Kong should not be a replica of some other model. Rather, a path to democracy with Hong Kong characteristics should be explored under the policy of One Country, Two Systems, and the Basic Law and in keeping with its political, economic, social, cultural and historical conditions. So, what are the strengths of democracy with Hong Kong characteristics? Thank you. 

Wang Zhenmin: 

The revision and improvement of Hong Kong's electoral system have formed a new democratic system with many characteristics, highlights, and strengths, which mainly lie in the following aspects: 

First, it underlines both political security and political inclusiveness. All countries put safety first in their electoral systems. We have seen multiple countries, including the United States, saying that other countries interfered with their elections, and such interference should be opposed. Is there any country that doesn't resist foreign interference? Foreign intervention will deform democracy. Should that occur, democracy will be manipulated and distorted by certain external forces, and people cannot enjoy a democratic life. Why should we exclude anti-China elements who disrupt Hong Kong from participating in democratic life? The reason lies in that what they truly want is not democracy. Therefore, we should fully ensure election and political security, which are the most important. Under the new electoral system, all the candidates are patriotic and love Hong Kong. It is up to those who have built Hong Kong to discuss Hong Kong issues, not those who serve foreign forces to stir up trouble. The new electoral system also highlights political inclusiveness. To ensure security, we don't need to exclude democracy and political inclusiveness but external interference and disruption. Prof. Han has just talked about this point. In his recent speech, Xia Baolong, vice chairman of the National Committee of the Chinese People's Political Consultative Conference, also made an in-depth exposition on political inclusiveness. We only exclude those who are doing bad things and serving external forces. Hong Kong's local politics are diverse, and the political spectrum is vast. Those with ulterior motives were the only ones excluded. Therefore, the candidates and those elected are from various political groups across a broad spectrum. I think this is a very significant feature of the new electoral system. Developing the broadest possible united front under the framework of One Country, Two Systems is also a bright spot. During relevant discussions, it was proposed by many people that foreigners' right to vote be removed. There is no other place in the world like Hong Kong where foreigners can enjoy the right to vote and the right to stand for election with a "green card" (permanent resident status). But no change was made to this stipulation. Isn't this a manifestation of political inclusiveness?

Second, it guarantees democracy and competition. Some misunderstandings hint that the principle of "patriots administering Hong Kong" would stop competition, and candidates could win an easy victory. However, it turned out to be the first time in Hong Kong that an "easy victory" situation was eliminated. Everyone must compete fairly, and there is also full competition among patriots who love Hong Kong, so that Hong Kong people can vote under normal circumstances. The elections in the past were abnormal. Now democratic rights have been taken back from the anti-China politicians seeking to disrupt Hong Kong and returned to Hong Kong people to ensure they have the freedom to choose, truly become the masters, and live a democratic life of their own. Therefore, the competition is no less intense than in the past. All candidates competed on the same platform in the election, campaigning on their policies, experience, capability, patriotism, and love for Hong Kong. In the past elections, those who showed intention to disrupt Hong Kong and China at large would have a larger chance to win. That was abnormal. Patriotism is the prerequisite for elections in any country in the world. For example, in the elections in the United States, candidates who dare to say that they are not patriotic will be out of the race immediately. However, in the past elections in Hong Kong, candidates campaigned on who was more unpatriotic. In comparison, this year's elections are indeed normal elections, focusing on the economy and people's livelihood. This is what Hong Kong people care about. It is the politicians who care about politics. Hong Kong people are busy working every day and what they care about are the daily necessities of life. So, is it rational if the focus is only on solving the politicians' problems rather than on Hong Kong people? Therefore, the competition under the new electoral system is real and a regular competition instead of being political performance and manipulation.

Its third strength lies in its broad representation and balanced participation. Professor Han also talked about this point just now, so I will not elaborate on it anymore. The broad representation is exactly what the former electoral system ignored, such as representatives from grassroots and vulnerable communities. As Hong Kong is a capitalist society, there is no question about giving due regard to the interests of the business community and maintaining the sound development of capitalism in Hong Kong. However, you also have to give due regard and consideration to the groups that have been ignored for too long. This is a shortcoming of the previous electoral system, and we tackled it this time. It is noticeable that the new electoral system pays more attention to the overall and fundamental interests of Hong Kong. In the past, members from Hong Kong Island district councils could not represent Kowloon, nor could members from the legal sector represent the medical sector. They only represented the interests of their specific sectors, instead of the overall interests of Hong Kong. Now, however, we see that the 40 LegCo members returned by the Election Committee represent the overall interests of Hong Kong.

Moreover, the new electoral system has changed the conflicting political culture in the past Western-style democracy. The conflicts between the executive and legislative branches and the internal strife within the LegCo tore the whole of Hong Kong apart. Is that normal? Western-style democracy has come to an end in Hong Kong. It can't go any further. It is what Hong Kong imitated in the past. The elections this time have transformed the situation. There must be checks and balances and coordination between the executive and legislative branches. It can be expected that the new electoral system will bring good governance to Hong Kong with a more effective executive-led system, and significantly improve its governing capabilities. That's all.

Global Times: 

Following the LegCo election in Hong Kong, we noticed that the G7, the EU and the Five Eyes have all expressed their concerns and worries over the democratic development and electoral system in Hong Kong. They alleged that the new electoral system has undermined Hong Kong's high degree of autonomy under the policy of One Country, Two Systems, and that the central government shows no respect to the rights and freedoms of the people of Hong Kong. What's your opinion on this? Thank you.

Wang Zhenmin:

I really have no idea what they are worried about. We make Hong Kong better. Is this what they are worried about? Doesn't everyone in Hong Kong and the mainland expect to make Hong Kong better? This is even what the world expects. People in Hong Kong, the mainland and the world at large all expect Hong Kong to get better. If there are worries over this, I think such worries are unnecessary and driven by ulterior motives.

For a long time, some politicians in the West have believed that there is only one model of democracy in the world, namely, the democracy they are practicing. They cannot allow any other models of democracy. However, as a matter of fact, they practice different models of democracy in the West. Is the democracy in Britain the same as that in the U.S. or in France? They are different. They have their own democratic and electoral systems. Why can't they allow Hong Kong to have its own democratic system? This resonates with what Mr. Deng Xiaoping said in the past, that the old colonial mentality and Western-centric theories are haunting them, reflecting their pride and prejudice.

The democratic development in Hong Kong has its own reality and conditions, and it needs to solve Hong Kong's problems. In judging Hong Kong's democracy, we cannot say it is good when it is similar to or the same as the democracy of some country, or bad when it is different. We should take into account whether Hong Kong's democratic system can solve the problems of the people of Hong Kong and if the system has its own logic and ground. It is itself violating democratic principles for those politicians to promote and impose Western-style democracy against the will of others. Why can't we run our own affairs and make our own decisions? Why do you want to choose a system of democracy for us? We are running our own affairs and do not need carping and irresponsible remarks from others. We are not making decisions for you, and we never interfere with what systems and models of democracy other countries choose.

Professor Han and I both study constitution-related issues. In the past, academia often portrayed Western democracy nicely. But over these years, seeing the reality, more and more people no longer admire or worship it. The West still thinks that they occupy the highland of global democracy, superior to all others, and they can point fingers at the democracy of other countries and regions. But things changed a long time ago. Serious problems have been adequately exposed in their democratic practices. Their system is hypocritical and dangerous, with deep-rooted downside, not perfect at all, which has been exposed in front of the world for a long time. These years, they have been facing severe failure in internal governance, becoming examples of failed democracy rather than examples of thriving democracy. In particular, after the presidential election in the United States last year, we saw the American public occupy Capitol Hill. That was a "Beautiful Sight to Behold." Of course, if similar incidents happen in other places, the United States will offer criticism, saying things are out of order in those places. But when it happened in the United States, they argued that their democracy was perfect. This showed typical "double standards." Such democracy and chaos are witnessed and disdained by people worldwide. But they still peddle it to other countries and regions. These years, we have seen them make all efforts to tout their democracy, and how is the result? We have seen disasters threaten places where their democratic system has been forced. We have seen tragedies, relentless wars, and broken families in those places. They are reflecting on and reforming such democracy themselves, then why do they want to sell it in Hong Kong and other places? It is increasingly clear that their democracy doesn't mean people being the masters of the country. Taking a serious look into it, I don't think they will let the people be the masters of the country, like what the U.S. Constitution says - "We the people…" Because in that way, capitalists will have nowhere to be. Can they let the "one person, one vote" system make the decisions? Not possible. Then who are the masters? The politicians, the capital, and the money. The people, though, are shrouded and beguiled by the noise of democracy. So, we wonder that, after how many U.S. governments will the issues of poverty, wealth gap, and deep-rooted racial discrimination be tackled in the country? In more than 200 years, have these issues been solved? Are things improving or getting worse? Of course, as democracy deepens, these problems should have been better tackled. But they are not solved but worsened, which means something is going wrong with the system. In the democratic systems of such countries, the reality is that politicians hold money in one hand and ballots in the other. Where are the people? Can you see the people? When elections take place, people are God. Politicians beg voters for their ballots. But where are the people when elections finish? No one knows. Is there anyone serving the people? There is a saying that, you cannot see beautiful spring days when your eyes are closed, and people won't be able to see the mud on your legs if you keep standing in the water. Two elections have shown how the new democratic electoral system works in Hong Kong, and I believe future practices will continue to testify to its effectiveness. This is a success of democracy, benefiting local people and improving their wellbeing. There is no more chaos, "black terror," attempts for "mutual destruction," and filibusters. There is no more betraying one's own country for personal gains. And there is no more acting against China and creating disturbances in Hong Kong. The central government and local people have the most significant say in such important issue as the democratic development in Hong Kong. It is not something for foreign politicians to make comments on. We shall firmly follow our political system. Thank you.

Hong Kong Ta Kung Wen Wei Media Group:

What roles will the white paper play in the education of Hong Kong's young people? What new insights can they obtain from the white paper? Thank you. 

Zhi Zhenfeng:

Those are really good questions. If the young people are strong, the country will be strong. Young people are the future of Hong Kong and the country, and the hope of the nation. Only by focusing on facts can we discern right from wrong. The history of Hong Kong's democratic progress is an important part of the history of Hong Kong's return to China. By reading the white paper, the origin and development of Hong Kong's democracy and the One Country, Two Systems policy can be understood, and the truth of history can be restored. This will teach Hong Kong's young people that the CPC and the Chinese government designed, created, safeguarded, and advanced Hong Kong's system of democracy and anti-China, destabilizing elements in Hong Kong are spoilers and saboteurs of Hong Kong democracy. The white paper will help Hong Kong youth gain a full understanding of the relationship between One Country and Two Systems and develop their accurate understanding of history so as to strengthen the education work concerning patriotism and national conditions. 

The white paper should be the antidote to fallacies. If you have a 13-year-old daughter, will you allow her to take to the streets to join demonstrations with those rioters who set fire, rampantly smash facilities, and commit robbery and physical assault? Do you agree with those so-called demonstrations? Will you feel relieved if your child is associated with those people? Meanwhile, since Hong Kong's return to China, anti-China, destabilizing forces in Hong Kong continue to promote the so-called "Umbrella Movement protests" and the 2019 turmoil. We can hardly imagine that those who promoted these ideas will love Hong Kong and uphold true democracy. It is impossible. Anti-China, destabilizing forces propagate terrorism in the guise of democracy, distort the real meaning of democracy and freedom, and poison young people's values to make them become victims of secessionist sentiment, black violence, and mutual destruction. So we must use the white paper as the antidote to clarify facts. 

In this context, the white paper should be a "textbook" for Hong Kong's young people. The white paper has sowed the seeds of the correct views of history and democracy in Hong Kong. As the masters of the country and Hong Kong, Hong Kong's young people will become more reasonable, increase in confidence, advocate morals, and proceed with determination by studying the white paper. The Hong Kong society can combine the contents of the white paper with national security education and national education in schools, compile textbooks, adolescence literature, and teacher's training programs based on the contents of the white paper. It can also work with local social organizations to carry out knowledge competitions to enhance the enthusiasm of young people to study the white paper. 

I think that Hong Kong's education, journalism, and literature and art sectors, especially those providing culture and entertainment products to young people, should all take action to help Hong Kong people, including the youth, to correctly understand the relationship between the One Country, Two Systems policy and Hong Kong's democracy, and create positive, healthy, quality works to realize the healthy development of democracy in Hong Kong and advance the democracy process in Hong Kong. Thank you. 

Han Dayuan:

I want to add something. As a university teacher, I am very concerned about the participation of young people in Hong Kong in this election system. As Professor Zhi said just now, I think the future of Hong Kong is closely related to every young person in Hong Kong. Therefore, it is crucial for the young generation in Hong Kong to care about the development of their country and the development of Hong Kong, including the political development. Young people are most concerned with housing, employment, and career growth opportunities. Therefore, to help them develop and grow, both the central government and the SAR government have provided a lot of policy support, including the Guangdong-Hong Kong-Macao Greater Bay Area development plan. As a university teacher, I maintain frequent contact with young people. As far as I know, the number of young people in Hong Kong who have visited the mainland is much less than I thought. I hope that relevant departments can take adequate measures to encourage more young people to come to the mainland themselves. I believe that coming out in person to see what the mainland is really like will make a difference. 

Western countries use democracy and human rights as a pretext for criticizing China. I hope that our young people in Hong Kong can think independently. Is what some Hong Kong scholars call human rights and democracy natural? Do we need to reflect on the concept of democracy defined by Western countries? Many opinions have been distorted. In the past two years since the COVID-19 outbreak, people worldwide have been reflecting on what true democracy is. China's democracy practice recorded in a white paper titled "China: Democracy That Works" exemplifies the respect for democracy, a typical value of humanity, and distinctive Chinese characteristics. Created by the CPC and the Chinese people, China's democracy is in accord with its national conditions and realities. Protecting human rights is the most essential and fundamental principle of democracy, and putting people's lives, health, and safety first is of the highest value when safeguarding human rights. In the face of the pandemic, we must view objectively which country and political party truly regards people's lives, health, and safety as the highest value, and saves every life at all costs. On the contrary, the country that convened the so-called "democracy summit" has already reached over 800,000 coronavirus-related deaths, exceeding its death toll during World War II. A country that talks about democracy and human rights should have the ability to protect the life and health of its citizens. Therefore, the democratic practices, including the One Country, Two Systems policy of China, a country led by the CPC and home to one-fifth of the world's population, can serve as an experience for global democracy and human rights progress. I hope that everyone, especially the young people in Hong Kong, can think about democracy and human rights independently and care about and follow the democratic development of the country. The country's democracy and human rights development will give new connotations to the One Country, Two Systems policy. On that front, we should be full of confidence and expectation. Thank you.

Wang Zhenmin:

During the 2019 turmoil in Hong Kong, I once said at a conference that we are all concerned about our children eating unhealthy food, but few parents care about our children learning wrong knowledge. We have seen what Hong Kong children have learned in the past few years. They learned about the distorted history of Hong Kong's democracy, full of lies and rumors. The white paper provides an authentic textbook on Hong Kong's history and democracy, worthy of careful study by Hong Kong young people. It is crucial to understand the true history of one's own country. If there is something wrong with the stomach, taking some medicine will do, but what if the false idea poisons the minds? It would be difficult to find the cure. The education of Hong Kong's youth matters. Nevertheless, we are full of confidence in Hong Kong's democracy and the future of Hong Kong. I firmly believe that the prospects are bright for democracy in Hong Kong, just as the white paper said. Thank you.

Shou Xiaoli:

Thank you, experts and friends from the media. Today's briefing is concluded. Goodbye, everyone.

Translated and edited by Huang Shan, Wang Yanfang, Xu Xiaoxuan, Zhang Junmian, Mi Xingang, Wang Yiming, Zhang Rui, Li Huiru, Zhang Jiaqi, Wang Wei, Li Xiao, Liu Sitong, Chen Xia, Zhou Jing, He Shan, Ma Yujia, Liu Qiang, Yang Xi, Wang Qian, Zhang Liying, Yuan Fang, Liu Jianing, Duan Yaying, David Ball, Jay Birbeck, Drew Pittock 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:

Han Zirong, vice president and secretary general of the Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games (BOCOG)

Huang Chun, deputy director general of the Pandemic Prevention and Control Office of the BOCOG 

Li Ang, deputy director general and spokesperson of the Beijing Municipal Health Commission

Chairperson:

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

Date:

Dec. 23, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). The second edition of the Beijing 2022 Playbooks outlining COVID-19 countermeasures were released recently. To help you better understand related information, we are delighted to be joined today by Ms. Han Zirong, vice president and secretary general of the Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games (BOCOG); Mr. Huang Chun, deputy director-general of the Pandemic Prevention and Control Office of the BOCOG; and Mr. Li Ang, deputy director general and spokesperson of the Beijing Municipal Health Commission. They will brief you on pandemic prevention policies and relevant preparations for the Beijing 2022 Olympic and Paralympic Winter Games. First, I'll give the floor to Ms. Han Zirong.

Han Zirong:

Friends from the media, good morning. On Dec. 13, the BOCOG, the International Olympic Committee (IOC), and the International Paralympic Committee (IPC) jointly released the second edition of the Beijing 2022 Playbooks, which provide epidemic prevention guidelines for all stakeholders to participate in the Beijing Winter Olympics and Paralympics.

Now, I would like to give you a brief introduction from three aspects: the background and process of compiling the playbooks and basic principles of epidemic prevention.

I. Background of compiling the playbooks

Against the backdrop of COVID-19, the Beijing Winter Olympics and Paralympics are facing tremendous pressure and challenges:

First, the Chinese government has always put people's lives first and implemented a dynamic zero-COVID-19 approach in line with the overall prevention and control strategy of preventing case import and domestic resurgence, which has effectively guaranteed the sustained and stable economic and social development of China and the health and safety of the people. Therefore, the Beijing Winter Olympics and Paralympics must strictly implement the Chinese government's epidemic prevention principles and requirements and keep the bottom line of epidemic prevention and control in society.

Second, the COVID-19 pandemic, especially the spread of Omicron and other variants, has brought great uncertainty to the global COVID-19 situation. During the Games, many Olympic-related people from different countries and regions will come to China, increasing the number of people gathered. Therefore, many positive cases will be highly likely to happen.

In that context, we, together with the IOC and the IPC, have compiled and released the playbooks. The epidemic prevention content in the playbooks should first meet the needs of the Games and reflect the Games-centered, athletes-centered approach to ensure the regular operation of the Games. At the same time, it must comply with China's epidemic prevention and control principles. We hope that all stakeholders can strictly implement the epidemic prevention protocols, jointly respond to COVID-19 challenges, and make joint efforts to ensure the safety of all participants and the host cities and make the Games safe and smooth.

II. Process of compiling the playbooks

The process of compiling the playbooks can be divided into three phases.

First, the BOCOG worked independently on the preparation phase. In the first half of this year, we started the compilation of the playbooks. To present a streamlined, safe, and splendid Games on schedule, we set the six principles. They are a streamlined Games, vaccination, closed-loop management, effective emergency response, a combination of prevention and control, and a holistic and balanced approach. After several rounds of soliciting opinions in mid-September, six playbooks for six categories of stakeholders were completed and submitted to the IOC for review.

Second, we compiled the first edition of the playbooks with the IOC. In early October, we had three video communication meetings with the IOC and established the timeline and framework of the compilation. We agreed to condense the six playbooks into two, one for athletes and team officials, and another for other stakeholders, and set the essential principles of strengthening vaccination, pre-departure COVID-19 prevention measures, closed-loop management, and nucleic acid tests and emergency response. Nine rounds of consultations were held intensively to discuss the text item by item, and the consensus was reached before we jointly released them on Oct. 25. After releasing the first edition of the playbooks, we held nine briefings for all stakeholders, who generally expressed their understanding and recognition. In the recent international test events, we strictly followed the epidemic prevention standards and requirements that would be adopted for the actual games, through which the playbooks and the measures have proven effective.

Third, we compiled the second edition of the playbooks with the IOC. Since Nov. 5, we have held 14 consultation and review meetings with the IOC on the revision of the playbooks. While keeping the basic framework of the first edition, we have absorbed the opinions and suggestions of various stakeholders and taken into account issues discovered in the test events, and revised specific measures and related details concerning pre-games epidemic prevention, review of the previously infected, nucleic acid testing processes, list of permitted destinations for stakeholders, and isolation facility standards for the asymptomatic to make the playbooks more feasible. Finally, on Dec. 13, the second edition of the playbooks were officially released, followed by six briefings to respond to the specific concerns of various stakeholders.

III. Basic principles of the playbooks

The playbooks set out six principles:

First, vaccination. Vaccination is a crucial means to reduce the risk of infection and transmission and ensure the safety of the events. Except for athletes and team officials who are exempt due to medical reasons, all Olympic-related personnel must complete full vaccination at least 14 days before coming to China to be exempted from quarantine at the designated facility and enter the closed loop. Furthermore, given the complexity of the current COVID-19 situation worldwide, we especially recommend that all Olympic-related personnel receive booster shots against COVID-19.

Second, closed-loop management shall be applied. It is a special management system. Within the closed loop, all the people arriving in China for the Games, and domestic staff working for them directly are subject to daily health monitoring and nucleic acid tests, and need to stay in the hotels or the Olympic villages within the closed loop. They will be only allowed to take dedicated Olympic vehicles for moving between designated venues and places within the closed loop, and not allowed to meet people outside the closed loop, let alone the general public.

Third, a COVID-19 Liaison Officer (CLO) mechanism shall be established. All international organizations arriving in China for the Beijing 2022 Olympic and Paralympic Winter Games must appoint CLOs to keep close contact with their members, ensure that they understand the contents of the playbooks, assist in their preparations before arriving in China, and carry out relevant coordination work, including epidemic emergency responses.

Fourth, tests, tracing, and quarantine shall be conducted. During the Beijing 2022 Olympic and Paralympic Winter Games, all people within the closed loop shall take nucleic acid tests every day. Those who test positive and test positive again after retesting must be quarantined and receive treatment. In accordance with the standards of epidemiological survey and close contact determination stipulated in the playbooks, we will learn about where the infected individual has been, so as to locate close contacts as soon as possible and take decisive measures to cut the chain of transmission.

Fifth, contact between people shall be reduced. In crowded spaces with poor ventilation, there is a greater risk of being infected with the novel coronavirus from close contacts. The playbooks stipulate that social activities should be minimized, masks should be worn at all times, and long-time stays, gatherings and close contact should be avoided in confined spaces.

Sixth, hygiene awareness shall be raised. All Olympic participants should wear N95/KN95/FFP2 masks without breathing valves or surgical masks of the equivalent standards during their stay in China. We must wash hands and disinfect frequently, and use soap-free sanitizer whenever possible. We encourage handclapping to encourage the athletes, rather than singing and shouting. We recommend trying to avoid the use of shared items, or sterilizing them before use. Rooms should be ventilated regularly to maintain good airflow.

Friends from the media, the Winter Olympics are just around the corner. To prevent and control the epidemic and ensure the safety of Winter Olympic events and participants, we will continue to do the following work: First, we will intensify publicity and training. We will invite the IOC, IPC, and Olympic committees of countries (regions) to offer training and interpretation of the playbooks to their CLOs and personnel arriving in China for the Games. We will also train the Olympic-related staff in host cities so that they know well the epidemic rules in the playbooks and follow these rules consciously and strictly. Second, we will improve our working mechanisms. We will set up a consultation mechanism between Chinese and foreign medical and epidemic prevention experts, improve the CLO communication and coordination mechanism, and enhance the mechanism of emergency response coordination in and out of the closed loop to ensure that all epidemic prevention measures are fully implemented. Third, we will strengthen coordination of the work in and out of the closed loop. Based on the epidemic prevention and control system of the host cities, the work in and out of the closed loop will be integrated to form synergy and establish a work pattern integrating commands and operations so as to ensure safety of the Games.

Friends, there are only 43 days to go before the opening of the Games. All the preparations are ready. We hope all the participants can understand the importance of the epidemic prevention and control measures in the playbooks and strictly abide by them. With the strong support of the Chinese people and the international community, we have the confidence and determination to stage a streamlined, safe and splendid Olympic Games for the world.

Finally, I would like to welcome friends from the media to continue to focus on, support, and participate in the preparations for the Beijing Winter Olympics and Paralympics. Thank you!

Shou Xiaoli:

Thank you, Ms. Han, for your introduction. Now the floor is open for questions. Please identify the news outlet you work for before raising questions.

CCTV:

My question is about the recently published second edition of the Beijing 2022 Playbooks. What's the difference between the two editions? What rules have been updated? Will new epidemic prevention measures be issued before and during the Games?

Han Zirong:

Thank you for your questions. I think many friends from the media are interested in this subject because the first and second editions of the playbooks were published in quick succession. What are their differences? Let me give you a brief answer.

The second edition is generally consistent with the first one in basic principles, framework, and specific measures. We mainly did revisions and improvements on specific measures in three aspects. First, we have added some anti-pandemic measures, such as anti-pandemic requirements for Chinese participants, key information on the epidemiological survey, and spectating policies for athletes. These are the newly added measures. Second, we have provided more detailed anti-pandemic requirements. For example, we have specified policies for athletes identified as close contacts of confirmed cases before the Games, retesting work for people who tested positive, and the work process of testing agencies abroad. Additionally, the second edition details the review processes for vaccine exemption and people with a history of infection, as well as the flight booking process, which has been a major concern to all stakeholders. We have also made detailed requirements for the service standards of accommodation and transportation. Third, we have updated relevant information, such as the time for nucleic acid testing, the ways of sampling, and the list of destinations allowed for all stakeholders, which is highly relevant to foreign participants. We have listed all the destinations allowed in the second edition. As for the question whether additional measures will be put in place before and during the Games, it fully depends on the changes of the epidemic situation in and outside China, especially the infectiousness and perniciousness of the Omicron variant. We will follow up on the epidemic situation closely, respect the professional opinions of medical experts, and maintain close contact with the IOC and the IPC, in order to make dynamic adjustments to anti-pandemic measures. Only by upholding flexibility can we properly address the risks and challenges brought by Covid-19. That's all from me.

Beijing TV:

According to the second edition of the playbooks, what are the requirements and management measures for the entry and exit of the Games participants? How to conduct closed-loop management between competition zones? What health monitoring measures will be taken upon the participants' arrival in Beijing? How to ensure the accessibility and timeliness of nucleic acid testing? Thank you.

Han Zirong:

Thank you for your questions. All of these questions are very specific and concern all stakeholders. Mr. Huang will answer them.

Huang Chun:

Thank you for your questions. Actually, these questions comprise four aspects: remote control and prevention, closed-loop management, health monitoring, and nucleic acid testing.

In terms of remote control and prevention for inbound personnel, first, they need to download the "My 2022" app at least 14 days before their departure for China. There is a health monitoring system in the app, and they need to report their monitoring results on it every day. Second, they need to be fully vaccinated 14 days before coming to China. Third, they need to conduct two nucleic acid tests within 96 hours before the departure of their flights. Fourth, for those who were infected before coming to China, they need to conduct two additional nucleic acid tests besides the two regular tests. They also need to submit related review documents to the BOCOG at least eight working days before departure. Fifth, we will conduct throat swab tests and nasal swab tests for all inbound personnel at customs at the airport. Sixth, we will provide negative certificates of nucleic acid tests within 24 hours of departure for outbound personnel to help them head back to their destination countries. Generally speaking, we have made strict measures from remote control and prevention to outbound process.

Regarding closed-loop management, Ms. Han just stressed its importance. It is also a key measure in the playbooks and in the whole Winter Olympic Games. The playbooks have elaborated the requirements for closed-loop management. For all inbound personnel, they need to follow the closed-loop management policy during their entire stay in China. During this period, we will provide shuttle services between hotels and competition venues and other working sites. All activities have to be conducted within the closed loop. No personnel shall leave the loop, let alone reach areas outside the loop in the city – this is our bottom line. Therefore, for all personnel under the closed-loop management, they need to strictly follow personal protection measures and the requirements in the playbooks. This is also a key measure for us to ensure the safety and smooth operation of the Games and the safety of all participants.

As for the health monitoring we just mentioned, it will not only be conducted during the Games on a daily basis, but also be implemented 14 days before all Games participants' departure for China. All personnel should take the initiative to monitor their health situation and upload the results to the relevant system. I believe that we are very familiar with health monitoring. They need to conduct body temperature checks at least twice a day, get symptoms such as cough and sore throat checked out, and take suitable precautions for individual protection. That's all for the health monitoring.

The IOC and all stakeholders are very concerned about the convenience and timeliness of nucleic acid testing. Nucleic acid testing is a very important measure to prevent and control the epidemic. We will conduct nucleic acid tests for people in the closed loop every day. Such high-frequency tests constitute a potent measure that can ensure positive cases are found promptly and that the transmission chain is broken. We have also considered the sampling time of the athletes and other stakeholders, and made meticulous arrangements to ensure sampling will not affect the running of the Games. Sampling points have been set up in the Olympic Village, contracted hotels, centralized sites, and other venues. The sampling time is quite flexible, with the services available from 6 a.m. to 11 p.m. each day. The athletes can go for tests based on their competition schedule without any appointments. The result of the sampling taken between 6 a.m. and 12 a.m. will come out before 8 p.m., and those between noon and 11 p.m. will come out before 6 a.m. the next day. Some people have asked if negative test results can be given on a daily basis. It is clarified in the handbooks that only those with positive results will be informed.  

Thank you!

Red Star News:

All athletes are encouraged to get vaccinated according to the competition standards of the second editions of the Playbooks. Are booster shots also needed for athletes? In addition, how to better manage those people who are exempted from vaccination because of medical reasons? Thank you.

Huang Chun:  

Thank you for your question. As you all know, COVID-19 vaccinations are being carried out across the world. Vaccination has been proven to be an effective measure to prevent COVID-19 infection and reduce transmission risks, as well as a key step to run the events safely. Therefore, the handbooks stipulate that, except for some athletes and team officials who are medically exempt from vaccination for specific reasons, we require all other stakeholders to get vaccinated to avoid 21 days of quarantine after their entry into China. As for the booster shot you mentioned, we have built a consensus with the IOC after extensive communication. Given the uncertainties of the global pandemic and the spread of the new Omicron variant worldwide, we strongly recommend that all athletes and other stakeholders get a booster shot before coming to China. Many countries have made positive responses and administered booster shots to their athletes. We have formulated strict medical exemption standards, which are explained in the Playbooks, with the IOC, the IPC, and some relevant experts, meaning that not every exemption application for personal reasons in any case can be approved. The exemption standards are only limited to a small minority of athletes and team officials. We believe that athletes, who cherish their sports careers and the opportunity to participate in the Winter Olympics every four years, will strictly and consciously implement the relevant requirements in the handbooks to better protect themselves and others, and ensure the safe and smooth running of the Games. That's all. Thank you.  

Cover News:

At present, the "Meeting in Beijing" test events are coming to an end. The epidemic prevention work of the test events has been carried out in accordance with the competition requirements of the Beijing Winter Olympic Games. I would like to ask what was the outcome of the epidemic prevention measures and what is the feedback from all parties? Thank you.

Han Zirong:

Thank you for your question, which is a really good one. As you all know, as of October 5, BOCOG has been conducting a series of international test events. In terms of epidemic prevention and control, we have adopted measures that include remote prevention and control, closed-loop management, daily nucleic acid testing and health monitoring, and stringent implementation of relevant competition standards and requirements. During the test events, positive COVID-19 cases did occur among athletes before they boarded and they didn't board their flights to China according to the requirements outlined in the handbooks. Positive cases also emerged at the airport customs upon entry and among close contacts after entry. In accordance with relevant requirements, the individuals were quarantined in designated facilities and treated in designated hospitals, respectively, according to whether they had symptoms or not.  

In line the requirements of the handbooks, we allowed close contacts to attend the training and competitions normally under the condition of strict protection. Some contacts even played to the best of their ability in the contests and won gold medals, with which the athletes were rather satisfied. Given these examples, it is fair to say that the first edition of the Epidemic Prevention Handbooks has indeed stood the practical test of the test events.  

With the support of all parties, both the test events and the epidemic prevention and control work at all venues and sites during the events went smoothly, demonstrating that the first versions of the handbooks have stood the test and got recognition. Despite the positive cases, they were handled quickly and effectively, breaking the spread of the epidemic. It is fair to say that the relevant epidemic prevention and control policies have been well received in general, and recognized and spoken highly of by the vast majority of athletes, team officials, and foreign media friends.  

That's all for my answer.

South China Morning Post:

If infected cases are reported in the venues, how can the infections be prevented from spreading in Beijing and other cities? Thank you.

Huang Chun:

As we all know, the Beijing 2022 Winter Olympics will be held amid the pandemic. The emergence of virus carriers or small clusters of confirmed cases is likely to happen. During the event, a large number of inbound and outbound visitors will gather here, so the risk of transmission is very high. We have formulated emergency response plans for any contingency. If positive cases appear, we will take the following measures. Individuals who remain symptomless will be quarantined in facilities set up in the three competition zones, which is different from common practice in cities where the positive cases are sent to hospitals. Individuals who display symptoms will be transferred to designated hospitals, such as Ditan Hospital in Beijing and the No. 1 People's Hospital in Zhangjiakou, both of which have rich experience in the treatment of infectious diseases. Athletes who test positive will definitely not be allowed to compete. They will be discharged from isolation in accordance with the discharge guidelines. Those who test positive but are asymptomatic will be tested every day, beginning 24 hours after the last test and then discharged after they provide two consecutive negative COVID-19 test results with at least 24 hours between the two samples and no other COVID-19 symptoms. They can return to their Games-time roles after recovery according to their conditions and the requirements of the competition. They will also be asked to adopt additional countermeasures. Those displaying symptoms in Ditan Hospital and other hospitals will only be discharged if the following conditions are met: their temperature returns to normal for three consecutive days; respiratory symptoms improve significantly; lung imaging shows significant improvement; and there are two consecutive negative COVID-19 tests with a sample interval of at least 24 hours. They also can return to their Games-time roles after recovery.

If a person tests positive for COVID-19, then they will undoubtedly have close contacts. We formulate close contact criteria during flights and competition in accordance with international standards such as those laid out by the WHO. In China's communities, close contacts will be quarantined in designated hotels for 21 days, however, at the Winter Olympics we will carry out a closed-loop management system. In a large loop, rather than doing daily testing once, a close contact should instead receive two tests, and live and eat separately. More specifically, we will arrange dedicated vehicles for close contacts to move freely between their locations of quarantine and the venues. If results are negative, then they can take part in the competition and continue working under certain conditions.

We as well as the general public place a lot of focus on the impact to society at large. Preventing infections within the closed-loop from spreading to communities in cities as much as possible is a red line, especially when faced with the severe acute Omicron variant. We will strictly apply the closed-loop management policy and requirements of daily testing to prevent the virus from spreading further. 

CGTN:

The U.S.-based National Hockey League (NHL) announced yesterday that their players will not be participating in the Beijing 2022 Winter Olympics because of the pandemic. I want to ask if China will make any adjustments to its anti-pandemic policies, so as to make it more convenient for foreign athletes to take part in the competition. 

Huang Chun:

Thank you. I also read of the news yesterday and am keeping an eye on it. As you just said, they cannot participate in the Olympics this year because of the pandemic and we are sorry about that.

The epidemic prevention and control policy for the event was jointly formulated by the IOC, IPC and BOCOG. We issued two editions of the Beijing 2022 playbooks on Oct. 25 and Dec. 13, respectively. The measures in the playbooks have been made in accordance with the latest scientific achievements and opinions of experts and in reference to the experiences of other international events. In particular, we have adopted such measures in the recent 13 test events and training weeks from October to December. The overall effect was obvious and recognized by all stakeholders. We believe that these measures can reduce the risk of transmission, safeguard the health of all participants and the people of China, and ensure the safe and smooth running of the Winter Games. Thank you.

Xinhua News Agency:

The Beijing 2022 Olympic and Paralympic Winter Games will involve three competition zones and 19 venues spread out over various locations. My question is, how will you guarantee medical treatment? Thank you.

Li Ang:

Thank you for your question. As we all know, medical treatment is a key part of the service guarantee for the Games. In accordance with the requirements outlined in the Beijing 2022 Playbooks and the FIS Medical Guideline, Beijing will follow a designated, secure and effective approach to implement its supporting services, so as to host a streamlined, safe and splendid Olympic Games. We have focused on the following four aspects:

First, we have improved resource allocation of medical treatment. We have set up three kinds of medical stations throughout the competition venue: fixed medical stations, competition field medical stations, and medical stations for spectators. There are 88 medical stations in total at competition areas in Beijing, which will provide on-site medical treatment and triage and transfer sick and injured people. A total of 1,140 key medical personnel from 17 designated hospitals and two pre-hospital first-aid institutions have been assembled to serve as medical support personnel for the venue, with a backup of 457 hospital-level experts. In addition, 120 medical personnel from 12 tertiary hospitals were selected to form a municipal-level backup, equipped with 74 ambulances near the stadiums, 54 of which are negative pressure ambulances. In accordance with epidemic prevention and control requirements during the Winter Olympics, the BOCOG classified Olympics-related patients into five categories: confirmed and suspected COVID-19 patients, patients with fever in the closed loop, other patients in the closed loop, patients with fever outside the closed loop, and other patients outside the closed loop. We have adjusted and optimized treatment in different designated hospitals. Eighteen designated hospitals will treat patients in specific categories to avoid overlapping routes of patients with different risks. After the competition starts, 1,188 medical staff and 840 hospital experts will be dispatched from designated hospitals to provide timely and efficient medical services. Meanwhile, 60 municipal-level experts and 10 academicians will provide high-level technical support. As you can see, we have made full preparations in terms of manpower.

Second, according to stadium conditions and hospital characteristics, we have developed differential and targeted schemes for medical security. Medical staff, including orthopedics, stomatology, and other disciplines, will treat patients injured in different sports. For example, the ice hockey stadium is equipped with CT, dental chairs, and other relative equipment. We have carried out targeted first-aid exercises for different venues. In order to give full play to the advantages of professional disciplines, designated hospitals developed targeted medical security schemes to improve medical treatment capabilities. Yanqing Hospital of Peking University Third Hospital has transformed a 12,000-square-meter independent inpatient building into the Winter Olympics Medical Center, equipped with 72 beds, CT and MRI equipment, operating rooms, nucleic acid sampling booths, and a fever clinic. Beijing Anzhen Hospital set up a special area for the Olympics-related patients. Peking University People's Hospital, Beijing Chaoyang Hospital, and Bejing Shijitan Hospital have adjusted their hospital layout, set up special wards, been equipped with special CT and MRI equipment, and established negative pressure hybrid operating rooms, which will provide a strong guarantee for suitable medical treatment during the Winter Olympics.

Third, we have accelerated the construction of polyclinics in Winter Olympic villages. A 1,500-square-meter polyclinic in Beijing Winter Olympic Village and a 1,658-square-meter polyclinic in Yanqing Winter Olympic Village have been built, including 18 disciplines such as emergency treatment, physiotherapy and rehabilitation, imaging, TCM, and dentistry, which will meet the needs of basic outpatient service for 16 hours a day and emergency treatment for 24 hours after the competitions begin. At present, medical equipment testing of the polyclinic in Beijing Winter Olympic Village has been completed, and the medical equipment of CT, MRI, and DR Fangcang of the polyclinic in Yanqing Winter Olympic Village have been debugged in place, which will ensure orderly medical treatment, including outpatient service, emergency treatment, and rehabilitation transfer during the competition.

Forth, we have strengthened training, exercises, and blood supplies. Based on the principle of full training and internal-external integration, we have increased training of medical personnel in the knowledge of Winter Olympics, English, and skiing skills. Forty ski doctors have reached the international rescue level, and 1,900 medical support staff have acquired basic first-aid capability. Beijing Red Cross Blood Center has established a special blood allocation mechanism during the competition, with reserves of Rh-negative blood maintaining at 1,800 to 2,000 units.

In a word, Beijing will coordinate its medical resources to guarantee medical treatment for the Winter Olympics and Winter Paralympics, and provide high-quality and efficient medical treatment for athletes and friends from all over the world. Thank you.

Han Zirong:

We can see from Mr. Li's introduction that medical services for the Winter Olympics and Winter Paralympics are ready. Due to the characteristics of Winter Olympics and winter sports, the probability of injury is high for both athletes and staff. Medical rescue in international competitions has strict operating procedures. In the case of emergency rescue, there may be queries about why a rescue was slow. In fact, during the competition, medical assistance has to follow procedures in light of international standards. For example, when an athlete falls, team doctors have to decide whether the athlete should be transferred for further treatment or receive on-site treatment. Emergency personnel can only transfer the athlete after team doctors have finished their on-site judgment. Especially in the case of injuries, the first thing we have to do is stop the game so as to prevent secondary injuries. We hope that friends from the media can pay more attention to the medical rescue procedures of such international competitions. Our medical rescue teams will certainly carry out emergency treatments in accordance with the rules and procedures of international competitions to guarantee suitable medical treatment at the Winter Olympics.

Kyodo News Agency:

I would like to inquire about the spectators. Which venues and sports events do the BOCOG plan to allow spectators to attend? What is the spectator limit? When will ticket sales start? What are the requirements of the COVID-19 countermeasures for the spectators? Thank you.

Han Zirong:

You have raised questions of common concern. In view of the complex situation of the global COVID-19 pandemic, in order to prevent the possible spread of the virus and ensure the safety of all participants, we have already announced that tickets will be sold exclusively to spectators residing in China's mainland.

Regarding the ticket policies, COVID-19 prevention requirements, and other related information for domestic spectators, we are still making plans and will release them to the public in due course. Please refer to the information published through our official channels. We will keep close communication with the IOC and issue relevant ticket policies and COVID-19 countermeasures for domestic spectators regarding the COVID-19 situation. We hope that everyone obtains information through official channels. That's all for my answer for now.

Southern Metropolis Daily:

How would you cope with the situation if a positive case is found during the Games? How would you minimize the impact on related personnel? Thank you.

Huang Chun:

Just now, a reporter asked a similar question, which I've already introduced. I will briefly answer it again.

During the Games, there is a probability of infections or a small-scale cluster outbreak happening in the closed loop. But we have already made a plan to deal with such a situation and the plan worked during the previous testing competitions. I've already introduced the symptoms of the infected, whether he or she has symptoms or not, where to isolate and treat the infected, and the criteria for ending isolation or quarantine and hospital discharge if a positive case were to be found. Regarding whether it would affect the schedule of the Games, generally speaking, we would not adjust the event unless a large outbreak occurs. Certainly, in this regard, we will keep close communication with the IOC and the IPC and make joint judgments on whether to suspend the Games or adjust the schedule and other arrangements. 

I've also introduced the criteria for close contact and relevant management requirements. The competitions of the close contacts would not be affected if they strictly implement the overall prevention and control principles and measures. But there is a prerequisite: the athletes must provide proof of negative test results within six hours before they take part in the competition. In addition, for other Olympic-related personnel except for the athletes, if his or her job and tasks can be replaced by others, he or she should implement the quarantine policy of the city.

Given the probability of infections, we hope that every participant should strictly observe the closed-loop epidemic prevention measures. Only in this way can the Games be held and run smoothly.

Thank you!

Shou Xiaoli:

Due to time constraints, the last question, please. 

CRNTT:

We have noticed that the Version 2 of the Beijing 2022 Playbooks say that the first point of entry into the Chinese mainland must be Beijing Capital International Airport. Why? We know that there is often a high flow of passengers at the capital airport. Will the travel of ordinary passengers be affected? How will participants get to the closed-loop hotel from the airport? Thank you.

Huang Chun:

Thank you for raising a question of great concern – will cross-infection happen at the airport among the ordinary passengers since a large number of inbound participants will arrive at China without immediate quarantine?

As the largest airport in China, Beijing Capital International Airport boasts a high passenger-carrying capacity. Since the COVID-19 outbreak, we have seen that the airport has accumulated rich experience in epidemic prevention and control. Generally, the first point of entry to Beijing is the Beijing Capital International Airport. It has competent staff who are experienced in epidemic prevention and control, proper facilities and layout, and standardized working mechanisms and workflow. In addition, the airport has set up specific parking spaces, special areas for personnel, and special passages and lines of flow for the Olympics. What's more, the Beijing Capital International Airport is relatively close to the three competition zones and the expressway, which ensures excellent transport for the inbound athletes and attendees. The public can rest assured because they are outside the closed loop. We can guarantee that. During the entire process, a closed-loop system is enforced, from athletes and attendees' entering China and leaving the airport, their transportation to the Olympic and Paralympic Villages and hotels by specific vehicles, and to their leaving of the venues after the competitions to the airport where specific areas will be set up to deal with the relevant formalities. All Olympic-relevant personal will use dedicated Games transport during the whole process. Given the closed loop, the public will be separate from the Olympic-relevant personal. With all this being said, the Beijing Capital International Airport is an ideal first point of entry. It is a correct choice. Thank you. 

Shou Xiaoli:

Thank you, Ms. Han. Thank you, all the speakers and friends from the press. Thank you for your attention. Today's press conference is hereby concluded. 

Translated and edited by Zhang Jiaqi, Wang Qian, Duan Yaying, Zhang Junmian, Qin Qi, Chen Xia, Xu Xiaoxuan, Yang Xi, Ma Yujia, Li Huiru, Lin Liyao, Liu Qiang, Wang Yiming, Wang Yanfang, 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:

Xu Lin, deputy director of the Publicity Department of the Central Committee of the Communist Party of China (CPC) and minister of the State Council Information Office (SCIO)

Xu Yousheng, deputy director of the United Front Work Department of the CPC Central Committee

Tian Peiyan, deputy director of the Policy Research Office of the CPC Central Committee

Guo Zhenhua, deputy secretary general of the Standing Committee of the National People's Congress (NPC)

Hu Henglu, head of the Research Department of the General Office of the National Committee of the Chinese People's Political Consultative Conference (CPPCC)

Wang Aiwen, vice minister of civil affairs

Chairperson:

Chen Wenjun, director general of the Press Bureau of the SCIO and spokesperson of the SCIO

Date:

Dec. 4, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. The State Council Information Office (SCIO) is holding a press conference today to issue and introduce a white paper titled "China: Democracy That Works," and then take your questions. Present at today's press conference are Mr. Xu Lin, deputy director of the Publicity Department of the Central Committee of the Communist Party of China (CPC) and minister of the SCIO; Mr. Xu Yousheng, deputy director of the United Front Work Department of the CPC Central Committee; Mr. Tian Peiyan, deputy director of the Policy Research Office of the CPC Central Committee; Mr. Guo Zhenhua, deputy secretary general of the Standing Committee of the National People's Congress (NPC); Mr. Hu Henglu, head of the Research Department of the General Office of the National Committee of the Chinese People's Political Consultative Conference (CPPCC); and Mr. Wang Aiwen, vice minister of civil affairs.

Next, I will give the floor to Mr. Xu Lin.

Xu Lin:

Ladies and gentlemen, friends from the media, good morning.

Democracy is a common value of humanity and an ideal that has always been cherished by the CPC and the Chinese people.

This year marks the centenary of the CPC. Over the past hundred years, the Party has upheld people's democracy and led the people in realizing their status as masters of the country. The Chinese people now truly hold in their hands their own future and that of society and the country.

Since the Party's 18th National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has developed whole-process people's democracy as a key concept and strived to implement it, further translating democratic values into science-based and effective institutions and concrete actions. The viability and strength of whole-process people's democracy can be seen across China.

Today, the SCIO issued a white paper titled "China: Democracy That Works." This important document is a systematic introduction to China's democratic values, their course of development, institutional arrangements and systems, actions, as well as relevant achievements and contributions. The document notes that whole-process people's democracy integrates process-oriented democracy with results-oriented democracy, procedural democracy with substantive democracy, direct democracy with indirect democracy, and people's democracy with the will of the state. It is a model of socialist democracy that covers all aspects of the democratic process and all sectors of society. It is true democracy that works.

The white paper consists of three parts: preamble, main body and conclusion. The main body is divided into five sections: "Whole-Process People's Democracy Under CPC Leadership," "A Sound Institutional Framework," "Concrete and Pragmatic Practices," "Democracy That Works" and "A New Model of Democracy." From these five aspects, it is clear that China's whole-process people's democracy has both distinctive ideals and pragmatic actions as well as both institutional procedures and participating practices. It not only promotes China's development, but also increases the diversity of the political progress of humanity. It is a democratic system that integrates the logics of history, theory and practice.

First, China's democracy puts the people as the country's masters. The people's status as masters of the country is the essence of people's democracy in China. The white paper reviewed the process in which the Party led the people in developing democracy during the New Democratic Revolution period (1919-1949), socialist revolution and reconstruction period (1949-1978), and the years of reforms, opening-up and socialist modernization after 1978. It notes that since the 18th CPC National Congress, the Party has led the people in proactively developing whole-process people's democracy, and China's democracy has entered a new historical stage with its people having greater confidence in the country's democratic course and the future of China's democracy getting brighter. The white paper points out that whole-process people's democracy is a creation of the CPC in leading the people to pursue, develop and realize democracy, embodying the Party's innovation in advancing China's democratic theories, systems and practices. The white paper stresses that the Party's history of struggle is a course of rallying the people and leading them to explore, establish and develop whole-process people's democracy.

Second, democracy in China has achieved a sound institutional framework. In China, the people's status as masters of the country is the bedrock of all the systems of the country, and underlies the operation of all the systems for state governance. Whole-process people's democracy involves complete institutional procedures.

China has adopted the governing system of the people's democratic dictatorship, upholding the unity of democracy and dictatorship to ensure the people's status as masters of the country. The system of people's congresses has been adopted as the governing structure, through which the people exercise state power effectively. China has upheld and improved the system of multiparty cooperation and political consultation under CPC leadership. The system is able to avoid situations where there is discussion without decision and there is decision without action. It also effectively mitigates the risks of inadequate oversight in one-party rule, and the problems of destructive competition in multiparty political systems. China has consolidated and developed the broad patriotic united front, systematically promoting harmonious relations between political parties, between ethnic groups, between religions, between social groups, and between Chinese people at home and overseas. China has upheld and improved the system of regional ethnic autonomy, making the people of all ethnic groups the masters of the country on the principle of ensuring the solidarity and unity of the country. China has also upheld and improved the system of community-level self-governance. Democracy at the primary level has been expanded so that local residents can manage their own affairs by serving the community, undertaking self-education, and exercising public scrutiny.

According to the white paper, these well-coordinated and comprehensive institutional procedures serve to put into place diverse, open, and well-organized democratic channels to ensure that the Party's policies and the state will are integrated with the people's aspirations and that the people are masters of the country.

Third, democracy in China has been tested through concrete and pragmatic practices. According to the white paper, if the people are awakened only to cast a vote but become dormant afterwards, that is no true democracy. If the people are offered great hopes during electoral campaigning but have no say afterwards, that is no true democracy. If the people are offered fulsome promises during electoral canvassing but are left empty-handed afterwards, that is no true democracy.

Whole-process people's democracy in China is a complete system with supporting mechanisms and procedures, and has been fully tested through wide participation. China's whole-process people's democracy is a combination of electoral democracy and consultative democracy, and is applied through a combination of elections, consultations, decision-making, management, and oversight. It covers the economic, political, cultural, social, eco-environmental, and other fields, with a focus on national development, social governance, and people's lives. Whole-process people's democracy ensures that the people's voices are heard and their wishes are represented in every aspect of China's political and social life. It prevents individuals from manipulating the political process to win elections, and leaves no room for politicians to shower promises while campaigning and break them all once elected.

Fourth, democracy in China is an extensive and true democracy that works. According to the white paper, democracy is not a decorative ornament, but an instrument for addressing the issues that concern the people.

With complete institutions and extensive participation, whole-process people's democracy has evolved from an idea into a system and mechanism of governance that has taken root in the soil of Chinese society and become part of people's lives. In China, all power belongs to the people, and the people enjoy extensive rights. In China, the people have gained a stronger sense of fulfillment, happiness, and security, and human rights are fully respected and protected. In China, democratic participation has kept expanding, and the people's demands can be freely expressed and effectively fulfilled.

The white paper points out that "One essential feature of a good model of democracy is that it will promote sound governance and boost national development," and "It is hard to see how a country can serve as a good example for the rest of the world if its own model of democracy is unsuccessful or inefficient in national governance." In addition, it states, "A good model of democracy should build consensus rather than creating social rifts and conflicts, safeguard social equity and justice rather than widening social disparities in favor of vested interests, maintain social order and stability rather than causing chaos and turmoil, and inspire positivity and appreciation of the good and the beautiful rather than instigating negativity and promoting the false and the evil."

China's democracy has boosted national development and social progress, and ensured the wellbeing of the people. It is high-quality democracy. 

The white paper emphasizes that "Whether a model of democracy works should be tested in actual practice and judged by the people."

Fifth, China's democracy has contributed a new model to the international political spectrum. Representing nearly one-fifth of the world's population, the more-than-1.4 billion Chinese people enjoy the status as masters of the country and extensive rights and freedoms. China has explored a new path to democracy and contributed its experience to global political progress.

The white paper points out that, "China has created and developed whole-process people's democracy in line with its national conditions. This is a form of democracy with distinctive Chinese features which at the same time reflects humanity's universal desire for democracy." It also says "There is no single road to democracy."

"Political systems vary from civilization to civilization, and each has its own strengths." "To judge other countries by one's own yardstick, or force them to duplicate one's own political system or democratic model … are undemocratic in themselves." Therefore, such deeds earn no one's heart and are doomed to fail. 

The white paper highlights that "All countries should uphold the principle of nondiscrimination, respect others' models of democracy, share experience with others, explore their own paths, and contribute their due share to human progress."

"There is always scope for improving the system of democracy." "China has achieved considerable progress in developing democracy; … China still needs to make further improvements. On the path towards comprehensive socialist modernization, the CPC will continue to uphold people's democracy, embrace the people-centered development philosophy, promote whole-process people's democracy, ensure the sound development of democracy, and pursue well-rounded human development and common prosperity for everyone."

"The Chinese people are willing to work together with all other peoples around the world to carry forward the common values of humanity – peace, development, fairness, justice, democracy and freedom. In a spirit of mutual respect and following the principle of seeking common ground while setting aside differences, we will add new elements to the world's political structure and advance towards a global community of shared future together."

That's all I have to introduce. Thank you!

Chen Wenjun:

Thank you, Mr. Xu. The Q&A session starts now. Please identify the news outlet you work for before raising a question. We have many journalists from other countries here, and questions asked in English will be interpreted into Chinese on the spot. Please start your questions now.

People's Daily:

China upholds the CPC's overall leadership, especially the centralized and unified leadership of the CPC Central Committee. What is the relationship between upholding the leadership of the CPC and whole-process people's democracy? Thank you.

Tian Peiyan:

The essence of the leadership of the CPC is to uphold and ensure the people's status as masters of the country. "Whole-process people's democracy is a creation of the CPC in leading the people to pursue, develop and realize democracy, embodying the Party's innovation in advancing China's democratic theories, systems and practices." Developing whole-process people's democracy can ensure the CPC leadership more effectively. We can say that upholding the CPC leadership is highly consistent with developing whole-process people's democracy, with the two reinforcing and complementing each other. 

On the one hand, upholding the CPC leadership is the fundamental guarantee for whole-process people's democracy. The CPC represents the fundamental interests of the overwhelming majority of the Chinese people, without any special interests of its own, and never represents the interests of any interest groups, powerful groups, or privileged elites. It stands firmly with the people and relies closely on the people to create history. In such a vast country with a population of more than 1.4 billion from 56 ethnic groups, if we were without the CPC leadership, especially the centralized and unified leadership of the CPC Central Committee, or if we implemented the so-called "democracy" in the West, it would be easy to become destabilized and fall into chaos, and democracy would inevitably reverse. Only by upholding the CPC leadership can we guarantee the right direction of democracy and ensure that people administer state affairs and manage economic and cultural undertakings and social affairs through various channels and in various ways in accordance with the law.

On the other hand, developing whole-process people's democracy is the intrinsic requirement of upholding the CPC leadership. Developing whole-process people's democracy can pool people's wisdoms and strengths into the cause of the CPC and the state, build stronger public support for the CPC leadership, make the policymaking of the CPC more reasonable, and implement the theories, lines, principles, and policies of the CPC in a more thorough and vigorous way. Thank you.

Lianhe Zaobao:

I have two questions. The U.S. will convene a Summit for Democracy next week. Recently, China has also emphasized whole-process people's democracy, and it released a white paper titled "China: Democracy That Works" today. Some hold that China and the U.S. are now in a struggle to make their own voice heard about democracy. What's your opinion on this? My second question is, the CPC will convene its 20th national congress in the second half of next year, and a total of 2,300 delegates to the congress will be elected. Could you please brief on the composition of the delegates, such as the ratio of officials against grassroots representation or that of male versus female? Thank you.

Xu Lin:

Thank you for your questions. First, we always hold that democracy comes in many forms. There are many ways to achieve it, and the model that suits best is always the most appropriate. As I have just mentioned, China's whole-process people's democracy is a model of socialist democracy that covers all aspects of the democratic process and all sectors of society. It is true democracy that works. It is rooted in China's history and culture, and suited to the country's national conditions. With distinctive Chinese characteristics, it draws on the achievements of human civilization, exemplifies common values of humanity, enriches international politics, and contributes China's ideas and solutions to the development of democracy. 

We always uphold that we should be open and inclusive and seek common ground while setting aside differences for different forms of democracy in different countries. As for the explorations and efforts in pursuit of democracy in different countries, we should respect them and draw on each other's experiences. That is true democracy. A handful of countries, adopting the hegemonic mindset that "whoever disagrees with me is wrong," treat other forms of democracy as undemocratic and even reject or suppress them. Those deeds are undemocratic themselves. Their models of democracy are notorious, and their own domestic governance is a mess, but they dictate to others and hurl abuses at others' models of democracy. Does this conform to their so-called democracy?

The U.S. proclaims itself "leader of democracy" and organizes and maneuvers a so-called "Summit for Democracy." But in fact, it just wants to suppress and contain countries with different social systems and development modes in the disguise of democracy. The deeds of being against democracy with the name of fake democracy are doomed to be a joke in the development of democracy and would not get any support.

As for your second question, next year, the CPC will convene its 20th national congress. Recently, the CPC Central Committee released a circular on the election of delegates to the Party's 20th national congress. Officials of the Organization Department of the CPC Central Committee were interviewed by Xinhua News Agency on the related issues. Here, I would like to give you a more detailed introduction.

According to the CPC Central Committee, a total of 2,300 delegates will be elected to the Party's 20th national congress. The quota for the number of delegates is mainly determined by the number of Party organizations and the number of Party members, while taking into account such factors as the number of delegates to the previous national congresses.

The CPC Central Committee stresses guaranteeing the proportion of delegates from frontline work and production. Among delegates representing provincial level regions, the central financial sector, and Beijing-based centrally-administered enterprises, Party members from the front line should account for at least one-third of the total while those at various leadership posts should not exceed two-thirds of the total. Female Party members should account for a certain proportion of the delegates. The proportion of female delegates from a provincial level region should be higher than that of female Party members in the total number of Party members in the region. There should be a certain number of female delegates from the central and state organs, the central financial sector, Beijing-based centrally-administered enterprises, the People's Liberation Army, and the People's Armed Police Force. These fully embody democracy within the Party and extensive representation, which will enable delegates to the Party's 20th national congress to better represent and reflect the will of Party members from all walks of life and sectors. Thank you.

Kyodo News Agency:

What kind of people can be candidates for people's congress deputies? How to elect deputies to the NPC and the local people's congresses at all levels? Compared with the systems of Western countries, what are the differences and characteristics? Thank you.

Guo Zhenhua:

The system of people's congresses is China's fundamental political system, whose original aspiration and essence is to ensure Chinese people's status as masters of the country. The Constitution stipulates that all power in China belongs to the people. The election of deputies to people's congresses, which is the basis of the system of people's congresses, has two notable characteristics:

First, the rights to vote for Chinese citizens are the most extensive. According to the Constitution, all citizens of the PRC who have reached the age of 18 shall have the right to vote and stand for election; persons deprived of political rights in accordance with law shall be an exception. Currently, more than 1 billion voters are participating in the elections to people's congresses at the township and county levels. Elections at the grassroots level are the most dynamic form of China's whole-process people's democracy, and also the world's largest elections.

The latest news reported that, in Beijing, Chinese President Xi Jinping, as a voter in Zhongnanhai electoral district in Xicheng district, cast his ballot at the Huairentang polling station. In Sichuan province, a 106-year-old woman cast her vote at a mobile ballot box outside her house. In Shanghai, a senior couple – a 90-year-old husband and his 78-year-old wife – displayed their collection of 31 voter's certificates after voting. These certificates are all owned by the couple, spanning 68 years. The oldest certificate belongs to Mr. Yuan, who participated in the first nationwide election of deputies to people's congresses in 1953 after the founding of the PRC.

Second, the deputies to people's congresses are fully representative of the people. China has five-level deputies: national, provincial, city, county, and township. At the end of 2020, 2.623 million people were serving as deputies to people's congresses at all levels nationwide. Among them, 2.478 million are at the township and county levels, accounting for 94.5% of the total. Deputies at the township and county levels are directly elected by the public; one person has one vote. Deputies to people's congresses at the city, provincial, and national levels are elected by people's congresses at the next level below. China's Electoral Law stipulates that there shall be an appropriate number of deputies from all regions, ethnic groups, and sectors, and makes clear requirements for the proportion of deputies elected from the grassroots level, especially workers, farmers, professionals and technicians, women, and ethnic minorities. It can be said that in China, deputies to people's congresses come from every region, every industry, every field, and every ethnic group.

Take the 13th NPC as an example. Among the nearly 3,000 deputies to the 13th NPC, 742 are women deputies, accounting for 24.9% of the total; and 468 workers and farmers, accounting for 15.7% of the total, including 45 migrant workers. Moreover, 613 deputies are professionals, accounting for 20.6% of the total, and 438 deputies are from ethnic minority groups, accounting for 14.7% of the total. All 55 ethnic minorities in China have NPC deputy representation. Even those with a very small population would have at least one NPC deputy. For example, the Monba ethnic group in Tibet, which has a population of around 10,000, also has one NPC deputy, who is female. She is a teacher at a local elementary school.

In terms of the characteristics that define China's electoral system, I would like to add a few points. China's first Electoral Law in 1953 granted the universality of the right to vote. It took Western countries several hundred years to realize universal suffrage in the legal sense while China achieved true universal suffrage without all those twists and turns. On the increasing number of people participating in elections – which is also the voter turnout – since the initiation of reform and opening up, China has conducted 12 direct elections to people's congresses at the township level and 11 direct elections at the county level, with a current participation rate of around 90%. On election funding in China, finances for deputy elections come from the treasury, which provides an institutional guarantee that election integrity will not be compromised by financial interests.

Thanks.

Phoenix TV:

The system of regional ethnic autonomy is an important part of socialist democracy with Chinese characteristics. Some voices from the international community believe that the Chinese government has tightened its management of ethnic minority groups, and that ethnic minorities don't have authentic autonomy. What's your comment on that? Thank you.

Xu Yousheng:

Thank you for your question. We know that the system of regional ethnic autonomy is a basic political system in China. It provides an important institutional guarantee for following the correct path of resolving ethnic problems according to Chinese principles. The system of regional ethnic autonomy means that areas with large ethnic minority populations can practice regional autonomy, establish autonomous organs and exercise the power of self-government under the unified leadership of the state. There are currently 155 ethnic autonomous areas in China, including five autonomous regions, 30 autonomous prefectures and 120 autonomous counties (banners). The area where regional ethnic autonomy is practiced accounts for 64% of the entire territory of China.

The system of regional ethnic autonomy is fundamentally aimed at maintaining national unity and ethnic solidarity. All autonomous organs of these areas are local governments subject to the unified leadership of the central government. They must ensure that national policies and orders are implemented smoothly and that national laws and regulations are enforced. On that basis, they must guarantee the equal rights and obligations of various ethnic groups in accordance with the law, support their economic development and improve their citizens' quality of life, achieve common development and common prosperity, and ensure that the autonomy of ethnic groups is fully realized. The ethnic autonomous areas enjoy autonomous rights across a wide range of fields, including legislative power, the right of economic development, the right of financial management, the right to cultivate and appoint ethnic minority officials, the right to develop education and culture and the right to use their own spoken and written languages, among others. Take the training and appointment of ethnic minority officials, something the CPC and Chinese government prioritizes, as an example. After more than 70 years, we have built a sizable and qualified team of ethnic minority officials, which has laid an important organizational foundation for implementing the system of regional ethnic autonomy. On all standing committees of people's congresses of the 155 ethnic autonomous areas, there are citizens from the local ethnic groups assuming the office of chair or vice chair. Likewise, all governors, prefectural commissioners and heads of counties of ethnic autonomous areas are citizens from local ethnic groups. 

Practice has proved that China's implementation of the system of regional ethnic autonomy is not only conducive to national unity, ethnic solidarity, and social stability, but also conducive to the development and progress of ethnic minorities and the long-term stability of the country. In the nine years from 2012 to 2020, the regional GDP of the five autonomous regions of Inner Mongolia, Guangxi, Tibet, Ningxia, and Xinjiang and the three multi-ethnic provinces of Yunnan, Guizhou, and Qinghai increased from 5.1 trillion yuan to 10.4 trillion yuan; the per capita regional GDP increased from 27,000 yuan to 52,000 yuan; and the urbanization rate increased from 43.1% to 55.1%. All 31.21 million impoverished people in ethnic minority areas have been lifted out of poverty, 420 state-level impoverished counties in ethnic autonomous areas have all gotten rid of poverty, and together with the rest of the country, they have achieved moderately prosperity in all respects.

As to whether the system of regional ethnic autonomy is good or not, whether it works or not, it should be judged by the Chinese people. The development and progress of ethnic minority areas, and the tangible data of people of all ethnic groups living a good life, are the best and most resounding answers. Thank you.

Guangming Daily:

We know that the system of the CPPCC was born in 1949. After more than 70 years of development and practice, what are the advantages and characteristics of this political institution in China's model of democracy? Thank you.

Hu Henglu:

Thank you for your question. The CPPCC originates from the political system created by the leading CPC and all non-communist parties, public figures without party affiliation, people's organizations, and public figures of all China's ethnic groups and sectors of society. It is deeply rooted in China's history and culture, and is an important means to achieve people's democracy in China. In September 1949, the first plenary session of the CPPCC was held, marking the formal establishment of the system of the CPPCC. For more than 70 years, under the leadership of the CPC, the CPPCC has adhered to the two themes of solidarity and democracy, served the central tasks of the CPC and the country, and played an important role in the great practice of establishing and developing the PRC, exploring paths of reforms, and realizing the Chinese Dream.

Socialism with Chinese characteristics has entered a new era. The CPPCC is an important channel and a specialized body for socialist consultative democracy. It integrates consultation, supervision, participation, and cooperation. It promotes broad unity, promotes multi-party cooperation, and practices people's democracy in consultations. It is an important part of China's national governance system and a political institution with Chinese characteristics. It has many characteristics and advantages in China's model of democracy and the whole-process people's democracy:

First, it promotes scientific and democratic decision-making in the process of political consultation. We insist on consultation before and during decision-making. Through plenary sessions, meetings of the standing committee, meetings of chairpersons, meetings of special committees, forums on specific subjects, and consultative seminars, we conduct extensive and in-depth consultations on the major policies of the country, important issues in various economic and social fields, and concerns of the people. For example, around the formulation and implementation of the 14th Five-Year Plan, we actively provided suggestions and political consultations on CPPCC's platform of consultation, submitted information for more than 220 rounds, put forward more than 190 proposals, and promoted the wishes, appeals, suggestions, and opinions of the CPPCC members and all walks of life in society to be fully reflected in the decision-making.

Second, it expands consensus and enhances solidarity in the process of political consultation. Through the CPPCC platform, all parties and groups, as well as people from all ethnic groups and all walks of life that participate in the CPPCC, not only conduct in-depth consultations and discussions on state affairs, pragmatically put forward opinions and suggestions, but also accept the propositions of the CPC, and then help publicize and explain the Party's policies and guidelines among people of different circles, enhancing trust and dispelling doubts, realizing the two-way effort of contributing their suggestions to aid administration, and, building consensus. For example, the 13th National Committee of the CPPCC implemented the decisions and arrangements of the CPC Central Committee, and actively consulted and made suggestions on how to resolutely win the fight against poverty, meanwhile, it tells the story of China's poverty reduction from the perspective of the CPPCC through member lectures, inspections, and themed reading groups. The CPPCC members therefore have a deep understanding of the original aspiration and mission of the CPC, the great course of building a moderately prosperous society in all respects, and the institutional strengths of the socialism with Chinese characteristics.

Third, it guarantees the people's orderly political participation in the process of political consultation. The CPPCC is composed of representatives from 34 sectors, including the CPC, the other political parties, the non-affiliates, people's organizations, 56 ethnic groups, and five major religions. At present, there are more than 3,200 CPPCC organizations at the national, provincial, city, and county levels, with more than 600,000 CPPCC members at all levels. This effectively guarantees all parties, organizations, ethnic groups, social groups and people from all walks of life to participate in the state affairs. The CPPCC supports non-Communist parties and non-affiliates to participate in the consultation and discussion of major national policies on the CPPCC platform, and makes institutional arrangements for the non-Communist parties to express their opinions and make suggestions on the CPPCC platform in the name of their own party. It serves as an important political and organizational form for implementing the system of multiparty cooperation and political consultation under the leadership of the CPC.

Thank you.

Reuters:

Comparing the whole-process people's democracy in China with democracy in the U.S., one difference is that voters in the U.S. can hold elected politicians accountable and vote them out in the next election if they think they didn't do a good job. Meanwhile, people's congresses in China only need to satisfy their superiors and the Party after being elected, and voters cannot vote out their superiors even if they are dissatisfied. What are your comments on this? Thank you.

Tian Peiyan:

Democracy is a concrete phenomenon that is constantly evolving. Rooted in history, culture, and tradition, it can take different forms and develops along the paths chosen by different peoples based on their exploration and innovation. The forms of democracy in China and in the U.S. should be tested in real-world scenarios and judged by the peoples.

Under the American system of democracy, politicians are agents of interest groups, rather than representatives of the interests of the voter majority or the country as a whole. They can willfully make promises to get elected but seldom fulfill them after being elected. They appear to be overseen by voters, but once elected, there's nothing voters can do but wait for the next election. If the people only wake up to cast a vote but become dormant afterwards, that is not true democracy. If the people are offered great hopes during electoral campaigns but have no say afterwards, that is not true democracy. If the people are offered fulsome promises during electoral campaigns but are left empty-handed afterwards, that is not true democracy. The Chinese people dislike and have no need for this kind of democracy.

Democracy in China is whole-process people's democracy under the leadership of the CPC. Party members and officials at all levels must accept oversight from the Party and the people throughout all aspects and sectors of the whole process, so as to ensure that public power, entrusted by the people, is and will always be exercised for the public good. No matter how high-level his or her position is, the person found to have violated Party discipline or state laws will be seriously punished, without exception. Deputies come from the people, represent the people, serve the people, are elected by the people, and are accountable to the people. They maintain close ties with the people at all times, always listen to and respond to the people's aspirations, actively advance solutions for the most pressing difficulties and problems that are of great concern to the people, and accept the oversight of the people and all social sectors. They are deputies who represent the people, reflect the will of the people, pool the wisdom of the people, and benefit the lives of the people. Voters and electoral units can disqualify or dismiss deputies who either cannot fulfill their duties or violate Party discipline or state laws, without having to wait until the next election. This kind of democracy is more broad-based, authentic, and effective.

According to surveys conducted by Harvard Kennedy School in China for 13 consecutive years, the Chinese people satisfaction with the Chinese government under the leadership of the CPC runs as high as 93%. I think people will make fair judges when comparing the democratic system in China with that in the U.S. Thank you.

Guo Zhenhua:

I agree very much with what Mr. Tian said about the contrast between how politicians in the U.S. behave during and after their election campaigns. I think one of the most important reasons is that, in the U.S., there is no institutional design or arrangement in its legal system for politicians, including members of Congress, to be overseen by voters after being elected. Even if voters are dissatisfied, they have to wait until the next election years later. In addition to the "revolving door" unique in the U.S. politics, it is unsurprising that members of the U.S. Congress speak for interest groups and are swayed by lobbying groups. On the contrary, in China, both the Constitution and the Electoral Law of the National People's Congress and Local People's Congresses stipulate that deputies to the NPC and people's congresses at local levels are subject to the oversight of voters and electoral units that elected the deputies, and voters and the electoral units have the right to dismiss deputies they elected. The Electoral Law also clearly stipulates procedures of dismissing deputies, giving voters in deputies' home electoral districts or deputies to the people's congresses of electoral units the power to jointly propose dismissals. In the past nearly four years since the 13th NPC, 10 NPC deputies have been dismissed in accordance with the law.

In all, comparing China with the U.S., the case is exactly the opposite of how you described. China's deputies to people's congresses are subject to strict and effective oversight during their terms of office, and the law stipulates clear dismissal rights and procedures. In the U.S., however, there is no institutional arrangement for those including members of Congress to be dismissed or supervised by voters during their terms of office. That is why we say that China's whole-process people's democracy has a sound institutional framework and concrete practices, which can ensure that voters and electoral units can effectively oversee the deputies they elect and leave no room for politicians to shower promises while campaigning and break them once elected.

Thank you.

China News Service:

What is the system of community-level self-governance in China? How do villagers committees and residents committees exercise self-governance? Thank you.

Wang Aiwen:

Thank you for your concern about the system of community-level self-governance, which is a basic political system in China. It is specified in the country's Constitution that residents committees established in urban areas and villagers committees in rural areas according to people's residences are people's organizations for self-governance at the grassroots level. Under the leadership of community-level Party organizations, such self-governance is a way for urban and rural residents to exercise their democratic right in accordance with the law to manage their own affairs including community governance, public affairs and public services by serving the community, undertaking self-education and exercising public scrutiny.

China has 492,000 villagers committees and 116,000 residents committees, covering all residents in urban and rural areas. These committees are selected by residents. How do they exercise self-governance? 

First, they organize democratic consultation. They pool ideas and widely solicit public opinions from residents. For example, they solicit residents' opinions regarding such affairs as the handling of community sanitation, aiding people in difficulty and expending collective income of villages, and make a to-do or priority list for the committees.

Second, they practice democratic decision-making on the basis of consultation. They review the affairs of consultation including the committee work to form final decisions through committee meetings and congresses.

Third, they organize residents to formulate or amend their own rules on self-governance and codes of conduct and self-regulation, which all residents need to obey. 

Fourth, they organize residents to oversee their work and review the performance of their staff. The entire decision-making process is made public, and so are the results of the decisions, which, together with residents' discussions, can be accessed via bulletins put on walls and bulletin boards or via cellphone. This practice ensures the supervision of the work of the committees. 

The system of community-level self-governance not only ensures people's democratic rights, but also plays an important role in our responses to major risks and challenges. In the fight against the epidemic, communities face great pressure in epidemic control due to China's large population of density. However, we have effectively contained the epidemic in our communities, because our residents and villagers committees have effectively organized the people to carry out joint and society-wide prevention and control, and contained the epidemic in communities. In the face of major risks and tests, the advantages of the Chinese system have been demonstrated. Thank you.

CRNTT: 

Democracy means supervision of public power. Judging from the corruption cases China has addressed in recent years, the country's anti-corruption situation is still complex and grave. What is your opinion on this matter? Thank you.

Tian Peiyan:

I'd like to take this question. Corruption is a common historical and social phenomenon in human society, which exists in all countries around the world. It is incompatible with the nature and principles of the CPC. Since its founding, our Party has been resolutely fighting against corruption. For a period before the Party's 18th National Congress, corruption was rather prominent in the country. Following the congress, our Party was deeply aware that corruption is the greatest threat to the Party's long-term governance. The fight against corruption is a matter of survival for the Party and the country, and therefore it is a major political battle that we cannot afford to lose, and also must not lose. Our Party is determined to honor its commitment to the 1.4 billion Chinese people by fighting corruption. No refuge has been excluded from the scope, no ground left unturned, and no tolerance shown in the fight against corruption. China has continued to impose tight constraints and maintain a tough stance and long-term deterrence, and has won a sweeping victory in the fight against corruption. Meanwhile, we are soberly aware that corruption has not been eradicated, and some areas are prone to corruption. The fight against corruption remains grave and complex, and will not stop. Our Party will continue to take integral and coordinated actions to raise the awareness, ability and resolve to resist corruption, and adopt effective measures to consolidate China's sweeping victory in the fight against corruption.

It is an important function of democracy to practice democratic oversight of public power and prevent its abuse and corruption. Since the 18th CPC National Congress, the Party has emphasized that public power is, and will always be, exercised for the public good and that power is prescribed by law, and regulated, constrained, and supervised by legal means to restrain power in an institutional cage. The exercise of power has been brought under stricter supervision. The supervisory systems of the Party and the state have been improved, and the reform of supervision mechanism and system building in key sectors have been advanced. A supervision system has been established with intra-Party supervision playing the leading role and various kinds of supervision coordinating with each other, thus preventing the anomie of power and rent-seeking to the largest extent. The Party has upheld democratic oversight throughout the entire process of the exercise of power and given full play to the irreplaceable role of democratic oversight in preventing corruption, thus reducing existing corruption constantly and restraining the increase of corruption effectively. Many corrupt officials were exposed through tip-offs and complaint letters, and individual interviews during disciplinary inspections. The fact that a large number of corrupt officials were investigated and handled does not mean the malfunction of democracy but proves the effectiveness of democratic oversight. We firmly believe that with the development of China's democracy and political system, democratic oversight will be more powerful, and corrupt officials shall have nowhere to hide in China. Thank you. 

Red Star News:

We all know that the deputies to community-level people's congresses are selected through direct election while those in the higher levels of people's congresses are elected indirectly. Will the current system mean that the suggestions and voices from ordinary people, especially vulnerable groups, will not be reflected in the highest level and be considered in the country's decision-making? Thank you. 

Guo Zhenhua:

The system of people's congresses is an important institutional support to whole-process people's democracy. The deputies to people's congresses in China, no matter at the national or community level, all come from the people and are rooted in the people. In addition, the deputies to people's congresses will stay in their original work positions after being elected so that they are in close contact with the people. 

In recent years, the people's congresses at all levels have set up more than 220,000 stations for the deputies to be in contact with the people, covering all townships and subdistricts across the country, and even some communities and villages. Deputies to the people's congresses at all levels receive information from the people and listen to their opinions at the stations on a regular basis. Such a system determines that deputies to the people's congresses in China are not career politicians and do not represent any particular interests. Therefore, they can truly and directly understand the people's aspirations and wishes, and submit the people's suggestions and advice through agencies of state power. At the NPC session each year, nearly 3,000 deputies will submit thousands of documents providing suggestions and advice. In this year's fourth session of the 13th NPC, the deputies put forward 8,993 suggestions, among which, the people's well-being was the biggest topic of discussion. For example, they discussed easing the burden of excessive homework and off-campus tutoring for students undergoing compulsory education, improving rural elderly care service systems, advancing a "toilet revolution" in rural areas, promoting the sorting of urban household waste, and improving social security for flexible employees such as delivery personnel. The suggestions bear the people's pursuit for a better life, reflect their aspirations, and demonstrate the responsibilities that the deputies have shouldered to hear the people's voices, pool the people's wisdoms, and benefit the people's lives. State organs carefully review the suggestions proposed by the deputies in accordance with law, and research and adopt reasonable suggestions in their work, including in their decision-making. They respond actively to social concerns and each and every one of the people's aspirations. 

Thank you. 

Global Times:

Some countries claim to be models of democracy for the whole world, but their response to the pandemic was awful and their social governance disordered, which is contradictory to that message. What are the functions of democracy? What are the standards for evaluating democracy? Thank you. 

Tian Peiyan: 

Democracy is not a decorative ornament, but an instrument for addressing issues that concern the people. True democracy should both take full cognizance of and fully realize the people's aspirations; give full expression to diversified opinions and advice, and form the united will of all the people; spur social creativity and vitality to the largest extent, and uphold social equity and justice effectively. 

For a long time, America has claimed itself as a model of democracy for the whole world. However, in the face of a pandemic unseen in a century, the American democratic system has exposed numerous of its maladies. In responding to the pandemic, due to serious political polarization, endless disputes among political parties, lack of coordination in different levels of government, and malfunctions in social oversight, America has failed to prevent and control the pandemic, which resulted in infections of nearly 50 million people and a death toll of more than 800,000. Such democracy will only bring disasters rather than happiness to the electorate . 

In the face of COVID-19, the CPC and the state have prioritized the people by putting their lives and health first, confidently risen up to the challenges and made resolute decisions, waging an all-out people's war against the virus in the shortest possible time. We have leveraged our institutional strengths to mobilize the whole nation and carried out a campaign to save lives on an unprecedented scale, which have reflected the country's nationwide coordination and solidarity. We have done everything possible to treat all patients, ranging from new-born infants to centenarians, saving countless lives. This has fully demonstrated that China's democratic system respects and protects everyone's life. 

How do you evaluate whether or not a country's political system is democratic and efficient? General Secretary Xi Jinping has given a definitive answer: It mainly depends on whether the succession of its leaders is orderly and in line with the law; whether all the people can manage state and social affairs and economic and cultural undertakings in conformity with legal provisions; whether the public can express their requirements without hindrance; whether all sectors can efficiently participate in the country's political affairs; whether national decision-making can be conducted in a rational and democratic way; whether people of high caliber in all fields can be part of the national leadership and administrative systems through fair competition; whether the governing party is in charge of state affairs in accordance with the Constitution and the law; and whether the exercise of power can be kept under effective restraint and supervision. History has proven that the China's style democracy works well in China. History will prove that the CPC will lead the Chinese people to enrich and improve the Chinese way of democracy, so that the tree of democracy will flourish with vitality. Thank you.

CGTN:

Some people think that China is exporting its model by virtue of its growing strength, which poses threats and challenges to the "world's democracies." What's your take on this? 

Xu Lin:  

Thank you for your question. First of all, I would like to point out that the concept of "world's democracies" is a false proposition concocted by a few countries. Democracy is the common value of humanity and a shared wealth of global political progress. Democracy is the right of the people in every country, rather than the prerogative of a few nations. It is for its people to judge whether a country is democratic or not, and it is up to the international community to judge whether a country is democratic or not. As Mr. Tian Peiyan just said, certain countries pose as the "model of world democracy" and "beacon of democracy" while failing to combat the pandemic, suffering chaotic domestic governance and severe political polarization, and imposing hegemony and bullying other countries. Doesn't it sound absurd? At present, the cause of human democracy stands at a crossroad between progression and regression. Some countries are inciting confrontation and division globally in the name of democracy and aggravating international tensions, and became a source of chaos in the world. It is clear to all who is threatening the cause of human democracy and becoming an obstacle to world peace and development. 

Democracy is an ideal that has always been cherished by the CPC and the Chinese people. This has been reflected in the main content of the white paper and in the statements made by other speakers in their answers. China is fully confident in our way of democracy. In active response to the people's needs and expectations for democracy, China has developed the whole-process people's democracy and established a democratic system covering a population of more than 1.4 billion from 56 ethnic groups living on 9.6 million square kilometers of land, making possible the widest participation of all its people.

Just now, Mr. Guo Zhenhua said that more than 1 billion voters have participated in the ongoing elections for deputies to the people's congresses at the county and township levels. Since the initiation of reform and opening up, China has held 12 direct elections to people's congresses at the township level and 11 direct elections to those at the county level, with a current participation rate of about 90%. We have a host of data and records on this. These facts together reflect the real situation of China's democracy and vividly demonstrate that the people are masters of the country.

China has developed the whole-process people's democracy here in our country and promoted democratic relations between nations. China upholds the principle that all countries, large or small, strong or weak, rich or poor, are equals. China does not copy from another country's political systems, nor do we ask other countries to replicate our practices. We believe that democracy comes in many forms in the richly diverse world and each country has the right to choose its own path to democracy. We are ready to strengthen exchange and mutual learning with other countries to jointly advance the political progress of mankind. Thank you. 

Chen Wenjun:  

Thank you to all the speakers and friends from the media. Today's press conference is hereby concluded.

Translated and edited by Wang Qian, Zhu Bochen, Li Xiao, Wang Yanfang, Liu Sitong, Zhou Jing, Mi Xingang, Wang Wei, Lin Liyao, Zhang Junmian, Cui Can, Liu Qiang, Zhang Rui, Huang Shan, Zhang Jiaqi, Li Huiru, Liu Jianing, Zhang Liying, Xu Xiaoxuan, Wang Yiming, David Ball, Daniel Xu, Tom Arnstein and Drew Pittock. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.