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Read in Chinese

Speakers:

Zhao Zeliang, vice minister of the Cyberspace Administration of China

Zhu Guoxian, member of the Standing Committee of the CPC Zhejiang Provincial Committee and director of the Publicity Department of the CPC Zhejiang Provincial Committee

Qi Li, secretary of the CPC Tongxiang Municipal Committee, Zhejiang province

Chairperson:

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

Date:

Sept. 10, 2021

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). The 2021 World Internet Conference Wuzhen Summit will soon kick off. Today, we are delighted to be joined by Mr. Zhao Zeliang, vice minister of the Cyberspace Administration of China (CAC); Mr. Zhu Guoxian, member of the Standing Committee of the Communist Party of China (CPC) Zhejiang Provincial Committee, and director of the Publicity Department of the CPC Zhejiang Provincial Committee; and Mr. Qi Li, secretary of the CPC Tongxiang Municipal Committee, Zhejiang province. They will first brief you on relevant information and then take your questions.

First, I'll give the floor to Mr. Zhao Zeliang.

Zhao Zeliang:

Ladies and gentlemen, friends from the media, the annual World Internet Conference (WIC) Wuzhen Summit will soon take place once again. Today, on behalf of the organizing committee, Mr. Zhu, Mr. Qi and I will brief you on the preparatory work for the summit.

The 2021 World Internet Conference Wuzhen Summit is jointly organized by the CAC and People's Government of Zhejiang province. The summit is scheduled to take place from Sept. 26 to 28 in Wuzhen, Zhejiang province, and the opening ceremony will be held on the morning of Sept. 26. Under the theme "Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace," the summit will be held both online and in-person. In addition to various activities taking place in the venues in Wuzhen, the event will also invite several key guests to participate online.

The world is undergoing profound changes unseen in a century, and the COVID-19 pandemic is wreaking havoc around the world. More than ever, humanity need to strengthen cooperation and join hands to move forward. The Chinese government has resumed hosting this global internet extravaganza in the form of the Wuzhen Summit and with its previous specification and scale, because it hopes that the conference can continue to give full play to its important role as "two platforms," namely a global platform for China to connect with the world, and a Chinese platform for the global internet to be shared and governed by all. The Chinese government also hopes to build in-depth communication with all countries and regions around the world and all parties of the internet to promote cooperation on digital technologies, optimize governance in digital ecosystem, and share in the benefits of the digital economy, so as to jointly build a community with a shared future in cyberspace and pool wisdom and strength for the development of human society. In accordance with the new characteristics of our time, this year's conference will have the following four highlights:

The conference this year will take a long-term perspective and discuss the future of civilization. "Building a Community with a Shared Future in Cyberspace" is the consistent theme of the World Internet Conference. The conference thoroughly implements General Secretary Xi Jinping's concepts and proposals of building a community with a shared future in cyberspace, grasps the developing trend of the integration of digital economy with economic and social development, and takes "Towards a New Era of Digital Civilization" as its theme this year. This not only reflects current trends, but is also of significance in both pace-setting and looking forward. During the conference, we will exchange ideas on this topic, both online and in-person, with nearly 2,000 representatives from domestic and foreign governments, international organizations, industry associations, internet companies in China and abroad, universities, think tanks and sci-tech research institutions, in a bid to offer insights for the building of a community with a shared future in cyberspace. As society is developing from industrial to digital civilization, the event also aims to envisage new forms of civilization for human society and jointly grasp new opportunities brought about by sci-tech revolution and development.

The conference this year will focus more on frontier sectors and reflect hot issues. The conference insists on reflecting frontier issues concerning the development and governance of the internet as well as the concerns of various parties. With regards to the topics of the sub-forums, a total of 20 sub-forums have been set up centered around hot issues regarding global cyberspace. In addition to traditional forums such as the Business Leaders Dialogue, the Belt and Road Forum for International Cooperation on Cyberspace, the International High-level Think Tank Forum on the Internet, and the Forum for International Norms in Cyberspace, this year's conference will also focus on 5G, artificial intelligence (AI), open source ecology, next-generation internet, data and algorithms as well as other new trends and hot issues in internet technologies, and select new topics accordingly. The conference will thoroughly address the concerns of various parties in China and abroad regarding data governance, the rule of law on the internet, the corporate social responsibilities of internet companies, online charity and digital efforts for poverty alleviation, as well as global anti-pandemic efforts and international communication, to name a few. In terms of the three major parts of the conference, the Release Ceremony for World Leading Internet Scientific and Technological Achievements will unveil 15 such achievements, demonstrating the new heights of the world's frontier internet technologies nowadays. The Light of Internet Expo has attracted some 300 Chinese and foreign companies who will proactively showcase the latest technologies and products concerning AI, big data, cyber security and so on. Meanwhile, the "Straight to Wuzhen" Global Internet Competition will continue to act as a competition for innovation and entrepreneurship, exploring new technologies, models and business forms of the development of internet.

The 2021 World Internet Conference will put more focus on opening up to expand its international influence. The organization of the conference always adheres to an international perspective, overcomes the adverse effects of the pandemic, and actively strengthens interaction and cooperation with embassies and consulates in China, well-known international organizations, international think tanks, and international conference organizations. It has invited the United Nations' Department of Economic and Social Affairs (DESA), the International Telecommunication Union (ITU), the World Intellectual Property Organization (WIPO) and the Global System for Mobile Communications Association (GSMA) to serve as co-organizers, and invited leaders from politics, enterprises, universities and research institutes of various countries to participate, and promotes many high-end dialogues and forum activities. The conference will also open a live video conference platform for the first time. Domestic and foreign guests will discuss global internet governance via online and offline platforms and share their experiences of global internet development.

The 2021 World Internet Conference will further strengthen its achievements and promote digital cooperation. The conference will hold "best practices in jointly building a community of shared future in cyberspace" case exhibition activities, comprehensively showing the best practices from network infrastructure construction, online cultural exchanges, network economic innovation and development, cybersecurity assurance, and cyberspace governance, and telling stories on international exchanges and cooperation in cyberspace. The activities will further enhance exchanges, build consensus, stimulate insights, strengthen cooperation, and provide a practicable path and strong impetus for all parties to jointly build a community of shared future in cyberspace.

Ladies and gentlemen, dear friends, the 2021 World Internet Conference will soon begin. On behalf of the organizing committee, Mr. Zhu, Mr. Qi and I, sincerely welcome all friends to participate in the conference, and strive to make this year's conference a colorful and influential event, and contribute to building a community with a shared future in cyberspace. Thank you.

Shou Xiaoli:

Thank you for your introduction, Mr. Zhao. I would like now to invite Mr. Zhu to make his introduction.

Zhu Guoxian:

Ladies and gentlemen, friends from the press, hello everyone. I am very happy to be here again at this familiar place, and meet new and old friends to introduce preparations for the 2021 World Internet Conference. As a journalist for the media, I participated in the conference on three occasions. Today as the director of the Publicity Department of the CPC Zhejiang Provincial Committee, I will brief you on the situation for the third time. On behalf of the CPC Zhejiang Provincial Committee and Zhejiang Provincial Government, I would like to sincerely invite everyone to meet again at Wuzhen in the golden autumn. I believe that the World Internet Conference will be more brilliant because of your presence, and will have more influence because of your wonderful reports. 

Just now, Mr. Zhao introduced the situation of the conference. As the host, Zhejiang will thoroughly implement the spirit of General Secretary Xi Jinping's important instructions, always uphold the concept of striving to improve on the previous session, and make good preparations to make the brand of the World Internet Conference brighter. We believe that the 2021 World Internet Conference will bring you special experiences, and provide you with materials and stories about Zhejiang in the era of digital civilization.

Zhejiang is a province where history and the future converge. This year marks the 100th anniversary of the founding of the CPC. One hundred years ago, the CPC was born on a tourist boat on Nanhu Lake in Jiaxing, not far from Wuzhen, thus initiating a century-long journey of fight and pursuit. Zhejiang is home to the revolutionary roots of the CPC. One hundred years later, in the historic year in which the CPC has fulfilled its first centenary goal and celebrates its 100th anniversary, General Secretary Xi Jinping and the CPC Central Committee have placed on Zhejiang the historical responsibility of pursuing high-quality development and constructing a demonstration zone for common prosperity, and given Zhejiang the glorious mission of exploring the path to realizing China's second centenary goal. At the historic crossroad of the two centenary goals, this year's World Internet Conference will be held in the land of Zhejiang and serve as a landmark on the new journey. Over the years, Zhejiang has seized major opportunities in the era of digital transformation. Guided by digital reforms, it has embarked on a path of innovation and development. A large number of internet companies, projects and talents have settled in Zhejiang. In the first half of this year, the added-value of the core industries of the digital economy in the province reached nearly 400 billion yuan, a year-on-year increase of 17.6%, accounting for 11.5% of GDP. In particular, since the digital reform, the whole province has focused on the "152" digital reform projects ("1" refers to the integrated intelligent public data platform; "5" refers to the five applications of digital technologies in the field of governance of the Party and government management, economy, society, and legal system; "2" refers to building a theoretical system and a system of institutional norms) and the "1+7+N" working system of carrying out reform, and launched platforms such as the "Zhejiang Fair" (a digital supervision system for business activities) and "Zhejiang Food Delivery Online." New breakthroughs in the digital field are constantly resulting in new achievements in social development.

Walking around Wuzhen, one will find the meeting of science and art. Some say that science and art are like two people climbing the same mountain from different directions, parting at the foot of the mountain and reuniting at the top. In Wuzhen, everything is married perfectly: the sound of pulling on oars with the flow of ideas, small bridges and corridors with interconnectivity, and an artistic and humanistic atmosphere with a pragmatic and realistic scientific temperament. In today's Wuzhen, modern landmarks such as the Wuzhen International Internet Exhibition & Convention Center, the Yunzhou Guest Service Center and The Light of Internet Expo center are situated along the Beijing-Hangzhou Grand Canal with its long history; while the Wuzhen Theatre Festival and the quaint Wucun village glow with even stronger cultural charm. Last week, the CPC Zhejiang Provincial Committee held a cultural work conference and made an important decision to implement projects to promote the cultural development of Zhejiang in the new era, enrich people's minds while pursuing common prosperity, achieve the goal of culture first in advancing modernization, and build a cultural pacesetter in the new era, creating a cultural development boom. The World Internet Conference is not only a feast of technology but also a feast of culture. Wandering through this world of art and science, we can better understand the secret of Zhejiang's development and perceive the landscape of common prosperity.

The conference will present digital applications in everyday life. The World Internet Conference is the best platform to stage the world's cutting-edge technological achievements of the internet. At this year's conference, we will introduce 25 smart projects such as 5G all-area autonomous driving, a smart nursing system and a digital ranch, centered around various scenarios such as life experience, smart production and industry eco-system. Over 300 leading enterprises such as Huawei, Alibaba, Tencent, Baidu, CETC and Kaspersky Lab will exhibit and showcase their latest internet-related technological achievements. During the conference, the Internet Technical Achievements Exhibition Hall will showcase innovative applications such as blockchain intelligent inspection, nanolithography and imaging devices, as well as integrated deep-sea robots both online and offline. In addition, we will hold a ground-breaking ceremony for the Internet Science and Technology Pavilion, which is scheduled to open in 2023, allowing the World Internet Conference to be open to the public throughout the year. In view of the need for epidemic prevention and control measures, we will build a smart system for the conference, integrating information systems for the management of conference guests, activities and venue resources, and optimize the application of technologies such as one-code access, facial recognition and infrared sensors, so as to ensure visual processes, problem tracking, controllable results and ultimately hold a safe conference.

Zhejiang has gained steam in digitalization reform and the excitement of the internet era is continuing to be written. We will hold the conference with high standards, provide high-quality services, and display high-level internet development results, which will come together to present a wonderful international conference. Thank you to friends from the media for your long-time concern and support for Zhejiang. That is all for my introduction.

Shou Xiaoli:

Thank you, Mr. Zhu. Now, the floor is open for questions. Please identify your news outlet before you raise a question. 

CCTV:

What were the considerations when deciding the theme of the World Internet Conference 2021, "Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace?"

Zhao Zeliang:

I will answer the question. Currently, with the rapid development of digitalization, the 2021 WIC's theme, "Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace," has special meanings. We all know that the first WIC was held in 2014 and since then we have held the conference for seven times. For the past more than seven years, the four principles for advancing the transformation of the global internet governance system and the five proposals for building a community with a shared future in cyberspace put forward by General Secretary Xi Jinping have been widely recognized by the international community. Since the outbreak of the COVID-19 epidemic last year, the internet has played an important role in recovering the global economy recovery, resuming the normal functioning of society, and promoting international anti-epidemic cooperation. The importance and urgency to build a community with a shared future in cyberspace has become even more prominent. 

"Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace" means that the WIC aims to broaden the common ground of the international community for achieving security, stability and prosperity in cyberspace. The WIC will focus on the new trends and hot issues in the development of the new round of technological revolution, and address the new challenges and problems in global cyberspace development and governance. We will widely expand the consensus of the international community and ensure that digital innovation benefits people of all countries and a better future for mankind will be built with joint efforts in humanity's progress towards a digital civilization.  

"Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace" is also expected to show China's sincerity for cooperation and to deliver confidence and strength in global cyberspace. Upholding the principles of mutually beneficial, open and shared development, the WIC aims to promote in-depth international digital cooperation, enhance solidarity and mutual trust in cyberspace, and present China's sincere wish and strong resolution to share new digital opportunities with the world and advance international digital cooperation. 

"Towards a New Era of Digital Civilization – Building a Community with a Shared Future in Cyberspace" also means that the WIC hopes to present Chinese wisdom and solutions to the world, share China's experience and achievements in promoting internet development and governance, and demonstrates the country's sense of responsibility to build a community with a shared future in cyberspace. Thank you. 

Hong Kong Economic Herald:

We all know that Zhejiang is fully advancing digitalization reform. What effects will it have on Zhejiang's internet industry and cyberspace governance? Thank you.

Zhu Guoxian:

I'd like to thank you for your concern for Zhejiang's digitalization reform, which is a reform that affects many other aspects in Zhejiang. This year, Zhejiang has vigorously pushed forward its digitalization reform, and opened a new chapter in Zhejiang's digital development. By focusing on the "152" digital reform projects, Zhejiang will carry out a well-rounded and systematic reform in its social development and governance capacity. By doing so, the digitalization reform will transform all social and economic sectors in a deep and all-round way and further guide the prosperous development of the internet industry in Zhejiang. The digitalization reform has the following features. 

First, the internet sector will continue to boom. Creating major applications through digital reforms will further promote the widespread application of the internet, boost innovation and breakthroughs in internet technologies, and facilitate the emergence of new business forms and new models. The role of data as a key production factor will become more prominent, which will bring major opportunities for the development of the internet sector.

Second, provincial-level digital governance will be comprehensively improved. In the process of deepening digital reforms, data-driven governance capacity will become an important impetus of Zhejiang province to transform government functions and promote governance innovations. The modern government building will focus on overall smart governance, being practical and innovative. 

Third, we will continue to build a safe and clean cyberspace. We will follow the people-centered philosophy of internet development in digital reforms, and coordinate development and security. In terms of the future development of the internet, Zhejiang will have more advantages in building a clean cyberspace. This will mean strengthening integrated internet management, ensuring that cyberspace is governed in accordance with law, building a cybersecurity protection system, and better regulating the development of the internet. Thank you.

Hong Kong Bauhinia Magazine:

The World Internet Conference is a grand gathering in the internet industry, and everyone has paid close attention to this year's lineup of guests. The conference will be convened in a few days. What important companies and people will participate in this year's conference? Thank you.

Zhao Zeliang:

In fact, this reporter friend has just given the answer while asking the question. Indeed, the WIC has become a symbol of Zhejiang, as well as a highlight of China's internet development. The role and influence of the WIC has been recognized by the international community. Therefore, the invitation of guests to this year's conference has gained much attention. With an open attitude and high-level positioning, we welcome friends, guests and representatives from industries, universities, research institutes and government departments around the world to attend the conference to better communicate ideas, promote consensus and contribute good ideas to the world's internet development. 

Since we began inviting guests to the conference, we have received close attention and active responses from all sides in China and abroad. Our guests come from more than 80 countries and regions. They include representatives of foreign government departments and embassies in China, heads of international organizations such as the Department of Economic and Social Affairs of the United Nations, the International Telecommunication Union, the World Intellectual Property Organization and the Global System for Mobile Communications Association, as well as representatives from well-known companies from China and abroad. They will share their cutting-edge insights, and also communicate and interact with each other to generate the sparks of wisdom. Thank you. 

China National Radio:

What new highlights can we expect for the release of the leading scientific and technological achievements in this year's World Internet Conference? Thank you. 

Zhu Guoxian:

I will answer this question. The world's leading scientific and technological achievements will be showcased through the "'Straight to Wuzhen' Global Internet Competition" and the "Light of the Internet Expo." Since you asked, I will introduce some of the highlights of the release. 

First, the competition organizers made innovations to promote specialization. Based on hotspot issues of the digital economy, the organizers worked with professional institutions in China and abroad to set five parallel contests covering AI, 5G applications, the industrial internet, the consumer internet and integrated circuits, attracting 1,012 projects from home and abroad. 

Second, the level of internationalization has increased. The competition organizers have intensified their efforts to work with well-known Chinese and foreign organizations, universities, business incubators, amid other platforms, They have attracted almost 200 projects from 19 countries, with many of them being high-level projects led by academicians of foreign countries. The competition also invited Steven Hoffman, known as the Godfather of Silicon Valley startups, to act as co-chair. 

Besides, as people are not only interested in the competition, but also our Light of the Internet Expo, here are some points I would like to share with you. First, we will expand the expo as appropriate. Two venues, namely the Light of the Internet Expo Center and Wuzhen Internet International Conference and Exhibition Center, will be used together to hold the event, with a total exhibition area of more than 30,000 square meters. Second, the expo will focus on more specific themes. Apart from the comprehensive exhibition area, we will set up areas with special characteristics, including one special area for the digital economy; three themed exhibition areas focusing on cyberspace security and individual information protection, the digital society and digital trade, and cloud computing and big data; and three regional exhibition areas. We call this "1+3+3." Third, more achievements showcased at the expo will be applied. We will invite well-known enterprises, both upstream and downstream in the industrial chain, to jointly participate in the expo, showcasing the entire ecosystem of the industry and further supporting industrial cooperation. Thank you. 

People.cn:

Every year during the WIC, important research outcomes are announced in blue papers which attract wide attention both at home and abroad. Compared with previous ones, what will be the focus of this year's blue papers and what features and innovations will be presented? Thank you.

Zhao Zeliang:

I will answer your questions. This year we will continue to release blue papers. The "World Internet Development Report 2021" will focus on both the latest and general trends in global internet development during the past year. It will systematically summarize the situation and highlights of internet development in major countries; showcase new internet technologies, applications and changes worldwide; and scientifically envisage the future trends of global internet development.

The upcoming "China Internet Development Report 2021" was compiled under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, especially General Secretary Xi Jinping's important thought on cyber development. The report will focus on the achievements of China's internet development during the past year, and make an assessment of internet development in each provincial-level region. Since the start of this year, the internet has promoted the high-quality development of the digital economy, and facilitated the country's new development paradigm of "dual circulation." China has comprehensively advanced the rule of law in cyberspace governance and the governance system of the platform economy has been gradually improved.

This year marks the 100th anniversary of the founding of the CPC, as well as the beginning of China's 14th Five-Year Plan. During the compiling of the report, the authors focused on the achievements of China's internet development under the strong leadership of the CPC, as well as its fresh experience and innovations in this regard. What's more, the authors also paid attention to the theme of our times and our main tasks, and dovetailed the contents of the blue paper with the country's macro-strategy and national plans for cyber and information development.

That is a brief introduction of this year's blue papers. Thank you.

The Poster News APP:

As we all know, Tongxiang is a city with an advanced economy and developed industries, especially the manufacturing industry. What progress has Tongxiang made in taking the opportunity of hosting the WIC to promote internet-driven high-quality economic development? Thank you.

Qi Li:

I will answer your question. First, I'd like to thank you for your attention to the development of Tongxiang.

Indeed, as you said, Tongxiang is a city with an advanced economy and developed industries. In 2020, its GDP reached 100.3 billion yuan (about $15.57 billion). The city now ranks 25th among China's latest top 100 counties (including county-level cities). As the permanent host city of the WIC, Tongxiang is seeking more than just regular growth achieved by enterprises of traditional strength. Ever since we began successfully hosting the WIC, we have considered the best ways to ensure the event brings benefits to the region and empowers our local enterprises to grow with internet technology. This has been our top question to think about, explore and put into practice. Generally speaking, we have made progress in three aspects.

First, we have seen a faster development. The digital economy has become the fastest growing industry with the most potential in Tongxiang. In 2014, there were merely more than 300 digital economy companies in Tongxiang. By 2020, this number had increased by more than eight times to 2,443, with an average annual increase of more than 350. Meanwhile, the output value of the digital economy's core industry here was merely more than 4 billion in 2014, but by 2020 it had grown close to 16.5 billion. This indicator continued to maintain rapid growth in the first half of this year, with an increase of 59%. The industry's rapid progress can be attributed to these surging statistics. Here I can give you examples of these developments in two industries. One is the smart car industry. In Tongxiang, the entire industry chain has been covered, such as batteries, motors, electronic controls, software and hardware for smart driving, and various other means of smart vehicle production. We can proudly say that Tongxiang has achieved the most complete smart car industrial cluster among all counties and prefectures in the country. This was totally unimaginable many years ago. The second example is the intelligent computing industry. During this year's World Internet Conference, the construction of the "Light of Wuzhen" Super-computing Center will be officially completed, and the first intelligent computing industry base in Zhejiang province, "Wuzhen Computing Town," which relies on the super-computing center, has also officially started construction. We believe that in the near future, Zhejiang's strongest computing brain will definitely show its super industrial agglomeration and radiation effects.

Second, we have seen a higher-level upgrading. "Internet Plus" has given wings to Tongxiang's industrial transformation and upgrading. We focus on industrial digitization and have vigorously promoted the transformation of "Internet Plus." In recent years, we invested around tens of billions of yuan each year to implement more than 1,000 digital transformation projects and promote higher-level industrial iterative upgrades. For example, in the manufacturing sector, through the construction of industrial command-center brains, future factories, and the Industrial Internet, production efficiency has been greatly improved. I can give you a small example: in Tongxiang, there is a traditional chemical fiber manufacturing company whose factories have been in operation for 25 years. Through the in-depth application of 5G technology, its production capacity has tripled in three years, the average human labor force has been reduced by 50%, production efficiency increased by 90%, and the comprehensive energy consumption is 20% lower than the industry average. Since the beginning of this year, we have three corporate groups that have entered the ranks of Zhejiang's Future Factory list, and five projects have entered the national list of intelligent manufacturing.

Third, we have seen a stronger driving force. Innovation is increasingly becoming the strongest driving force for the high-quality development of Tongxiang's economy. To innovate, we must have a platform. Centered on building the Wuzhen Internet Innovation and Development Pilot Zone, we have built 13 industrial innovation and development platforms led by the Big Data High-tech Industrial Park and supported by the Digital Economy Town and the Smart Vision IoT Town. A large number of innovative enterprises have settled in Tongxiang. Up to now, the total number of high-tech enterprises and technological enterprises in Tongxiang has reached 1,424. Innovation is even more inseparable from talent. In recent years, Tongxiang has attracted nearly 20,000 college graduates annually and has successfully established the first batch of "Home for Academicians" in Zhejiang province, gathering 46 academicians and securing 28 projects. This year we cooperated with Tsinghua University and Yangtze Delta Region Research Institute of Tsinghua University, and invested 1.2 billion yuan to start building the Wuzhen Lab, working together to create a gravitational field and a cradle of innovation and development. Tongxiang is also increasingly becoming a top choice for all kinds of talents in entrepreneurship and innovation.

Therefore, being faster, higher, and stronger is the most direct portrayal of Tongxiang benefiting from the huge dividends of the World Internet Conference. The people of Tongxiang are in conscious pursuit of development in order to lay a more solid foundation for Tongxiang to achieve its new goal of being a leading demonstration zone leader for common prosperity. I would like to take this opportunity to invite friends of Tongxiang to visit our city. What you will see is a Tongxiang that has been transformed by the World Internet Conference, and a Tongxiang that is even more splendid under the grand vision of building a community with a shared future in cyberspace.

Red Star News:

China has decided to build Zhejiang into a demonstration zone for achieving common prosperity. Can you tell us what exemplary and leading roles Zhejiang has played in promoting common prosperity? What are Zhejiang 's achievements and plans for building a demonstration zone for achieving common prosperity? Thank you.

Zhu Guoxian: 

Thank you for your attention to the high-quality construction of the demonstration zone for achieving common prosperity in Zhejiang. Common prosperity is the essential requirement of socialism and an important goal for socialist modernization. General Secretary Xi Jinping has put forward a series of important views and proposals and made a series of important deployments. On Aug. 17, Xi stressed at the tenth meeting of the Central Commission for Financial and Economic Affairs that rather than being egalitarian or having only a few people prosperous, common prosperity refers to affluence shared by everyone, both in material and cultural terms, and shall be advanced step by step. The meeting encouraged creating conditions that are more inclusive and fair for people to get better education and improve their development capabilities, as well as shaping a development environment that provides chances for more people to become wealthy. Zhejiang is building a demonstration zone for achieving common prosperity in accordance with the requirements of Xi.

Entering the new journey of the Second Centenary Goal, Xi and the CPC Central Committee have given Zhejiang a new mission of building a demonstration zone for common prosperity through high-quality development. This is not only a political responsibility but also a golden opportunity for Zhejiang. Zhejiang held a plenary session for the provincial Party committee, which made special arrangements and put forward three concepts, namely, "supporting people to embark on the journey of prosperity through innovation and hard work, and encouraging those who have become better-off to help those still lagging behind," " government, society, enterprises and individuals working together" and "taking a phased-in approach from lower level to the higher and from part to whole." The three concepts are adopted to narrow the three gaps, including gaps between regions, urban and rural areas and incomes. The main objectives of "four leadings and three beauties" in the next five years and the main tasks of "carrying out demonstrations in seven aspects" have been clarified, and a phased road map and mission statement for promoting the construction of a demonstration zone for common prosperity has been formed.

Your question relates to what kind of development paradigm Zhejiang has adopted. I think we can use five scenarios to show Zhejiang demonstration zone for common prosperity through high-quality development. The first is one in which everyone participates and does their best to embark on the road of sustainable common prosperity, create a happy life, and build a better home through innovation, creation, self-efforts, and mutual help.

The second is a scenario of prosperity, which shows the organic unity of efficiency and fairness, as well as development and sharing. This not only requires vigorously developing productivity and continuously improving efficiency, but also preventing polarization, promoting and maintaining fairness, and realizing high-quality sharing. Our goal is that by 2025, the per capita GDP will reach 130,000 yuan and the per capita disposable income of residents will reach 75,000 yuan. Meanwhile, a new mechanism will be established and improved to encourage those who have become better-off to help those still lagging behind, so as to make development opportunities more equal and allow everyone to share in the fruits of development. Zhejiang province has 26 mountainous counties and we will focus on accelerating the development of these counties.

The third scene is a balanced picture of regional integration, promotion in all respects, and common prosperity. We will build a new framework of regional integration in urban and rural areas and shape an olive-shaped social structure with the middle-income population as the majority. By 2025, the per capita GDP difference ratio between the highest level and the lowest level in the province will narrow to within 2.1, and the income ratio between urban and rural residents will be down to within 1.9. Zhejiang is now the only province where the income ratio between urban and rural residents is within 2, compared to 1.98:1 last year. 

Zhejiang province aims to have 80% of all households earn an annual disposable income from 100,000 yuan ($15,520) to 500,000 yuan ($77,600), and 45% of all households earn an annual disposable income from 200,000 yuan ($31,040) to 600,000 yuan ($93,120).

The fourth scene is a civilized picture, which features the prosperity of people's cultural activities, harmonious coexistence between man and nature, and social solidarity and harmony.

Zhejiang province will make overall economic, political, cultural, social, and environmental progress. We will promote cultural innovation to enhance ideological progress and develop civilization to promote social progress to pursue common prosperity in cultural term, promote harmonious coexistence between man and nature and social harmony.

The fifth scene is happiness that people can see, touch, and experience. Zhejiang province will make a digital transformation to promote quality and efficiency of public services to solve people's problems, worries, expectations, and concerns. It will take the lead in making significant progress in ensuring access to childcare, education, employment, medical services, elderly care, housing, and social assistance to meet people's multilevel and diverse needs in their entire life.

I'm here to invite you to Zhejiang to experience and join in building the five scenes of a happy life. You're welcome to give valuable advice on the building of Zhejiang into a demonstration zone for achieving common prosperity. Thank you.

Cover News:

What is the current state of the artificial intelligence (AI) industry in China? How will this conference reflect the use of the targeted empowerment of AI? Thank you.

Zhao Zeliang:

First, you can find the answer in the Wuzhen Summit. I believe that AI must be the focus of this year's Wuzhen Summit.

From main forums to sub-forums and from the "Straight to Wuzhen" Global Internet Competition to the Release of World Leading Internet Scientific and Technological Achievements, I believe that there is a large amount of information about AI technical products. 

Hence, I suggest that you go to Wuzhen to listen and participate in discussions to find answers to your questions. However, I will outline some ideas about this issue in advance for your reference.

In recent years, with the rapid improvement of internet technology and big data technology, especially computing and communication capabilities, and the widespread application of perception technology, AI has indeed entered a new stage of development.

Artificial intelligence not only embodies deep learning, such as natural language processing and text processing, but also the synthesis of our voices and text. One day in the future, with the application and development of AI technology, it will be possible that AI technology will write news faster than all you journalists.

But don't worry, you won't lose your job, and you will become smarter with time.

We have seen much progress in human-machine collaboration and the widespread application of AI in automatic control. The popular idea of intelligent vehicles has become a reality. So, AI has entered a new stage of development. AI is not just an industry. I think it will profoundly change the way we live, study, and work. It may also greatly promote social and economic development. I believe AI development will give rise to more new products, technologies, industries, business forms, and models. All these will greatly promote the development of human society and bring tangible benefits to the common people.

Many countries, including China, are paying significant attention to AI development. China has formulated a national plan to boost its AI-related technologies. We need to support AI development, as it will likely become a driving force in social development and a new growth engine. At the same time, we need to develop AI in a rational and rule-based way. AI can greatly benefit society and promote development. However, like everything else, AI may also have negative effects. People are concerned about personal information collection and privacy protection. With the further development of AI, such challenges will become more serious and potential risks more visible. In the era of AI, to protect the safety and interests of netizens and safeguard national security, we should regard these issues as being no less important than economic growth. We should fully implement General Secretary Xi Jinping's instructions and balance development and security. This is especially important for AI development.

We also need to strengthen cooperation on AI development. As I said just now, AI integrates technologies in various fields, including the internet, information and communication, big data, computing, and perception. We need to strengthen cooperation, especially international cooperation, to accelerate and better regulate AI development. That's my view on these issues, but the real answers will be provided in Wuzhen. Thank you.

Shou Xiaoli:

The CAC and Zhejiang province have sent invitations. We welcome journalists to the 2021 World Internet Conference Wuzhen Summit scheduled to take place from Sept. 26 to 28. That's all for today's press conference. Thank you, all the speakers. Thank you, friends from the media. Goodbye!

Translated and edited by Zhu Bochen, Wang Qian, Gao Zhan, Huang Shan, Wang Yiming, Liu Sitong, Liu Jianing, Yuan Fang, Yang Xi, Chen Xia, Li Xiao, Zhang Liying, Zhang Rui, Liu Qiang, Xiang Bin, Zhou Jing, Wang Mengru, Zhang Junmian, David Ball, Jay Birbeck, 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:

Cong Liang, vice chairman of the National Development and Reform Commission (NDRC) and deputy director of the Office of the Leading Group for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area

Xu Hongcai, vice minister of finance

Pan Gongsheng, deputy governor of the People's Bank of China (PBC) and administrator of the State Administration of Foreign Exchange (SAFE)

Zou Zhiwu, vice minister of the General Administration of Customs of China (GACC)

Lin Keqing, member of the standing committee of the CPC Guangdong Provincial Committee and executive vice governor of the People's Government of Guangdong Province

Qin Weizhong, deputy secretary of the CPC Shenzhen Municipal Committee and mayor of the Shenzhen Municipal People's Government

John Lee Ka-chiu, chief secretary for administration of the Hong Kong Special Administrative Region (SAR) Government

Cheong Weng Chon, secretary for administration and justice of the Macao SAR Government

Chairperson:

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

Date:

Sept. 9, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office (SCIO). Recently, the Communist Party of China (CPC) Central Committee and the State Council issued a general plan for building the Guangdong-Macao In-depth Cooperation Zone in Hengqin and a plan for comprehensively deepening the reform and opening up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. Today, we are holding this press conference to expound on these two plans, introduce the development of Hengqin and Qianhai, and answer your questions. Today's press conference will be held via video link with the main venue in Beijing and three sub-venues in Guangdong, Hong Kong and Macao SAR. Please forgive us if there's signal delay.

Next, I will introduce to you the speakers. Here in Beijing, we have Mr. Cong Liang, vice chairman of the National Development and Reform Commission (NDRC) and deputy director of the Office of the Leading Group for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA); Mr. Xu Hongcai, vice minister of finance; Mr. Pan Gongsheng, deputy governor of the People's Bank of China (PBC) and administrator of the State Administration of Foreign Exchange (SAFE); and Mr. Zou Zhiwu, vice minister of the General Administration of Customs of China (GACC). In Guangdong, we have Mr. Lin Keqing, 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. Qin Weizhong, deputy secretary of the CPC Shenzhen Municipal Committee and mayor of the Shenzhen Municipal People's Government. In Hong Kong, we have Mr. John Lee Ka-chiu, chief secretary for administration of the Hong Kong Special Administrative Region (SAR) Government; and in Macao, we have Mr. Cheong Weng Chon, secretary for administration and justice of the Macao SAR Government.

Next, I will give the floor to Mr. Cong. 

Cong Liang:

Ladies and gentlemen, friends, good afternoon. Thank you for your attention and support to the GBA, especially Hengqin, Qianhai and other major cooperation platforms in Guangdong, Hong Kong and Macao. I would like to take this opportunity to express my sincere gratitude to friends from all walks of life who care about and support the construction of the GBA.

General Secretary Xi Jinping attaches great importance to the construction of major cooperation platforms in the GBA, and has personally promoted the establishment of the Hengqin and Qianhai cooperation zones. He has visited Hengqin four times and Qianhai three times, and delivered a series of important speeches and instructions, which pointed out the direction for the construction and development of the cooperation zones. General Secretary Xi Jinping emphasized on many occasions that the original goal of establishing the Hengqin new area was to create conditions for the diversified development of Macao's economy; and that Qianhai needs to rely on Hong Kong, serve the mainland, and open up to the world, further promote Guangdong-Hong Kong and Shenzhen-Hong Kong cooperation, and promote Hong Kong to better integrate into the development of the country to create a new pacesetter for reform and opening up.

In line with the decisions of the CPC Central Committee and the State Council, we have worked with Guangdong, Hong Kong, Macao and relevant departments to formulate a general plan for building the Guangdong-Macao In-depth Cooperation Zone in Hengqin and a plan for comprehensively deepening the reform and opening up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. General Secretary Xi Jinping personally presided over the meetings to review and approve the plans for Hengqin and Qianhai. These two plans were released to the public a couple of days ago. The Hengqin plan focuses on the original goal of promoting the moderately diversified economic development of Macao. With a goal-oriented and problem-oriented approach, the plan aims to serve Macao and promote the integrated development of Hengqin and Macao. Generally speaking, it covers the following aspects: one theme, four major positions, three-phase goals, four major tasks and several supportive measures.

The "one theme" refers to promoting the moderately diversified economic development of Macao. This is the starting point and foundation of our work in Hengqin.

The "four major positions" refer to serving as a new platform to boost Macao's appropriate economic diversification, a new space that provides convenience for Macao residents' daily lives and employment, a new model to enrich the practice of "one country, two systems," as well as a new high ground for building the Guangdong-Hong Kong-Macao Greater Bay Area.

The "three-phase goals" are related to 2024 and 2029, the beginning of two new terms of the Macao SAR government, and 2035, an important year for China's modernization. We have set development goals for these three years in terms of institutional mechanisms, industrial development and public services.

The "four major tasks" comprise of developing new industries that promote a moderately diversified economy in Macao, creating new space that facilitates the life and work of Macao's residents, building a new integrated system with Macao featuring a high level of opening up, and improving a new system of joint consultation, management and sharing between Guangdong and Macao.

The "several supportive measures" refer to enhancing the Party leadership and Party building in an all-round manner in the cooperation zones, enhancing legal guarantees, increasing the delegation of power, establishing and improving the risk management mechanism, and strengthening organization and implementation.

The Qianhai plan focuses on the two key points of "zone expansion" and "reform and opening up," and includes tasks in three areas.

The first is to expand the development space of the Qianhai cooperation zone. According to the plan, the total area of the zone will be expanded from 14.92 square kilometers to 120.56 square kilometers, and relevant supportive policies will cover the whole area following procedures, providing greater space for cooperation between Shenzhen and Hong Kong.

The second is to build an experimental platform for deepening reform and innovation in an all-round manner. According to the plan, major reform tasks will be piloted, and several tasks have been put forward including promoting the innovative development of the modern service industry, accelerating the reform and innovation of scientific and technological development mechanisms, creating a world-class business environment, and innovating the governance model of cooperation zones.

Third, a gateway and hub featuring high-level opening up will be built. The plan specifies that a higher-level open economy will be established and improved. The plan also puts forward effective measures for enhancing service trade liberalization with Hong Kong and Macao, promoting greater opening up of the financial sector, improving the openness of legal affairs, and improving high-level participation in global cooperation, among other measures.

Looking forward, we will act in accordance with the decisions and deployments made by the CPC Central Committee and the State Council, work with relevant parties to carefully organize the implementation efforts, and ensure good communication, coordination and services, so that all tasks of the two plans can be carried out. Thank you.

Chen Wenjun:

Thank you, Mr. Cong. Next, I'll give the floor to Mr. Lin Keqing.

Lin Keqing:

Ladies and gentlemen, friends from the media, the official release of the plans for the two cooperation zones marks a new stage of comprehensive construction and development in Hengqin and Qianhai. We have felt the great support for Guangdong and the high expectations for GBA from General Secretary Xi Jinping and the CPC Central Committee. We feel highly motivated and encouraged. 

The construction of the two cooperation zones has offered historic opportunities to Guangdong's reform and growth in the new development stage. The move is a strategic means for Guangdong to serve the "one country, two systems" policy, a strategic platform for Guangdong to further deepen reforms comprehensively, and a strategic support for Guangdong to serve the new development paradigm.

The CPC Guangdong Provincial Committee and the People's Government of Guangdong Province have taken on this major responsibility and historic mission, comprehensively and precisely grasped the strategic intention of General Secretary Xi Jinping and the CPC Central Committee, and have been working step by step with Hong Kong and Macao to turn the blueprints of two cooperation zones into reality. First, we have made intensified efforts to study, publicize, and implement the two plans. The Standing Committee of the CPC Guangdong Provincial Committee has met to communicate the two plans, a meeting of mobilization has been held on the provincial level, and the entire provincial Party committee has also met on the same matter. Second, we have made all-out efforts to improve relevant coordination mechanisms. Two leading groups for the construction of the two cooperation zones have been established, headed by Li Xi, secretary of the CPC Guangdong Provincial Committee. Ma Xingrui, governor of Guangdong province, serves as the first deputy head of the groups. Third, we are creating a system of policies, plans and laws for the construction of the two zones. We have formulated policy documents and advanced the formulation of a new round of overall plans for the two cooperation zones, drafted regulations for the Hengqin Cooperation Zone, and revised regulations for the Qianhai Cooperation Zone. Fourth, we have spared no efforts to facilitate the implementation of major tasks, programs, and industrial projects. Focusing on Hengqin's design function of promoting an appropriate level of economic diversity in Macao and Qianhai's role of serving the development of the mainland and opening up to the world based on its adjacency to Hong Kong, we have been working to implement all the tasks, programs and industrial projects concerning the two cooperation zones. Thank you.

Chen Wenjun:

Next, I'll give the floor to Mr. John Lee Ka-Chiu.

John Lee Ka-Chiu:

Ladies and gentlemen, friends from the media, good afternoon. The Hong Kong SAR government highly welcomes the plan released on Sept. 6 by the central government for comprehensively deepening the reform and opening up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. The plan focuses on promoting higher-level opening up, facilitating the innovation of the modern service industry, and speeding up the building of a modern service industry in Qianhai that connects to Hong Kong and meets international standards. The Hong Kong SAR government firmly believes that we will be able to make good use of the advantages of the "one country, two systems" policy to promote the development of the modern service industry in Qianhai. At the same time, Hong Kong will give greater play to its advantages as an international center for finance, shipping and trade as well as a global aviation hub to provide more space for Hong Kong's professional services to develop.

With the support of the central government, the governments of the Hong Kong SAR and Shenzhen have been working to improve Qianhai's development and provide convenience for Hong Kong's professional services to develop in Qianhai. In recent years, law and architecture-related opening up policy measures have been introduced in Qianhai, which are widely welcomed by Hong Kong. So far, about 11,500 Hong Kong companies have registered in Qianhai, covering not only the just-mentioned professional services but also such modern services as finance, logistics, information, and science and technology.

In addition, Qianhai keeps attracting Hong Kong's young innovators and entrepreneurs to join the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub. The hub has incubated a lot of successful companies, becoming one of the many fruitful examples of Shenzhen-Hong Kong cooperation.

Released by the central government, the Qianhai plan has taken Shenzhen-Hong Kong cooperation onto a new level, allowing the two cities to better play their role of leading development as two core cities of the GBA. Hong Kong's business community and professional service providers have been actively making preparations to embrace the new opportunities brought about by the plan to Hong Kong people and companies. The government of the Hong Kong SAR will continue to strengthen cooperation with the governments of Guangdong province and Shenzhen city to promote the development of Qianhai and create broader development space. Thank you.

Chen Wenjun:

Thank you, Mr. John Lee Ka-Chiu. Next, I'll give the floor to Mr. Cheong Weng Chon. 

Cheong Weng Chon:

Thank you, Mr. Chen. The release of the general plan for building a Guangdong-Macao in-depth cooperation zone in Hengqin was an important move to implement President Xi Jinping's instructions. It is also a major action to support Macao in developing a moderately diversified economy and enrich the practices of the "one country, two systems" policy. The plan will inject new impetus, provide new space, and create new opportunities for Macao's long-term development. The Macao SAR government highly welcomes the introduction of the general plan, and would like to express our heartfelt thanks to the central government for its strong support.

The general plan contains new institutional designs and comes with greater reform efforts, broader opening up access, as well as high quality policies. According to the general plan, the in-depth cooperation zone will become a new platform for promoting a moderately diversified economy in Macao, a new space for Macao residents to work and live in, a new demonstrative practice of "one country, two systems", and a new pacesetter for the development of the GBA.

The government of the Macao Special Administrative Region (SAR), headed by Chief Executive Ho Iat Seng, will join hands with our citizens in seizing the historic opportunity to fully implement the general plan. Next, we will work on the following aspects:

First, we will fully study the plan and follow the policy orientation in building the cooperation zone to lay a foundation for the follow-up actions. Second, we will raise public awareness. We will work actively to introduce the plan to Macao residents so that they can have a better understanding of the importance of building the cooperation zone. Third, we will work closely with Guangdong province to leverage our respective advantages to build synergy for win-win cooperation. Fourth, we will ensure the good implementation of the plan. Efforts will be made to develop a list of duties and specify the duties for different departments so that all tasks will be fully completed. This will help us secure a better future for the Guangdong-Macao In-depth Cooperation Zone in Hengqin.

Chen Wenjun:

The floor is now open for questions. Please identify your news outlet before asking your questions.

CCTV:

The general plan for building the Guangdong-Macao In-depth Cooperation Zone in Hengqin made it clear that four major new industries will be supported in Macao. Why have the four been selected? What concrete policies will be rolled out to support their development? Thank you. 

Cong Liang:

Thank you for your questions, I will answer them. General Secretary Xi Jinping has made it clear many times that the original mission for building the Hengqin new area is to create a favorable environment for Macao's economic diversification. We kept this in mind when we formulated the plan for Hengqin and decided what major industries to develop in the zone. We have taken into consideration the development foundation of Hengqin, the industrial advantages of Macao, and the expectations from Macao residents, among others, in a holistic manner. After repeated discussions and careful comparisons, we proposed in the plan that four major industries should be promoted in the corporation zone, which are: scientific and technological research and development; high-end manufacturing; traditional Chinese medicine (TCM) and other signature businesses of Macao; industries related to culture, tourism, conventions, exhibitions, business and trade; and modern finance. Scientific and technological research and development will provide an important platform for innovation-driven development and is also what Macao expects to develop in the future. Industries related to culture, tourism, conventions, exhibitions, business and trade enjoy a solid foundation for development in Macao and have a competitive edge. Finance and TCM, though only taking a small share in Macao's economy at present, are widely recognized by the society of Macao as the major industries to develop in the future. Particularly, Chief Executive Ho Iat Seng has raised on many occasions the intention to develop TCM industry, and a series of measures have been taken recently to develop it. 

The foundation of Hengqin's industrial development remains weak. To accelerate the development of its major industries, we have identified a series of supportive policies in the plan for Hengqin. 

First, we will enhance our capacity for sci-tech innovation. Urgently-needed sci-tech infrastructure be built and major international science plans and projects will be implemented in the cooperation zone. Second, we will facilitate the flow of goods. We will ease the control on the "first line" (the boundary between Hengqin and Macao). There will be tax-free or bonded access for all goods and products except those listed as nonqualified by the law and regulations. We will exempt import tariffs for qualified goods produced by companies in the corporation zone when the goods enter the mainland through the "second line" (the boundary between Hengqin and the rest of the Chinese mainland). Third, we will improve the preferential policies concerning corporate income tax. Corporate income tax rates will be lowered to 15% for eligible companies in the zone. Fourth, we will attract talent from China and abroad. High-level professionals and urgently-needed professionals who work in the cooperation zone will be exempted from paying the portion of personal income tax that exceeds 15% of their taxable income. In addition, there are specified arrangements in terms of improving visa policies for foreign professionals and facilitating them to take part in the building of the zone. Fifth, we will explore new methods in cross-border financial management. More flexible financial policies will be implemented to facilitate cross-border direct investment, cross-border finance, and cross-border security investment. We will explore practices for free cross-border capital flows and push for capital account convertibility.

What needs to be pointed out is that there are many specific categories of the industries mentioned in the plan. Therefore, we should be selective when deciding what emerging industries to be developed in Hengqin, as the place is not large enough for all industries to settle in. There are things we will do and things we won't do. We are not looking for a so-called "business registration economy" or "headquarters economy." Instead, we will develop the real economy and create more jobs to build the zone into a popular destination for investment and talent.

Next, we will work with Guangdong province, Macao SAR and other related departments to formulate the Catalogue of Encouraged Industries in the cooperation zone and revise the Overall Development Plan of Hengqin. We will further specify the categories of industries, focus on advantageous industrial sectors, take multi-pronged approaches in terms of policy, human resources and financial support, scale up efforts to tackle challenges, and facilitate fast and large-scale industrial development, in a bid to promote Macao's economic diversification. Thank you. 

South China Morning Post:

According to the Qianhai plan issued on Sept. 6, the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone will be expanded to 120 square kilometers from 14.92 square kilometers. What are the considerations on the expansion? There are worries in Hong Kong that there may be competitions between the newly developed industries in Qianhai and those industries already built in Hong Kong, and that it may even lead to a brain-drain from Hong Kong. How can we formulate the Qianhai-Hong Kong relationship to be both competitive and complementary? Thank you. 

Cong Liang:

Thank you for your question. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area makes clear requirements to further promote the development of the Qianhai cooperation zone and rolls out preferential policies in the new expanded areas. In accordance with the decisions and deployments made by the CPC Central Committee and the State Council, we will manage the items concerning the expansion of Qianhai in a comprehensive approach. We support the expansion of Qianhai with two considerations.

On the one hand, the expansion of the Qianhai cooperation zone will nourish more development spaces for deepening reform and opening up in Qianhai. After over a decade of development and construction, area limitation has become a prominent problem restricting the reform and development of Qianhai. The expansion of Qianhai will promote institutional innovation and industrial upgrading in Qianhai, as well as the trial implementation of major reform policies. It's fair to say that the expansion of Qianhai acts as a means of deepening reform and opening up, and creates conditions for the further reform and opening up.

On the other hand, it will create more opportunities for Hong Kong. Strengthening cooperation between Shenzhen and Hong Kong is Qianhai's mission, as well as its special advantages. At present, numerous modern services enterprises from Hong Kong have entered the mainland market through Qianhai. However, due to the area limitation, it's hard to fully meet the development needs of these enterprises. After the expansion, the land available for industrial development will increase substantially in Qianhai. It will better leverage Hong Kong's advantages, upgrade cooperation between Shenzhen and Hong Kong, provide strong support for Hong Kong's economic development and push forward the integration of Hong Kong into national development.

Next, we will collaborate with the authorities of Guangdong province and Shenzhen city to concentrate on two aspects, in accordance with the decisions and arrangements made by the CPC Central Committee and the State Council. First, we will steadily accelerate the zone expansion and launch of preferential policies. We will promote the existing preferential policies in the fields of financial reform and innovation, and legal affairs cooperation to all newly added areas after the expansion, in a bid to provide compelling support for the deepened reforms and opening up in Qianhai. Second, we will make efforts in addressing institutional issues created by the proper decoupling between administrative districts and economic zone. The zone expansion involves two administrative districts of Baoan and Nanshan. We will work jointly with Guangdong province and Shenzhen city, to accelerate the process of proper decoupling between localization administration and economic management, fully leveraging the two institutional advantages and arousing the enthusiasm of all.

Thank you.

People's Daily:

Mr. Cong mentioned that General Secretary Xi Jinping has inspected Hengqin four times and repeatedly stressed the original inspiration of Hengqin New Area was to diversify Macao's economy. We would like to know, as of today, what achievements have been made in the construction of Hengqin, and what achievements have been made to diversify Macao's industries? Thank you. 

Lin Keqing:

Thank you for your questions. In 2009, General Secretary Xi Jinping, who was China's vice president at that time, raised the curtain of reform and opening-up in Hengqin. Over the past decades, Hengqin has been transformed from a boarder island into a pioneer area of China's reform and opening-up. The incredible developments have laid a solid foundation for the construction of the Guangdong-Macao in-depth cooperation zone.

First, economic strength has increased substantially with the rapid growth of key economic indicators, the constant improvement of regional gross domestic product and financial revenue, and the sound momentum of development of new industries and new forms of business. The new economic growth point has gained robust growth with increasingly powerful comprehensive strength and development potential.

Second, the infrastructure has been constantly improved. The new checkpoint at the Hengqin Port has adopted the customs-clearance mode known as "joint inspection and one-time release". The network of trunk roads featuring "five horizontal axes and three longitudinal axes" has basically taken shape. The artery of communications connected through Hengqin Bridge has opened to traffic.

Third, we have further promoted innovation in institutions and rolled out a total of 622 innovative measures, 4 of them were selected as the best practice cases in national free trade zones, and 11 of them were replicated and promoted to the rest of the country. A total of 537 types of government services in the Greater Bay Area can now be handled online, and 237 cross-border administrative approval items can be processed online as well.

Fourth, Hengqin's role in promoting an appropriately diversified economy in Macao has achieved initial success with a total of 4,578 Macao-funded enterprises registered there, and 314 Macao enterprises operating in this region. The Guangdong-Macao Cooperation Industrial Park in Hengqin has provided land for 25 projects with an agreed investment of 79.3 billion yuan. The Traditional Chinese Medicine Science and Technology Industrial Park of Cooperation between Guangdong and Macao has fostered 50 Macao pharmaceutical projects. Four state key laboratories in Macao have set up branches in Hengqin, incubating 613 innovation and startup projects from Macao. The unidirectional verification of professional qualifications has started. A total of 589 tour guides, 57 construction enterprises, 269 professionals in the field of architecture from Hong Kong and Macao, and 53 physicians and 7 community workers from Macao have started practicing in Hengqin.

Fifth, Macao residents' lives in Hengqin have become increasingly convenient. The Macao New Neighborhood Project will provide comfortable accommodation for around 10,000 Macao residents. A total of 7,756 Macao residents have applied for residence cards in Hengqin. Nearly 100,000 Macao residents seek medical advice in Hengqin each year. The quota of Macao-tagged vehicles allowed to enter Hengqin increased to 10,000 this year. The Hengqin Comprehensive Service Center of the General Union of Neighborhood Associations of Macao has provided service for nearly 70,000 mainland and Macao residents living in Hengqin.

At the same time, we should note that the development of Hengqin's real economy is still inadequate. The city's service role for Macao is yet to be sufficiently visible. It remains an arduous task to promote the diversity of Macao's industrial development. The construction of the cooperation zone is a glorious mission with heavy responsibilities. We will profoundly comprehend and precisely grasp the strategic intentions of General Secretary Xi Jinping and the Central Committee of the CPC, hold fast to the original intention to appropriately diversify Macao's economy, concentrate on "the four new" strategic positioning and "the four new" major tasks, and work collectively with Macao to turn the great blueprint depicted by General Secretary Xi Jinping and the Central Committee of the CPC into reality. Thank you. 

Macao Daily:

The general plan for building a Guangdong-Macao in-depth cooperation zone in Hengqin provides strong financial support and tax policies in the areas of corporate income tax, personal income tax and import tariffs. What were the main considerations in formulating these policies? And in what areas have innovations been made? Thank you.

Xu Hongcai:

Thank you for your questions. Hengqin is an important platform for promoting cooperation between Guangdong and Macao and boosting the moderately diversified development of Macao's economy. In accordance with the policy decisions and plans of the CPC Central Committee and the State Council, the Ministry of Finance has attached great importance to the development of Hengqin. We have implemented the special preferential tax policies in Hengqin and given positive financial support.

We have followed General Secretary Xi Jinping's important instructions that "the original goal of establishing the Hengqin New Area was to create conditions for the diversified development of Macao's economy" and adhered to the requirements of "gathering strength to overcome the difficulties from policy, manpower, financial and other aspects working in parallel." Under a unified and standardized fiscal system, we have focused on the diversified development goals and changing circumstances in Hengqin, further improved policies and measures, and strengthened support to promote in-depth cooperation between Guangdong and Macao. I will briefly introduce several types of taxes and measures.

In terms of corporate income tax, we will further improve policies and measures. All industries conducive to the moderately diversified development of Macao's economy are subject to the  preferential corporate income tax rate of 15%. The capital expenditure of businesses that meet the requisite criteria will also be permitted a one-time pre-tax deduction or accelerated depreciation and amortization in the current period of expenditure. .  Income from tourism, modern services, high technology, and new overseas direct investment will be exempted from corporate income tax. By these preferential policies, we will promote the moderately diversified development of Macao's economy.

In terms of personal income tax, the preferential efforts will be further increased. For domestic and overseas high-end professionals and employees in short supply in the cooperation zone, the part of their personal income tax burden exceeding 15% will be exempted. Macao residents working in the area will be exempted from paying the part of personal income tax amount exceeding that in Macao. In this way, we will attract more people and encourage Macao residents to find jobs and start businesses.

In terms of import and export taxes, line-division management will be further improved. During the "first-line" customs inspection, goods  will be granted tax-free access to the cooperation zone, except those identified as non-qualifying by the law. During the "second-line" customs inspection, goods entering the mainland from the cooperation zone will go through customs procedures in accordance with the relevant regulations on imported goods, and collect customs duties and import-link taxes. Goods produced in companies within the cooperation zone that do not contain imported materials, or contain imported materials but have a value-added exceeding 30% or higher, will be exempt from import tax when they enter the mainland." This way we will promote the integration of the industries of Guangdong and Macao. Goods entering Hengqin via the "first-line" will be granted tax-free access except those identified as non-qualifying by the law. Goods entering the mainland via the "second-line" will be regulated according to the relevant tax policies.  More convenient personnel exchanges will also be promoted between Hengqin and Macao.

In terms of financial support, we will further improve institutions and systems. The implementation of preferential tax policies will inevitably result in a reduction of fiscal income for both the central and local governments. However, in order to support the sustainability of the plan, such reductions will be covered by the central government itself. For the problem of local revenue reduction in the cooperation zone, the central government has specifically arranged comprehensive financial subsidies under a unified and standardized fiscal system. It needs to be stressed that the central government subsidy policies will be linked to such things as the cooperation zone's efforts to attract Macao enterprises, expand employment, increase the real economy's output value, and support key industries. We will strengthen the impetus of the cooperation zone in serving the diversified development of Macao's economy through institutional mechanisms.

The Ministry of Finance will closely focus on the strategic positioning of the cooperation zone, refine the content of our policies with relevant departments, and promote the implementation of policies, so as to allow policies to play an effective role and promote the accelerated development of the Guangdong-Macao in-depth cooperation zone in Hengqin. Thank you.

Xinhua:

The Macao government has made great efforts to promote the diversified development of Macao's economy since the current chief executive of Macao, Ho Iat Seng, took office in 2019. What has the Macao government done and what achievements have been made? Going forward, what are the key tasks of the Macao government relying on Hengqin in order to facilitate the diversified development of Macao's economy? Thank you.

Cheong Weng Chon:

Thank you. Since the beginning of the fifth term of the Macao SAR government, the most important priority for us has been promoting the moderately diversified development of Macao's economy. The main work includes the following aspects:

In terms of the Traditional Chinese Medicine (TCM) industry, we have drafted a new law on TCM production registration, which will be implemented from next year. The Guangdong-Macao Traditional Chinese Medicine Science and Technology Industrial Park in Hengqin has formed an industry cluster.

In terms of the modern financial industry, we will continue to improve relevant laws and regulations. Some draft laws including the Trust Act will be deliberated by China's legislature

In terms of cutting-edge technologies, we have restructured the Economic Bureau into the Economic and Technological Development Bureau, and formulated preferential tax policies for hi-tech and innovative enterprises. A number of funded research projects have yielded results.

As for conferences, exhibitions, culture, tourism and sports, the development of the conference and exhibition industry gradually tends to be specialized and market-oriented. The market model of tourism plus exhibitions is also being gradually enhanced. Large-scale sports events continue to be held, giving full play to their brand effect.

The Guangdong-Macao in-depth cooperation zone in Hengqin is creating a new platform and bringing new opportunities for Macao's moderately diversified economic development. This is mainly reflected in the following four areas:

First, it will boost Macao's branded industries such as TCM. We will promote applying "Supervised in Macao," "Manufactured in Macao," or "Designed in Macao" signs to TCM products manufactured in the cooperation zone after they are approved and registered in Macao. We will work to simplify the approval procedures for sales of Macao's external-use Chinese patent medicine in the Greater Bay Area.

Second, it will enhance technological research and development as well as high-end manufacturing industries, with the focus on integrated circuits, new materials, new energy, big data, and biomedicine, and boosting the microelectronics industry chain including custom chip designs. We will promote Macao University and other universities to set up demonstration bases of industry-university-research collaboration in the cooperation zone.

Third, it will promote culture, tourism, conferences, exhibitions and trade industries, with the focus being on tourism, conferences, exhibitions, and sports events. We will support Macao's industries in holding more branded and international trade fairs in Hengqin, and facilitate cross-border exchanges for exhibition organizers. We will build a trade market for high-end consumer goods, and help Macao's enterprises develop China-Portugal cross-border e-commerce businesses based on the cooperation zone.

Fourth, it will boost the modern financial industry, with the focus on bond market, wealth management and finance lease. We will encourage cross-border yuan settlement businesses, further reduce the application requirements for Macao's financial institutions to set up bank and insurance branches in Hengqin, and build a financial service platform for China and Portuguese-speaking countries. Thank you.

China Daily:

Promoting financial connectivity is an important part of achieving regulation compatibility and institutional connectivity in the Guangdong-Hong Kong-Macao Greater Bay Area. The financial industry is also the focus of the development of Hengqin and Qianhai. Could you introduce what efforts the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) have taken to support the development of the two regions? What effective measures have been rolled out this time? Thank you.

Pan Gongsheng:

Thanks for your questions. The PBOC and SAFE pay much attention to the development of the Guangdong-Hong Kong-Macao Greater Bay Area. Following the requirements of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area issued by the central authorities, we will promote financial opening-up and innovation in the Greater Bay Area, including Hengqin and Qianhai. 

In May 2020, the PBOC and other financial regulatory departments jointly unveiled the Financial Support Guideline for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area, which focused on the key areas of financial reform and opening-up and deployed 26 financial opening-up and innovation initiatives in the Greater Bay Area, including Hengqin and Qianhai. Over the past year, the PBOC and the SAFE have continued to promote the implementation of various financial innovation measures in the principle of giving priority to people's livelihoods and finances while considering both long-term and immediate goals.

In terms of finance as related to people's livelihoods, a pilot campaign has been launched for Hong Kong and Macao residents to open mainland bank settlement accounts by remote means, and gradually expand the scope and scale of applicable organizations to facilitate the use of mobile electronic payments by Hong Kong and Macao residents in the mainland. We rolled out services benefiting people's livelihoods, such as direct payments of cross-border electronic bills and self-service queries of personal credit reports for Hong Kong and Macao residents. These financial reforms and further opening-up have made it more convenient for people to live in the Greater Bay Area.

In terms of market connectivity, we will continue to expand the channels for Investors from Hong Kong and Macao to invest in the mainland's capital and bond markets, and promote the implementation of cross-border Wealth Management Connect and southbound Bond Connect schemes, which will be launched in the next few days.

In terms of green financial cooperation, we have promoted local governments to issue green municipal bonds in Hong Kong and Macao and strengthen the cooperation between green bond evaluation and certification institutions in the Guangdong-Hong Kong-Macao Greater Bay Area to jointly set up a green financial alliance in the Greater Bay Area.

In addition, we also launched pilot campaigns of free trade accounts, the cross-border transfer of credit assets, foreign debt facilitation, cross-border capital pools and cross-border investment policies for private equity funds in the Greater Bay Area, including Hengqin and Qianhai.

Next, the PBOC and the SAFE will implement the policy decisions and plans of the CPC Central Committee and the State Council, and continue to give more financial support to the development of Hengqin and Qianhai.

First, in accordance with the two schemes issued by the central government and serving to central government's strategic position of Hengqin and Qianhai, the PBOC is coordinating with the financial regulatory departments of Hong Kong and Macao to formulate special financial policies to support reform and opening up in the two regions.

Second, according to Hengqin's strategic position of grounding itself to serve Macao in the integrated development of the two places, we designed open financial policies and plans for Hengqin, and explored building an electronic fence monitoring system. We will promote the greater opening up of financial services in Hengqin to Macao financial institutions to realize the full integration of financial services, boost the development of characteristic financial businesses in Macao, improve the width and depth of Macao's financial market, and enhance its financial radiating capacity to Portuguese-speaking countries.

Third, we will leverage the role of Qianhai to boost financial cooperation between Shenzhen and Hong Kong, so as to give full play to Hong Kong's role as an international financial center. We will focus on the free flow of cross-border capital, and strive for more open capital accounts to advance openness and connectivity of the financial services sector between the two cities. We will gradually establish a system of financial regulations that is in line with international practices, and improve our market-oriented, law-based and international financial environment, and usher in a more open financial sector.

Fourth, while opening our door wider to the world, we will also establish and improve a system for monitoring, preventing and defusing financial risks, in order to increase monitoring of abnormal cross-border capital flow. We will also strengthen Guangdong-Hong Kong-Macao cooperation on supervision of anti-money laundering, counter-terrorist financing and anti-tax evasion activities, and tighten Guangdong-Hong Kong-Macao cooperation on financial supervision, so as to ensure a more efficient fight against cross-border money laundering and illegal financial activities. Thank you. 

Southern Metropolis Daily:

General Secretary Xi Jinping has inspected Qianhai many times, calling for the area to leverage the advantages of Hong Kong, provide services to the mainland, and maintain an international vision. Could you please introduce the efforts Qianhai has made in promoting cooperation between Shenzhen and Hong Kong in recent years? What measures will be adopted to leverage Qianhai's role in advancing in-depth cooperation with Shenzhen and Hong Kong?

Chen Wenjun:

This question regards both Shenzhen and Hong Kong. I'd like to invite Mr. Qin to answer it first.

Qin Weizhong:

Thank you for your question. With the care of General Secretary Xi Jinping, Qianhai has been established as a major strategic platform of reform and opening up in the new era. Since the 18th CPC National Congress, General Secretary Xi Jinping has inspected Qianhai three times and made important instructions, giving full recognition to its development model and growth momentum. The Qianhai plan issued by the central authorities showcases the care of the General Secretary and the CPC Central Committee toward Qianhai's development. The CPC Shenzhen Municipal Committee and the Shenzhen municipal government, following the strategic instructions made by the General Secretary and the CPC Central Committee, have immediately relayed and implemented the Qianhai plan. With the support of relevant ministries, governments of Guangdong province and Hong Kong SAR, we have been striving to develop and open up Qianhai. The main achievements of Shenzhen-Hong Kong cooperation in recent years lie in three aspects:

First, a lot of modern service companies from Hong Kong have registered in Qianhai. A total of 11,500 Hong Kong-invested companies have registered in Qianhai, with the actual use of Hong Kong investment reaching $22.6 billion. Qianhai has become a home to China's first Hong Kong-invested holding consumer finance company, the first Hong Kong-invested holding public offering fund company, as well as the first joint venture securities company.

Second, the institutional innovation has made a series of achievements. A total of 645 achievements have been made thanks to institutional innovation, 65 of which have been adopted nationwide.

Third, a series of favorable measures have been put in place to help Hong Kong residents in terms of their living and employment. Currently, talents in more than 20 sectors, such as tax accountants and registered architects, are able to conveniently work in Qianhai. The Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub and other similar organizations have fostered 245 startup venture teams from Hong Kong. As such, Qianhai has become one of the regions with the highest correlation and closest cooperation between the mainland and Hong Kong. A high degree of consensus was achieved at the Shenzhen-Hong Kong cooperation meeting held on Sept. 6. Going forward, we will comprehensively implement the requirements of the Qianhai plan made by the central authorities, and remain true to the original aspiration of serving Hong Kong and Macao. We will adhere to the requirements of leveraging the advantages of Hong Kong, providing services to the mainland, and maintaining an international vision. We will strive to promote Qianhai Shenzhen-Hong Kong cooperation upto a new level, and support Hong Kong to further integrate into the national development.  

First, we will make good use of the "new space" brought about by the expansion of the cooperation zone. We will ensure high quality in the new round of general planning and the territorial space planning for the development of Qianhai, and ensure that one third of the newly vacated land designated for industrial purposes will be used by Hong Kong capital and Hong Kong-invested companies.

Second, we will take advantage of the "new dividends" brought about by the new policies. We will work toward making policies in terms of industries, finance and laws accessible in the whole area, and fully leverage the huge opportunities presented in expanding the area.  

Third, we will explore "new fronts" of Shenzhen-Hong Kong cooperation, such as modern finance, technology services, exhibition economy, marine economy and professional services.

Fourth, we will foster "new advantages" in the business environment. We will accelerate the adoption of regulations to protect investors in the Qianhai cooperation zone. We will work with Hong Kong to build an international legal services center and an international commercial dispute resolution center. We will also build the cooperation zone into a pilot platform for comprehensively deepening reform and innovation and a gateway hub for high-level opening up.

I'd also like to take this opportunity to invite all of you to visit Qianhai. Thank you.

John Lee Ka-chiu:

Thank you for your question. The cooperation between Hong Kong and Shenzhen has been a unique story during China's reform and opening up over the past 40-plus years. Such practice of giving full play to Hong Kong's advantages and contributing to the country's needs has been a win-win and mutually beneficial relationship. The release of the Qianhai plan will ensure a higher level of cooperation between the two cities, and leverage their roles as "double engines" in promoting development of the Guangdong-Hong Kong-Macao Greater Bay Area.

With the support of the central authorities, the local governments of Hong Kong and Shenzhen have been making great efforts to improve the development of the Qianhai area and facilitate Hong Kong's professional service providers entering Qianhai. In recent years, policies and measures have been put in place to further open up the professional services sector, which is highly welcomed by industry in Hong Kong. For example, in terms of legal services, Qianhai is the first place to establish joint venture law firm run by law firms from the Chinese mainland and Hong Kong. This pilot experience has been adopted across the Chinese mainland. Qianhai took the lead to use Hong Kong's investment and laws, allowing those Hong Kong-invested companies to take Hong Kong's laws as those applicable to civil and commercial contracts. Moreover, eligible Hong Kong lawyers and barristers, who have obtained their practicing certificates after examination, are able to engage in part of the legal services in the nine mainland cities in the Greater Bay Area. In terms of architecture and related engineering professional services, eligible Hong Kong consultant companies, contractors and other professional personnel, are able to provide services in Qianhai after registering their certificates. Corresponding to the related certificates on the Chinese mainland, their services can cover five areas: architecture, engineering, measurement, planning and landscape architecture. 

The Hong Kong SAR government will deliberate with the relevant central government departments on how to utilize the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) to immediately implement Qianhai plan's measures on further opening service trade and help Hong Kong's professional service sector make deployments and arrangements as soon as possible. The Hong Kong SAR government will also work with relevant industries to provide suggestions for and cooperate with the Qianhai cooperation zone in such fields as finance, innovative technology, law and business environment after its expansion.

At the same time, the Hong Kong SAR government will strengthen cooperation with the Guangdong and Shenzhen governments to further support Hong Kong youths in their startups based on the sound foundation of projects such as the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub and the Funding Scheme for Youth Entrepreneurship in the Guangdong-Hong Kong-Macao Greater Bay Area. Thank you.

Phoenix TV:

The modern service industry, and mainly the financial sector, is a competitive industry in Hong Kong and a sector jointly developed by Shenzhen and Hong Kong in Qianhai. What are your considerations for better playing Hong Kong's role as an international financial center and enhancing its cooperation with Qianhai to provide higher-quality financial services for the Guangdong-Hong Kong-Macao Greater Bay Area, or even for the whole country? Thank you.

Chen Wenjun:

Your question is related to the PBC and Hong Kong SAR. As such, I'll invite Mr. John Lee Ka-chiu answer this question first.

John Lee Ka-chiu: 

Thank you for your question. The Qianhai plan stressed that it will further open the financial sector, including carrying out trials in areas such as interconnectivity with Hong Kong's financial markets, cross-border utilization of RMB, and foreign-exchange management facilitation. It also proposed launching a pilot account system that allows settlement in RMB and foreign currencies in the same bank account, so as to provide quality, safe and highly efficient services for market entities. In addition, the plan proposed deepening green finance cooperation between Guangdong, Hong Kong and Macao, and exploring the establishment of unified green finance standards, so as to serve mainland enterprises' fundraising for green projects in Hong Kong and Macao. 

In fact, the Outline of the 14th Five-Year Plan (2021-2025) pledged to support Hong Kong in enhancing its status as an international financial center, to strengthen its functions as a global offshore RMB business hub and an international center for asset management and risk management, and to deepen and expand the interconnectivity between the mainland and Hong Kong's financial markets. Shenzhen's Outline of the 14th Five-Year Plan (2021-2025) also specified that the city will establish a global financial innovation center, including building a global center for innovation capital and a global center for innovation and technology.

Hong Kong and Shenzhen are the hubs and driving engines of the Guangdong-Hong Kong-Macao Greater Bay Area. Under the leadership of the chief executive of the Hong Kong SAR and the secretary of the CPC Shenzhen Municipal Committee, we set up special working groups with Shenzhen municipal government to promote financial connectivity and cooperation between the two cities, thus contributing to the high-quality development of the Greater Bay Area and deepening the reform of the country's financial market.

Financial cooperation between Shenzhen and Hong Kong remains close, and a number of fruitful outcomes were yielded. For example, in terms of interconnectivity, the Shenzhen-Hong Kong Stock Connect has run smoothly and expanded continuously since its launch in 2016. By the end of this July, the cumulative turnover of northbound transactions exceeded 28 trillion yuan, and the cumulative turnover of southbound transactions exceeded HK$8.3 trillion. Since the end of last December, the scope of southbound stocks eligible in the Shenzhen-Hong Kong Stock Connect has been expanded to biotech companies that go public on the Hong Kong stock market under new listing rules, but haven't yet had a record of revenue or profit.

The Hong Kong SAR government will continue to deepen cooperation in the financial services sector with the government of Shenzhen, contributing to the Greater Bay Area and the country as a whole. Thank you.

Hong Kong Bauhinia Magazine:

The general plan for building the Guangdong-Macao In-depth Cooperation Zone in Hengqin specified that the cooperation zone is the area under customs supervision between Hengqin island's "first-line" and "second-line." The ports between Hengqin and Macao shall be subject to the "first-line" administration, and the ports between Hengqin and the rest parts of the mainland shall be subject to the "second-line" administration. What was your consideration in setting up such a new system? What role will it play? Thank you.

Zou Zhiwu:

Thank you for your questions.

The GACC has earnestly implemented General Secretary Xi Jinping's important instructions on Hengqin's opening-up and development, carried out the decisions and plans of the CPC Central Committee and the State Council, and supported the building of the Guangdong-Macao In-depth Cooperation Zone in Hengqin. This general plan specified that the cooperation zone is the area under customs supervision between Hengqin island's "first-line" and "second-line." This posed a new requirement for the customs work.

In fact, in 2011, the "The Reply of the State Council on Relevant Policies of Development of Hengqin" proposed that "the port between Hengqin and Macao should be set as a 'first-line' management, and the port between Hengqin and the mainland should be set as a 'second-line' management." This time the general plan has further clarified the two-line management system, mainly for the continuous implementation of filing management for goods entering and leaving through the first line, and further simplifying declaration procedures and factors. Except for goods and articles that are not tax-exempted or bonded as specified by national laws and administrative regulations, other goods and articles may be tax-exempted or bonded into the cooperation zone.

The implementation of two-line management can give better play to the unique policy and institutional advantages of the cooperation zone. And this is conducive to building a new, sophisticated system to ensure integrated openness with Macao. Likewise, this promotes rational and diverse economic development in Macao, fosters an industrial connection between Hengqin and Macao, and allows for the flow of personnel between Hengqin and Macao, in particular, for Macao residents to enter and exit the cooperation zone conveniently, so that it can truly become a new space where Macao residents live and find employment – all while becoming a new model of "one country, two systems", as well as a high ground for building the Guangdong-Hong Kong-Macao Greater Bay Area.

As you all know, Guangdong and Macao belong to different customs areas, and so too do they have different tariff levels, prohibition and control systems, inspection and quarantine, as well as other laws and regulations. This requires the customs and relevant administrative departments of the two localities to find a set of common or mutually recognized rules and standards for the cooperation zone. It also requires customs to support and service the construction of the cooperation zone, facilitating "hard connectivity" between infrastructures and "soft connectivity" of regulatory rules and standards.

Next, the General Administration of Customs and relevant departments of the State Council will take into account the opinions of all sectors of the Macao SAR and relevant parties of Guangdong province, with an eye towards strengthening the connection and coordination with the Macao Customs Service and relevant administrative departments, intensifying efforts to innovate the regulatory system, tailoring a regulatory system and matching supportive measures to enhance regulation while optimizing services in the cooperation zone, earnestly implementing them, and striving to properly play customs' role in building the cooperation zone. Thanks.

Chen Wenjun:

The previous questions raised by Phoenix TV involve two aspects. Mr. John Lee Ka-chiu has replied, and we now invite Mr. Pan Gongsheng to add some more details.

Pan Gongsheng:

Thank you. Mr. John Lee Ka-chiu from the Hong Kong SAR has already given good answers to the questions raised by the reporter. Let me add something. As you all know, Hong Kong is a major international financial center. It has a highly open business environment, an in-depth financial market system, a complete financial infrastructure and an international financial supervision system. It has been the world's freest economy for 25 consecutive years. It is the world's largest offshore renminbi (RMB) market, the fifth-largest stock market and foreign exchange trading center, the third-largest bond market in Asia, and the largest fund management and private wealth management center in Asia. Since 2019, international funds have continued to flow into Hong Kong's financial market, the exchange rate of the Hong Kong dollar has remained stable, the scale of IPOs ranks among the top in the world, and Hong Kong's status as an international financial center has been continuously consolidated.

The People's Bank of China will follow the "one country, two systems" principle and the unified deployment of the CPC Central Committee and the State Council, to thoroughly implement the national 14th Five-Year Plan and the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. Qianhai will be coordinated to further experiment and showcase financial openness and boost Hong Kong's role as an international financial center, in order to provide high-quality financial services for the Greater Bay Area and the whole country.

First, we will leverage Hong Kong's status as an international financial center to promote the internationalization of the RMB. As an international financial center, Hong Kong has a large number of global financial institutions. At present, Hong Kong's RMB fund pool exceeds 800 billion yuan, which provides important support for the promotion of RMB internationalization. In the future, the cross-border RMB business innovation pilot program will be trialed in Qianhai, which will help expand the depth and breadth of Hong Kong's offshore RMB business and consolidate Hong Kong's position as the world's largest offshore RMB market.

Second, we will accelerate the interconnection of the financial markets of the mainland and Hong Kong. The Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect established between the mainland and Hong Kong provide convenient and efficient channels for foreign investors to invest in the mainland's capital and bond markets. At present, more than 70percent of mainland stocks held by foreign investors are purchased through the Shanghai- and Shenzhen-Hong Kong Stock Connects. In the future, the Qianhai cooperation zone can continue to play a pioneering role in connecting the financial markets of the Chinese mainland and Hong Kong.

Third, we will promote cooperation between the mainland and Hong Kong in green finance, technology finance, financial technology, financial innovation, and financial supervision.

Fourth, we will treat Qianhai as a test field for implementing the negative list of the financial industry and connecting with international standards. We will gradually build a financial rules system that is in line with international standards, promote the integrated development of financial rules, and lead China's financial opening up to the outside world. Thanks.

Chen Wenjun:

Last question, please. 

Shenzhen TV:

General Secretary Xi Jinping had stressed that it is necessary to make full use of the major cooperation platforms between Guangdong, Hong Kong and Macao to attract more young people from Hong Kong and Macao to study, work and live in the mainland, while promoting extensive communication, comprehensive exchanges, and in-depth integration among young people from the three areas, and strengthening their solidarity with the whole nation. What have the Hengqin and Qianhai cooperation zones done to promote the entrepreneurship and employment of Hong Kong and Macao youths? And how will the implementation of plans benefit more Hong Kong and Macao youths in the future? Thank you.

Chen Wenjun:

Your questions may concern Guangdong, Hong Kong and Macao. First, we invite Mr. Cheong Weng Chon to answer.

Cheong Weng Chon:

Thank you, Mr. Chen. Hengqin is Macao's starting point for its participation in the development of the Greater Bay Area and its integration into national development, according to the policy address for the fiscal year 2020 of the Macao SAR government. This new area provides the most convenient and suitable space for Macao's diverse economic development, as outlined in the policy address. In recent years, the Macao SAR government has supported young entrepreneurs looking to work or start a business in Hengqin. As of this May, incubators including Macao-Hengqin Youth Entrepreneurship Valley (Inno Valley HQ) and Hengqin International Science and Technology Innovation Center have incubated 537 projects from Macao, and another 121 are currently under incubation. A project to support youth entrepreneurship and innovation, as well as platforms for advisory services and experience sharing, have facilitated cooperation between young people from Macao and the Greater Bay Area. A strategic position of the Guangdong-Macao in-depth cooperation zone in Hengqin is a new space that makes Macao residents' life and employment more convenient. The Macao SAR government is finding more ways for young people in Macao to work, start a business and live in the cooperation zone. We will continue supporting young people with innovative visions and those who want to work or start a business in the zone.

According to the general plan of building the Guangdong-Macao in-depth cooperation zone in Hengqin, four major industries will be prioritized including sci-tech research and development and high-end manufacturing to help Macao foster a more diverse industrial landscape. This will also offer Macao's young people more diversified employment opportunities and broader space for their development in Hengqin. Thank you.

Chen Wenjun:

Mr. John Lee Ka-chiu, please.

John Lee Ka-chiu:

Thank you. The Hong Kong SAR government welcomes the plan for comprehensively deepening the reform and opening up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. In particular, we welcome the policy that makes it more convenient for young people from Hong Kong and Macao to study, work, stay, live, and start a business in the cooperation zone.

Young people represent the future, are a source of hope and stand as a pillar of society. They also drive long-term social and economic development. The Hong Kong SAR government pays close attention to the vitality of youth communities and has launched projects to facilitate exchanges, study, employment, and entrepreneurship for young people. We encourage them to broaden their horizons, understand our country's development through hands-on experience, and seize opportunities.

In terms of entrepreneurship, innovation and business startups are booming on the mainland this year, bringing numerous opportunities for Hong Kong's young people. Many Hong Kong companies have developed their businesses in Qianhai. Increasingly improved supportive measures have attracted a number of young people from Hong Kong to start businesses at the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub (the Qianhai "dream works") and other bases for innovation and entrepreneurship. These bases have incubated many successful enterprises and are quite popular among Hong Kong's young business leaders. The Hong Kong SAR government has launched the Funding Scheme for Youth Entrepreneurship in the Guangdong-Hong Kong-Macao Greater Bay Area. It aims to offer entrepreneurial support and incubation services, as well as start-up capital to young Hong Kong residents who intend to start a business in Hong Kong and in mainland cities across the Greater Bay Area.  

In terms of employment, with support from the Guangdong provincial government, the Hong Kong SAR government launched the Greater Bay Area Youth Employment Scheme early this year to encourage and support Hong Kong university graduates to seize opportunities for career development in mainland cities in the Greater Bay Area (including Qianhai). The scheme has been met with an enthusiastic response, collecting nearly 3,500 job vacancies and more than 20,000 applications. Over 800 graduates have found jobs through the scheme, of which 530 are working in Shenzhen. The Hong Kong SAR government will proactively request feedback from both employers and employees to ensure the scheme achieves its intended results.

In terms of exchanges and internships, the Hong Kong SAR government will continue to optimize and expand various programs for both of these fields, in order to help young people better understand the national condition, as well as the job market, workplace culture, living environment and development opportunities on the mainland.

Looking forward, Qianhai will continue offering Hong Kong's younger generation excellent opportunities, and the Hong Kong SAR government will consistently improve relevant programs to help them better integrate into the country's overall development. Thank you.

Chen Wenjun:

Last but not least, Mr. Lin Keqing will give his answer.

Lin Keqing:

In recent years, we have been supporting young people across Hong Kong and Macao to work or start a business in Guangdong province through key platforms such as Hengqin and Qianhai. I will focus on three aspects in this regard.

First, we established and constructed platforms such as the "1+12+N" bases, which help young people from Hong Kong and Macao with innovation and entrepreneurship. For example, platforms such as the Qianhai "dream works" and Inno Valley HQ have fostered ideal hard environment and soft environment, which can provide Hong Kong and Macao's young people with a wide range of services, including exchanges, training, incubation, display and match-making.

Second, we implemented a series of policies to help Hong Kong and Macao's young people thrive. The policies include recruiting Hong Kong and Macao residents to government units and public institutions, mutually recognizing professional qualifications, coordinating social security schemes, and putting in place preferential individual income tax rates. All these will offer Hong Kong and Macao's young people more employment opportunities in Guangdong. In addition, we implemented policies to ensure they have equitable access to entrepreneurship and employment opportunities. We introduced specialized measures to support Hong Kong and Macao's young people as they navigate entrepreneurship, employment, and life in the cooperation zones. Those measures include "Measures to Support Hong Kong and Macao Young People with their Development in Qianhai" and "Interim Measures to Further Support Macao Young People with Innovation and Entrepreneurship in Hengqin."

Third, we promoted exchanges to give Hong Kong and Macao's young people a better understanding of the mainland. We organized activities such as the Guangdong-Hong Kong-Macao Greater Bay Area Internship Program for Macao Youths and the Career and Internship Fair for University Students in Guangdong-Hong Kong-Macao Greater Bay Area. Likewise, we held start-up competitions such as "Community Entrepreneurs Cup" and "Makers in Guangdong" to attract more young people from Hong Kong and Macao, and encourage them to pursue programs in Guangdong. In addition, we organized publicity activities, entrepreneurship training, salons and job fairs to inspire Hong Kong and Macao's young people to participate in the development of the Greater Bay Area and find their place in the country's overall development.

Next, we will implement decisions and plans made by General Secretary Xi Jinping and the CPC Central Committee on developing the two cooperation zones, further improve policy systems and enhance policy coordination. We will upgrade platforms to attract resources and optimize services to increase efficiency. Through these measures, we aim to achieve more high-quality outcomes in helping Hong Kong and Macao's young people with their entrepreneurship and employment. Thank you.

Chen Wenjun:

Thank you, all the speakers. Thank you, friends from the media. That's all for today's press conference.

Translated and edited by Wang Yiming, Wang Qian, Zhu Bochen, Yuan Fang, Cui Can, Chen Xia, Qin Qi, Huang Shan, Dong Qingpei, Ma Yujia, Duan Yaying, Zhang Rui, Gong Yingchun, Wang Yanfang, Zhang Tingting, Liu Sitong, Zhang Liying, Li Xiao, David Ball, Jay Birbeck, Pittock Drew Anthony. 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

Qian Keming, vice minister of commerce

Chairperson:

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

Date: 

Aug. 23, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! Welcome to this press conference from the State Council Information Office (SCIO). The Ministry of Commerce (MOFCOM) has played an active part in building a moderately prosperous society in all respects. Today, we are delighted to be joined by Mr. Wang Wentao, minister of commerce; Mr. Wang Shouwen, vice minister of commerce and deputy China international trade representative; and Mr. Qian Keming, vice minister of commerce. They will share relevant information and answer your questions. First, let's give the floor to Mr. Wang Wentao.

Wang Wentao:

Friends from the media, ladies and gentlemen, good morning! I am very glad to be attending this SCIO press conference today. First of all, I would like to extend my appreciation to you for your long-term attention to and support for China's commerce work.

At the ceremony marking the centenary of the Communist Party of China (CPC), General Secretary Xi Jinping announced that we have realized the first centenary goal of building a moderately prosperous society in all respects. This historic achievement made by the Chinese people under the CPC's leadership is a key milestone in our socialist modernization drive.

The commerce work connects China with the world, links urban and rural markets, and concerns each and every household. It has also played an important role in building a moderately prosperous society in all respects. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China's commerce work has made historic achievements and undergone significant reforms. China has further consolidated its position as a major economy and trading nation, and is accelerating its move toward becoming a quality economy and trader. While being the world's second largest consumer market and largest trading nation, China also leads the world in paid-in foreign investment and outbound investment with growing global economic governance capacities, which in turn promote economic prosperity, social development and the people's well-being. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the commerce system bears in mind the country's most fundamental interests and carries out the "four commitments."

Next, I would like to share with you some information about our commerce work.

First, we are committed to expanding domestic demand as a strategic priority to foster a strong domestic market. China enjoys the advantage of a unique and super-sized market with a population of 1.4 billion people and a 400-million strong middle-income group. Domestic demand is a fundamental driver of China's economic growth and its expansion is essential to meeting people's aspirations for a better life. We have driven innovation in circulation by creating 15-minute community service circles for the convenience of residents, upgrading pedestrian streets, transforming the retail sector, promoting the innovative development of commodity markets, improving cold-chain logistics facilities for agricultural products, enhancing the urban and rural logistics distribution system, and advancing the standardization of commercial circulation to make it smoother and more convenient. We have upgraded consumption by boosting the consumption of goods such as cars and home appliances, and services such as catering and housekeeping. We have recently announced five leading cities for developing into international consumption centers. Meanwhile, we have strengthened commercial systems in counties and boosted rural consumption. We have worked to ensure emergency supplies. In response to unexpected situations, such as the recent floods and sporadic coronavirus cases, we enhanced the joint supply security mechanism to ensure market supplies. In 2020, the total retail sales of consumer goods reached 39.2 trillion yuan. Consumption has been the strongest engine driving economic growth for many years.

Second, we are committed to expanding high-level opening-up to promote high-quality development. Opening-up is the only way for China to achieve national prosperity. Driven by greater opening-up, reform and development holds the key to China's continual development achievements. High-quality development requires a high-level of opening-up. We continue expanding the scope of opening-up and further broadening market access. The negative list for foreign investment has been shortened from 93 to 33 items. We have also raised foreign equity caps in areas including the automotive, finance and securities sectors. We have launched comprehensive pilot demonstration programs for wider opening-up in the services sector. We have actively built new highlands and platforms for opening-up, pushed for the establishment of 21 pilot free trade zones and the high-quality development of the Hainan Free Trade Port while promoting the innovative upgrading of national economic development zones. We ensured the success of major expos such as the China International Import Expo, Canton Fair, China International Fair for Trade in Services, and China International Consumer Products Expo. We have accelerated institutional opening-up and improved systems and mechanisms commensurate with new business types and models such as cross-border e-commerce. We have promulgated the Foreign Investment Law and regulations for its implementation, implemented a pre-establishment national treatment plus negative list management system nationwide. We aim to align with international rules and advance trade and investment liberalization and facilitation.

Third, we are committed to serving the people through commerce and contributing to the victory in eradicating poverty. Winning the fight against poverty is the most daunting and complex task for achieving moderate prosperity in all respects. We have been upholding a people-centered development philosophy in the commerce work. On one hand, we have leveraged the strengths of commerce and introduced measures in five commerce-related areas of e-commerce, housekeeping services, overseas labor services, industrial growth and border trade. On the other, we have actively cooperated with other countries and international organizations to channel more development aid to impoverished regions in central and western China to support local industrial development.

Fourth, we are committed to pursuing mutually beneficial cooperation and common development under the vision of building a community with a shared future for mankind. We have pressed ahead with the Belt and Road cooperation by intensifying trade and investment cooperation with partner countries and forging closer business and cultural exchanges, so that all countries can enjoy new development opportunities and broader markets, and share in the dividends of China's reform and development. Through our well-implemented cooperation and foreign aid projects, we have provided assistance within our ability to developing countries, notably the least developed countries, as part of our efforts to implement the vision of building a community with a shared future for mankind. We have played an active part in international economic governance, put forward China's proposals and contributed Chinese wisdom to multilateral meetings such as the G20, APEC and BRICS. We firmly uphold the multilateral trading system with the WTO as the core and are striving to build an international network of high-standard free trade zones.

Looking ahead, we will march forward on the new journey toward fully building a modern socialist country. The positioning of the commerce work can be summarized in three important aspects, that is, commerce work, as an important part of the domestic circulation and an important link between domestic and international circulations, plays an important role in building a new development paradigm. Commerce work is an important part of the domestic circulation as it includes domestic trade. The position as an important link between domestic and international circulations involves foreign trade, foreign investment and domestic trade. Our work can play an important role in building a new development paradigm. Ahead of us are heavy responsibilities and a noble mission. We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, ground our work in the new stage of development, and fully and faithfully apply the new development philosophy. With our focus on the positioning in the above three important aspects, we have introduced a portfolio of "5+5" measures for this year's work. Specifically, for smoother domestic circulation, we will take five measures of elevating traditional consumption, fostering new types of consumption, upgrading consumption platforms, optimizing distribution networks, and developing stronger distributors. To promote international and domestic circulations, we will also make efforts in five aspects of keeping the fundamentals of foreign trade and foreign investment stable, deepening Belt and Road economic and trade cooperation, promoting the integration of domestic and foreign trade, developing high-standard opening-up platforms, and strengthening multilateral and bilateral trade and economic cooperation. To sum up, the three important aspects will be implemented through the five measures in domestic circulation and another five in international and domestic circulations, which together constitute our fundamental tasks this year.

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

Chen Wenjun:

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

CCTV:

During the historic transformation from secure access to food and clothing to a decent life, and finally, to moderate prosperity, China's consumption structure has shifted focus from consumption for survival and a decent life to consumption for an affluent life and enjoyment. What measures have been taken by the MOFCOM to upgrade consumption, and what measures will be adopted in the future? Thank you.

Wang Wentao:

I will answer your questions. Consumption is an important engine driving growth and reflects people's need for a better life. Since the 18th CPC National Congress, the MOFCOM has resolutely implemented the strategy of expanding domestic demand. Here I will present you some data. In terms of scale, China's total retail sales of consumer goods grew from 20.6 trillion yuan in 2012 to 39.2 trillion yuan in 2020, up by 8.4% per annum on average. China has become the world's second-largest consumer market, second only to the United States. In terms of structure, people's level of consumption and quality of life have been greatly improved, which I think has been witnessed by everyone here. Here are some figures. Every 100 households have 121 color TV sets, 102 refrigerators, and 254 mobile phones. Our service consumption has grown rapidly. Though hit hard by the epidemic, it still accounted for 50.1% of total consumption spending last year. Along with the improvements in the quality of life, consumption upgrading has been continuously accelerated. We have seen that new areas of consumer spending continue to emerge in service consumption and new consumption patterns, such as digital consumption, cultural consumption, tourism consumption, and health consumption. Nowadays, some new business formats and models are often referred to as consumption scenarios. Different consumption scenarios keep evolving and innovating. Next, the MOFCOM will adapt to consumption trends and make efforts in the following aspects:

First, we will upgrade traditional consumption, which has a huge potential. Home appliances, furniture, automobiles, and catering are the top four popular consumption products, accounting for about 25% of the total retail sales of consumer goods. Take automobile consumption for example, we will promote the shift from purchase management to usage management for automobiles, especially expanding the distribution of second-hand cars. These days I have paid special attention to second-hand cars. One of the rules of international automobile consumption is that when vehicle holding reaches a certain number, the market of second-hand automobiles will see a significant rise in trade volume. Therefore, the second-hand market will grow bigger in the future, promoting both sequential consumption and circular consumption. We encourage the recycle of home appliances and furniture in the regions with suitable conditions, as well as exchanging old for new. We also support innovation of the catering industry's operational model and improvement in service quality to further expand catering consumption. More attention should also be paid to the preservation and innovation of time-honored brands, brand consumption, and especially new business formats and models, including the "China-Chic" economy, which has attracted many young people.

Second, we will accelerate the fostering of new consumption patterns. The pandemic has buoyed some new consumption patterns dominated by online consumption, with many innovative changes. So, we must accelerate the fostering of new consumption patterns, including smart shops, contactless delivery, house call services, and other new business formats and models. Meanwhile, we encourage traditional circulation enterprises to create new consumption scenarios which are immersive, experiential, and interactive. When going shopping in Beijing, I often find some new, exciting, and refreshing consumption patterns. There are many creative internet-famous sites in districts with distinctive features. All these are new and dynamic growth areas.

Third, we will upgrade consumption platforms. Through the innovation and development of consumption platforms, we will connect points, lines, and planes and finally combine the expansion of consumption with the improvement in people's living standards. I just said that we are fostering five international consumption centers, namely Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing. Meanwhile, we will promote high-quality upgrading of pedestrian streets and develop business districts and districts with distinctive features. This May, we worked with relevant departments to launch a nationwide campaign of Consumption Promotion Month, which was a great success. Next, while making an all-out effort to contain the epidemic, we will launch more campaigns and adopt a series of policies and measures to further boost consumption based on its characteristics. We will also promote shopping festivals to attract consumers and boost the market and the business, meet diversified demand at various levels, and adapt to the trends to promote the upgrading of both consumption structure and capacity. Thank you.

Economic Daily:

Since the 18th CPC National Congress, China's open economic system has been continuously improved, providing strong support and guarantees for China's opening up to the outside world and the building of a moderately prosperous society in all respects. The Fifth Plenary Session of the 19th CPC Central Committee made arrangements for developing new systems for an open economy with even higher standards. How will the Ministry of Commerce implement these arrangements and promote institutional opening up? Thank you.

Wang Wentao:

Opening up is an important feature of the socialist system with Chinese characteristics. It's a broad question, so let me answer it.

In the process of building a moderately prosperous society in all respects, especially since the 18th CPC National Congress, we have opened to the outside world in a wider and deeper manner. Some high-level open systems have basically taken shape. For example, in terms of law, the foreign-related economic and trade legal system has been gradually improved. In terms of management, the management system, policy system, and security guarantee system have also become more complete. A market system that is relatively unified, open, competitive, and orderly has gradually taking shape. Opening up is a kind of reform in itself. In the next step, we need to promote reform with determination, courage and responsibility and deepen reform by opening up and accelerate the transition from opening up based on flows of goods and factors of production to opening up based on rules and related institutions. We will further push forward the continuous improvement of the new systems for an open economy with higher standards in the following three aspects.

First, we will scale up efforts to improve free trade zones and ports. Since their establishment, pilot free trade zones have served as good models of reform and opening up. At the national level, we have rolled out 278 institutional innovations. Meanwhile, the Hainan Free Trade Port is also under steady construction. We have reached a consensus and pinpointed our targets. In the next step, we will promote our opening up in accordance with a higher standard of international economic and trade rules. We may apply high-level economic and trade rules in some areas with favorable conditions and conduct stress tests. Testing helps boost our opening up efforts. After detailed analysis, some economic and trade rules can be directly implemented when the conditions become favorable. Some must be ratified and then implemented, such as the Regional Comprehensive Economic Partnership (RCEP). We take high-standard economic and trade rules as references to promote further opening up. We will also further cut the negative list on foreign investment in the pilot free trade zones. We have been exploring and working hard in these aspects.

Second, we will improve the balance in opening up our different regions. We will further promote major regional strategies and regional coordinated development strategies and strengthened inter-regional connections, including coordinating coastal and inland areas and connecting the eastern and western regions. In particular, there is great potential for opening up in the central and western regions as China further deepens opening up. China has a vast territory, and there is a lot of room for development in the central and western regions. This year, in accordance with General Secretary Xi Jinping's requirements for enabling exhibits to become traded goods and exhibitors to spot more investment opportunities at the China International Import Expo (CIIE), we launched a series of investment promotion events for the CIIE, so that CIIE exhibitors can learn more about the market and investment environment of China's central and western regions. The first promotional event was held in Sichuan province and next, we will launch a series of activities to promote the linkage between the east, west, central areas and northeast China. Considering the transfer of some industries and the expansion of the market, we will also accelerate the innovation and development of border trade, speed up the construction of border economic cooperation zones and cross-border economic cooperation zones, and step up the opening of border areas to the outside world.

Third, we will improve the security guarantee system for the open economy. Development is the foundation of security, and security is the bottom line at all times. We must keep security in mind and accelerate development on the basis of security. The more open we are the more attention we must pay to security. We will improve the level of supervision, ensure the security of the industrial chain and the supply chain, properly resolve economic and trade frictions, and forestall and defuse major risks.

ThePaper.cn:

In recent years, there have been a growing number of free trade agreements in the world. How is the development of China's free trade agreements coming along? What role do they play? What are the future plans?

Wang Wentao:

Mr. Wang Shouwen will answer this question.

Wang Shouwen:

Thank you for your question. Indeed, currently, international free trade agreements are flourishing. According to WTO statistics, more than 350 free trade agreements have been reached so far. It is particularly noteworthy that some large free trade agreements have been signed and entered into force. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the RCEP, the EU-Japan Economic Partnership Agreement, and the U.S.-Mexico-Canada Agreement are all large-scale free trade agreements. Under the correct leadership of the CPC Central Committee and the State Council, we have followed the general trend of international regional economic integration, actively carried out free trade agreement negotiations with trading partners and made great progress. In 2002, China's first free trade agreement, the free trade agreement reached with ASEAN, enabled us to embark on a new journey of free trade agreements. So far, we have successfully negotiated19 free trade agreements and signed agreements with 26 countries and regions.

It is worth mentioning that since the 18th CPC National Congress, we have signed nine free trade agreements (FTAs), including eight with individual countries, such as the Republic of Korea (ROK), Australia and Switzerland, and the Regional Comprehensive Economic Partnership (RCEP) agreement. Meanwhile, we've upgraded existing free trade agreements, including the China-ASEAN FTA, and proceeded with negotiations on upgrading the China-Chile FTA, the China-Singapore FTA, and the China-New Zealand FTA. These are all very important works.

You asked what important role FTAs have played for our country. I should say that the role is very clear. First, the FTAs play a significant role in expanding trade and investment relations with our free trade agreement partners and stabilizing the overall performance of foreign trade and foreign investment. For example, trade volume with its FTA partners accounted for only 12.3% of China's total foreign trade in 2012, but last year, the proportion rose to nearly 35% of the total. Last year, the epidemic had a great impact on global trade, however, China's trade with its FTA partners grew by 3.2%, while trade with non-FTA partners only increased by 0.8%. Therefore, FTAs play a very significant role in foreign trade. In terms of investment relations, last year, nearly 70% of China's outbound investment was to its FTA partner countries and 84% of foreign investment in China was from FTA partners. Therefore, FTAs play a very significant role in investment relations.

Second, FTAs have further deepened economic and trade relations with FTA partners. For example, bilateral trade between China and the Association of Southeast Asian Nations (ASEAN) was only more than $78 billion in 2003, however, the figure reached $685.1 billion last year, an increase of 8.7 times. If there are no FTAs, trade cannot grow so much. China has remained ASEAN's largest trading partner for 12 consecutive years. In 2020, ASEAN also became China's largest trading partner. Take another example - Chile. Chile's trade with China accounted for 20%, or one-fifth, of its total foreign trade in 2012, compared to one-third last year. This goes to show just how effectively the FTA and the FTA upgrade have worked to promote trade between the two countries. Pakistan is another example. We inked the China-Pakistan FTA in the past, with a low level of trade liberalization. We upgraded the FTA the year before last. After the upgrade, the level of liberalization has increased. Pakistan's exports to China have grown rapidly, and the trade imbalance between China and Pakistan has also been narrowed.

Third, FTAs have greatly promoted China's opening-up. In terms of trade in goods, China has an average most-favored-nation tariff rate of 7.5%. Under FTAs, China and its trading partners implement zero tariffs on 90 percent of products, so the level of tariff liberalization in goods trade is very high. In terms of trade in services, of the 160 services sub-sectors under the 12-sector WTO classification, China committed to opening up 100 sub-sectors under 9 sectors when entering the organization. By promoting free trade agreements, we have greatly enhanced the openness of trade in services. Take the RCEP agreement as an example. China added 22 new services sectors to the 100 sectors it committed to open upon its accession to the WTO, and raised the level of openness of 37 sectors. In terms of investment, there are no agreements regarding investment openness in the WTO. The FTAs have created many rules regarding investment openness, investment market access, investment facilitation, and investment protection, which will help develop mutual investment between China and its FTA partners, and advance regional integrated development to form more stable industrial and supply chains.

We will further expand opening-up by signing more free trade agreements and upgrading our existing free trade agreements. In accordance with the decisions and deployments of the CPC Central Committee and the State Council, we will step up our efforts to build a network of high-standard free trade zones, which focuses on neighboring economies, radiates across the Belt and Road Initiative-related economies, and has a global reach. Next, we will upgrade our existing free trade agreements, including the China-Singapore FTA and the China-ROK FTA. At the same time, we will accelerate negotiations on new agreements, including the China-Japan-ROK FTA, China-Gulf Cooperation Council FTA, China-Israel FTA and China-Norway FTA. We are actively considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We will thoroughly implement the decisions and deployments of the CPC Central Committee. Thank you.

China Daily:

According to the website of the World Trade Organization (WTO), the organization's 12th Ministerial Conference will be held in November. The WTO is now facing challenges, and all parties have paid close attention to how the WTO will get through the difficulties. My question is that after the 18th CPC National Congress in 2012, what role has China played in safeguarding the multilateral trading system? Additionally, what achievements can we expect from the 12th WTO Ministerial Conference? Thanks.

Wang Wentao:

Your question is a timely and professional one. All parties have attached great importance to it. This question goes to Mr. Wang Shouwen.

Wang Shouwen:

Thanks for your question. Just as you mentioned, the WTO is currently facing severe challenges, and is in a difficult situation. For example, the WTO Appellate Body has been paralyzed, making it quite hard to defend justice in international trade. In terms of facilitating trade negotiation, it's not easy to reach multilateral trade agreements now. In particular, some countries have politicized trade issues and taken unilateral and protectionist trade measures, greatly undermining the efficacy and authority of the multilateral trading system. As a responsible member of the WTO, China has always been an active participant in all the work and trade negotiations of the WTO since it joined the organization. China was and remains committed to supporting the multilateral trading system and has actively participated in relevant reforms to the WTO. China is an active participant, strong supporter and major contributor in the multilateral trading system. 

You asked about the work we have done in the WTO since the 18th CPC National Congress. Let me give you an example. In 2013, China actively participated in the WTO Ministerial Conference held in Bali, Indonesia, and worked hard towards the conclusion of the Trade Facilitation Agreement. The full implementation of the agreement has successfully cut the cost of international trade by around 14%. In 2015, China took an active part in the WTO Ministerial Conference in Nairobi, during which we agreed to eliminate export subsidies for agricultural products, which was a boon for agricultural trade liberalization. Also, during this conference, as an important participant, China actively pushed for the conclusion of an agreement on expanding the products covered by the Information Technology Agreement, involving a global trade volume of over one trillion U.S. dollars. This was a significant contribution. In addition, China has played an active and important role in advancing negotiations on topics including investment facilitation, e-commerce, and micro, small and medium-sized enterprises.

General Secretary Xi Jinping has reaffirmed on many international occasions China's commitment to firmly upholding WTO rules, supporting necessary reforms to the WTO and jointly safeguarding the multilateral trading system with other members. China has made great efforts towards reform of the WTO. In June of 2018, a white paper titled "China and the World Trade Organization" was released, explaining China's concrete measures to support the multilateral trading system. In November of 2018, China released its position paper on WTO reform, outlining three principles and five suggestions for reform. In May of 2019, China submitted its WTO reform proposals for concrete actions concerning 12 topics in four areas. This is also the first reform proposal submitted by a developing country to the WTO. In November of 2019, China hosted the Informal WTO Ministerial Meeting in Shanghai and encouraged all parties to reach an important consensus on safeguarding the multilateral trading system. China, the European Union and other WTO members agreed last April on an interim appeal arbitration arrangement while the organization's Appellate Body remains incapable. In other multilateral mechanisms of global governance, including the G20, APEC and the BRICS, China has also advocated to support the multilateral trading system. On all such occasions, China has stated its position on building an open world economy and a community with a shared future for mankind. 

The 12th WTO Ministerial Conference you mentioned will be the first in four years. The last Ministerial Conference took place in Argentina in 2017. There are many expectations for the upcoming conference. In our opinion, the extent to how many achievements will be made during the conference is of great significance to enhancing the WTO's image and the international community's confidence in the WTO. We expect that achievements will be made in negotiations on fishing subsidies and the fight against COVID-19. We hope there will be some arrangements regarding the reform of the Appellate Body. We are also looking forward to positive progress in service domestic regulation, investment facilitation and e-commerce. Such outcomes will all help enhance the international community's confidence in the efficacy and authority of the WTO. To achieve these, we will support Ngozi Okonjo-Iweala, the Director-General of the WTO, in organizing and coordinating effective negotiations among WTO members, to achieve practical progress and fully demonstrate the organization's value and role. 

This year marks the 20th anniversary of China's accession to the WTO and also the start of the 14th Five-Year Plan. China will open its door even wider to the world. We will work, in line with the arrangements made by the CPC Central Committee, to propose China's suggestions and approaches for WTO negotiations and reform. In addition to accelerating the building of the new development paradigm and the promotion of high-level opening-up, we will join hands with our trade partners across the globe to make economic globalization open, inclusive, balanced and beneficial to all. Thanks.

International Business Daily:

Convenience is a new demand for people seeking a better life, which is also an important sign of moderate prosperity in all respects. What work has the Ministry of Commerce done to improve the circulation network and facilitate household consumption? In which areas will further efforts be made in the future? Thank you.

Wang Wentao:

Thank you for your questions. I will answer them. Circulation is connected to production at one end and consumption at the other, and it has a fundamental and leading role in the national economy. The development of China's circulation industry has been very rapid, making big steps, especially in terms of internationalization, standardization, intelligence, intensification, and informatization. It is moving relatively fast, and in some aspects, it is leading the world. Our circulation efficiency is improving while costs are gradually decreasing. In 2020, for the total logistics cost for the entire society – that means, total logistics costs as a percentage of GDP of China – dropped to 14.7%, which is a decrease of 3.3% compared with 2012. Chain operation, e-commerce, logistics and distribution, smart stores, contactless distribution, unmanned retail, and other new business formats and models continue to emerge, some of which represent forced model innovations due to the COVID-19 pandemic and other situations. Many of these innovations are ahead of the rest of the world. Circulation efficiency is as important as production efficiency, and it is an important aspect of improving the overall operating efficiency of the national economy.

The developments mentioned above are indeed good, but we will also see some problems and shortcomings during development. Although the share of total national logistics costs in China's GDP has dropped to 14.7%, it is still relatively high compared to those of developed countries. So we may encounter logistics costs that are relatively high, and that enterprises' complaints are also relatively strong. Next, we will be problem-oriented to make up for these shortcomings, strengthen the weaknesses, and make efforts in the following aspects.

First, in rural areas, we will launch county-level commercial system construction campaigns. Rural commerce still has great potential, but it is constrained due to shortcomings in circulation. For example, logistics coverage and express deliveries cover 99.7% of areas at the township level but only a little over 50% at the village level. This shortcoming restricts the further development of rural consumption. We propose to promote the construction of a rural commercial system based on the principles of "county-level overall planning, with counties as the center, towns as the focus, and villages as the foundation." Additionally, we'll encourage and promote the "three sinks" by market-based means: the sinking of the supply chain of enterprises to small-town and rural markets, which mainly encourages the marketing network of large-scale circulation enterprises to extend to the countryside and provide distribution and standardized procurement for some small merchants serving millions of households in rural areas; the sinking of logistics and distribution to small-town and rural markets, including the integration of resources in e-commerce distribution, postal services, supply and marketing, and the express delivery, as we encourage them to sink further; and the sinking of commodities and services to small-town and rural markets so that rural commodity consumption can adapt to the characteristics of rural areas. Service consumption is a shortcoming worth singling out among all the shortcomings in rural areas, and we must continue to strengthen it, including by providing better after-sales service. By encouraging the "three sinks," we realize the building of the rural commercial system, which are the sinking of the supply chain of enterprises, the sinking of logistics, and the sinking of goods and services.

Second, in terms of urban areas, in addition to building international consumer cities, business districts, pedestrian streets, and characteristic urban neighborhoods, we will also extend the "last mile to your home" development, i.e. the community, to create convenient living circles that people can reach within 15 minutes from their residence. We will accelerate the construction of wet markets, convenience stores, and comprehensive community service centers. We will accelerate the development of branding and chaining convenience stores, support enterprises in their digital transformation, innovate business models, promote convenient consumption, and push forward the construction of standardized wet markets.

Third, we will improve commercial circulation facilities. We will mainly focus on shortcomings to exert our strength. Currently, the shortcoming worth singling is cold chain logistics. The cold chain circulation rate of meat in China is only 30%, and that of fruits and vegetables is less than 20%, while that of developed countries is more than 90%. Therefore, our next step is to promote cold chain logistics for agricultural products, speed up the construction of cold chain logistics, and make up for these shortcomings.

Fourth, we will strengthen emergency guarantees. After the COVID-19 outbreak, the Ministry of Commerce, in accordance with the requirements of the central government, worked with relevant government departments, commissions, and localities to form a nine-province joint supply and guarantee mechanism to ensure the supply of daily necessities in Hubei province and Wuhan city. Recently, as we witnessed new outbreaks of the pandemic in various places, coupled with floods in some places, media outlets reported that there were some instances of panic buying and that the supply of materials encountered some difficulties. In addition, due to the pandemic prevention and control measures, logistics has not been so smooth or even blocked in some places for a short period of time, resulting in some particular supply shortages. In response, we immediately launched a joint guarantee and supply mechanism, with localities as the main body, strengthening the supply of materials in various regions. Then, things tended to return to normal quickly, ensuring that people could go on with their daily lives. Next, we will try to improve the provision of early warning predictions based on big data. If there is a shortage of goods in some places due to the supply being affected, and there is abnormal data, we must give reminders and warnings, and then we must immediately activate the joint guarantee and supply measures. We also particularly hope that media outlets will continue to strengthen supervision in this area and report relevant emerging situations in a timely manner. We will pay attention to the media reports on the one hand, and on the other hand, through our system, including the system of government functional departments and the monitoring system we have established, we can reflect on the situation and respond promptly, quickly, and accurately, making sure that no matter what happens, the basic guarantee of the people's daily necessities can be met. Thank you.

Red Star News:

The Political Bureau of the CPC Central Committee held a meeting on July 30. During the meeting, General Secretary Xi Jinping stressed that China should align its efforts to consolidate and expand the achievements in poverty elimination with an emphasis on promoting rural vitalization. To our knowledge, the MOFCOM has introduced numerous commerce-related assistance measures, such as reducing poverty via e-commerce. What will be done next to help extensively promote rural vitalization? Thank you.

Wang Wentao:

I've covered this in my opening remarks. Mr. Qian Keming will further elaborate on your question.

Qian Keming:

As Mr. Wang pointed out in the opening remarks, commerce-related work stretches from urban to rural areas, connects China with the rest of the world, and synergizes production and sales, thus giving it special advantages in poverty alleviation. We have fully leveraged its strengths in this regard by introducing a policy package in five aspects and attracting all sectors of society to actively engage in the work and effectively help develop industries in poverty-stricken areas, boost employment, and increase farmers' incomes.

First, reducing poverty through the e-commerce industry. Currently, the e-commerce industry has become one of the most direct and effective ways to help poor people escape poverty and increase their incomes. The MOFCOM has carried out comprehensive demonstration projects in which e-commerce has been brought to rural areas and covered all national-level poverty-stricken counties across the country. The MOFCOM also organized large e-commerce enterprises to establish public welfare channels on e-commerce poverty alleviation work, and developed rural e-commerce brands. Preliminary statistics show that e-commerce has helped some 7.71 million farmers either start a business or find employment locally. Meanwhile 6.19 million people have seen their incomes increase.

Second, reducing poverty through the housekeeping industry. The housekeeping industry is a small but powerful lever for poverty alleviation work. The MOFCOM has carried out poverty alleviation projects in this regard and built connections between housekeeping firms and national-level poverty-stricken counties. A total of 31 export centers for housekeeping workforces have been established, and more effort has been made in the training of housekeeping staff. The scheme helped employed more than 850,000 people in poverty-stricken areas, thus helping their families step out of poverty.

Third, reducing poverty through the export of labor. Employment channels have been expanded via the export of labor. The MOFCOM has built connections between labor export enterprises and poverty-stricken areas, funneled more resources into these regions, and supported labor in poor areas to work abroad. Over the years, some 146,000 people have been sent abroad to work. Their average annual income exceeded 100,000 yuan, with some even earning 300,000 to 400,000 yuan a year. Hence, those people working abroad can help their whole family emerge from poverty and thus bring an economic boom to the region.

Fourth, reducing poverty through the development of industry, industrial development has expanded the market. The MOFCOM has held a series of events to synergize production and sales, with contracted purchases reaching 42 billion yuan over the years. The MOFCOM also works to reduce poverty through consumption and encourages commodity circulation enterprises across the country to set up booths for poverty alleviation products, which has expanded sales channels for agriproducts. From the 122nd to the 128th Canton Fair, companies from poverty-stricken counties were exempted from a total of 86.69 million yuan in booth expenses, and inked deals worth more than $1.7 billion.

Fifth, reducing poverty through border trade. In this sense, border trade has facilitated poverty alleviation via openness. The MOFCOM has worked proactively to improve policies concerning border trade and promote its diversified development. This has reduced poverty for some 500,000 people in the border regions and helped increase their incomes. A three-year action plan on paired assistance has been carried out in which 24 national-level economic development zones in eastern China now cooperate with 19 economic cooperation zones in either border or cross-border regions. In this way, high-quality development of the economy in border regions has been better facilitated.

As China has secured a complete victory in the battle against extreme poverty and kicked off a new chapter toward rural vitalization, the MOFCOM will continue to make coordinated efforts and make commercial resources more accessible at the community level. Just now, Mr. Wang mentioned that the outreach of commercial resources should be expanded to the community level in three aspects. The MOFCOM will improve the circulation of commodities, expand openness and cooperation, and boost employment so as to align efforts to consolidate and expand the achievements in poverty elimination with efforts to promote rural vitalization. In terms of improving commodity circulation, the MOFCOM will strengthen the establishment of a three-tier logistics system at the village, township, and county levels in poor areas, improve trunk circulation networks for agriproducts, and precisely synergize production and sales. A project which boosts agricultural development through e-commerce will also be carried out. In terms of openness and cooperation, the MOFCOM will improve the assistance programs of the Canton Fair, promote the on-the-spot processing of imported goods in border trade, and facilitate the relocation of the processing trade. The MOFCOM will also launch a campaign to introduce hundreds of enterprises to border regions. An open and cooperative platform will be built for regions that have shaken off poverty. In terms of boosting employment, the MOFCOM will launch a campaign that will help farmers shed poverty through the housekeeping industry. Regional brands for housekeeping labor will be built. The MOFCOM will continue to help export labor and promote stable employment for people who have shaken off poverty. All these tasks require us to further enhance the economic vitality and sustain impetus for further growth in poor areas, and keep the smooth economic circulation between urban and rural areas so that poor regions can be better integrated into the new pattern of development and make new contributions to comprehensive rural vitalization. Thank you.

Hong Kong Economic Herald:

My questions are related to the Belt and Road Initiative (BRI), put forward by President Xi Jinping in 2013. What achievements have MOFCOM made in promoting the initiative? And what contributions have been made in building a community with a shared future for mankind? What is the situation regarding China's investment in countries along the Belt and Road this year? And what are MOFCOM's investment plans going forward? Thank you.

Qian Keming:

China has been actively promoting mutual development and prosperity between China and the rest of the world in its course of building a moderately prosperous society in all respects. In 2013, President Xi Jinping proposed the BRI with a focus on building a community with a shared future for mankind. Over the past eight years, fruitful outcomes have been achieved in the process of advancing the grand visionary initiative through practical actions; and a highly extensive platform for international cooperation has been formed as a global public good which has been extremely popular. Next, I will introduce the progress made by MOFCOM in promoting the BRI from five aspects:

First, unimpeded trade was deepened. We promoted the high-efficient flow and rational distribution of resources. China has positively expanded imports, developed new forms and models of business such as cross-border e-commerce, promoted the construction of overseas warehouses, stepped up efforts to build grand trade passageways including China-Europe freight routes and the New International Land-Sea Trade Corridor, and shaped a network of free trade zones built with high standards. Between 2013 and 2020, China registered $9.2 trillion in total volume of goods trade with other Belt and Road countries.

Second, investment and cooperation continued to be improved and industrial and supply chains were established for mutual benefit. China focused on facilitating outward investment and cooperation, deepened international production capacity cooperation, and promoted trilateral and multilateral market collaboration, as well as actively attracting overseas enterprises to invest and operate their businesses in China. From 2013 to 2020, China invested a total of $136 billion directly into other Belt and Road countries, and a total of 27,000 enterprises from other Belt and Road countries were established in China, with total investment volume reaching approximately $60 billion.

Third, cooperation projects were effectively implemented and partnerships for improving connectivity were deepened. China, with host countries, jointly promoted infrastructure connectivity, accelerated the construction of green projects and projects related to people's well-being, and co-established overseas economic and trade cooperation zones. Between 2013 and 2020, Chinese enterprises registered a turnover of $640 billion in contracted projects in other Belt and Road countries. As of the end of 2020, the economic and trade cooperation zones built by Chinese enterprises in these countries had seen investment of nearly $40 billion, paying fees and taxes to the host countries exceeding $4.4 billion, and creating 330,000 jobs for local people.

Fourth, we set up and improved various mechanisms and platforms to provide tremendous opportunities for boosting openness and cooperation. So far, China has signed more than 200 cooperation documents with 172 countries and international organizations to promote the BRI, increasing its circle of friends. MOFCOM made efforts to build more than 90 bilateral cooperation mechanisms regarding unimpeded trade, investment and cooperation, service trade, and e-commerce to tackle problems encountered when cooperating via practical measures. At the same time, the successes of the CIIE, Canton Fair, CIFTIS and China International Consumer Products Expo have significantly boosted trade connections with the countries and regions involved.

Fifth, we wrote a vivid chapter in building a community with a shared future for mankind when we worked together to fight against the COVID-19 pandemic with vigorous and effective measures. Faced with the sudden outbreak of the pandemic, China, while endeavoring to ensure proper domestic prevention and control measures, cooperated with other countries to overcome difficulties through mutual assistance. China has so far provided emergency assistance to 150 countries and 13 international organizations, and exported anti-epidemic supplies to more than 200 nations and regions, and is providing vaccine assistance to 102 nations and four international organizations.

Going forward, MOFCOM will follow the decisions and arrangements of the CPC Central Committee and the State Council, continue to deepen economic and trade cooperation through the BRI, boost trade using well rounded approaches, make investments and build cooperative relationships innovatively, improve relevant platforms and mechanisms, strengthen risk prevention and control, and realize high-quality development through the BRI, thus making continued contributions to building a community with a shared future for mankind, with deeper and more solid measures. Thank you.

Hong Kong Bauhinia Magazine:

Foreign trade is one of the "three carriages" driving China's economy, contributing much to the country's employment and taxes, and playing a vital role in building a moderately prosperous society in all respects. Faced with the complicated global trade situation, what are MOFCOM's forecasts for China's foreign trade in the future? What policies and measures will you be taking? Thank you.

Wang Wentao:

As we all know, foreign trade is one of the "three carriages" driving China's economy. To answer your question, I will cite a series of statistics.

First, foreign trade has promoted the steady development of the economy. In 2020, the scale of China's foreign trade hit a record high of $4.6 trillion, accounting for 14.7% of the international market share. Second, it has fueled supply in the domestic market. The CIIE planned, arranged and promoted by Xi Jinping, general secretary of the CPC Central Committee, has boosted imports, and provided numerous commodities favored by Chinese consumers. With imported goods going to ordinary supermarkets and millions of households, consumers now have more options. Third, it has expanded employment and taxes, bringing jobs to around 180 million people.

Since the 18th CPC National Congress in 2012, China's foreign trade has contributed a total of 11% to the country's total financial revenue, while maintaining a stable foreign exchange reserve of around $3 trillion. It has effectively guaranteed the sound balance of international payment for a huge country like ours. China has already become the world's largest trading nation in goods. Last year, it ranked first in terms of total trade volume in goods and services globally.

How do we perceive this situation? China's foreign trade maintained an upward momentum in the first seven months of this year, with an increase of 24.5% year on year, hitting a 10-year high. This growth can be attributed to multiple factors, while of which are one-offs. Given the temporary nature of these one-off factors, we think the situation in the first half of next year will be very serious. For example, the increasingly severe pandemic situation in surrounding regions brought about the re-shoring of orders, with many orders shifting to China. However, as the pandemic has gradually been curbed, these re-shored orders might be transferred back. The exports of medical supplies such as masks, medical isolation gowns and respirators soared at the beginning of the pandemic. Now, there has been a sharp decline as these one-off factors fade away. We see growth gradually slowing as the second half of 2021 gets under way. We may encounter more severe challenges next year. At the same time, our economy started to recover from the second half of last year. Given the huge numbers, the rapid pace of recovery cannot be sustained for a long time. We hope the recovery will slow down in a gradual manner with growth eventually stabilizing within a reasonable range. Improving the cross-cycle policy adjustment will allow the economic fluctuations to stabilize within a reasonable range, and prevent harm from dramatic fluctuations in economic growth and market entities. So, for the second half of this year, we will concentrate on improving the cross-cycle policy adjustment in a bid to keep foreign trade within a reasonable range. Specifically, we will focus on four aspects: stabilizing growth, promoting innovation, ensuring a smooth flow in industrial and supply chains and expanding cooperation.

We will stabilize growth, mainly in terms of market entities and orders. We are still faced with some difficulties, which are also commonly seen in the international community, such as limited shipping capacities and expensive shipping fees, rising prices of bulk commodities and raw materials, pressure caused by the rising renminbi exchange rate, and rising labor costs. These are the four main issues being faced by foreign trade companies. Small- and medium-sized enterprises (SMEs) are facing rather difficult circumstances. Therefore, we will take a series of measures to stabilize market entities and orders. 

We will promote innovation. Besides the traditional foreign trade activities, we will fully promote the development of new business forms and patterns, such as cross-border e-commerce and exports of high-tech, high-quality and high added value products. We will also step up efforts to promote Chinese brands overseas.

We will ensure a smooth flow in both foreign trade industrial and supply chains.

We will expand cooperation. Due to time constraints, I will condense this point as deepening international economic and trade cooperation. As Mr. Wang said earlier, we should deeply integrate the efforts in protecting the multilateral trading system, negotiating FTAs and upgrading FTAs into overall international economic cooperation, and better play our part in promoting development of the globe and Chinese foreign trade. Thank you.

Chen Wenjun:

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

China Review News:

We have noted that last year, global cross-border direct investment fell by about 40%, but foreign investment in China registered a trend-bucking rise of 4.5%. This suggests that foreign investors are still optimistic about the Chinese market. What role has foreign investment played in China's efforts to build a moderately prosperous society in all respects? Some foreign-funded enterprises are worried that foreign investment will no longer be needed to foster a new development paradigm. What's MOFCOM's take on this? What other measures will be taken to attract foreign investment? Thank you.

Wang Wentao:

Thank you for your question – I'll answer it. I completely agree with your conclusion that foreign investors are still optimistic about the Chinese market. Your question involves three aspects: first, the role foreign investment plays; second, our view on some foreign investors' concerns; third, what measures should be taken next. I will respond to these three aspects individually.

Here, I'll make a simple evaluation of the role and contributions of foreign investment. China has always been an important destination for foreign investment. Since the 18th CPC National Congress, the overall scale of foreign investment flowing into China has been on the rise and has been the second largest worldwide over the past four years. Especially last year, despite a 40% drop in global foreign investment, foreign investment entering China grew by 4.5%, bucking the declining global trend. This type of investment is not easy to come by. As an important part of China's market entities, foreign-funded enterprises have made unique and significant contributions to the country's economic and social development. Foreign enterprises account for 2% of all market entities in China and have created about 40 million jobs – one-tenth of the employed urban population. Additionally, they have contributed to one-sixth of China's tax revenue and two-fifths of imports and exports. This fully shows that foreign-invested enterprises are important participants in, witnesses, and contributors to China's building of a moderately prosperous society in all respects. While foreign enterprises contribute to China's development, they themselves have also grown well in the country. The Chinese market has become an important and even main source of profit for some multinational companies. According to a survey by foreign chambers of commerce, 56% of U.S. enterprises, 73% of European enterprises, and 89% of Japanese enterprises in China made profits last year despite being affected by the pandemic.

We put forward fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Some one-sided interpretation of the paradigm focuses too much on the domestic circulation as the mainstay and worries about the discarding of foreign investment. This is a complete misunderstanding. General Secretary Xi Jinping has stressed many times that a new development pattern is by no means a closed domestic circulation, but a more open dual circulation that allows domestic and overseas markets to reinforce each other. In fact, most foreign enterprises in China are practitioners of dual circulation. Their domestic circulation is "in China and for China." They purchase, produce, and sell in China and are deeply integrated into the country's domestic circulation. At the same time, these companies have contributed two-fifths of China's imports and exports, which have also promoted domestic and international dual circulation.

Next, we will take measures in four aspects: expanding opening-up, strengthening services, safeguarding rights and interests, and improving the business environment.

First, we will open wider. Mr. Wang Shouwen has mentioned this. Just now, I also spoke about how we will further shorten the negative list and accelerate the efforts to formulate the 2021 version of the negative list. By widening the market access and relaxing the restrictions, we will open wider. We have also promoted negotiations on some free trade agreements and actively facilitated and participated in WTO reforms.

Second, we will step up efforts to guarantee services. We have set up special work teams with 20 departments and key provinces to help vital foreign enterprises and projects solve problems. The special teams have been operating normally. The Investment Promotion Agency of the Ministry of Commerce has established a National Center for Complaints of Foreign-Invested Enterprises – their telephone number is 010-64404523. All provinces and cities in the country have agencies for complaints from foreign companies, not only the MOFCOM, which can be checked on the official website of MOFCOM. If foreign enterprises encounter any difficulties or problems, they can solve them through coordination at different levels. This is what it means to "strengthen services."

Third, we will enhance protection of the legitimate rights and interests of foreign investors. We will make good use of the complaint mechanism and better protect their rights and interests in accordance with the law.

Fourth, we will continue to improve the business environment. We will effectively implement the Foreign Investment Law and its implementation regulations, improve the supporting systems, and foster a business environment that is based on market principles governed by law and up to international standards. As General Secretary Xi Jinping has said, China will open its door only wider to the world. We're happy to see that foreign companies invest in China and can share the dividends of China's reform and development. Thank you.

Chen Wenjun:

Thank you, all the speakers. Thank you, friends from the media. That's all for today's press conference.

Translated and edited by Zhang Liying, Wang Wei, Li Xiao, Li Huiru, Wang Yiming, Ma Yujia, Wang Mengru, Zhang Junmian, Cui Can, Yuan Fang, Zhang Rui, Wang Zhiyong, Zhu Bochen, He Shan, Zhang Tingting, Liu Sitong, Qin Qi, Xu Xiaoxuan, Wang Qian, David Ball, Jay Birbeck, 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, head of the Comprehensive Department of the Ministry of Commerce (MOFCOM)

Zhu Xiaoliang, head of the Department of Market Operation and Consumption Promotion of the MOFCOM

Li Xingqian, head of the Department of Foreign Trade of the MOFCOM

Zong Changqing, head of the Department of Foreign Investment Administration of the MOFCOM

Chairperson:

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

Date:

July 22, 2021

Xing Huina:

Friends from the media, good afternoon. Welcome to this briefing held by the State Council Information Office (SCIO). Today's briefing will introduce China's commerce work and operations in the first half of 2021, followed by questions from the media. Today, we are joined by Ms. Guo Tingting, head of the Comprehensive Department of the Ministry of Commerce (MOFCOM); Mr. Zhu Xiaoliang, head of the Department of Market Operation and Consumption Promotion of the MOFCOM; Mr. Li Xingqian, head of the Department of Foreign Trade of the MOFCOM; and Mr. Zong Changqing, head 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 afternoon. I'll start by briefly introducing the overall statistics. 

Since the beginning of this year, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, the MOFCOM has grounded its work in the new stage of development, applied the new development philosophy, and contributed to fostering a new pattern of development. Three new guiding principles have been put forward for China's commerce work, which include making commerce work a key part of the domestic economic circulation, turning it into a key joint linking domestic and international economic circulation, and giving full play to its role in establishing a new pattern of development. In accordance with these new guiding principles, the MOFCOM is sparing no effort to promote the dual circulation development pattern while ensuring the smooth flow of domestic circulation. Generally speaking, in the first half of this year, China's commerce work has seen rapid growth, achieved stable performance, and moved in a positive direction. New progress has been achieved in the high-quality development of commerce work, and new contributions have been made to the sustainable and sound growth of the national economy.

First, domestic consumption continues to pick up. In the first half of 2021, China's retail sales of consumer goods totaled 21.2 trillion yuan, up 23% year on year. Its two-year average growth stood at 4.4%. Final consumption expenditure contributed to 61.7% of economic growth, which reflected its prominent role as a "stabilizer." The consumption of commodities rebounded significantly. From January to June, the retail sales of commodities increased by 20.6%, of which, spending on automobiles, cosmetics, and gold, silver and jewelry increased by 30.4%, 26.6% and 59.9%, respectively. Service consumption recovered at an accelerated pace as it accounted for 52.5% of household consumption, up 3.2 percentage points. Catering revenue basically recovered to pre-pandemic levels. New types of consumption boomed. From January to June, China's online retail sales reached 6.1 trillion yuan, up 23.2% year on year. Shipments of 5G smartphones increased by 100.9%. Offshore duty-free sales in Hainan province increased 3.7 times. We have effectively ensured supply and price stability, strengthened the market surveillance and early-warning system, and adjusted meat reserves. The supply of daily necessities was sufficient, and prices were generally stable. China's Consumer Price Index (CPI) rose 0.5% in the first half of 2021.

Second, foreign trade posted rapid growth. From January to June, China's total imports and exports of goods reached 18.1 trillion yuan, up 27.1% year on year. Exports and imports grew by 28.1% and 25.9%, respectively. The two-year average growth of total foreign trade in goods, exports and imports stood at 10.8%, 11.3% and 10.3%, respectively. The vitality of market entities was enhanced significantly. The number of enterprises with actual foreign trade business reached 479,000, up 8.1% year on year. The imports and exports of private enterprises increased by 35.1%, which is 8 percentage points higher than the overall growth of foreign trade. New business forms and models developed at an accelerated pace. The imports and exports of cross-border e-commerce increased by 28.6%. Market procurement exports grew by 49.1%, and there were more than 1,900 overseas warehouses. China's trade with its major trading partners registered rapid growth. Its imports and exports to the Association of Southeast Asian Nations (ASEAN), the European Union (EU), and the U.S. increased by 27.8%, 26.7% and 34.6%, respectively. Its foreign trade with countries along the Belt and Road increased by 27.5%. The commodity structure of China's foreign trade was further optimized. Exports of mechanical and electrical products increased by 29.5%, accounting for 59.2% of the total export volume. Specifically, the exports of automobiles, machine tools and home appliances grew by 101.4%, 39.6% and 35.8%, respectively. Trade in services saw innovative development. From January to May, the total imports and exports of trade in services reached 1.9 trillion yuan, up 3.7%; the imports and exports of knowledge-intensive services accounted for 46.4% of the total amount.

Third, substantially more foreign investment was utilized. In the first half of 2021, foreign direct investment (FDI) into the Chinese mainland, in actual use, surged 28.7% year on year to 607.84 billion yuan. Its two-year average growth stood at 12.7%. The number of enterprises also increased rapidly. More than 23,000 foreign-invested companies were set up, representing an increase of 47.9% and bringing the total number of foreign-invested firms to over 1.06 million. The composition of foreign investment was further optimized. FDI into China's manufacturing industry, in actual use, increased by 9.9%, the highest growth rate over the same period in a decade. FDI into China's service sector, in actual use, grew by 33.4%. Foreign investment from major source regions saw stable growth. Investment from countries along the Belt and Road, ASEAN countries and the EU increased by 49.6%, 50.7% and 10.3%, respectively. Actual investment from China's Hong Kong, Singapore, the Republic of Korea and Germany increased by 35.5%, 53.6%, 29.9% and 32.4%, respectively. The exemplary role of opening-up areas became rather prominent. FDI into 21 pilot free trade zones, in actual use, amounted to 100.88 billion yuan, attracting nearly 17% of the country's total amount of FDI with less than four thousandths of the country's land area. Newly established foreign-invested firms and the actual use of FDI in the Hainan Free Trade Port increased 4.9 times and 6.7 times.

Fourth, outbound investment cooperation was stable and orderly. In the first half of this year, non-financial direct investment decreased by 3.7% year-on-year to 348.83 billion yuan, (equivalent to $53.9 billion, up 4.7%). Investment cooperation within the framework of the Belt and Road Initiative (BRI) was deepened. The investment into countries along the Belt and Road grew by 8.6%, up 2 percentage points to 17.8% of total outbound investment. The investment structure continued to improve. Investment into information technology, scientific research services and the transportation sector jumped by 26.8%, 74.2%, and 98.7%, respectively. The level of cooperation was steadily upgraded. The turnover of overseas contracted projects increased by 3.2% to 439.76 billion yuan. The number of newly signed projects worth more than $50 million went up by 6% to 404. Win-win cooperation was fully demonstrated. By the end of the first half of this year, overseas economic and trade cooperation zones had invested $47 billion accumulatively, paid about $6 billion in taxes and fees to host countries, and created 380,000 local jobs.  

Next, the Ministry of Commerce (MOFCOM) will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and adhere to the decisions and plans of the CPC Central Committee and the State Council. We will comprehensively promote consumption, improve the modern circulation system, advance high-level opening-up to the outside world, firmly stabilize the overall performance of foreign trade and foreign investment, actively participate in global economic governance, and accelerate efforts to interlink markets, integrate industries, promote mutual innovation and connect rules, so as to better serve the fostering of a new development paradigm.  

That's all for my introduction. Thank you.

Xing Huina:  

Thank you for your briefing, Ms. Guo. The floor is now open for questions. Please identify your news outlet before asking your question.

CCTV:  

I have a question about the BRI. It can be said that economic and trade cooperation is an important part of the BRI. In the first half of this year, what progress was made in BRI economic and trade cooperation? Thank you.

Guo Tingting:  

Thank you for your question. Since General Secretary Xi Jinping put forward the major proposal of developing BRI through joint efforts, MOFCOM has earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, and constantly deepened BRI economic and trade cooperation. This has achieved remarkable results. In the first half of this year, MOFCOM strived to overcome the impacts of the pandemic and made new progress in promoting BRI economic and trade cooperation, making new contributions to the high-quality development of BRI. This is mainly reflected in the four following aspects:  

First, unimpeded trade developed fast. In the first half of this year, the trade volume of goods between China and countries along the Belt and Road expanded by 27.5% year-on-year to 5.35 trillion yuan, higher than the overall growth of and accounting for 29.6% of the country's foreign trade. MOFCOM actively promoted the integrated development of new business forms and models of foreign trade (such as cross-border e-commerce and overseas warehouses) and major trade passageways, and steadily facilitated the construction of the New International Land-Sea Trade Corridor. In the first half of this year, China-Europe freight trains made 7,377 journeys and distributed 707,000 twenty-foot equivalent units (TEU) of goods, up 43% and 52%, respectively. The accumulative freight train journeys exceeded 41,000, reaching 168 cities of 23 European countries.  

Second, investment cooperation continued to deepen. In the first half of this year, China's non-financial direct investment in countries along the Belt and Road grew by 8.6% to 62 billion yuan, increasing its share in the country's total outbound investment to 17.8%. The turnover of contracted projects in countries along the Belt and Road reached 254.67 billion yuan, making up 57.9% of the national total. Steady progress was made in overseas projects and the construction of industrial parks. Enterprises settled in the China-Belarus Industrial Park totaled 71, and projects such as Jakarta-Bandung High-Speed Railway, Budapest-Belgrade Railway and Colombo Port made active headway. At the same time, 2,775 new enterprises were established in China by countries along the Belt and Road, with a direct investment of 39.11 billion yuan, up 67.8% and 49.6% year-on-year, respectively.  

Third, the development of free trade zones proceeded steadily. So far, China has signed seven free trade agreements with 13 countries along the Belt and Road. In April, China formally deposited its ratification instrument of the Regional Comprehensive Economic Partnership (RCEP) agreement with the ASEAN Secretary-General, becoming one of the first countries to complete the ratification procedures. Currently, countries like Singapore and Japan have also deposited their ratification instruments. All parties are pushing for the agreement to become effective on January 1, 2022. To help localities and businesses make good use of RCEP, MOFCOM held two thematic national online training sessions, with more than 66,000 participants and more than 70% of them being enterprise representatives. In addition, we actively considered joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), signed a protocol on upgrading the China-New Zealand Free Trade Agreement, and actively promoted negotiations on the China-Gulf Cooperation Council Free Trade Agreement and China-Japan-South Korea Free Trade Agreement, among others.  

Fourth, the mechanisms and platforms have become more complete. The Ministry of Commerce actively promotes the establishment of trade and investment cooperation mechanisms with relevant countries. The ministry has established working groups for smooth trade with 15 countries and investment cooperation working groups with 42 countries. In addition, the ministry has established 14 mechanisms for cooperation in trade in services. We actively developing "Silk-Road E-commerce" and promote the establishment of bilateral e-commerce cooperation mechanisms with 22 partner countries. At the same time, we have successfully held important expos such as the China International Consumer Products Expo, the 129th session of the China Import and Export Fair (Canton Fair), and the China-Central and Eastern European Countries (CEEC) Expo, which effectively boosted economic and trade exchanges with relevant countries and regions.

In the next step, the Ministry of Commerce will continue to implement the decisions and plans of the CPC Central Committee and the State Council, adhere to the principles of extensive consultation, joint contribution and shared benefits, and uphold the philosophy of open, green and clean cooperation. In order to make Belt and Road cooperation high-standard, people-centered and sustainable, we will continue to do a good job in the epidemic prevention and control of overseas projects and personnel, strengthen international cooperation on COVID-19 response, and promote the and upgrading of Belt and Road trade and investment. With these measures, we hope to make new contributions to promoting the high-quality development of the Belt and Road Initiative and build a community with a shared future for mankind. Thanks.

Phoenix TV:

Regarding consumption, how does the Ministry of Commerce view the recovery of the consumer market in the first half of the year? What are the highlights? What's the next trend? What measures will the Ministry of Commerce take to stimulate consumption? Thanks.

Zhu Xiaoliang:

Thank you for your questions. Since the beginning of this year, in the face of complex and fast-changing domestic and international environments, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, commerce departments at all levels have resolutely implemented the decisions and plans of the CPC Central Committee and the State Council. They have strengthened work coordination and overall planning, and taken multiple measures to stabilize and expand consumption. The consumer market has on the whole shown a trend of steady and continuous recovery, which has played an important role in supporting the stable recovery of the economy. In the first half of the year, total retail sales of consumer goods increased by 23% year on year, and the contribution rate of consumption to GDP growth rebounded to 61.7%. Compared with 2019, total retail sales of consumer goods in the first half of the year increased by 9%, among which, the first quarter amount increased by 8.5%, and the second quarter amount increased by 9.4%, 0.9 percentage point higher than that of the first quarter. 

There are four highlights in the growth of the consumer market. The first is the sustained and rapid development of mid-to-high-end consumption. For example, in the first half of the year, the retail sales of cosmetics and communication devices above designated unit size increased by more than 25% over the same period in 2019. Imports of suitcases and bags, jewelry, and clocks and watches have doubled year on year. The second is the rapid growth of consumption of big-ticket items, such as automobiles. In the first half of the year, automobile retail sales reached 2.2 trillion yuan, a year-on-year increase of 30.4%, and its contribution to the total retail sales of consumer goods reached 13%. The third is the accelerated recovery of cultural and tourism consumption. China's box office revenue has recovered to nearly 90% of the same period in 2019. Railway and civil aviation passenger traffic has recovered to nearly 80%. Red tourism, rural tourism, and self-driving tours are booming. The fourth is the popularity of green, healthy and smart consumption. For example, new-energy vehicle sales accounted for 9.4% of total vehicle sales, and 5G mobile phone shipments accounted for 73.4% of total mobile phone shipments.

There are still some problems in the current operation of the consumer market, such as an unbalanced recovery and unstable foundation. As China's economy continues to recover steadily, epidemic prevention and control have become more precise and effective, policies and measures have taken effect, and consumer confidence has gradually increased, we expect that the overall consumer market will continue its steady and sound recovery.

The Ministry of Commerce will continue to implement the decisions and plans of the CPC Central Committee and the State Council, ground our work in the new development stage, apply the new development philosophy, and serve to create a new pattern of development. We will resolutely pursue the strategy of expanding domestic demand, promote the implementation of various measures to stimulate consumption in all sectors, give better play to the fundamental role of consumption for economic development, and better meet the people's growing needs for a better life. Next, we will focus on the work in the following aspects:

First, we will further improve policies and measures to promote consumption. While implementing the policies and measures that have been introduced to stabilize and expand automobile consumption, and to boost consumption of other big-ticket items, we will conduct in-depth surveys and research in accordance with changing situation and tasks, and reserve new policies to expand domestic demand and promote consumption.

Second, we will improve the city's capacity to provide pro-consumption services. We will accelerate the building of international consumption center cities and carry out campaigns to promote urban commerce, in a bid to better meet people's needs for a variety of high-quality consumer products.

Third, we will ramp up more effort to expand the rural market. We will move faster in developing a business system at the county level, promote the sustainable and healthy development of rural e-commerce, and improve the backbone network for the circulation of agricultural products. This will further tap into spending potential in rural areas.

Fourth, we will bolster consumer spending in traditional sectors. Efforts will be made to stabilize the consumption of bulk consumer goods, such as motor vehicles, household appliances and household goods, and foster a more rapid and sound recovery of the catering sector. 

Fifth, we will boost new types of consumption. We will support and encourage traditional businesses to accelerate digitalized and smart-based transformations, and pursue a wider and deeper integration of online and offline activities. 

Sixth, we will ignite people's enthusiasm for consumption. As epidemic prevention and control measures on a regular basis continue, a series of pro-consumption campaigns will be launched in line with local conditions, to spur holiday spending and further boost market vitality and unleash consumption potential. Thanks. 

The Paper.cn:

With the normalization epidemic prevention and control worldwide, there is a decline in demand for trades in products regarding COVID-19 epidemic prevention and control. Many manufacturing countries have resumed their production. Will China face an increasing pressure on adjusting its export structure? What's your take on the future of China's foreign trade? Thanks. 

Li Xingqian:

Thanks for your questions. In the first half of this year, China's total imports and exports expanded 27.1% year-on-year in terms of the yuan, hitting a historical record high. This is a result of multiple factors, such as international supply and demand. What matters most is the fact that supply creates demand. Since the outbreak, China has taken creative approaches to offering services and guaranteeing the production and people's livelihoods worldwide through international trade, and the country has strengthened its capacity to compete in a comprehensive manner. There was a huge gap between supply and demand in the COVID-induced international market. China's supply chain in international trade has quickly adapted to the changing demand of international markets, and supplied marketable products in a timely manner, which met the needs for epidemic prevention, and production and life across the world. As a responsible major country, China has provided over 300 billion masks, 3.7 billion protective suits and 4.8 billion testing kits to more than 200 countries and regions. More than 600 million doses of COVID-19 vaccine have been offered to the rest of the world. All these made great contributions to the global battle against COVID-19. In addition, in the purpose of offering services to meet the needs of people working from home during lockdowns worldwide, foreign trade companies in China have mobilized available resources in manufacturing, improved R&D and design capabilities, and strengthened quality control. A great amount of high-quality consumer goods have been exported to the rest of the world.  

Beginning this year, with a more rapid speed of vaccine rollout, some countries have seen an economic rebound and gradually resumed their production, posing both challenges and opportunities for China's foreign trade. On the one hand, China's exports will face stiffer competition in international markets. On the other hand, there is a huge demand for raw materials and equipment for production across the world, which creates an increasing demand for importing capital goods and intermediate goods from China. The proportion of consumer goods in exports dropped in the first six months of this year, while capital goods and intermediate goods in exports accounted for 76.7% of the total, 2.5 percentage points higher than the previous year. The changes you mentioned are exactly the chance and the driving force for China's industrial chain and supply chain in international trade to better adapt to international markets and boost its capacity to compete. We hope countries around the world reopen economy as soon as possible, restore close trade cooperation, and work together to inject vitality into the global economy.

According to our recent survey, around 40% of the foreign trade companies saw growing export orders that were newly placed compared to the previous year. It is expected that the recovery of external demand and the steady economic growth will continue to underpin the development of China's foreign trade. However, in light of the growing base last year, there will be a decline in the growth of foreign trade in the second half of this year. The development of foreign trade still faces uncertainties and instabilities. The risk of COVID-19 resurgence remains and the current global economic recovery is weak. The rising cost of raw materials, the disruption of maritime transportation for logistic services as well as other problems have further squeezed profit margins of foreign trade companies and affect their willingness to receive orders. 

Currently, we are keep a close eye on the changes in international trade. In the second half of this year, we will focus on resolving pronounced problems encountered by companies, and work with related departments and the local governments to introduce new policies and measures that are more targeted, to fully reduce the overall cost of foreign trade companies. By pursuing an innovation-driven growth, we will firmly promote high-quality development of trade and boost the capacity to compete in international trade, in a bid to consolidate the foundation for developing foreign trade industries, sustain a stronger momentum of development and ensure unimpeded circulation channels, and move faster toward establishing a new development paradigm. Thanks.

Southern Metropolis Daily:

We have noticed that Amazon has recently banned a large number of sellers, including many from China, affecting some Chinese companies. What are your comments on this? Thank you.

Li Xingqian:

Thank you for your question. Due to the COVID-19 epidemic, traditional trade and economic activities such as exhibitions have been impeded. Enjoying the unique advantages of low cost, high efficiency and great convenience without the limitations of time and space, cross-border e-commerce became popular among consumers worldwide, showing rapid growth. China's cross-border e-commerce has also seen rapid development. In 2020, its volume of imports and exports reached 1.69 trillion yuan, up 31.1% year on year. This year, it has so far maintained a double-digital increase, with volume reaching 886.7 billion yuan in the first six months and a growth rate of 28.6%.

Thanks to rapid development, cross-border e-commerce enterprises have diversified export channels. Some companies operate businesses relying on large-scale e-commerce platforms, some build independent websites to explore markets, and new business models, including livestreaming commerce and big data marketing, emerged. A number of Chinese enterprises and brands have gained recognition in the international market, making the Chinese experience and approaches a new sample for the development of global cross-border e-commerce and providing references for other countries in this field. Meanwhile, due to varying laws, cultures, and business practices across different countries, Chinese enterprises have to face various risks and challenges when going global. I have learned that practices of some sellers were considered to have violated Amazon's code of conduct and other terms. Thus, their businesses were suspended by the platform. We always require Chinese enterprises to abide by the laws and regulations of different countries, respect local customs, and conduct businesses in accordance with the laws and regulations. We will help enterprises to improve their capacity of risk control and align with international economic and trade rules and standards, and firmly support them to protect their legitimate rights and interests through appropriate measures. We will also promote communication and cooperation among upstream and downstream entities so as to jointly bolster the healthy development of the industry.

In general, the problems that emerged in the development of new business forms in foreign trade can be put down to them having not been "acclimatized" or as "growing pains." In the process of learning-by-doing and mutual learning, we hope the platform will cherish the important contributions made by enterprises and fully respect all kinds of trade entities. We believe that the platform and enterprises will find a solution that is both compliant and reasonable. The Ministry of Commerce will continue to follow the progress of this issue. Thank you.

Cover News:

Recently, the Ministry of Commerce released the statistics on foreign investment in China from January to June. What are the characteristics of the growth rate of foreign investment in the first half of this year? What did the Ministry of Commerce do to stabilize foreign trade and investment? Thank you.

Zong Changqing:

Thank you for your questions. This year, faced with a complicated and severe environment both at home and abroad, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Ministry of Commerce worked with other departments and various regions to firmly implement the deployments of the CPC Central Committee and the State Council on stabilizing foreign trade and investment and ensuring stability on the six fronts and security in the six areas. The work of stabilizing foreign investment has been steadily promoted. In the first half of the year, foreign investment in China grew rapidly, which is significantly better than expected and laid a solid foundation for achieving the country's goal of keeping foreign investment stable for the whole year. There are four main characteristics to this:

First, rapid growth. In the first half of this year, actually used FDI in the Chinese mainland surged 28.7% year on year to 607.84 billion yuan, increasing 27.1% from the same period in 2019. Defined in U.S. dollars, FDI jumped 33.9% year on year to 90.96 billion U.S. dollars, increasing 28.6% from the same period in 2019. No matter in yuan or U.S. dollar terms, the FDI's pace of growth in the first half of this year was the highest in almost 10 years, and its scale hit a record high for the same period.

Second, high technology. The actual use of FDI in high-tech industries increased by 39.4% year on year to 192.4 billion yuan, up 39.6% from the same period in 2019, and its proportion hit a record high for the same period. FDI in the high-tech manufacturing sector surged 29.2%. Among these, FDI in computer and office equipment manufacturing and electronics and communication equipment manufacturing increased by 45.4% and 34.2%, respectively. FDI in the high-tech service sector jumped 42.7%. Among these, FDI in the transformation of scientific and technological achievements industry and in the R&D and design service industry increased by 93.2% and 45.8%, respectively.

Third, major foreign-funded projects were increased. 

The number of large foreign investment projects with contract values over US$100 million increased 81.3% year on year to reach 602, up 76% compared with the same period in 2019. A number of landmark projects were also launched, including Hyundai Motor Hydrogen Fuel Cell System (Guangzhou), Bosch Hydrogen Powertrain Systems (Chongqing), Bio-pharmaceuticals Facility (Hangzhou) of Thermo Fisher Scientific, and the Legoland Shanghai Resort.

Fourth, foreign investment projects were supported widely across China. Foreign funds in China's eastern, central and western regions increased by 29.7%, 33.6% and 6.1%, respectively. Meanwhile, 20 provinces in China registered double digit growth in foreign investment. Among them, the top six provinces -- Shandong, Zhejiang, Shanghai, Jiangsu, Guangdong and Beijing -- saw growth rates of 61.9%, 36.4%, 35.6%, 26.7%, 20.6% and 13.5%, respectively.

Since the beginning of 2021, the MOFCOM has been mainly focused on the following four aspects:

First, we have stabilized favorable investment policies. We continued to carry out a series of policies on stabilizing foreign investment, particularly the Suggestions on Further Stabilizing Foreign Trade and Investment, which was released last year by the State Council. The MOFCOM also issued the Notice on Effectively Stabilizing Foreign Investment By Centering on Fostering a New Development Paradigm, with 22 supportive measures being launched. We also joined hands with relevant departments to introduce supportive policies to stabilize foreign capital such as by strengthening financial securities and preferential tax policies for imported scientific innovations. A recent survey conducted by the MOFCOM showed that 68.6% of foreign enterprises were very satisfied with foreign policies issued by the central authorities, and 31.4% of them were basically satisfied.

Second, we have broadened the platform. While continuing to support Beijing's creation of an open and comprehensive demonstration zone in service sectors this year, we added the four additional trial sites of Tianjin, Shanghai, Hainan and Chongqing to expand overall services, and carried out 203 experimental measures, forming a new pattern of "1+4" pilot projects which were approved by the State Council. We further enhanced the innovation ability of national-level economic development zones, while another 13 national economic technological development zones were approved by the State Council.

Third, we have invited more foreign funds. We made concerted efforts in attracting foreign capital by integrating investment resources and establishing a joint-action mechanism that is marked by "serving the new development paradigm and supporting the flow of foreign funds into local enterprises." More than 20 major expos were held, including the 12th Central China Investment and Trade Exposition (Expo Central China 2021) and the 27th China Lanzhou Investment and Trade Fair. We also conducted a series of events to promote investment, such as the "China International Import Expo (CIIE) entering Sichuan" and "multinational corporations travelling to western China" to help local enterprises bring in more foreign funds. According to incomplete statistics, in the first half of this year, over 900 commercial events were launched across China, with more than 1,400 new contracts being signed with foreign companies, reaching a total contractual value of more than $170 billion.

Fourth, we have improved services. We have given play to the role of coordinated mechanisms for foreign trade and foreign investment as well as the task forces for key foreign-funded projects. The joint-action mechanism between central departments and local governments has been improved. We held 38 exchange activities focused on key industrial fields such as medicine and integrated circuits, which were joined by foreign enterprises and chambers of commerce, We coordinated efforts to address more than 900 problems raised by foreign enterprises and key foreign-funded projects, such as personnel entry into China, custom checks and vaccinations. We arranged for over 20,000 foreign personnel to come into China and helped businesses resume normal production and operations, thus stabilizing expectations and confidence among foreign investors.

Bloomberg News:

The five-year plan issued by the MOFCOM states that the total volume of retail sales of consumer goods will increase by 5% in the following five years, which is much lower than the GDP growth rate, as we all noticed that this year China's economic growth may exceed 6% and the figures were even higher in the past few years. Why has the MOFCOM set such a conservative target? Do you think it will benefit China's dual-circulation if total consumption is low in some private businesses?

Zhu Xiaoliang:

I will answer this question. Since the reform and opening-up, China's retail sales of consumer goods have maintained sustained and rapid growth. In recent years, as people's income has increased, the domestic consumption structure has upgraded, transforming from commodity consumption into service consumption. The proportion spent on Chinese service consumption is increasing. In the first half of this year, the proportion spent on service consumption by Chinese residents reached 52.5%. As far as we estimate, this proportion will continue to increase along with the improvement of the people's living standards. Against such a backdrop, China's retail sales of consumer goods have registered a slower but stable performance. In the next period, service consumption will continue to grow rapidly and with an increasingly higher proportion. Regarding stability, we aim to achieve a growth of 5% in the retail sales of consumer goods in the next stage. Thank you.

National Business Daily:

We have noticed that, over the past year, the international shipping market has seen an increasingly fierce shortage of containers, and shipping fees have repeatedly hit new highs. What are the MOFCOM's forecasts for the international shipping market in the future? What measures will you take to address these issues in China's foreign trade logistics? Thank you.

Li Xingqian:

Thank you for your attention. At the present time, the shortage of shipping containers has become a common concern of all the Chinese foreign trade enterprises, severely restricting the development of international trade. Against the backdrop of the ongoing pandemic, China's foreign trade has actively helped other countries to combat the virus, effectively guaranteed the needs of the people, strongly supported the smooth operation of global industrial and supply chains, and greatly boosted the countries' confidence in winning the battle against the virus and helping the economy to recover. It has served as a "stabilizer" in global trade. Over the past year, the international shipping market has seen continuous tension between supply and demand with a limited carrying capacity of containers and exorbitant shipping fees. There are complains from local level about the sharp increase of the operating costs of foreign trade enterprises due to the hard-reserved shipping space and expensive shipping fees. Many of the foreign trade enterprises have reacted violently to these issues. In especial, small and medium enterprises are under extremely heavy pressure.

The CPC Central Committee and the State Council have attached great importance to solving the practical difficulties faced by foreign trade enterprises. The MOFCOM has closely followed these shipping issues with the Ministry of Industry and Information Technology, the State Administration for Market Regulation, and other relevant departments. We have made great efforts to improve the output of containers, increase carrying capacities, and strengthen supervision of prices. We have also provided guidance for the local governments to roll out relevant measures. We will further collaborate with other departments to address issues of urgent concern and help the foreign trade enterprises to overcome immediate difficulties.

We have noticed that the contradiction between supply and demand has directly affected global trade and will eventually affect the customers' interests. However, the high profit made by the shipping companies has also drawn much attention. As an open economy, we resolutely support all kinds of enterprises across the world to travel overseas while honoring credibility. Win-win cooperation for mutual benefit is the foundation of trade. We hope that shipping enterprises will focus on the long term, cherish the opportunities in Asian markets, and establish cooperation based on long-term stability and mutual benefit with Chinese foreign trade enterprises and others across the world. Through this, we can work together to overcome difficulties and further boost the international circulative economy. We appeal to business associations of all relevant fields, including the shipping market and freight forwarding, to strengthen self-regulation and urge enterprises to operate in accordance with laws and regulations. At the same time, we call for countries across the world to promote international cooperation and information sharing and make joint efforts to maintain the order of international logistics, and promote the smooth operation of international supply chains. Thank you.

The Poster News APP:

How is the performance of the automobile market in the first half of this year? What measures will the MOFCOM take to spur automobile consumption? Thank you.

Zhu Xiaoliang:

Thank you for your concern about the automobile market. I will answer this question. The auto industry has always been a pillar industry in our national economy, serving as an engine to expand domestic demands and boost consumption with its long industrial chains and strong driving effects. In recent years, retail sales of automobiles have accounted for about one-tenth of the country's total sales. The CPC Central Committee and the State Council attach great significance to this sector. This year's government work report proposed to keep vehicle and other major consumption stable and to remove unreasonable restrictions in the second-hand car dealing market. The MOFCOM has been implementing these policies with great care and has worked with other departments to promote cross-province registration of second-hand cars, providing convenience for used car dealing. We have also promoted new energy vehicles in villages and handed out guidelines to the local commerce authorities on how to spur car consumption as part of the efforts to help them boost car consumption.

With various policies and measures in place, the automotive market has maintained a good momentum of steady growth. In the first half of the year, all major indicators exceeded levels from before the epidemic. First, sales of new vehicles achieved rapid growth, reaching nearly 12.9 million, a year-on-year increase of 25.6% and an increase of 4.4% compared to the same period in 2019. Second, sales of new energy vehicles increased substantially. In the first half of the year, 1.2 million vehicles were sold, a two-fold increase from the same period last year and close to the full-year sales of 2019. As I mentioned earlier, sales of new energy vehicles accounted for more than 9% of total vehicle sales. Approximately 256,000 new energy vehicles were sold in June, a new record for a single month. Third, the automotive aftermarket became more vibrant. The transaction volume of used cars exceeded 8.4 million, and the volume of recycled scrapped motor vehicles reached 1.31 million, an increase of 52.9% and 41.3% year-on-year, respectively. Meanwhile, the ratio of used car sales to new car sales has risen to 0.65:1.

Judging from the situation in the second half of the year, as China's economy continues to recover steadily, more policies and measures have been rolled out to promote consumption, which will provide strong support for the development of the automotive market. Meanwhile, factors such as a chip shortage and rising raw material prices will also have a certain impact on the automotive market. Based on comprehensive research and judgment, we believe that automotive sales for the whole year are expected to achieve positive growth, reversing the continuous decline for three consecutive years.

By the end of June this year, China's car ownership had reached 292 million, with an average of over 200 cars for every 1,000 people. In the next step, the Ministry of Commerce (MOFCOM) will thoroughly implement the decisions and deployments of the CPC Central Committee and the State Council. In accordance with the new situation and changes, the MOFCOM will work with relevant departments to boost automobile consumption and accelerate the construction of a new development paradigm featuring step-by-step consumption upgrading, efficient use of vehicles, and a green cycle.

First, we will accelerate the transformation of automobile management from emphasizing purchase to use, adjust and optimize automobile management policies, remove obstacles restricting automobile purchase and use, and release the potential of automobile consumption.

Second, we will deepen reforms to streamline administration and delegate power, improve services in automobile circulation and promote the introduction of related measures to stimulate the vitality and internal driving forces of the automobile market.

Third, we will promote the removal of unreasonable restrictions on used car transactions; further facilitate the standardized, branding, and large-scale development of the used car industry; and boost the market.

Fourth, we will improve the relevant management systems in the field of automobile circulation and speed up the revision of the Measures for the Administration of the Circulation of Secondhand Automobiles and Provisions on the Standards for Compulsory Retirement of Motor Vehicles to optimize the automobile consumption environment. Thank you.

International Business Daily:

Recently, prices for international bulk commodities and raw materials have soared, and the RMB has appreciated. How much impact will these have on the business of foreign trade companies? What measures will be taken to ease the strain on business costs? Thank you.

Li Xingqian:

Thank you for your understanding and concern about the pressure on foreign trade companies. Since the beginning of this year, multiple difficulties have arisen, including rising raw material prices, poor shipping logistics, volatile exchange rates, and rising labor costs. These led to an increase in operating costs of foreign trade companies and squeezed profit margins. Some foreign trade companies "didn't want to receive orders" or run into a situation where "production increased, but profits dropped." Small- and medium-sized foreign trade companies were hit harder. The MOFCOM has attached great importance to this situation. Analysis shows that the international transmission of prices is the main reason for an increase in raw material prices. The rapid increase in domestic and international demands worsened the situation, which brought great pressure on manufacturing companies and foreign trade companies. Together with local governments and departments, we have been closely following and monitoring the price of bulk commodities, promoting imports through various channels, and building stable foreign trade channels for bulk commodities. The prices of some bulk commodities have already fallen. In terms of maritime logistics, we have been cooperating with relevant departments to closely follow shipping problems, promote an increase in container output, ensure shipping capacity, and enhance price supervision. In response, a series of measures have also been rolled out in various places. At present, significant results have been made to enhance shipping capacity, the return of old containers, and the launch of new containers. Regarding exchange rate fluctuations, we have been working with relevant departments to promote financial institutions to continuously optimize products and services for hedging foreign exchange risks, and actively promoting the guide to exchange rate hedge for foreign trade companies to provide targeted guidance for companies to avoid risks.

The MOFCOM has been closely following the practical difficulties faced by foreign trade companies. Based on in-depth analysis and judgment, we will further improve the trade policy toolbox, optimize the business environment, cut costs for companies, and ensure the stable production and sound development of various market entities, especially micro-, small-, and medium-sized foreign trade companies. Thank you.

Xing Huina:

Today's press conference concludes here. Thanks to all the speakers and friends from the media. Goodbye!

Translated and edited by Zhu Bochen, Wang Wei, Xu Xiaoxuan, Chen Xia, Zhang Liying, Zhang Rui, Cui Can, He Shan, Lin Liyao, Zhang Junmian, Zhang Tingting, Liu Qiang, Qin Qi, Li Huiru, Wang Yiming, Yuan Fang, 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 Nanping, vice minister of science and technology

Zeng Yixin, vice minister of the National Health Commission

Wang Chen, vice president of the Chinese Academy of Engineering, president of the Peking Union Medical College, and director of the National Center for Respiratory Medicine

Liang Wannian, team leader of the Chinese side of the joint expert team of WHO-convened Global Study of Origins of SARS-CoV-2

Yuan Zhiming, director of the Wuhan National Biosafety Laboratory, and researcher at the Wuhan Institute of Virology, Chinese Academy of Sciences

Chairperson:

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

Date:

July 22, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning! Welcome to this press conference from the State Council Information Office (SCIO). The topic of the press conference is COVID-19 origin tracing. Today, we have invited Mr. Xu Nanping, vice minister of science and technology; Mr. Zeng Yixin, vice minister of the National Health Commission; Mr. Wang Chen, vice president of the Chinese Academy of Engineering, president of the Peking Union Medical College, and director of the National Center for Respiratory Medicine; Mr. Liang Wannian, team leader of the Chinese side of the joint expert team of WHO-convened Global Study of Origins of SARS-CoV-2; and Mr. Yuan Zhiming, director of the Wuhan National Biosafety Laboratory, and researcher at the Wuhan Institute of Virology (WIV), Chinese Academy of Sciences. They will introduce the relevant information and take your questions.

Next, I will give the floor to Mr. Zeng.

Zeng Yixin:

Friends from the media, good morning. I'm very glad to see so many journalists present at this press conference regarding COVID-19 origin tracing, as this is a very specialized issue. Since the COVID-19 outbreak, all responsible countries and scientists have been eager to find out where the coronavirus came from. Solving the question will greatly help prevent similar pandemics. On March 30, the World Health Organization (WHO) released the joint study report "WHO-convened Global Study of Origins of SARS-CoV-2: China Part," marking a good start for the global study of the origins of SARS-CoV-2. Governments, scientists, media outlets around the world have paid great attention to the report. Over the past few months since the report was released, more and more scientific evidence has proved it is a valuable and authoritative report that stands the test of science and time. The conclusions of the report are scientific, as they were made on the basis of scientific principles.

First, let's review the background of the report.

Before the joint study, China had organized a multidisciplinary team to do a lot of work on origin tracing, despite arduous epidemic prevention and control tasks. It was on the basis of this work that our experts and the WHO experts to China discussed and jointly formulated the Terms of Reference (TOR) last July. Since then, China has carried out origin-tracing studies in strict accordance with the TOR.

At the beginning of this year, the WHO international expert team arrived in China and started the China part of the global study of the virus origins. China upheld the principles of openness, transparency, science, and cooperation, and gave full support to the expert team. Together with local governments, we have done our best to coordinate relevant organizations to meet the requirements of the experts. The experts visited a total of nine places they wanted to visit, including Jinyintan Hospital, the Huanan Seafood Wholesale Market, and the WIV. They talked with everybody they wanted to talk with, including medical workers, laboratory staff members, researchers, market managers, merchants, residents, and recovered patients. The joint origin-tracing study involved a heavy workload, but the experts carried out careful and in-depth analysis into every question and every piece of data. They often worked around the clock, forgetful of their sleep and meals. We deeply admire their professionalism and spirit of science. On behalf of the Chinese government, I would like to express our heartfelt gratitude to the international experts.

Second, I would like to talk about the conclusions of the study.

The report is an account of the China part of the global study of the virus origins. The expert team reached the following conclusions. The coronaviruses found in bats and pangolins are most highly related to SARS-CoV-2 and share the highest homology with SARS-CoV-2 by sequencing. However, neither of the viruses identified so far from these mammalian species is sufficiently similar to SARS-CoV-2 to serve as its direct progenitor. Although the homology is high, there is still much difference. Based on research results in various fields, such as clinical epidemiology, zoology, and environmental testing, the joint study team assessed the likelihood of different possible pathways for the introduction of the virus. First, direct zoonotic spillover is considered to be a possible-to-likely pathway. Second, introduction through an intermediate host is considered to be a likely-to-very-likely pathway. To put it simply, this means the virus would have been transmitted from an animal reservoir to an intermediate host, followed by transmissions to humans. This a likely-to-very-likely pathway. The third potential pathway is introduction through cold food chain products. Some sporadic outbreaks in many places last year showed that introduction through cold food chain products was possible. So, this is considered a possible pathway in the report. At last, introduction through a laboratory incident is considered to be an extremely unlikely pathway.

Third, let's talk about the next step for tracing the origin of the virus.

On the one hand, we have been actively supporting relevant departments and scientists to continue the tasks that need to be supplemented and improved, which are clarified in the China part of the joint report of WHO-convened global study of origins, and will give timely feedback to the WHO. In other words, we will complete the remaining tasks as soon as possible. On the other hand, the China part of the joint report has pointed out the direction for the next step of joint study of origins in various countries and localities under the global framework, and we should continue to move forward along this direction. I want to emphasize that the China part of WHO-convened joint study on the origins of the COVID-19 is an excellent example of international cooperation. We worked with the WHO and jointly explored a set of effective working mechanisms and working methods for global origin tracing of emerging infectious diseases. WHO experts have established a sound cooperation mechanism with Chinese experts. The cooperation between the two parties has been very close, which is of great significance to promoting the global tracing of the origins of the COVID-19. The expert group has always upheld a scientific and rigorous professional attitude, repeatedly discussing and researching every specific issue. This is a very good model and mechanism. Therefore, we sincerely hope that the international team of experts who participated in this study on origins can continue to play a role in the next phase of relevant work and make full use of their valuable experience in the follow-up global tracing study, making contributions to get to the bottom of the origin of the COVID-19.

Origin tracing is a complex scientific matter that involves many disciplines and experts in many different fields. It is also a global problem. The origin tracing of diseases such as AIDS, Ebola, Middle East Respiratory Syndrome, SARS in 2003, and avian flu in 2009 all proved to be very difficult, and some of their origins still remain undiscovered. Therefore, for the next phase, the origin tracing work should be conducted under the overall planning and coordination of the WHO and based on the first phase of study. Outstanding experts from multiple countries should be organized to carry out further studies. It is necessary to ensure that scientists must be the main actors in the research. We also call for strengthening exchanges, cooperation and information sharing. We should scientifically carry out the work of tracing the origin.

That's all for my opening remarks. Thank you!

Shou Xiaoli:

Thank you, Mr. Zeng, for the introduction. Now the floor is open to questions. Please identify your news outlet before raising questions. 

CCTV:

As mentioned earlier, tracing the origin of a virus is a long-term complex scientific issue. Relevant origin tracing work was carried out on the 1918 flu pandemic, 2009 H1N1 pandemic, and the global AIDS epidemic. This time, the inquiry into the origin of the COVID-19 has also been carried out globally. What is its significance and the reasons for it? Thank you.

Wang Chen:

Let me answer this question. This is a very important and necessary scientific and health matter. There are three important issues of an infectious disease. The first is the source of infection; the second is the transmission route; and the third is who is likely to be infected, the so-called susceptible groups. These three issues are important scientific links and scientific elements for us to understand the infectious disease. Origin tracing is related to the issues of source and transmission route. Therefore, by clarifying the issue of origins, we can answer the question of where the pathogen of this infectious disease came from. It holds important value not only for this infectious disease, but also has reference significance for the prevention and control of other infectious diseases in the future. The scientific community around the world is deeply interested in this issue, and it is a key matter that we need to focus on and explore. Therefore, this matter is worth exploring. But as Mr. Zeng said just now, we must realize that it is complex, and we need to hold a particularly objective and scientific attitude when probing into origins of a virus. 

Asahi Shimbun:

I have two questions. First, the WHO proposed last week to conduct a second phase of the study into the origin of COVID-19 in China, including an investigation into Wuhan's seafood markets as well as audits of relevant research institutions like the WIV. They expect China to support this process in a spirit of transparency. How do you comment on this? Will China welcome the second phase of the COVID-19 origin probe? Second, in a report released in March on the China Part of the global study of the origins of COVID-19, the WHO said it was extremely unlikely that the virus escaped from a laboratory. However, some scientists have voiced their views in an article published in Science magazine this May, saying that consideration should be given to both a natural spillover and a lab accident. Two countries initially reported the COVID-19 outbreak. Do you think the virus was caused by natural spillover or human factors? Thank you.

Zeng Yixin:

I'll take the first question. Thanks for asking this question. I would like to express my thoughts on the WHO's plan to conduct the second phase of the study into the origin of COVID-19. Honestly speaking, I was rather shocked over the news, because the plan has listed the hypothesis that China's breach of laboratory protocols caused the virus to leak as one of the research priorities. From this point, I can feel that the plan showed disrespect for common sense and arrogance toward science.

First, rumors including one about three WIV staff falling ill and the other one about the WIV conducting so-called "gain of function" experiments on the virus were dispelled long ago. They are pure lies.

Second, RaTG-13, the most similar coronavirus that the WIV collected from bat specimens, shares only 96.2% homology with SARS-CoV-2. 

Moreover, some have wondered if the SARS-CoV-2 is a man-made virus. Some Indian researchers published a preprint scientific manuscript saying that they have found similarities between SARS-CoV-2 and HIV, speculating that the SARS-CoV-2 was man-made. The authors withdrew the paper after being criticized by their international peers. As many other viruses also show similar sequences, we cannot infer simply from this point that the SARS-CoV-2 was man-made. Based on thorough analyses, many experts concluded that there are not any traces of modification in the virus. It's common knowledge to genetic engineers that the artificial modification of a virus will definitely leave traces. But SARS-CoV-2 doesn't have any such traces, which totally rules out the theory that it was man-made.

So far, none of the staff or post-graduate students at the WIV have ever contracted SARS-CoV-2, nor has the WIV conducted any gain-of-function research on coronaviruses. There is no so-called man-made virus there. Then how could it happen that the virus leaked from the laboratory due to violations of lab procedures? Therefore, the "lab leak" theory goes against the common sense and scientific law. More importantly, the WHO sent an expert team on a field trip to the WIV and arrived at the conclusion that a lab leak was extremely unlikely. The experts, selected by the WHO, were authoritative in their respective fields and were rich in research experience. We should respect their conclusions. Therefore, the WHO's plan on the second phase of the study into the COVID-19 origin, as you mentioned, demonstrates a disrespect for common sense and goes against science in some respects. We cannot accept such a plan.

The COVID-19 origin tracing is definitely a scientific issue. The Chinese government has long supported the science-based investigation of the COVID-19 origins, but opposes politicizing the issue. We believe the second phase of origin tracing should be an extension of the first one, guided by the Resolution WHA73.1 and conducted after thorough discussions and negotiations among all WHO members. What was done in the first phase of origin tracing, especially by those that have reached a clear conclusion, should not be repeated. What should be carried out is the origin tracing of early cases, molecular epidemiology, and intermediary hosts in multiple countries and regions based on extensive consultations among WHO members.

The WHO-China joint research, conducted in the first phrase of origin tracing, fully demonstrated that the scientific and rational approach is to conduct work after the WHO and the host country reach consensus on origin-tracing research. The approach not only demonstrates respect to sovereign states, but also promotes origin-tracing work to be conducted in an orderly, smooth, high-quality, and efficient manner. It is necessary to summarize and absorb the successful experience of phase-one work and carry out the next phase based on it. Therefore, on July 4, the Chinese expert team proposed its recommendations on the second-phase origins study to the WHO and exchanged views with WHO experts. In the proposal, we voiced our concerns and core points. We hope the WHO can carefully consider the concerns and advice of Chinese scientists, take investigating the origin of the COVID-19 virus as a scientific issue free from political interference, and proactively and properly conduct sustained investigations into the origin of the virus in multiple countries and regions around the globe. We also call for strengthening international cooperation and exchanges in origin-tracing research, finding the most likely source of the virus as soon as possible and preventing the next pandemic like COVID-19 from happening again by every possible means. Our aim is to better understand the source of SARS-CoV-2, in order to handle the virus effectively and prevent similar pandemics from happening again. Therefore, we must equip ourselves with science-based principles, and promote origin-tracing work in line with scientific rules. This is the attitude adopted by the Chinese government. Thank you. 

Yuan Zhiming:

The WIV has responded many times to the coronavirus lab leak rumors. Right now, Mr. Zeng elaborated on the same issue, and now I would like to add something.

It has become an academic consensus that the COVID-19 virus evolved in nature. On July 5, 2021, 24 leading experts from around the world published an article again in The Lancet medical journal, noting that the coronavirus Chinese lab leak theory remains without scientifically validated evidence. On July 7, 2021, scientists from the United States, the United Kingdom and Australia released a preprint paper in Zenodo, a research data sharing platform in Europe, in which they wrote, "There is currently no evidence that SARS-CoV-2 has a laboratory origin. There is no evidence that any early cases had any connection to the WIV, … nor evidence that the WIV possessed or worked on a progenitor of SARS-CoV-2 prior to the pandemic." A few days ago, in a joint paper published in the journal Science China: Life Sciences, 22 Chinese and overseas scientists applied a classic evolutionary theory to elaborate why SARS-CoV-2 could only come from nature, rather than being man-made. Using scientific evidence, they refuted the lab leak conspiracy theory on the origin of the virus.

I have also noticed that some media have paid great attention to the safety of the Wuhan P4 lab. As a laboratory with the highest level of biosafety, precaution and protection, the Wuhan P4 lab has never seen any laboratory leaks or human infections since it began operating in 2018. Designed, constructed and run in line with both international requirements and domestic standards, the Wuhan P4 lab has stable and reliable biosafety precautions in place, and has established a set of complete biosafety management systems and a professional team to bolster, manage and maintain its operation. I can assure you that the infrastructure, management, team composition and working protocols at the Wuhan P4 lab are the same as other P4 labs in operation around the world. There were media reports that three researchers at the WIV went to the hospital in November 2019 with all the same symptoms as COVID 19. These reports were created out of thin air. It would have been very simple for us to know the truth if the reporters had provided us with the names of these alleged researchers. In fact, we have long proposed the solution, but received no response to date.

What I want to emphasize is that first, before December 30, 2019, the WIV didn't come into contact with, preserve or study SARS-CoV-2; second, the WIV never designed, manufactured or leaked the virus; third, none of the WIV staff members and graduate students have ever been infected with the virus so far.  

Facing the sudden outbreak of the COVID-19 epidemic, the WIV, leveraging its long-accumulated advantages in platforms, technologies and talent, quickly identified the virus as a new coronavirus and isolated the virus strain. The institute also sequenced the whole genome of the virus and submitted the genome sequence to the WHO under the United Nations on January 12, 2020. These important research results have provided bases for global respiratory pathogen testing, antiviral drug screening and vaccine research, and bought time for the global fight against the pandemic. After the virus strain was isolated, we organized tasks of antiviral drug screening, vaccine research and animal model construction, which effectively supported the scientific and technological response to the pandemic.  

Certainly, due to its location in Wuhan and its work in fighting the epidemic, the WIV has attracted global attention and been embroiled in various kinds of rumors. These rumors have exerted great pressure upon the researchers at the institute, interfered with some of our normal scientific research, and brought negative impacts on normal academic exchanges and sci-tech cooperation in the international academic community.  

Facing the still raging pandemic, no country can stay immune. Only global cooperation and coordinated action can effectively contain the spread of the virus and restore prosperity and harmony to people around the world. Adopting the attitude of openness and transparency, the WIV is ready to keep working with scientists to contribute to the fight against COVID-19. Thank you. 

Liang Wannian:  

I would like to add something. During January and February this year, the WHO-China joint expert team, while studying the origins of the virus, put forward four different possible or potential pathways for the introduction of the virus, one among which was through a laboratory incident. The four pathways were proposed based on our past experience and understanding of viruses, especially the coronavirus-related diseases. The four routes include the direct introduction from a natural host to humans; the introduction through wild animals and an intermediate host to humans from a natural host; a cross-border long distance introduction through cold chains; and an introduction through a laboratory incident. All the four routes are called "potential introduction pathways." How did we assess them? At that time, the whole study was centered on these four routes to collect materials, including carrying out interviews, literature reviews and field inspections.  

I will focus on laboratory-related hypotheses. At the beginning, after discussion, the expert team basically thought that laboratory incidents may occur most likely in two cases. One is artificial synthesis, which scientists explicitly find impossible. The other is leakage and the most important point in this regard is whether the laboratory had the virus or not. The answer is that the WIV didn't engaged in such research before, as Mr. Zeng and Mr. Yuan clearly explained just now. The scientific community and the Wuhan side have made it clear as well. However, for further validation, the expert team specially went to the WIV to get details, and conducted field inspections with relevant researchers and management staff. We obtained information particularly about the institute's implementation of standard processes, management and security systems, and about research projects the institute was and is engaged in. Then, we came back and discussed again. We talked about evidence that supported the lab incident and evidence that didn't. The detailed information is recorded in the report on the joint WHO-China study of COVID-19 origins, which was published on the official website of the WHO on March 30. The details about our inspection to the WIV are also included in this report. You are welcome to read it. We finally concluded that the introduction through a laboratory incident was "extremely unlikely."

When we were assessing the possibilities, we adopted a five-scale system. Because it's not easy to tell whether there is a possibility or not. It is not easy to determine whether a possibility absolutely exists or absolutely doesn't. So, we adopted a semi-quantitative method to conduct this assessment by utilizing continuous variables, in which we graded the virus' four possible pathways of introduction with the five rankings of 'very likely,' 'likely,' 'possible,' 'unlikely,' and 'extremely unlikely.' As for the possibility of a lab leak, our experts reached a final consensus that it is 'extremely unlikely.' As we were discussing the issue and finalizing the joint report, we offered relatively clear advice and recommendations for further studies regarding other possible pathways of introduction of the virus, including direct zoonotic transmission, introduction through an intermediate host followed by zoonotic transmission, and introduction through the cold food chain. This advice and recommendations include the objectives, emphases, and methodologies for further studies. However, we think that introduction through a laboratory incident is 'extremely unlikely,' therefore, it is no longer necessary to continue to devote energy and resources to study this hypothesis. Of course, we don't exclude the possibility of new evidence emerging. In that case, further studies can be conducted. If certain countries need to do further studies on this aspect, we suggest, from the point of view of the Chinese experts, that the studies be conducted in countries that haven't undergone lab inspections like the ones conducted in Wuhan, to at least gain more understanding of possible leaks there, which actually gives rise to safety issues. Together, our experts carried out a relatively thorough exploration and inspection of the Wuhan lab and reached the conclusion that it is 'extremely unlikely' to be the pathway of introduction of the virus. 

That's all I want to add, thank you.

Phoenix Satellite Television:

Previous reports say that several miners fell ill inside a mine in Tongguan town, in Mojiang county of Yunnan province in 2012. According to what the experts know, is there a connection between these miners and the bat coronavirus RaTG13 or SARS-CoV-2? Thank you.

Yuan Zhiming:

In July and October 2012, the WIV team received 13 blood serum samples belonging to four of the miners from Tongguan town, which were collected by the First Affiliated Hospital of Kunming Medical University and sent by the Guangzhou Institute of Respiratory Health. We didn't detect any bat coronavirus in the miners' blood serum samples after conducting multiple nucleic acid tests, antibody tests, and genome sequencing. This also shows that these cases are not connected to SARS-CoV-2 at all. 

The RaTG13 coronavirus that you just mentioned is a viral sequence detected by the WIV team from the biological samples collected from Mojiang county in Yunnan province in 2013 and was not discovered from the blood serum samples of the sick miners that we received in 2012. So there is no evidence that the RaTG13 coronavirus and similar bat coronaviruses have any connection with the cases of the sick miners from Mojiang county in 2012. 

Of course, the WIV has made several public responses regarding the origin and distinctive features of the RaTG13 coronavirus and its difference from SARS-CoV-2. On July 24, 2020, the Science magazine published an interview with Professor Shi Zhengli, which disclosed that the evolutionary distance between the RaTG13 coronavirus and SARS-CoV-2 ranges from 20 years to 50 years. If you are interested in this, you can read the related content of that interview in the Science magazine. Thank you.

Reuters:

Recently, the WHO discussed concerns over information transparency. Is China willing to provide raw data that might reveal the early transmission of COVID-19 in Wuhan? If not, can you explain the reason? The virus database managed by the Wuhan Institute of Virology went offline in 2019. Has the institute published all the genome sequences it has collected since the outbreak? The joint report by the WHO and China said that scientists conducted tests on thousands of animal samples — will China do any more tests? Will China carry out studies on more venues and facilities that are used for breeding animals? How many more bat communities can be studied? Thank you.

Liang Wannian:

I will answer the first and third questions. When our joint team of experts conducted the study in January and February, we had sufficient discussions over the issue of providing early-stage raw data. At that time, we said that since this is an international joint research team launched by the WHO, the 17 foreign scientists and the 17 Chinese scientists should be acting as a whole and all the members should be highly integrated and conduct the research work as a team. We followed four common principles to complete the origin-tracing task initiated by the WHO. We had been following the principles of making research plans together, conducting on-site inspections together, analyzing data together, and presenting our study report and results together. 

The most important thing in the origin-tracing work is the early information and data. Mr. Zeng just explained that following the outbreak of the epidemic, Chinese scientists carried out extensive and in-depth origin-tracing work under the leadership of the Ministry of Science and Technology, the National Health Commission and other relevant departments before the joint research launched by the WHO. Among this work, we were very concerned at the time with the data related to animals and early cases. I have also noticed that regarding the data of early patients, some foreign voices have said that we didn't provide them, especially the data of the first 174 COVID-19 cases. In fact, these patients' data were all displayed and shared during our stay in Wuhan. However, China has relevant standing regulations regarding patients' clinical data, including epidemiological survey data and laboratory test data, which involves personal privacy. If the data is completely released, this will violate the relevant regulations. At the time, we did a lot of work to centralize these databases, and conducted analysis and research together with foreign experts, including on what to analyze, what patterns could be seen in the end, and the conclusions drawn in the final report — we did this work together. It is only because we need to guard the patients' privacy, that we did not agree to give away the original data, nor did we allow them to copy it or take photos. At the time, international experts also fully understood and believed that this was international routine, not only in China. Later, we also explained many times why we were not handing over the original data. In fact, this is a rough concept. First, what does it mean to say we "did not provide" the data? In fact, we showed it to you and we analyzed it together. We thought it was provided; it's just that we didn't let you take the data away. Second, what is the "original data"? Was it the data we finally analyzed after sorting and analysis, or the raw data, every single data point? There are big differences in understanding. I remember that when we were conducting research, our team of experts had no problem on this point, and thought that the data provided by China was for joint research. I want to explain this a little bit: It's not true that we deliberately didn't provide the data; neither was it because we didn't give the data away to the foreign experts, that the conclusions drawn in our research report were said to be one-sided. You can understand this when you look at our detailed research report.

The third question you just mentioned was regarding the research into animals. We believe that the introduction pathway of animal origin, especially from natural hosts to intermediate hosts to humans, has gone from "more likely" to "very likely." Therefore, we particularly suggested that in the future more energy should be invested, and even that the top priority of the work should be concentrated in this direction. Chinese scientists have done a lot of work in this regard. When we went to work on site in Wuhan, the Chinese side had already demonstrated some results of tests on animals in markets. Just now, Mr. Zeng introduced in detail that there were no positive findings from the tests of animals in markets. Also, we had the comprehensive tracing of their upstream farms, and no positive results were found. The scope was then further expanded. We had conducted virus antibody or nucleic acid testing for more than 38,000 livestock and poultry samples, and more than 41,000 samples of wild animals collected from 31 provincial-level regions across the country from 2018 to 2020, yet still no positive results were found. All such detailed data, including the animal species, sources, testing methods and testing results, was reflected in detailed tables and graphs in the joint report. Actually, in brief, whether it was in markets or the upstream of the markets, or in the broader areas of the country, whether it was livestock and poultry, or wild animals that Chinese scientists can find, we have carried out tests on them all, and no positive results have been found in terms of antigens or antibodies.

In fact, Chinese scientists have also done a lot of research on bats and collected a large number of samples. At that time, compared with other countries, we believed that China had led the world in the breadth and depth of bat research and done more. As Mr. Zeng and Mr. Yuan just mentioned, viruses quite similar to SARS-CoV-2 were found through our research, but there are still differences. Scientifically speaking, it is certain that no SARS-CoV-2 has been isolated from China's large number of bat samples. Similarity does not mean the same. Secondly, there are many kinds of bats that live widely in the world. As we know that there has been no systematic study on bats in many parts of the world. Studies on bats, as parts of studies on wild animals, should be a focus when tracing origins of COVID-19, according to the basic conclusions of scientists and the results of our first-phase origin tracing. Bats are so widely throughout the world, and they are very likely to be an intermediate animal, so the research should not be limited only in China but also encouraged on a larger scale, such as in countries and regions with a bat distribution. 

Studies on origins of COVID-19 in animals should be the focus of next phase. This is the most worthwhile thing to do. The natural evolution of a pathogen is the most worthwhile topic of our attention. Our study should not only be limited on wild animals such as bats, but also related animals, such as pangolins, civets, minks and more. It is valuable to study the possible origins and distribution of these intermediate hosts, which have been proved able to carry or possibly carry pathogens through researches carried out by scientists of various countries. Of course, further research on markets that have had outbreaks, including the upstream and downstream chains of farms, is also valuable. I know that Chinese scientists have been working very hard in this regard even after the global study on the coronavirus origins. We have also been expecting that scientists around the world will do this work, focusing on natural evolution and animals. That's all I have to say. 

Yuan Zhiming:

Just now, the reporter mentioned the database of the WIV, which is a preliminary framework established by the team of the institute. The structure and content of the database are still being improved. Considering the large number of malicious attacks on the institute's website and the work and private email addresses of many of its staff, including Shi Zhengli's team, the database is currently shared within the WIV. 

The project team will analyze and systematically sort out the original data of the database and publish research results in the form of papers, which will also be displayed and retrieved in a visual way on the database. As we know, it is the usual practice that the original data of scientific research is published in the form of papers after being analyzed and collated and the database will then be opened to the public. The institute will strictly follow the rules of the sci-tech community in displaying and sharing our scientific data. 

The WIV has always insisted on timely sharing of the information on scientific research. We have submitted to the WHO the whole genome sequence in a timely manner after we obtained the preliminary results of the pathogen identification. As early as Feb. 3, 2020, the research team, led by Shi Zhengli, published a paper in Nature linking the origin of COVID-19 to nature. After we found that several drugs had antiviral activities at the cellular level, we published our research results in international magazines on Feb. 4. Meanwhile, the WIV also actively took part in international video and audio academic conferences, organized by the WHO, the United States National Academy of Sciences, the French National Institute of Health and Medical Research and the Russian Academy of Sciences, to share our research results in the establishment of animal models, the selection of antiviral drugs, and the development of inactivated COVID-19 vaccines with our international counterparts. 

Running the laboratory, we have long upheld a set of management principles which feature openness, shared benefits, and transparency. Over the past four years, we have continuously organized workshops concerning lab-based biosafety management and technologies, and helped some countries train groups of personnel in the fields of infectious diseases prevention and control and biosafety management. We proactively participate in the global and regional system of high-containment biosafety labs, and become one of the designated labs under the UN Secretary-General's Mechanism (UNSGM) and a member of the Group of High-containment Laboratory Directors (GOHLD), and share with global colleagues our management experience and technological progress. Some of our staff have also received biosafety training and relevant qualifications in France, Australia, Canada and the U.S. In the meantime, we have invited biosafety experts from France, the U.S., Germany, the U.K., and Canada to our labs and they provided on-site guidance and exchanged experience with us, so as to jointly promote the safe and stable operation of high-containment laboratories around the world. That's all. Thank you.

Bloomberg:

Since the WHO team concluded its field mission in China, research published in June showed that animals that could've carried the coronavirus were being sold live at markets in Wuhan, including at the Huanan market. Was this known when the WHO team visited Wuhan? If not, why? And what investigation of these animals has taken place? Additionally, what communication has there been between China and the WHO about these animals? Second question, what progress has been made in checking for SARS-CoV-2 antibodies in the stored blood of Hubei residents collected in 2019? Thank you.

Liang Wannian:

I'll take your questions. Regarding the information mentioned in your first question, we knew nothing about this situation when the WHO and China joint team were doing their jobs in January and February. At that time, the WHO and China joint team had spent half a day conducting an on-site investigation in the Huanan Seafood Market and discussed and communicated with relevant shop owners and management staff. The joint team went into detail about the situation in the Huanan Seafood Market, including the distribution of booths, the types of items on sale, the composition of shop owners, management details, and certain regulations, to name a few. At that time when we visited the Huanan Seafood Market, it was shut down and all the businesses were closed. We got inside the market and spent hours communicating and discussing. Therefore, we have presented all the information that we know about Huanan Seafood Market, such as those concerning the composition and situation of sales staff and customers, as well as the products being sold. This information was jointly studied and discussed by the experts of the team. Thus, we did go to the Huanan Seafood Market. In fact, since the foreign experts of the joint team left Wuhan on Feb. 10, Chinese experts have maintained good communication and contact with them, because lots of scientific issues require further discussions after the field work was finished.

As you may have noticed, the WHO and China joint team held a press conference in Wuhan on Feb. 9, and the final joint research was published on the WHO's website on March 30. During this period of time, we communicated with 17 global experts almost on a daily basis in order to improve the report, since many issues required to be stated in a more precise manner. Since the research was published on March 30, we have still maintained good relationships and built sufficient communication with foreign experts. For example, Chinese experts have kept close contact with their foreign counterparts concerning follow-up works and some scientific issues. Just now, Mr. Zeng also mentioned that Chinese experts gathered and conducted research on the WHO's plan for a second phase of the study of origins of COVID-19 -- based on the experience of the first phase of such a study, especially the report of the joint study of the first phase. Experts of both sides have taken a responsible attitude. We have drafted a proposal from the perspective of Chinese experts on the WHO's plan for a second phase of the study of origins of COVID-19. During the drafting process of the proposal, we discussed and communicated with relevant WHO experts. We also hope that they could put forward relevant suggestions for the WHO from their own perspective, so as to provide a basis for better carrying out the global study of origins of COVID-19. In fact, throughout the whole COVID-19 origin-tracing process, scientists have upheld the spirit of seeking truth regarding scientific issues. We have maintained very good relationships. This is my answer to your first question.

Your second question is about blood samples. This is a very good question. Regarding the origin-tracing of the virus, apart from the early epidemiological studies, testing of early samples, especially the blood samples, if any pertinent evidence found through tests, will be conducive to tracing the earliest COVID-19 case. According to China's research, the earliest case reported in China was on December 8, as said in our research report. But the earliest reported case is an index case at most, and doesn't mean it is the primary case. The primary case refers to the first human who was infected at the moment when the virus jumped from an animal to a human. The person is also called the "patient zero." Our research and the previous related research papers of Chinese scientists fully suggest that the case reported in Wuhan on December 8 is probably not the primary case. There might be other cases that occurred before. But where did these cases come from? This is another question. The region where cases were first reported doesn't necessarily mean it is the region where the virus jumped the species barrier from animals to humans. Of course, it's better to test the blood samples. We had made our proposals in Wuhan, and invited experts from the Wuhan Blood Center to have a full discussion.

Experts from the Wuhan Blood Center told us that they had kept blood samples, but the samples were kept for the use of responding to possible medical disputes and lawsuits due to blood transfusion. Such a sample is called a "blood braid." A small amount of plasma and serum is kept in the pilot tube of a blood bag, which is sealed at both ends. In accordance with the Article 31 of the Measures for the Administration of Blood Stations, the term of preservation of a blood sample shall be two years after the whole blood or the component blood is used. A quite small amount of blood is preserved during the period and it can only be available for use when there is a medical dispute or lawsuit. For example, a donor has donated blood to a patient, and then the patient is diagnosed with Hepatitis or AIDS. The disease is probably transmitted through blood transfusion and samples are kept to determine whether the disease was caused by blood transfusion. So, samples are usually kept for two years at least, and kept in the pilot tube of the blood bag. The amount of blood serum is quite small. We believed that it was necessary for us to conduct the test. I remember that we and the experts from the Wuhan Blood Center and the WHO spent an afternoon discussing it. The issue was then specifically referred to in our report, which will be our future research work in the next stage. Once the blood from the Wuhan Blood Center is used and after the two-year validity term, meaning the samples meet the requirements stipulated in the Measures for the Administration of Blood Stations, we will carry out relevant works. In fact, the Chinese side is organizing related experts and institutions to make preparations for the work. So far, we have made several assessments and evaluations on the testing methods and action plan, which will be implemented after the expiry. Related institutions from the Chinese side also express that, once they have the results, they will deliver them to both the Chinese and foreign expert teams. Thanks. 

China Daily:

According to the WHO expert team for origin tracing of SARS-CoV-2 this February, COVID-19 introduction through an intermediate host is "likely-to-very-likely", and introduction through cold chain products is "possible." What's your take on that? Thanks. 

Wang Chen:

The role the cold chain plays in spreading infectious diseases is a new phenomenon. I am an expert in respiratory diseases. Respiratory infectious diseases are a dominant type of infectious diseases. The transmission route of respiratory viruses, including the cold chain, is indeed a new phenomenon that deserves our full attention. In summary, first, in terms of epidemiology, we have found associations between the cold chain and the disease. That is to say, through epidemiological investigations, we found that the possible cause of some COVID-19 infections could be traced to touching the surface of cold chain products. The close associations can be seen from the COVID-19 flare-ups in Beijing's Xinfadi Market and Qingdao. The infected people were exposed to the cold chain, and no other possible sources of the virus were since found, except the cold chain.

Second, in terms of detection of the nucleic acid of the virus, positive results have been found on cold chain goods. During the outbreak in Qingdao, in particular, the RNA of SARS-CoV-2 was detected on the surface of cold chain goods, and the virus was isolated and cultured, proving the fact that living virus existed on the surface of cold chain goods. Given the two points above, the chain of evidence has become complete. Moreover, there is a circumstantial evidence for the exploration of the scientific issue, which is that the virus can survive and remain infectious for a longer period in a cold and relatively dry environment. It can even survive for 21 days in winter. Therefore, when the virus emerges in a place, and if the cold chain products get the virus, the virus can be transmitted from one place to another in a low temperature during transportation, leading to cross-regional transmission accordingly. The cold chain transmission is a new feature that we have found in the COVID-19 pandemic, which is worthy of attention, and the chain of evidence for the transmission has become relatively complete.

To further trace origins of the virus, we suggest that the cold chain should be taken as a key clue. Given the circumstances of international trade, with the exchange of people and goods around the world, the items-to-human transmission in the cold chain environment has made pathogen transmission more complicated, which is particularly worthy of investigation and studies.

Xinhua News Agency:

Since the outbreak of the pandemic, scientific research has played a very important role. Could you talk about the work of the Ministry of Science and Technology in terms of the scientific research on origins of COVID-19? What achievements have been made? Thank you. 

Xu Nanping:

Thank you for your question. There are a lot of journalists today, and everyone looks very serious. It shows that everyone recognizes the importance of the origin tracing of COVID-19. We should realize that origin tracing is substantially a scientific matter, so scientific research has played a crucial role in searching for origins of the virus. The Chinese government attaches great importance to the scientific research on the origin tracing of the virus. After the outbreak, China made five priorities for scientific research, and origin tracing of the virus is one of the priorities which has been considered as very important. The Chinese government called on the scientific research community to follow the principle of "open, transparent and responsible" and put the utmost effort to find out "where the virus came from." Responding to this call, the Ministry of Science and Technology has organized research groups from the Chinese Academy of Sciences, the Chinese Academy of Medical Sciences, the Chinese Center for Disease Control and Prevention, and universities to carry out scientific research on the origin tracing of the virus on a number of priority areas, including animals, humans, molecules and the environment. Some progress has been achieved.

I'd like to name some examples. I think everyone is concerned about the first one. After human-to-human transmission was detected, we wondered where the virus came from; whether it was the animals around us which might have transmitted the virus to humans; or whether it could spread from people to animals. All these regard tracing animal origins. We conducted nationwide viral tests over wild animals, poultry and livestock in 31 provinces, municipals and autonomous regions soon after the epidemic broke out. The tests covered dozens of species, such as pigs, cattle, sheep, chickens, ducks, geese, pigeons, turkeys, wild rabbits and wild boars. We tested more than 80,000 samples over a short period of time, and no COVID-19 antibodies or positive nucleic acid test results were detected. After that, we further conducted COVID-19 challenge trials on animals around us in the lab, and classified them into groups according to their susceptibility to COVID-19 infection, such as highly susceptible, not susceptible or resistant. By doing so, we further understood the situation, and it was also helpful for us to determine the priorities in terms of tracing animal origins. 

Second, in order to define the origin of the virus, bat was one of the animals we focused on. In the wake of the COVID-19 outbreak, we organized several groups to conduct research on the coronavirus carried by bats to identify its similarity with SARS-CoV-2. As several experts said just now, bat coronavirus RaTG13 has a 96.2% genome homology with SARS-CoV-2. Yet further research found it shows only 89.3% amino acid homology in the receptor-binding domain (RBD), meaning that its infectiousness is to some extent very low. Our further experiments showed that the infectiousness of RaTG13 differs greatly from SARS-CoV-2 when infecting different species. As such, experts have concluded based on a comprehensive study and judgement that RaTG13 has a remote evolutionary relationship with SARS-CoV-2.

Apart from bats, researchers also found other animals carry SARS-CoV-2-related coronavirus. For instance, scientists detected multiple strains of coronavirus in smuggled pangolins seized by customs. Among them, the highest genome homology with SARS-CoV-2 is 92.4%, lower than RaTG13, but one strain of the pangolin coronavirus shows 96.9% amino acid homology with SARS-CoV-2, higher than RaTG13's 89.3%. Through those studies, scientists concluded that pangolin coronavirus may have played a role in the evolution of SARS-CoV-2. 

Our research groups have done lots of other work such as molecular tracing. The origin-tracing work has made solid progress due to joint efforts with overseas scientists. By July 19, Chinese research groups and their overseas counterparts from the U.S., the U.K. and other countries had jointly published 225 articles related to tracing origins of the COVID-19 virus, and Chinese research groups had published 352 articles. That shows our origin-tracing work is highly international. During this period, Chinese and U.S. medical scientists held six dialogues via video link on prevention and control of COVID-19. On top of that, we have beefed up efforts on data and information sharing regarding scientific research, and established the 2019 Novel Coronavirus Resource database for global sharing under the China National Center for Bioinformation. By July 19, the database had garnered and shared more than 2.53 million collections of worldwide SARS-CoV-2 genome sequences, and offered access to almost 300,000 users from 177 countries and regions. 

More than one year of effort has made us realize that tracing origins of the virus is a scientific question full of uncertainties, so there is a long and arduous way to go. At the same time, we should realize that origin-tracing work is very important, and we should give a good answer to the serious and fundamental question about where the virus comes from. With responsibilities falling on us and difficulties lying ahead, we must firm up our confidence and adopt a science-based approach. Only by basing the origin-tracing work on scientific attitudes, scientific methods and scientific facts can we uncover the truth. Thank you. 

CGTN:

Recently it was reported that Chinese researchers last year deleted some genome sequences of cases from the early stage of the outbreak, which had been uploaded on to the database maintained by the U.S. National Center for Biotechnology Information (NCBI). It was speculated that China has concealed some information about the origin of the virus. How would you respond to this issue? Thank you.  

Zeng Yixin: 

After it was reported, we immediately conducted an investigation. The report mentions the deletion of SARS-CoV-2 sequences, which is relevant to a paper 'Nanopore target sequencing for accurate and comprehensive detection of SARS-CoV-2 and other respiratory viruses' published by researchers from Wuhan University in the international scientific journal 'Small.' According to the title, we can tell the paper was about a sequencing method. When they made a submission last March, the sequencing results were needed. That means when a sequencing method is created, the results are needed to assure its accuracy and reliability. Therefore, the researchers uploaded their concrete sequencing results of the virus onto the database of the National Center for Biotechnology Information (NCBI), a branch of the National Institute of Health (NIH). 

On June 9, 2020, the journal sent back the researchers the proofread paper where they found the information about where they had uploaded the sequencing results of samples from confirmed cases had been deleted. The researchers thought that since the information about the sequencing was deleted, it was unnecessary to keep those sequencing results on the NCBI.

Therefore, they sent an email to the NIH to request the removal of the data on June 16, 2020. The NIH followed the protocol and deleted the data without notice. When the researchers requested the removal, the data was automatically removed without notifying the researchers. The researchers were not informed, and hence they ignored this. So it is clear that the researchers had absolutely no need, or intention, to hide or conceal any information. Recently, they uploaded all 244 pieces of sequencing data of 61 COVID-19 samples onto the GSA database built by the China National Center for Bioinformation, which is open to global researchers.

As far as we know, the earliest sampling in the case was done on Jan. 30, 2020, some time after the initial outbreak, so the sequences cannot count as early ones and thus have limited value or information regarding the study of SARS-CoV-2 origins. However, a U.S. researcher, Jesse Bloom, with the Fred Hutchinson Cancer Research Center, fabricated the conspiracy theory that this was an attempted cover-up, without any confirmation from the Chinese researchers and with absolutely no understanding the background context of the matter. His actions deviated from science and violated scientific ethics, having not only smeared the Chinese researchers, but also causing a negative effect on relevant international public opinion. After the publication, his paper has been criticized by experts from various countries for its violation of scientific ethics. During this epidemic, the public is deeply concerned about and highly sensitive to the words and deeds of professionals, especially scientists. Therefore, researchers should understand they have their own responsibility to society. Especially during the pandemic, people are highly sensitive to opinions about the disease, so we professionals should not speculate in a deceptive and unrealistic manner. This could cause bad influence on the whole society's control and prevention of the pandemic. We should instead make contributions and correctly guide public opinion. Here, I want to remind every expert to learn the lesson that experts are more than just experts; they have a responsibility to the society. This deserves recognition. Thanks. 

Global Times:

At present, the start point of the global spread of the coronavirus continues to go further back. Some have proposed studies to be conducted in multiple countries and regions around the globe within the framework of the WHO. The United States, in particular, should also be subject to investigation. What are your opinions of that? Thank you.

Liang Wannian:

I'd like to take this question first before having the other experts share their opinions. Results of ongoing studies into the origin tracing by scientists in various countries showed that this coronavirus emerged in multiple places in the world before the time we knew about its existence. Here are some examples.

Samples from November 2019: A SARS-CoV-2 in situ hybridization reaction detected at multiple parts on skin biopsy of an Italian woman.

Samples from November 27, 2019: Coronavirus genetic materials detected in wastewater collected from a Brazilian city.

Samples from December 13, 2019-January 17, 2020: Check-ups of donated blood samples for archive in nine U.S. states found that 106 blood samples tested positive for coronavirus antibodies.

The early gene sequences collected from Iran, Brazil and Italy on December 24, 2019 uploaded to national databases.

The mid of December 2019: The prevalence of neutralizing antibodies reportedly increased in France.

Sample from December 27, 2019: A throat swab of a French patient with hemoptysis tested positive for coronavirus RNA in RT-PCR detection.

Samples from January 2020: Waste water samples collected in Barcelona of Spain tested positive for coronavirus.

Samples from January 2, 2020-March 18, 2021: Nine of 24,079 blood samples from 50 U.S. states tested positive for coronavirus antibodies.

These examples come from recent studies of scientists from around the world, which show that Wuhan might not have been the first place of SARS-CoV-2 inception. The spread of the virus could be complex, with a cyclical infection chain from a human or an animal host to an object, and then to humans and later back to objects. Just now, Mr. Wang Chen talked about the importance of the studies into cold chains. In fact, the studies into the entire transmission pattern of the virus, including its origin tracing have offered us a new vision and a new issue, as well as a new scientific proposition to solve. As for the modes of transmission and circulation, how the virus jumped from animals to people, including from animals to objects and then to people? what is the logical relationship between them? What are their roles and interface points? All shed lights on new research ideas. 

Next, studies into early cases, biological samples, genetic sequences, natural hosts, intermediate hosts and cold chains should be conducted with joint efforts in multiple countries and regions around the globe. To explore trans-species infections and viruses' global spread, research work ought to be done on the diversity of viruses and their evolution in animal hosts, on the interaction among animals, environment and humans, and on the factors affecting virus infections among people. This is what we need to do in the future.

Viruses are a common enemy of mankind; and in both prevention and treatment, we must unite. The critical, complicated and difficult scientific mission of tracing origins of viruses requires cooperation of scientists across the world, of governments and of all people. Thank you.

Wang Chen:

I want to share a view that the findings just mentioned by Professor Liang have also been recognized by the international scientific community, which suggest the possibility of multiple sources. The origin-tracing work is so complex with diversity. If we really want to find the origins, we should not be restricted in our vision but rather broaden it. It is an important issue of direction for the world to make systemic studies of origin tracing in multiple regions and multiple orientations.

Shou Xiaoli:

Thank you, to our speakers and journalists from the media. Today's briefing is hereby concluded. Goodbye.

Translated and edited by Zhang Liying, Wang Qian, Wang Yiming, Yang Xi, He Shan, Guo Yiming, Zhang Junmian, Li Xiao, Xu Xiaoxuan, Li Huiru, Liu Sitong, Guo Xiaohong, Zhang Rui, Wang Wei, Huang Shan, Zhu Bochen, Cui Can, Liu Qiang, Gong Yingchun, Yuan Fang, Wang Yanfang, Wang Zhiyong, Duan Yaying, 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:

Cong Liang, deputy head of the National Development and Reform Commission

Sun Yuning, vice minister of the General Administration of Customs of China

Xu Jing, director of the Department of Strategy and Planning of the Ministry of Science and Technology

Wang Xin, director of the Research Bureau of the People's Bank of China

Chen Yin, member of the Standing Committee of the Communist Party of China (CPC) Shanghai Municipal Committee, and executive vice mayor of Shanghai

Weng Zuliang, member of the Standing Committee of the CPC Shanghai Municipal Committee, and secretary of the CPC Pudong New Area Committee

Chairperson:

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

Date:

July 20, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Recently, the Communist Party of China (CPC) Central Committee and the State Council jointly issued a guideline to support the high-level reform and opening-up of the Pudong New Area in Shanghai and build Pudong into a pioneer area for socialist modernization. This is a major decision made by the CPC Central Committee with Comrade Xi Jinping at its core. To help you have a more in-depth and accurate understanding of this document, today we have invited Mr. Cong Liang, deputy head of the National Development and Reform Commission (NDRC); Mr. Sun Yuning, vice minister of the General Administration of Customs of China (GACC); Mr. Xu Jing, director of the Department of Strategy and Planning of the Ministry of Science and Technology; Mr. Wang Xin, director of the Research Bureau of the People's Bank of China (PBC); Mr. Chen Yin, member of the Standing Committee of the CPC Shanghai Municipal Committee, and executive vice mayor of Shanghai; and Mr. Weng Zuliang, member of the Standing Committee of the CPC Shanghai Municipal Committee, and secretary of the CPC Pudong New Area Committee. They will introduce the relevant information regarding the guideline and take your questions. Next, I will give the floor to Mr. Cong.

Cong Liang:

Ladies and gentlemen, friends from the media, good morning. Shanghai plays a very important role in the overall work of the Party and the country. The development and opening-up of Pudong opened a new chapter for deepening China's reform and opening-up. On Nov. 12, 2020, General Secretary Xi Jinping called for new missions for Pudong in China's reform and opening-up at a grand gathering to celebrate the 30th anniversary of the development and opening-up of Pudong. He said that efforts should go into making Pudong a pioneer of reform and opening-up at a higher level, a vanguard in fully building a modern socialist country, and an example that highlights the Chinese people's confidence in the path, theory, system, and culture of socialism with Chinese characteristics. This is a major decision made by the CPC Central Committee based on a comprehensive analysis of the specific features of our times, realistic requirements, and the dynamics of the domestic and international environments. Recently, the CPC Central Committee and the State Council jointly issued a guideline to support the high-level reform and opening-up of Pudong and build Pudong into a pioneer area for socialist modernization. Next, I will give a brief introduction regarding the guideline.

The guideline fully implements the guiding principles of General Secretary Xi Jinping's speech and draws up an ambitious blueprint for building Pudong into a pioneer area for socialist modernization. In general, the guideline highlights the following three points. First, supporting Pudong in acting as a pioneer and a vanguard on a new journey toward socialist modernization in order to implement the national rejuvenation strategy within the wider context of the once-in-a-century changes taking place in the world. Second, supporting Pudong in acting as a central node of the domestic circulation and a strategic link of China's new development paradigm of "dual circulation," and helping it play a better role in leading and stimulating the integrated development of the Yangtze River Delta in order to foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Third, to further promote reform and opening-up in the new era, the guideline supports Pudong in taking up the heaviest burdens and tackling the hardest tasks, setting an example of high-level reform and opening-up, as well as demonstrating China's commitment and confidence in deepening reform and opening wider to the world.

Based on these three points, the guideline gives five strategic positions to Pudong, sets two-stage development goals, and introduces 21 major tasks and measures in seven aspects.

The five strategic positions include becoming a pioneer in promoting higher-level reform and opening-up, a benchmark for innovation-driven development, a leader in the allocation of global resources, a pacesetter of boosting domestic demand, and a model of modern urban governance.

The two-stage development goals are as follows. By 2035, Pudong will see its modernized economy comprehensively established, modern urban districts built, and modernized governance fully realized. Its urban development level and international competitiveness will be at the forefront globally. By 2050, Pudong is expected to become an important urban area which will be highly attractive, creative, competitive and influential globally, a global model of urban governance and a "shining pearl" of a great modern socialist country.

There are seven measures which are as follows. First, we will make every effort to strengthen the engine of innovation. We will speed up the research and development of key technologies, build world-class innovative industrial clusters, deepen the systemic reform of scientific and technological innovation, and lend impetus to indigenous innovation-driven development in order to target global frontiers of science and technology, serve the main economic battlefield, strive to fulfill the significant needs of the country and benefit people's lives and health. Second, we will improve the reform of systems integration. By introducing a range of measures aimed at basic and leading reform efforts, we will innovate government service management, strengthen the basic position of competition policy, improve the integrated operation mechanism of factor markets, and activate new momentum for high-quality development. Third, we will promote high-level institutional opening-up. We will advance the pilot trials of the Shanghai Pilot Free Trade Zone and its Lingang Special Area, build Shanghai into an international shipping hub, establish the "express" system of bringing in global high-end talent, and create an integrated special economic function zone in Pudong, so as to consolidate our internationally cooperative and competitive edge. Fourth, we will enhance our allocation ability of resources on a global scale. When promoting the development of the Belt and Road Initiative through joint efforts, we will further open up the financial sector, set up primary investment and financing platforms at home and abroad, improve financial infrastructure and systems, and be active in the allocation of resources such as capital, information, technology, and talent around the globe, helping foster a new pattern of development. Fifth, we will boost urban governance modernization. We will initiate a new stage in urban construction for the people through innovating and improving the urban governance system. This will create an urban landscape that is suitable for the times. It will feature a harmonious and beautiful environment, and enhance the life quality of our citizens. Sixth, we will make use of the advantages that come with our great domestic market to improve the quality and scale of its demands. We will cultivate and popularize Shanghai's brands of services, manufacturing, shopping, culture and tourism, in order to not only meet new demands, but also generate new demands with high-quality supply. Seventh, we will balance development and security imperatives. With the focus on finance, public health, and production safety, we will improve the risk control and management system to adapt to deepening reform and opening-up and forestall systemic risks.

The most important work now is how to achieve the goals in this completed blueprint. The National Development and Reform Commission will fully grasp and put into practice the guiding principles of the speech by General Secretary Xi Jinping at the ceremony marking the centenary of the founding of the Communist Party of China (CPC), and make great efforts to coordinate related departments and push forward the implementation of the various reform measures in the guidelines, in accordance with the CPC Central Committee and the State Council's policy decisions and plans and under the leadership of the leading group for promoting the integrated development of the Yangtze River Delta. Thank you.

Chen Wenjun:

Thank you, Mr. Cong. Now, let's give the floor to Mr. Chen.

Chen Yin:

Ladies and gentlemen, friends from the media, good day to you all. Thank you for your attention to Shanghai's development, especially for the support and attention to the work of high-level reform and opening-up in the Pudong New Area of Shanghai. The CPC Central Committee gave the historical mission of building a pioneer area for socialist modernization to Pudong, Shanghai, which is a landmark during the city's development, giving full recognition to the successful practice of Pudong's development and opening-up in the past three decades and also showing the expectations for Shanghai achieving new miracles in the new era. Yesterday, at the meeting organized by the CPC Shanghai Municipal Committee and the Shanghai government, Li Qiang, Shanghai's Party chief, said that principles of the speeches by General Secretary Xi Jinping at the ceremony marking the CPC centenary and at the grand gathering to celebrate the 30th anniversary of the development and opening-up of Shanghai's Pudong must be implemented, as well as the guidelines of building a pioneer area for socialist modernization. The city sends a strong message of high-level reform and opening-up, and will make great efforts to achieve new miracles and build a new image. On the new journey, we will always be at the forefront of reform and development and be a great pioneer in accordance with the requirements of the CPC Central Committee.  

First, a holistic strategic design is needed. We will make a holistic strategic design in accordance with requirements by General Secretary Xi Jinping on Shanghai's work during the process of promoting high-level reform and opening-up of Pudong. The priority is to build economic zones with special functions in Pudong and promote the construction of a special customs supervision zone. Pudong will be built as an international financial, trade and shipping center, and a core area for international scientific and technological innovation. Moreover, Pudong will be supported in constructing an international consumption center and a model of modern urban governance that people enjoy living and working in. Meanwhile, we will improve the system of legal protections so that Pudong will be supported to find solutions through trials and breakthroughs when facing up to new challenges.

Second, we will strengthen the pioneering role of landmark projects, so as to make more breakthroughs as soon as possible and bring Pudong area and Shanghai to new heights of development. Firstly, we will promote the innovative development of the Chinese capital market through building of the trading platform for international financial assets. Several major pieces of financial infrastructure will be constructed including a national warehouse receipt registration center for bulk commodities traded on the exchange and a national large-scale warehouse for precious metals traded on the exchange. Secondly, we will build new highlands of independent innovation and further highlight the functions and role of the Zhangjiang Comprehensive National Scientific Center. National laboratories, world-class major science and technology clusters, an international data port and a data exchange will all be built. Thirdly, we will focus on key functional blocks, major transportation hubs and high-end leading industries, in order to create new highlights and hotspots. Lastly, we will promote major projects for the integrated development of the Yangtze River Delta, such as a global shipping hub, a public health emergency management system and a capital market service base.

Third, we will work to make breakthroughs in system integration. In order to achieve the best level and meet the highest international standards, we will explore and reform system integration and collaboration efficiency, and coordinate finance, shipping, trade and technological innovation. Key blocks, such as Lujiazui Financial Zone, Zhangjiang Scientific Center and Lingang New Area, will be interconnected. We will actively allocate global capital, information, technology, talent and other resources, and expand the fast track of two-way connectivity between basic research, applied research and industrialization, so as to boost the engine of innovation.

Fourth, we will explore ways to achieve independent reform. According to the guideline, the central government has asked us to carry out both a comprehensive pilot reform and an institutional openness pilot. Regarding comprehensive reform, we will further coordinate economic, social and urban governance, formulate pilot schemes, introduce new special measures to further relax market access, and promote the pilot reform of "one permit for one industry" system. A pilot system for listing registration and confirmation will be explored. We will work to see our people are able to access more government services via a single website, and realize the "one network and co-governance" of urban management. In the respect of institutional opening-up, we will intensify risk and stress tests, and expand openness from the factor level to the system level. The Shanghai Pilot Free Trade Zone and Lingang New Zone will be the pioneers, and the Yangshan Special Comprehensive Bonded Zone will witness new breakthroughs in construction. In keeping with the goal of building Pudong into a pioneer area for socialist modernization and in line with the central government's general layout for Shanghai's development, we will further delegate power and energize development in Pudong, and transform institutional policies into powerful driving forces. We will strengthen coordination between reform, innovation and development. The high-level reform and opening-up in Pudong are expected to play a bigger role in leading and stimulating the integrated development of the Yangtze River Delta, the development of the Yangtze River Economic Belt, as well as China's overall economic development. We will spare no efforts to fulfill all the tasks assigned by the central government. Thank you.

Chen Wenjun:

Thank you, Mr. Chen. The floor is now open for questions. Please identify your news outlets before asking questions.

CCTV:

The guideline listed measures to build Pudong into a pioneer area for socialist modernization. In what areas will Pudong play a leading role? Thank you.

Cong Liang:

Thanks for your question. Your question really touches on a key aspect of the guideline. During the 14th Five-Year Plan period (2021-2025), China steps into a new development stage of fully building a modern socialist country. In face of a complex and fast-changing situation, there are no precedents or prior experiences to follow. Therefore, advanced regions are needed to spearhead and become pioneers. The CPC Central Committee supports Pudong to become a pioneer for socialist modernization. In my opinion, its leading role will be reflected in the following four aspects:

First, it will lead in fostering the impetus for high-quality development. As the largest economic city in the country, Shanghai is positioned as international economic, financial, trade, shipping and technological innovation centers. Pudong will carry out the important function of helping Shanghai build itself into the "five centers". In order to fulfill the goal of becoming a pioneer area for socialist modernization, Pudong has to completely, accurately and comprehensively implement China's new development paradigm, and explore a creative path to transform philosophy into practice. In this way, Pudong will be able to foster a powerful momentum for regional development, and promote Shanghai to play a better role in leading the integrated development of the Yangtze River Delta, so as to improve the overall efficiency of China's economy.

Second, it is reflected in promoting the realization of a high level of self-reliance and self-strengthening and a smooth economic cycle. Core technologies controlled by others are our biggest hidden risk. The key core technologies cannot be requested, bought or begged, so we can only depend on being self-reliant. Pudong has unique advantages in planning and initiating scientific and technological innovations. It should play the role of being the "vanguard force" or "national team" for key core technologies, and work as a trailblazer and leader in technological innovation, aiming at scaling the heights of the forefront fields of brain science, quantum technology and other areas. This is especially so in terms of solving the problem of cutthroat competition in key areas such as high-end integrated circuit components and basic software and hardware. On the basis of eliminating these bottlenecks and clearing circulation blockages, Pudong will further play its role as a key node in the smooth economic circulation, provide an important channel for better use of domestic and international markets and resources, and create an important hub for the global industrial chain, supply chain and value chain.

Third, it is reflected in the provision of high-level institutional supply. China's reform has entered a "deep-water zone," and some deep-level systematic and mechanism barriers have not been eliminated. Pudong must keep a close eye on important areas and key links, continue to deepen reforms, explore and develop good experiences and practices, and consolidate them in the form of laws and regulations in a timely manner, to provide greater high-level institutional innovation. For example, in terms of establishing a new open economic system, the local government should study open policies and institutional arrangements with strong international market competitiveness, and support Pudong to achieve breakthroughs in the fields of human resources, technology, capital and cross-border data circulation. In terms of finance, it should support Pudong in developing offshore RMB transactions, cross-border trade settlement and overseas financing services, and explore and improve related institutional arrangements. In terms of shipping, the local government should support Pudong in strengthening close connections among river, sea, land, air and rail transportation, explore integrated management systems and mechanisms, and implement a pilot ship registration management system that is in line with international practices.

Fourth, it is reflected in better practicing the people-centered development philosophy. Pudong should take the lead in implementing the concept of "people's city built by the people and for the people"; construct a systematic, complete, scientific, standardized and effective urban governance system; build a harmonious and beautiful ecological environment; develop the city into a beautiful home where people and nature coexist harmoniously; and explore a development path for the megacity with Chinese characteristics which embodies the characteristics of the era and highlights the advantages of China's socialist system. It is necessary to continuously improve the level of balance and quality of public services, leave the best resources for the people, and continuously improve the people's senses of gain, happiness and security. Thank you.

CRNTT:

General Secretary Xi Jinping has called on Pudong to strive to become the central node of the domestic circulation and the strategic link between the international and domestic dual circulations. What considerations has Shanghai made to support Pudong in serving the country's establishment of a new development pattern? Thank you.

Chen Yin:

Thank you for your question. The important speech made by General Secretary Xi Jinping at the grand gathering celebrating the 30th anniversary of the development and opening-up of Pudong can be said to be a plan for Pudong's high-level reform and opening-up, and the instructions on what banner should be upheld and in which direction it should be oriented. The CPC Central Committee's recent guideline further clarified the way forward and strategic priorities. Shanghai will thoroughly implement the important instructions of General Secretary Xi Jinping and the requirements of the CPC Central Committee's guideline, and support Pudong to accelerate building itself as a central node and then into a strategic link, to accumulate new experiences, explore new paths, and achieve new breakthroughs for serving the country in building a new development pattern.

First, we will focus on building the "two specials" (special economic function zone and special customs supervision area), and explore a new system to serve the building of the new development pattern. We will promote the creation of a special economic function zone across the whole district of Pudong, and make new breakthroughs in the reform of the market-based allocation of factors, the reform of the commercial system, and the deepening of the reform of "single industrywide permits." We will also make good use of the open carrier role of the Yangshan Special Comprehensive Bonded Zone to promote institutional innovations for trade and investment facilitation and liberalization. In addition, we will give full play to the radiation and leading role of the Yangtze River Delta, deepen cross-regional cooperation in key areas for the need of the country, for the relevance of the market and for the anticipation of the market, and explore more effective and win-win institutional supply.

Second, we will build "four core zones," which refers to the core zones of Shanghai as an international financial, trade, shipping and tech-innovation center, and enhance the new momentum to serve the building of the new development pattern. We will strengthen independent innovation capabilities and build a number of national innovation bases, functional industries and service innovation platforms in key areas such as integrated circuits, biomedicine, artificial intelligence and aerospace. We will also deepen financial opening-up and innovation, develop RMB offshore transactions, cross-border trade settlement and overseas financing services, and increase the two-way opening of the market. In addition, we will upgrade the energy level of trade services, and strengthen the alignment with high-standard international rules in the fields of investment access, service trade and digital trade. We will also accelerate the joint efforts of the Yangtze River Delta to build a global shipping hub, expand the shipping network with countries and regions along the Belt and Road, and build a core hub for the international shipping system.

Third, we will build "one center," namely an international consumption center, to add momentum for fostering a new pattern of development. We will support Pudong to lead in domestic consumption upgrades and prioritize the "debut of new products" economy and brand economy. We will build world-class commercial areas in Lujiazui, the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone, and the Qiantan area of the World Expo Park as consumption clusters to guide and create new consumption demands with high-quality supply.

Fourth, we will build "one standard model," namely a standard model for urban governance toward better livability and working conditions. We will develop an urban governance system that is comprehensive, rational, rule-based, and effective. First, we will innovate the urban governance system, accelerate its digital transformation, and further promote the "one unified management network" to synergize economic, social and urban governance. Second, we will promote organic urban renewal through coordinated efforts, implement the strictest ecological environmental protection system and improve the ability to respond to major emergencies. Third, we will improve the pattern for developing people's well-being, preserve the city's distinctive culture, and create a standard model for urban governance toward better livability and working conditions in a bid to build a people's city.

The guideline also included instructions on establishing a legal system to support Pudong to make bold attempts and trials and carry out independent reforms. We will make full and good use of the local legislative rights granted to Shanghai by the central government, establish a working mechanism that is commensurate with the rights to legislate by reference to special economic zones, and introduce a list of creative legislation and a list of adapted legislation in certain areas to provide a solid legal guarantee for fostering a new pattern of development. Thank you.

ThePaper.cn:

The guideline uses many beautiful words to describe Pudong's future, including the vision to become a shining pearl of a great modern socialist country by 2050. I would like to ask Mr. Weng, how will Pudong New Area achieve this goal? Could you give us an idea of Pudong's future? Thank you.

Weng Zuliang:

Thank you for your questions. The guideline assigns Pudong the major task of building a leading area for socialist modernization and the grand goal of becoming a shining pearl of a great modern socialist country by 2050, fully embodying the expectations of General Secretary Xi Jinping and the CPC Central Committee for Pudong. Officials and people in Pudong are greatly encouraged and inspired.

On the new journey, Pudong will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly study and implement the principles of General Secretary Xi Jinping's important speech at the grand gathering celebrating the 30th anniversary of Pudong's development and opening-up and his other important speeches and instructions about Shanghai, and unswervingly move forward along the three paths that General Secretary Xi Jinping has outlined for Pudong.

First, we will unswervingly free minds and deepen reform. We will comprehensively free minds in order to guide and promote in-depth reform breakthroughs. When making plans for reform breakthroughs, we will give more consideration to the whole development process of things, the entire chain of industrial development, and the full life cycle of enterprises. We will focus on strategic reforms, pioneering reforms, fundamental reforms, targeted reforms, and improvement-oriented reforms to stimulate market vitality and enhance governance efficiency.

Second, we will unswervingly expand opening-up to the world. We will pursue opening-up at a deeper level, in broader areas, and with greater intensity, and pay greater attention to institutional opening-up. We will give better play to the role of the China (Shanghai) Pilot Free Trade Zone and its Lingang Special Area as "test fields," align ourselves with the highest international standards and levels, and step up stress test.

Third, we will unswervingly break free from conventions and pursue innovation and breakthroughs. We will strive to make major innovations in basic science and technology and major breakthroughs in key and core technologies. We will optimize the ecology for innovation and entrepreneurship, smooth the two-way fast lane linking basic research, applied research, and industrialization and build world-class industrial clusters.

The central government has outlined a beautiful vision for Pudong by 2050. In addition to becoming a shining pearl of a great modern socialist country, Pudding is also expected to become an important urban area with strong global appeal, creativity, competitiveness, and influence, and a global model for urban governance capability and efficiency. In my mind, Pudong in the future will become the best destination for global investment, trade, and entrepreneurship. Goods, technology, talents, data, and capital from all over the world will be efficiently allocated here, and new discoveries, inventions, start-ups, and products will constantly emerge. In the future, Pudong will also become the best example of a "people's city," where everyone has the opportunity to excel in life, and can participate in governance in an orderly manner, enjoy a high-quality life, feel the human touch and have a sense of identity and belonging. The people living in Pudong will feel a sense of gain, happiness, and security. Thank you.

Phoenix TV:

My question is for the General Administration of Customs (GAC). We know that currently, there are five special customs regulation zones in Pudong. After the release of the guideline, what measures will the GAC take to support the development of the special customs regulation zones in Pudong? Thank you. 

Sun Yuning:

Thank you for your questions. Since the 1990s, China has successively approved the establishment of five special customs regulation zones in the Pudong New Area, including Waigaoqiao bonded area, Waigaoqiao Port comprehensive bonded area and Yangshan special comprehensive bonded area. These special regions have played an important role in attracting foreign investment and advanced technologies, promoting innovative development and fostering new forms of foreign trade, and carrying out institutional innovation and stress tests. I have a set of data here. In 2020, the total imports and exports in the five special customs regulation zones reached 1.1 trillion yuan, accounting for 53% of the total in Pudong and 32% of the total in Shanghai, respectively, over the same period. From this data, we can see that these special regulation areas are of great significance for the high-level reform and opening-up of the Pudong New Area. The promulgation and implementation of the guideline have brought new historical opportunities and also put forward higher requirements for the development of the special customs regulation zones in the Pudong New Area. Next, the GAC will introduce specific measures to implement the guideline and increase support in the following three aspects:  

First, we will accelerate the institutional opening of the special customs regulation zones, support institutional innovation in Yangshan special comprehensive bonded area, and improve supporting measures and information systems. We will promote a series of innovative measures, including the direct release of goods at customs, with only enterprises outside the bonded area being required to make declarations, and completely canceling customs account books to unleash the dividends of reform. We will advance the policies of Yangshan special comprehensive bonded area in the other qualified special customs regulation zones in Pudong, facilitate the development of strategic emerging industries, and let qualified enterprises enjoy convenient customs clearance measures adopted in Yangshan special comprehensive bonded area.  

Second, we will support the development of advanced manufacturing sector in the special customs regulation zones. We will enhance policy assistance in fields like integrated circuits, biological medicine and civil aviation, take key technologies as a breakthrough point, support the innovative development of advanced manufacturing sector in Pudong, and build world-class industrial clusters.  

Third, we will realize the joint development of the special customs regulation zones. We will assist local governments in making full use of the policies in the special customs regulation zones, better carry out industrial planning and investment attracting and selecting, and encourage each zone to complement each other's advantages and seek differential and complementary development. We will support these special areas to perform the bonded display and trading function, and give play to the driving and spillover effects of the China International Import Expo (CIIE). We will assist Shanghai Futures Exchange in exploring the establishment of a national commodity warehouse receipt registration center, and in carrying out the bonded futures delivery of crude oil and fuel oil, and facilitate the cross-border flow and efficient allocation of all kinds of factors. I believe that the special customs regulation zones will play a bigger role in and make greater contributions to the high-level reform and opening-up of the Pudong New Area. Thank you.  

China News Service:  

The guideline put forward that the Pudong New Area will deepen the innovation of systems and mechanisms for science and technology, and build a new highland for independent innovation. What measures will the Ministry of Science and Technology (MST) take to promote the implementation of the guideline? Thank you.  

Xu Jing:  

Thank you for your question. I'll answer it. The MST has fully implemented the decisions and arrangements of the CPC Central Committee and the State Council, and vigorously supported the Pudong New Area in becoming a model of the times for independent innovation and development to enhance its independent innovation capacity, increase its global influence. The MST will also speed up efforts to develop the Pudong New Area into a core area of the international science and technology innovation center of Shanghai. In general, we have measures in the following four aspects:  

First, we will support Zhangjiang National Innovative Demonstration Zone in playing its leading role and strengthen regional innovation capacity. We will focus on such fields as integrated circuits, life science, artificial intelligence, accelerate the establishment and operation of national laboratories, lead to foster national strategic sci-tech strength, and enhance the development of pilot incubation centers for applying scientific and technological achievements. We will work hard to develop national technological innovation hubs in the Yangtze Delta , build a number of engineering technology research centers and national clinical medicine research centers, and strengthen the development of Zhangjiang Comprehensive National Science Center based on major national sci-tech infrastructure and sci-tech innovation bases.  

Second, we will give full play to the leading role of Pudong New Area in the innovation-driven development of Shanghai and the Yangtze River Delta. The Ministry of Science and Technology will support the Pudong New Area to head the building of the concerted mechanism for technological breakthroughss and innovators in the Yangtze River Delta to jointly achieve breakthroughs in core technologies in several strategic areas and to build and improve the mechanism for the science and technology innovation community in the Yangtze River Delta. We will step up efforts to have a clear division of work, make breakthroughs in key technologies, supply high-end products, and establish Chinese standards. Efforts will be made to support Pudong New Area to play a leading role in building a new generation of the national AI innovative development pilot zone, enhance its capacity to boost original AI innovation, and conduct new AI applications and experiments to energize the industries in the field of AI in a bid to reach a "highland" which features international influence in regard to AI. And we will keep supporting Pudong to host the World Artificial Intelligence Conference. 

Third, we will support the building of a high-level platform for international scientific and technological exchange. In the field of brain science, we will launch international big science research plans and take the lead in developing an effective model for organizing international big science research plans and projects. We will continue to support the Shanghai Pujiang Innovation Forum and World Laureates Forum.

Fourth, we will deepen sci-tech institutional reforms and support Pudong New Area to "move first and experiment first." We will support the national research and development institutions in Pudong to carry out Shanghai's policies for improving sci-tech systems and mechanisms. We will support new-type research and development institutions in Pudong New Area to conduct work under the management framework based on regulations, comprehensive budget management, and performance evaluation. We will support universities and scientific research institutions to establish professional technology transfer institutions. Pilot work will be carried out to confer the ownership or rights of long-term use of job-related scientific and technological achievements on scientific research, and grant Pudong greater autonomy in the management of foreign sci-tech professionals working in Shanghai.

Next, the Ministry of Science and Technology will implement the tasks stipulated in the guidelines and ramp up efforts to build Pudong New Area into an exemplary success in an era marked by independent innovation and development. Thanks for your questions.

Red Star News:

The guidelines stipulate that efforts on the research and development of core technologies should be stepped up in Pudong New Area, and a batch of national science and technology innovation bases will be built there accordingly. What are the major advantages of Pudong compared to other regions across the country? Thanks. 

Weng Zuliang: 

Thanks for your question. Pudong is the core area of the Shanghai international science and technology innovation center. With regards to the building of Zhangjiang Science City, we constantly improved the magnet effect of Zhangjiang Comprehensive National Science Center and its role in demonstrating the achievements of cutting-edge technology. Now Pudong is home to 10 big scientific research facilities (some are under construction), 249 foreign-invested research and development centers, and 717 research and development institutions affiliated with companies. The guidelines stipulate that Pudong should strengthen basic research and applied basic research, better equip itself to achieve breakthroughs in core technologies, and build a number of national sci-tech innovation bases. This demonstrates the country's support for Pudong and trust in Pudong as a whole. We will spare no effort to guarantee success in these areas and put the bases to use as soon as possible.  

To build Pudong into a highland for independent innovation, we will gather strategic sci-tech driving forces, focus on optimizing the atmosphere for innovation and entrepreneurship, and promote the integration of basic research, applied research, and industrial development. The focus will be on improving four systems to catalyze innovation and entrepreneurship, which we believe also draws on Pudong's advantages in the following areas.

First, it's a whole-of-the-life-cycle system for innovation incubation. Pudong has established an incubation chain encompassing the seedbed, incubator, and accelerator. It houses more than 170 accredited incubators. Leading companies have set up the Open Innovation Center to better leverage their advantages of resources within the company and of global innovation networks to foster small and medium-sized sci-tech companies with joint efforts and achieve collaborative innovation among companies.

Second, it has a public sci-tech service system that covers all links. Revolving around the innovation chain, we made plans to develop the area's service chain. Pudong has already built over 200 platforms for sci-tech public services, involving services for research, measurement, testing, and certification of scientific and technological achievements, reducing the cost of innovation.

Third, it has a comprehensive intellectual property rights (IPR) protection system. The first Chinese mainland intellectual property bureau, dealing with all legal issues concerning patents, brands, copyright, and geographical indication opened in Pudong New Area. Pudong is also home to the first IP court in the free trade zone, which unifies the adjudication of civil cases, administrative cases, and criminal cases with regard to IPR. Platforms such as the China (Pudong) IPR Protection Center and Copyright Service Center of the Shanghai Pilot Free Trade Zone were set up to provide companies with quick examination, proper determination, and correct protection. Next, in accordance with the guidelines issued by the CPC Central Committee and the State Council, we will build a high-level IPR protection system and implement a stricter system on punitive damages involving IPR infringement cases.

Fourth, it has a financing and investment system that covers all sectors regarding sci-tech development. By setting up a fund of funds for sci-tech innovation, granting credit enhancement funds to small and micro-sized companies and piloting the program for securitization of IPR, Pudong has taken multiple approaches to address the difficulties faced by startups in accessing financing. The Yangtze River Delta Capital Service Base was also established in Pudong New Area, which helps startups go listed on the START market by providing professional training and services. We have taken solid steps to improve systems and measures, to help Pudong grow into a magnet for sci-tech innovation. Thanks. 

Beijing Youth Daily:

"Born for and thriving on China's reform and opening-up" has always been Pudong's motto. In June 2005, the State Council designated Pudong as a pilot area in its national comprehensive reform strategy. In September 2013, the China (Shanghai) Pilot Free Trade Zone (FTZ), the country's first FTZ, was officially unveiled in Pudong. In the process of building Pudong into a pioneer area for socialist modernization, what new standards and requirements have been selected for the reform and opening-up? Thank you.

Cong Liang:

Thank you for your question. Reform and opening-up is a significant feature of contemporary China. Over more than 30 years, Pudong has been at?the forefront?of China's reform and opening-up, creating many "national firsts": the first finance and trade zone, first bonded area, first pilot free trade zone, new Linggang area and so on. The development of Pudong has provided the most vivid portrayal of China's reform and opening-up and the course of socialist modernization. As we have entered the new stage of development, reform and opening-up stands at a new historical juncture with more arduous tasks and more severe challenges. It requires us to be more courageous and take more measures to remove barriers on the path to development, in a bid to strengthen the momentum and vigor for development. The high-level reform and opening-up of Pudong New Area supported by the CPC Central Committee requires Pudong to remain a pioneer in China's new reform drive, be sensitive to changes, respond to them with well-judged actions, be ready to adjust the approach when necessary, so as to enrich China's reform and opening-up in practice and further deepen reform and expand opening-up on a higher level. 

Regarding the aspect of reform, we will focus on reinforcing system integration and synergistic efficiency. Pudong will take the lead and provide experience for the rest of the country. We will design the reform measures based on the overall processes of the development of things, the whole chains of industrial development and the lifecycle of the development of enterprises, enhance consistency among multiple reform measures, and amplify the comprehensive effects of reform.

Regarding the aspect of opening-up, we will focus on making new ground in pursuing opening-up on all fronts, employ the highest standards, and expand openness from the factor level to the system level of rules, regulations, managements and standards, so as to provide high-level systems, high-quality products and high-efficiency funds, and take a lead in establishing a new system for an open economy that is compatible with international rules.

In a bid to achieve these goals, General Secretary Xi Jinping has made clear requirements for the central and state organs to make concrete plans in support of the high-level reform and opening-up in Pudong. Regarding the aspect of deepening reform, the guideline calls for a range of fundamental measures aimed at leading reform efforts. It also urges innovation in the methods of government services, easing of market access, deepening the reform of "one integrated license," and giving Pudong greater power in compiling resources. According to the guideline, we should explore a new management mode for the total area of construction land, in combination with the territorial spatial planning. In terms of the use of energy, we should carry out an energy consumption intensity-oriented system with moderate flexibility in total energy consumption. Regarding high-level opening-up, the guideline says that we should build a special economic function zone covering the whole of Pudong New Area, strengthen stress tests for the open economy, accelerate the construction of special customs supervision zones, upgrade regulatory and monitoring arrangements, and allow qualified enterprises to enjoy the preferential custom policies such as those of Yangshan Special Comprehensive Bonded Area. We should also provide support in the fields of tax arrangements, cross-border services, high-end talent introduction, financial opening-up and so on. At the same time, the guideline requires us to improve the system of legal protections so that Pudong will be supported to find solutions through trials and breakthroughs when facing up to new challenges. At the 29th session of the 13th National People's Congress (NPC) Standing Committee, which concluded on June 10, the committee adopted a decision authorizing Shanghai Municipal People's Congress and its standing committee to formulate regulations concerning the Pudong New Area based on the practical needs for reform and innovation in Pudong. Such regulations must abide by the Constitution, as well as the basic principles of the laws and the administrative regulations.

It should be emphasized that, instead of making Pudong a "land of preferential policies," the government's supportive measures will give Pudong greater say in reform and development and help build it into a powerful "propeller" for high-level reform and development. Thank you.

Yicai:

Shanghai is becoming an open center for RMB asset allocation. What new measures will the PBC take to promote the two-way opening of financial markets and two-way cross-border RMB capital flow? What role will Shanghai play in this process? Thank you.

Wang Xin:

Thank you for your questions. In recent years, China has continuously promoted the opening of its financial sector in a market-oriented, law-based, and internationalized manner. This is reflected in several recent aspects. First, we have been promoting high-level opening up for bond markets, stock markets, foreign exchange markets, commodity futures markets, and financial derivatives markets. Second, we have been lifting restrictions on the proportion of foreign shares held in banks, securities, funds, futures, and personal insurance. Third, we have been easing access restrictions in areas such as corporate credit investigation, rating, and payment.

With the development of the financial market, China's bonds and stocks have been included in many international mainstream indexes such as MSCI, Bloomberg, JPMorgan Chase & Co, and FTSE Russell. An increasing number of foreign investors have a growing willingness to hold more RMB financial assets. We have continuously expanded cross-border investment and financing channels, improved relevant institutional arrangements, and provided convenience for overseas investment to flow into the market, forming a multi-channel and two-way open framework featuring direct market entry and interconnection mechanism. Shanghai is gradually improving its functions as a global center for RMB assets allocation, pricing, and risk management.

As global demands for RMB assets increase steadily, there will be more calls to improve risk management, the legal environment, and talent supply for handling RMB assets. Shanghai will become a hub for RMB asset allocation, risk management, and fintech development, a model city for best-in-class business environment and a preferred destination for financial professionals with enhanced competitiveness as an international financial center.

For the next step, the PBC will continue to support Shanghai's international financial center initiative. It will also support Shanghai in further improving systems of the financial market, products, institutions, and financial infrastructure, and in strengthening its role in global financial resource allocation. Meanwhile, it will support Shanghai to take the lead in the free exchange of RMB. Upholding three principles of conducting business and preventing money laundering, terrorist financing, and tax evasion, we will further facilitate the corporate trade and investment funds to flow in and out, explore the free flow and convertibility of capital in the Lingang New Area of Shanghai Pilot FTZ. In these ways, we will contribute to building Shanghai into an important hub and bridge linking the international and domestic markets under the new development paradigm.

Macao Monthly:

How will Shanghai Pudong New Area attract top global talents in the process of keeping abreast of global science and technology development, meeting major national needs in the economic battlefield, safeguarding people's lives and health, strengthening the transformation of scientific and technological achievements into actual productivity, improving the industrial chain, and building a world-class scientific and technological innovation industrial cluster? Thank you.

Weng Zuliang:

I will answer this question. Thank you for your question. We all know that talents are the primary resource. The total number of talents in Pudong has reached 1.55 million. To complete the major tasks assigned by the central government to build the pioneer area, it is necessary to further gather global talents. Pudong will grow into a pacesetter for attracting talents from around the world.

In recent years, Pudong has established China's first overseas talent bureau and an international talent hub integrating functions for providing talent services and allocating human resources. It has taken the lead in issuing a series of innovative policies to improve the flow of overseas talents and the convenience of work. For example, we took the lead in achieving "services to be accessed via one website" for overseas talents to work in China. We issued China's first permanent resident identity card linked to a pilot free trade zone, the first work permit for foreign students with a bachelor's degree, the first batch of work permits for foreign entrepreneurs, and the first batch of business licenses for technological companies established by high-level foreign talents holding the permanent resident identity card.

In General Secretary Xi Jinping's important speech at the grand gathering to celebrate the 30th anniversary of the development and opening-up of Shanghai's Pudong, he described how Pudong should take the lead in implementing more open policies for facilitating the attraction of talent. Pudong, in accordance with the requirements of the general secretary and with the support of relevant national and municipal departments, continues to strengthen opening-up and innovation of talent policies. It is also piloting the launch of policies for foreign talents to conveniently purchase foreign currency with their salary and special medical insurance policies for foreign talents. We also set up pilot areas to carry out national immigration policies and implemented immediate approval of work permits for high-level foreign talents.

Looking forward, we will work to carry out reform concerning the mutual recognition of the foreign talents' certificate, establish a one-stop referral system for foreign talents' permanent residence in the Pudong New Area, and push for the right of review on high-end foreign talents. We will also gradually relax restrictions on the employment of foreign talents in professional sectors and introduce a list system recognizing international vocational qualifications. In the meantime, we are working for a better environment concerning career development and living conditions of talents so that talents around the world are able to be introduced, stay, and develop in Pudong and give full play to their talents here. Thank you.

Cover News:

According to the guideline, Pudong will expand openness from the factor level to the system level and take the lead in establishing an open economic system that is compatible with prevailing international rules. A special economic function zone will be built in Pudong, and risk tests on the open economy in the area will be intensified. What are the considerations behind this target? Regarding expanding openness from the factor level to the system level, what are the specific plans and how will these plans be carried out? What messages does it send concerning intensifying risk tests on the open economy? Thank you.

Chen Ying:

Thank you for your questions. Back in 2010, Comrade Xi Jinping paid a visit to Pudong and put forward three requirements concerning the area's development principles. He stressed that Pudong's development is significant due to its exemplary role and functions, its courage in pilot trials, and its functions as a pacesetter. These three requirements are further reflected in the CPC Central Committee and the State Council's guideline, which supports building Pudong into a pioneer area for socialist modernization. The guideline stipulates that a special economic function zone will be built in Pudong, which demonstrates the necessity of carrying out opening-up policies and systems that are highly competitive in the global market. All of these provide new opportunities for Pudong's development and grant it new historic missions. This is reflected in the following three aspects:

First, more advanced pilot trials will be carried out in Pudong in a bid to showcase its full opening-up. The guideline stipulates that Pudong will pilot system-related opening-up measures. While further expanding openness in the fields of investment and trade, the area will also work to enhance its cooperative capacity domestically to better contribute to the national development strategy. We will highlight the internal driving force of market entities, give full play to the platform function of China (Shanghai) Pilot Free Trade Zone, its new Lingang area, and Yangshan Special Comprehensive Bonded Area. More institutional innovations will be introduced to meet the needs of enterprises and encourage more market entities to develop their internal driving force. We will also double the efforts to prevent systemic risks. As we usually say, openness is only possible under sound management. We will think about worst-case scenarios, coordinate relations between development and security, and establish a risk-control system concerning financial risks, public health emergency response, urban security, and safe production so as to better cope with a higher-level reform and opening-up.

Second, more advanced industrial functions will be developed in Pudong. By building a special economic function zone, the area's industrial capacity will be further expanded. We will focus on developing world-level industrial clusters in the fields of integrated circuits, artificial intelligence, and biomedicine so as to promote breakthroughs in key lines and core technologies. We will proactively study and practice new topics concerning international economic and trading rules, such as digital currency, building institutional strength and competitiveness concerning industrial development, and accelerating our pace in establishing an open industrial system that matches its positioning of a special economic function zone, so as to better participate in the global market on behalf of the country.

Third, a stronger exemplary role of Pudong will be given full play. To build a special economic function zone in the area, the key is to enhance the capacity of leveraging global resources. Looking forward, we will work to seek greater synergy among core fields such as finance, shipping, trade, and sci-tech innovation. We will build Pudong into a central pivot of domestic economic circulation and also a strategic link between domestic and international circulation. By doing so, we will better integrate Pudong's higher-level reform and opening-up into major national strategies such as the integrated development of the Yangtze River Delta and Hongqiao international open hub to give full play to Pudong's leading role in the integrated development of the Yangtze River Delta. Thank you.

Chen Wenjun:

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

Translated and edited by Zhang Liying, Wang Qian, Wang Yanfang, Zhou Jing, Lin Liyao, Zhang Junmian, Zhang Rui, Wang Wei, Yuan Fang, Yan Xiaoqing, Xu Xiaoxuan, Yang Xi, Wang Yiming, Zhu Bochen, Li Huiru, Qin Qi, 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

Speaker:

Peng Huagang, secretary general of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and spokesperson for the SASAC

Chairperson:

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

Date: 

July 16, 2021

Xing Huina:

Friends from the media, good afternoon! Welcome to this press conference held by the State Council Information Office (SCIO). We are delighted to be joined by Mr. Peng Huagang, secretary general and spokesperson of the State-owned Assets and Administration Commission of the State Council (SASAC). He will introduce the performance of the state-owned enterprises (SOEs) managed by the central government in the first half of this year and answer your questions. 

We will first invite Mr. Peng Huagang to give a brief introduction.

Peng Huagang:

Thank you, Ms. Xing. Friends from the media, good afternoon! First, I'd like to extend my appreciation to you for your long-term attention, care, assistance and support for the SASAC and centrally administered SOEs. As usual, I will make a brief introduction and then answer your questions.  

The first half of this year is an important period for celebrating the centenary of the Communist Party of China (CPC) and realizing our first centenary goal, which is to build a moderately prosperous society in all respects. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the SASAC and centrally administered SOEs have resolutely implemented the decisions and arrangements of the CPC Central Committee. We have followed the general principle of pursuing progress while ensuring stability; seized the opportunities brought by the continuous recovery of production demand; adjusted and optimized their production and operation rhythm; and accelerated to upgrade their efforts for higher quality and better efficiency. In the first half of the year, central SOEs made progress, achieved steady and sound performance, and improved quality while registering relatively fast growth. The economic performance of these enterprises has significantly improved, showing unceasing development resilience.  

In the first half of 2021, the net profits of centrally administered SOEs reached 1.02 trillion yuan, exceeding one trillion yuan in half a year for the first time, up 133.3% year-on-year and 45.4% over the same period of 2019, registering a two-year average growth of 20.6%. In June, the net profits of the central SOEs stood at 244.62 billion yuan, up 54.3% from June 2019, with both the accumulative and monthly net profits hitting a record high. In the first half of this year, the accumulative operating revenues of central SOEs totaled 17.1 trillion yuan, up 28.2% year-on-year and 18.2% over the same period of 2019, achieving a two-year average growth of 8.7%. The operating revenues in June registered 3.6 trillion yuan, up 23.3% from June 2019.  

In the first half of the year, centrally administered grid enterprises sold 3.1 trillion kilowatt-hours of electricity, up 19% year-on-year and 16.9% over the same period in 2019. The power output rose 9.4% in June from a year earlier, registering positive growth for 15 consecutive months. The crude oil output of central SOEs in the petroleum and petrochemical sectors reached 160 million tons, down 0.1% year-on-year and 1 percentage point narrower than that of the first five months. The sales of refined oil stood at 160 million tons, up 8.8% year-on-year. Coal enterprises produced 500 million tons of raw coal accumulatively, up 5.4% year-on-year. The accumulative sales of commercial coal totaled 660 million tons, up 16% year-on-year. Steel enterprises produced 90.38 million tons of steel in total, up 18.3% year-on-year. The total transport turnover of air transportation enterprises was 29.31 billion ton-km, up 38.8% year-on-year, and the monthly total transport turnover has maintained positive growth for five consecutive months.  

In the first half of the year, the SASAC and centrally administered SOEs, always bearing in mind the country's most fundamental interests, have done a tremendous amount of effective work in serving and supporting major national strategies, implementing peak carbon emission and carbon neutrality plans, boosting rural revitalization as well as the production and supply of COVID-19 vaccines, and preventing and defusing major risks. At the same time, a number of super projects made their debut. For example, all the generating units of the Wudongde Hydropower Station under the China Three Gorges Corporation and the first three units of Baihetan Hydropower Station were put into operation. The ultra-deep-water gas field, Deep Sea No. 1, of China National Offshore Oil Corporation (CNOOC) started production. The venues of Beijing 2022 Winter Olympics undertaken by China Minmetals Corporation and China Communications Construction Company were fully completed. A number of major programs presented a steady flow of feats. For instance, China's Tianwen-1 spacecraft left a Chinese footprint on Mars for the first time; the Shenzhou-12 spaceship conducted a fast autonomous rendezvous and docking with China's space station core module Tianhe; and the domestically designed third-generation nuclear reactor Hualong One entered commercial operation. Major projects and programs have been put into operation intensively, effectively demonstrating the strength of the country and greatly boosting the morale of the people in this year of grand celebration. 

A few days ago, the SASAC Party committee held a seminar for leaders of central enterprises to fully study and put into practice the guiding principles of General Secretary Xi Jinping's important CPC centenary ceremony speech on July 1, and made special work arrangements for the second half of the year. Next, the SASAC will follow the guidelines of General Secretary Xi Jinping's important speech on July 1, adhere to the general principle of seeking progress while pursuing stability, consciously incorporate the work of the SASAC and centrally administered SOEs into fostering a new development paradigm for overall consideration and planning. We will work hard and actively make progress and real results. We will focus on priorities and strengthen our foundation, and further arm ourselves with the Party's innovative theories. We will work on our foundation and look to the long run, and effectively promote the high-quality development of enterprises. We will concentrate on urgent tasks and better tackle critical problems, and resolutely carry out key reform and innovation missions. We will pay attention to security and prevent risks, and cement the bedrock for safe development. We will emphasize providing support and gave play to advantages, and comprehensively improve the quality of Party building work in our enterprises. By doing so, we aim to ensure the fulfilling of various goals and tasks, get off to a good start of the 14th Five-Year Plan, and make positive contributions to the steady and healthy growth of the national economy.  

Now, I would like to take your questions. Thank you.

Xing Huina:

Thank you, Mr. Peng, for your introduction. The floor is now open for questions. Please state the name of your media organization before asking your question.

China Media Group:

In terms of the main data, the performance of central SOEs in the first half of this year has been very good. What are the main reasons for this? What are the new characteristics of central SOEs in the first half of the year? Thank you.

Peng Huagang:

Thank you for your questions. In the first half of this year, as I have just mentioned, central SOEs have made steady progress in their economic operations, significantly improved their economic performance, showed sustained resilience in their development, and maintained a development trend of steady and fast improvement. All business indicators are eye-catching, which is the biggest feature of the first half of this year.

First, revenue and profit increased rapidly. In the first half of the year, the operating revenue of central SOEs reached 17.1 trillion yuan, up 28.2% year on year, while the two-year average growth rate was 8.7%. More than 90% of enterprises maintained double-digit growth, and the total realized profit was 1.31 trillion yuan, up 116.7% year on year, and the two-year average growth rate was 17.9%. At the beginning, I also reported that the net profit was 1,023.21 billion yuan, exceeding 1 trillion yuan for the first time in half a year. We used to say that "half of task is completed halfway through the year." In fact, from the perspective of the law of economic operation, the task is a little less completed, because more efforts will be made in the second half of the year. This time, we absolutely completed half of our task as we marked the halfway point, and for the first time, exceeding 1 trillion yuan, with an average growth of 20.6% for two years. The net profits of most industries witnessed substantial increase.

Second, operation quality continued improving. In the first half of the year, the operating revenue profit margin of central SOEs was 7.6%, up 3.1 percentage points compared to the same period of the previous year, and 1.1 percentage points higher than that of the same period in 2019. The annual labor productivity was 685,000 yuan per worker, up 30.5% year on year. In the first half of the year, the operating cash flow of central SOEs exceeded 1 trillion yuan, which was the best ever level during this period, an increase of 139.6% year-on-year. At the same time as a substantial growth in performance, various enterprises have persisted in tightening their belts, focusing on management and controlling costs, and the financial expenses have decreased by 6.4% year on year. At the end of June, the overall debt-to-asset ratio of central SOEs was 64.9%, a year-on-year decrease of 1 percentage point. 

Third, driving force for development became stronger. In the first half of the year, central SOEs invested 321 billion yuan in R&D, an increase of 37.4% over the same period last year, and the intensity of R&D investment increased by 0.12 percentage point over the same period last year. Among them, the R&D investment intensity of central industrial enterprises increased by 0.14 percentage point year on year. In the first half of the year, the fixed asset investment of central SOEs increased steadily, with a total investment of 1.1 trillion yuan, a year-on-year increase of 10.5%, and an average growth rate of 8.7% in two years. The growth of scientific research investment and investment has made our development more powerful.

It should be said that the economic operation of central SOEs has made steady progress, and improved steadily and rapidly, providing strong support for the "six stabilities" and "six guarantees."

We owe these achievements to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and to the scientific guidance of General Secretary Xi Jinping's important remarks on the reform and development of state-owned enterprises and Party building. At the historic juncture of the "Two Centenary Goals," General Secretary Xi Jinping, with a strong sense of historical responsibility, made plans for China's economic work in the first year (of the 14th Five-Year Plan period), pushed China's economic recovery and epidemic prevention and control measures to remain at the forefront of the world, provided fundamental impetus for the business and development of central SOEs, and strengthened their confidence and determination.

In the first half of the year, central SOEs also benefited from China's further advantages in epidemic control and economic growth as well as a sound external environment. Another reason for the good performance is that the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and central SOEs have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, made thorough plans, taken proactive actions, and worked hard to overcome difficulties and achieve new progress. Central SOEs planned and acted proactively and implemented the requirements for them to achieve the goals that the growth rates of net profit and total profit are higher than that of the national economy, the profit margin of operating income, the intensity of R&D investment, and the productivity of all employees improve notably, and the asset-liability ratio is steady, healthy and controllable. They have actively risen to all kinds of risks and challenges, and seized opportunities to expand markets, increase income, bring out potential and improve performance. All staff members have been hard-working and dedicated, making new achievements in reform, development and Party building. It is fair to say that we have delivered very good performance in the first half year. Thank you.

ThePaper.cn: 

Since the beginning of this year, two groups of four central SOEs have completed merger and reorganization. Since the 18th National Congress of the CPC in 2012, a total of 20 groups of 38 enterprises have been reorganized. I would like to ask, regarding these mergers and reorganizations, what are the considerations of the SASAC? What measures will you take next to optimize the layout and structure of central SOEs?

Peng Huagang:

Thank you for your questions. Accelerating the merger and reorganization of central SOEs is a key step to optimize the distribution, structural adjustment and efficiency of resource allocation of the state-owned sector at an accelerated pace. It is of great significance to keep the industry and supply chains stable as well as to foster world-class enterprises with global competitiveness at an accelerated pace. It is an issue of common concern. 

In the first half of this year, in line with the decisions and arrangements of the CPC Central Committee and the State Council, the SASAC worked with other relevant departments to promote the merger and reorganization of central SOEs in a steady manner, and made good progress. These included the merger and reorganization of ChemChina and Sinochem. Besides, we have carried out merger and reorganization to form specialized enterprises. For example, we established China Satellite Network Group Co. Ltd as the first central SOE headquartered in Xiongan New Area. Sinochem Holdings has been established and the integration of Sinochem and ChemChina's agricultural business has been completed. Further efforts will be made to deepen their business integration. Resources coordination in chemical engineering and other fields is also proceeding in an orderly manner. Besides, we have completed the integration of Potevio into China Electronics Technology Group Corporation. We are now connecting the two enterprises in various aspects including strategic planning, corporate governance, management system, business layout, and Party building to lay a solid foundation for deeper integration. Moreover, PipeChina is further integrating oil and natural gas pipelines and the shareholding rights of KunLun Energy's pipelines has been transferred, marking the end of the integration of major pipelines to basically form a national network. We have made great efforts in this regard in the first half of this year.

Next, the SASAC will firmly follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and implement the instructions on optimizing the distribution and structural adjustment of the state-owned sector. We will uphold market rules and guide central SOEs to carry out merger and reorganization proactively and prudently in accordance with laws and regulations. We will focus on efforts in the following aspects:

First, regarding strategic reorganization, we will focus on the supply-side structural reform, innovation-driven development and efforts to build China into a manufacturer of quality. In light of the needs of industrial development, we will steadily promote merger and reorganization in such industries as steel, and power transmission and distribution equipment manufacturing for central SOEs with ripe conditions. We will actively foster and establish new central SOEs in related fields at proper times. Several years ago, reorganization usually occurred among two or three enterprises. In recent years, specialized reorganization usually gives birth to new central SOEs. 

Second, in terms of specialized integration, with the goal of building strong and specialized enterprises, we will vigorously promote specialized integration through free transfer of shares, purchase of shares, joint-shareholding and other means and enterprises with competitive edges will be the major players in the process. By optimizing resources allocation, we hope to sharpen enterprises' core competitiveness and build world-class enterprises with global competitiveness.

Third, to advance integration, we will urge newly-established central SOEs and those involved in new merger and reorganization operations to further integrate internal resources, bring out the benefits of synergy, and improve the efficiency of resources allocation to achieve the goals of the reform as soon as possible. Thank you. 

China Economic Information Service:

The State-owned Assets Supervision and Administration Commission (SASAC) of the State Council put forward operating goals for China's centrally-administered state-owned enterprises (SOEs) this year, which is to promote net profits and total profits of central SOEs to grow faster than the national economy. The profit margin of operating income, the amount of R&D investment, and the per capita labor productivity must significantly increase. Meanwhile, we must maintain a stable and controllable asset-liability ratio. In the second half of the year, what are the key arrangements for central SOEs to achieve these goals? Thank you.

Peng Huagang:

Thank you for your question. When I introduced the situation previously, I mentioned the "two benefits and four rates," around which your question revolves. This is also a new target framework for central SOEs depending on high-quality development. The "two benefits and four rates" target entails new requirements for the operation and development of central SOEs. The requirements you just mentioned were the goals set at the beginning of this year. In order to better achieve these goals, we will work mainly in the following aspects:

First, we will adhere to these goals and promote the continuous improvement of the operating performance of central SOEs. Focusing on the goals and tasks set at the beginning of the year, we will comprehensively leverage tools such as budget guidance, assessment, and incentives to promote the "two benefits and four rates" to achieve "two highs, three increases, and one stability." The "two highs" refer to the fact that the growth rate of net profit and total profit should be higher than that of the national economy. The "three increases" means that the profit margin for operating income, the amount of R&D investment, and the per capita labor productivity must significantly increase. "One stability" means that we need to maintain stability and control of the debt-to-asset ratio.

Second, we will strive to improve quality and efficiency in the high-quality development of central SOEs. Focusing on expanding domestic demands as the strategic fulcrum, we will actively participate in the construction of new infrastructure and new urbanization initiatives and major projects, undertake projects with high return rates, high added value, and high technological value, and constantly explore and develop new growth areas. We will strengthen cooperation across industry chains and coordination within the industry. We will strengthen the infrastructure construction cooperation and share benefits together in industries such as communication towers, oil and gas pipeline networks, ports and wharves. We will actively and steadily carry out international operations in a stable and orderly manner and promote higher-level international cooperation in fields like infrastructure construction, exploitation of energy and resources, and equipment manufacturing.

Third, we must step up structural adjustments and promote the continuous optimization of the distribution of state-owned capital. Focusing on building a new development paradigm and serving major national strategies, we will further adjust and optimize the distribution structure of state-owned capital, strictly implement the negative list of investment projects, and vigorously advance the disposal of the non-main business, non-dominant business, and the elimination of inefficient and idle assets. We will steadily promote strategic reorganization and professional integration and accelerate the construction of a modern industrial system.

Fourth, we must strengthen reform and innovation and bolster the momentum and vitality of central SOE development. We will carry out the three-year action plan for the reform of state-owned enterprises to ensure that more than 70% of the three-year reform tasks will be completed in 2021, and greater and more substantive results can be achieved in key areas. We will tackle key projects concerning central SOEs, continuously improve capacity for independent innovation, and strive to build pacesetters in original technology and extend modern industrial chains.

Fifth, we will work to prevent and defuse risks and promote central SOEs to effectively safeguard national economic security. We will further consolidate the results of bringing down leverage and reducing debt, identify bond redemption risks, and strictly prohibit debt evasion. We will prevent financial business risks, strictly control increments, speed up the optimization of stocks, prevent funds from being diverted out of the real economy, and promote the construction of the treasury management system. We will employ information technology and intelligent means to strengthen capital management and prevent capital risks.

Judging from the situation in the first half of the year, if we can implement these measures in the second half of the year, we will surely be able to accomplish this year's goals and tasks and make greater contributions to overall economic and social development. Thank you.

Hong Kong Bauhinia Magazine:

The outline of the 14th Five-Year Plan was put forward to accelerate the improvement of the distribution and structural adjustment of the state-owned sector. What are the SASAC's overall considerations and objectives for the reform and development of state-owned assets and SOEs during the 14th Five-Year Plan period? Thank you.

Peng Huagang:

Thank you for your question. That is what we have just completed. Implementing the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee, the SASAC has conducted a comprehensive and in-depth study and is working on its outline of the 14th five-year plan. This year, we have mainly implemented the guiding principles as well as the opinions on the distribution and structural adjustment in the state-owned sector in the new era, putting forward the three-level planning system of the state-owned assets. We have formulated the outline of the 14th five-year plan for central SOEs and the plan for improving the distribution and structural adjustment of the state-owned assets system. Details of both projects have already been released. They aim to lead the state-owned assets and SOEs systems to better uphold and strengthen the leadership of the Party; focus on duties and main business; vigorously improve the distribution and structural adjustment; intensify the reform of state-owned assets and SOEs; develop new strengths in industrial clusters, regional coordination, complementary advantages, new growth drivers, flexible mechanisms, and integrated development; further develop state-owned assets and SOEs; accelerate building world-class enterprises; and give beneficial play to the strategic importance of the state-owned sector.

For the state-owned assets system, we will vigorously improve the distribution and structural adjustment of state-owned assets so that by the end of the 14th Five-Year Plan period, they will play a more prominent role in strategic security, leading the industry, people's livelihoods, and with public services. They will also provide stronger guidance and guarantees for developing proactive and strategic industries and securing industrial chains and supply chains, and significantly increase the competitiveness of SOEs. These efforts will involve a few aspects.

First, we will make great efforts to improve their industrial layout and channel them into important sectors and key fields. Second, we will make great efforts to improve their regional distribution to serve major regional strategies, coordinated regional development strategies, and functional zoning strategies. Third, we will make great efforts to promote their structural adjustment, facilitate the development of different economic sectors side by side, strengthen efficient cooperation among all sides, deepen strategic reorganization and professional integration, and handle market-oriented development and law-based governance.

For central SOEs, we will make great efforts to start a new journey of high-quality development and accelerate the construction of world-class enterprises. By the end of the 14th Five-Year Plan period, we will strive to build a group of leading enterprises in various industries; a group of leading enterprises in scientific and technological innovation; a group of champion companies in specialized, refined, featured, and high-tech products and services; and a group of backbone enterprises for basic guarantees. At present, both plans have been issued for implementation. Next, we will strengthen their implementation to ensure that the tasks laid out in them are in place. Thank you.

21st Century Business Herald:

The Opinions of the CPC Central Committee and the State Council on Supporting High-level Reform and Opening Up of Pudong New Area and Building Pudong into a Pioneering Area for Socialist Modernization were published yesterday. It mentioned actively and prudently promoting mixed-ownership reform, merger, and reorganization of SOEs where conditions permit. How should we interpret it? What deeper explorations will be made in thepioneering area compared with current reform measures? Thank you.

Peng Huagang:

Thank you for your questions. As for the mixed-ownership reform, systematic arrangements have been made throughout the Guidelines on Deepening Reform of SOEs as well as other supplementary policies and the three-year action plan since the Third Plenary Session of the 18th CPC Central Committee. It has also been mentioned in major national strategies, including plans for the pioneering area. This is one of the important aspects of SOE reform, so it should be mentioned. The CPC Central Committee has long made its policies clear, and we have made active efforts over the past few years to implement them. In general, we still carry out reforms according to local, business, and enterprise conditions and oppose one-size-fits-all or arbitrary arrangements, no matter which sector we are handling.

First, we emphasize reform at different levels and in different fields. In terms of different levels, group companies, their subsidiaries and sub-subsidiaries should adopt different measures. Among group companies, we have made it clear to carry out more diversified reforms rather than mixed-ownership reforms. In terms of different fields, we emphasize further promoting market-oriented reforms in highly competitive industries. Enterprises owned by companies invested and operated by state-owned assets are also the focus of our mixed ownership reforms.

In a word, we will actively and prudently promote reforms through approaches tailored to the specific conditions of each enterprise. Another very important part of the process is to transform the operating mechanism. Mixed-ownership reforms help to further improve governance and develop market-based operating mechanism. For example, professional managers and market-based salary distribution are what we require on the whole. We hope that the pioneering area can step up its reform in this regard. Thank you.

Cover News:

China's national carbon market was officially launched on July 16, with the first batch of participants including 2,000 enterprises in the power sector. What work have centrally-administered state-owned enterprises (SOEs) done in building the carbon emission trading market? What are the next plans for SASAC in promoting the green transformation of central SOEs? Thank you.

Peng Huagang:

Thank you for your questions. Carbon peaking and carbon neutrality are very important issues. Central SOEs have been actively carrying out related work. The main task of central SOEs in the national carbon market is to steadily promote the establishment of systems and mechanisms for low-carbon development, improve the system for carbon asset management, actively participate in the construction of a national energy-use rights and carbon emissions trading market, release carbon emissions reports and disclose information in accordance with the law. In addition, we are supporting enterprises to improve their energy efficiency though market-based approaches, such as integrated energy services and contracted energy management. We are also helping enterprises to build investment and financing systems in accordance with the goals of carbon peak and neutrality, and develop green financial products and innovative business. At present, some central SOEs have set up carbon asset management institutions for statistical accounting of carbon emissions and inventory of greenhouse gas emissions, and are actively participating in the trading of carbon emissions. China's central SOEs in key industries such as energy and steel also invested in or hold shares of carbon trading institutions in Beijing, Shanghai, Hubei province and other places. China's central SOEs actively participated in the progress of China's carbon market from establishing rules and markets to trading. Some enterprises said that the first batch of carbon trading participants in pilot regions were mainly central SOEs. SASAC attaches great importance to carbon peak and neutrality goals. We are actively collecting ideas and formulating plans to encourage central SOEs to play a better role in achieving carbon peaking and carbon neutrality.

We will focus on the following tasks:

First, we will steadily promote the green and low-carbon transformation of the industrial structure. During the formulation of the 14th Five-Year Plan for central SOEs, SASAC strengthened the arrangements for green and low-carbon development, with the aims to vigorously develop green and low-carbon industries, promote the low-carbon transformation of traditional industries, and strictly curb haphazard launches of high-energy consumption and high-emission projects.

Second, we will steadily promote the optimization of the energy structure. We will guide central SOEs to control fossil fuel consumption and to develop non-fossil energy, exploit hydropower according to local conditions, accelerate the development of wind and solar power, and develop nuclear power in an active and orderly manner. We will push forward the construction of clean energy via China's mega hydropower stations such as those at Wudongde and Baihetan. We will develop a new electricity system that utilizes new energy as the main source of electricity supply. We will take holistic steps to promote the complete industrial chain of hydrogen resources, including production, transportation, storage and utilization. At present, more than one-third of central SOEs are formulating a complete industrial chain of hydrogen resources and have made achievements in technology research and development and demonstration application.

Third, we will steadily promote efficient use of energy and resources. We will encourage central SOEs to strictly control both the intensity and total consumption of energy. We will strengthen energy management and strictly evaluate the performance of energy conservation targets and pursue accountability accordingly. We will upgrade energy-saving and low-carbon technologies, strengthen energy efficiency benchmarking and target-hitting, and continue to promote green and efficient coal production and use. Central SOEs' energy consumption per unit of output is continuing to decline.

Fourth, we will steadily promote applications of green and low-carbon technologies. We will organize central SOEs to achieve major scientific and technological breakthroughs in low, zero and negative carbon technologies, leading to breakthroughs in green and low-carbon technologies. For some projects carried out by central SOEs, we have advanced the deployment of low-carbon technology in wind power, nuclear power, hydrogen energy and new energy vehicles. We will continue to strengthen efforts in technology research, development and application in smart grids, energy storage, hydrogen energy, carbon capture and other technologies.

Next, SASAC will resolutely implement the decisions of the CPC Central Committee and the State Council. We will organize central SOEs to make every effort to achieve the goals of carbon peak and neutrality. We will enhance efforts to shut down outdated production facilities and promote technology research, development and application in low, zero and negative carbon technologies. We will give full play to the important role of central SOEs and contribute to achieving the goal of carbon neutrality.

Yicai:

At the end of June this year, the debt-to-asset ratio of the centrally-administered SOEs was 64.9%, a year-on-year decrease of 1 percentage point. What are the SASAC's considerations for preventing and resolving major risks for the next step? In particular, what specific measures will be taken to prevent the default risks of SOE bonds? Thank you.

Peng Huagang:

Thank you for your questions. Preventing and resolving risks is an issue that the SASAC and central SOEs attach great importance to. In the past few years, we have done a lot of related works, and the results are excellent. The most direct effect or the most obvious result was that the debt-to-asset ratio of central SOEs at the end of June was 64.9%, a decrease of 1 percentage point year-on-year. On the whole, the ratio has remained stable, and the debt risks are under control. In recent years, there has not been a single bond default incident relating to central SOEs.

In the next stage, we will continue to manage and control central SOEs' debt risks. The works will be done mainly in the following aspects: First, we will control the debt ratio. We attach great importance to debt ratio. We will formulate warning lines and control lines according to each industry's situation; implement categorized control and operate on a one-policy-for-one-enterprise basis; set an annual target of the debt ratio for each central SOE and follow it up for implementation, so as to keep central SOEs' overall debt level stable. Second, we will put key enterprises under control. We will strengthen the dynamic monitoring of debt risks, accurately identify high-risk enterprises through the debt risk quantitative assessment system, and adopt special regulatory measures to resolve and handle the risks of different enterprises with different policies. Third, we will keep high-risk businesses under control. We will strictly control the risk of bulk commodity trade that is not the main business of an enterprise and only yield a low gross profit. We will strictly control the risks of such businesses as financial derivatives, financing guarantees and public-private partnership (PPP). We will also resolutely prohibit trade financing business. In the past few years, we kept rectifying trade financing activities, and now we strictly prohibit the development of this business.

In terms of preventing bond risks, we have established a set of bond risk prevention mechanisms for central SOEs. First, we strictly limit the proportion of bond issuances. We strictly control the proportion of high-risk corporate bonds in interest-bearing debt, and the proportion of short-term bonds in all bonds, so as to prevent the risk of centralized redemption. Second, we will strictly control the use of bond funds, focus on main businesses and industries, strictly prevent funds from circulating within the financial sector without investing into the real economy or being diverted out of the real economy, and strictly prevent any misappropriation of funds for illegal arbitrage. Funds raised through bonds must be invested into the real economy and are not allowed to be used in other sectors. Third, we will strengthen bond risk monitoring, paying close attention to the bond default risks of enterprises with severe operating losses and tight cash flow, and make arrangements for redemption funds in advance. Fourth, we will establish a credit guarantee fund to encourage enterprises to steadily resolve bond default risks in accordance with market principles, laws and international standards. Enterprises face many risks in market operations, but financial risks and bond risks are very direct risks. Therefore, the SASAC and central SOEs attach great importance to this work, and the results have so far been quite good. Thank you.

Red Star News:

Which central SOE business sectors have been most affected since the outbreak of the COVID-19? Have these sectors fully recovered based on their performance in the first half of this year? In addition, how is the overseas investment performance of central SOEs? Thank you.

Peng Huagang:

Thank you for your questions. Since the outbreak of the COVID-19, the central SOEs' aviation industry has suffered the heaviest blow. Businesses in all three central aviation enterprises were severely affected in 2020. Total transport turnover and passenger volume last year was less than half of normal annual levels, suffering losses of nearly 30 billion yuan, which was indeed a heavy blow. China is not alone in this regard, with most aviation enterprises around the world having been seriously hit by the pandemic. Nevertheless, it didn't take long for China to resume production and restore the normal operation of its economy and society, and the affected industries are also recovering gradually. In general, the situation this year is better than that of the same period in 2020.

In the first half of this year, the total transport turnover of all three central aviation enterprises increased by 38.8%; passenger volume increased by 63.1%; and cargo and mail volume increased by 25.2%. Their major business volume has recovered to more than 70% of that seen in the same period in 2019. In the first half of this year, the total business revenue among these three enterprises increased by nearly 30% year on year. Although their net profit is still in deficit, their losses were significantly reduced by more than 15 billion yuan compared to the same period last year.

Regarding your question about central SOEs' business development overseas, I think the overall situation is manageable, but it will definitely affect performance to a certain extent. Since the outbreak of the pandemic, we have taken numerous measures. While the pandemic in China has been effectively curbed, the situation abroad is still rather grave. Given this, the SASAC established guiding groups for pandemic prevention overseas at the early stage of the outbreak. Until now, the guiding groups have still been on duty 24 hours a day, maintaining contact with central SOEs overseas, and issuing a series of standard guiding documents and manuals for projects and personnel abroad. This is a summary of effective on-site pandemic prevention measures. To provide timely medical treatment for those infected, we have established a telemedicine platform, coordinated medical resources at home, and built standardized clinics in other countries. These clinics are directly connected to major hospitals in China via telemedicine means and have played a crucial role in dealing with infected staff overseas in a timely manner. In accordance with the domestic requirements of pandemic prevention and control, flights outside China have not fully resumed. The flow of personnel should also follow requirements accordingly. By arranging charter flights and other means, we have managed to coordinate the dispatch of staff and relevant vocation plans. So far, we have dispatched employees on approximately 170,000 overseas trips, of which 20,000 trips were made via charter flights. We have also organized 170,000 trips bringing employees back to China, of which 10,000 trips were made via charter flights. Currently, central SOE projects concerning the construction of the Belt and Road Initiative have not been affected by the pandemic and are continuing. The overall situation in this regard is going well. Thank you.

CRI:

China aims to achieve more than 70% of the goals of its three-year action plan by the end of this year, so what measures have been taken to boost the action plan? What are the difficulties? How about the work plan for the second half of the year? Thank you. 

Peng Huagang:

Thanks for your questions. The three-year action plan has been the top priority of the SOE reform in recent years. Compared with the reforms of previous years, the promotion of the three-year action plan has its own characteristics. As we often say, we should advance the three-year action plan in accordance with the requirements of being measurable, assessable, and verifiable, and by taking real actions. We should also focus on integrating the Party's leadership into corporate governance, and work on improving efficiency, promoting innovation, defusing risks and standardizing accounting. Specifically, there are three characteristics.

First, systematic advancement. We printed and distributed work reports, refining the tasks of the three-year action plan into 337 specific measures, and specifying objective requirements, forms of achievements and timelines. State-owned enterprises and localities have also formulated work reports, putting forward 11,913 and 3,679 reform measures respectively, and thus making the reform tasks detailed, practical and specific. Taking work reports as the focus of our efforts, we have established at all levels a system of written pledges and a system of "holder of primary responsibility," and made sure that responsibilities are fullfiled at all levels. The intensity of work has been unprecedented. 

Second, penetrable promotion. In the past, we advanced reforms step by step. This time, we have been working at a high level to make extensive efforts to move forward with a checklist of reform measures and time-bound reform tasks. We established the work promotion system of monthly meetings, quarterly reviews, semiannual reports and a year-end summary. The monthly meetings are held through remote video link, directly involving the important secondary and tertiary subsidiaries to remove obstacles of the "last one kilometer" of reform policy implementation. We found this problem a few years ago: some enterprises have done well in promoting reforms through layer-by-layer arrangements, while some do not know how to reform. The three-year action plan has helped solve this problem once and for all through penetrable operations. 

Third, quantitative supervision. An online supervision system was established, setting up 94 collection indicators and 26 calculation indicators for centrally administered state-owned enterprises and 79 collection indicators and 34 calculation indicators for local enterprises. The system summarizes and informs the accomplishment of key tasks monthly to identify, analyze and solve problems in time, effectively playing the role of dynamic monitoring, data collection, regular summaries and real-time supervision. During the process of promoting the three-year action plan, these measures are really innovative and the promotion made the tasks of reform clearer for enterprises at various levels and provided greater reform motivation and pressure. During the process of our supervision, we will directly send a supervision letter to the company if we think there is a problem and ask the chairman of the company to read it. This method has achieved good results. 

According to the current situation, many institutional problems have been satisfactorily solved through the three-year action plan of SOE reform. For example the following tasks have entered their final stages, with fulfilment rates of more than 97%, 98% and even 99%: relieving SOEs of their obligations to provide water, electricity, heating and property management services to their employees' homes; reforming medical and educational institutions and collectively owned factories run by SOEs; and socialized management of retired employees. The task of relieving SOEs of their obligations to operate social programs as well as other longstanding problems will soon be resolved once for all. 

The reform has also enriched the modern management system. By focusing on the tenure system and contract management of the executive level at SOEs and deepening the reform of the personnel, labor and income distribution, SOEs have seen increased vitality and effectiveness. In addition, their employees are demonstrating more enthusiasm and creativeness at work.

There are many good examples. Not long ago, we held a meeting at China FAW Group Corporation (FAW) and asked some central SOEs which have seen quite effective reforms to share their experiences. For example, China First Heavy Industries (CFHI), as we all know, it is a Qiqihar-based SOE for heavy equipment and machinery. General Secretary Xi Jinping visited it twice. The leadership of the heavy machine maker has been resolute in applying the tenure system and contract management of the executives to the company. The goal is to remove the rigid evaluation bondage so that the selection of management staff can be based on their performance. If an executive cannot meet 60% of the target income and 70% of the target profit, the person will be removed from the post. Moreover, through market-based recruitment and employment policies, the company has canceled 187 management units, laid off 2,355 staff and lowered its corporate burden by 21%. Such ambitious moves have stimulated the company's vitality and helped improve the company's performance. Thanks to the reform, CFHI's annual profit growth has maintained 131% during the past three years.

Another example is FAW, which has intensified its market reform, especially in terms of personnel, labor, income distributions and management units. The reform started from its headquarters and expanded to its subsidiaries. A total of 28,000 staff participated in the re-recruitment process for the company's job posts, in which 1,700 defeated went into a round of training to increase their competency for another chance of re-employment. The process has led to a 16.7% adjustment in the company's senior managers and attracted much public attention. Over the past years, its self-developed Hongqi brand has seen a surge in sales from 4,000 in 2017, 30,000 in 2018 and 100,000 in 2019, to 200,000 in 2020. This year's sales target is 400,000. The sales are growing in line with the improvement in production. Thanks to its effective reform, the company is seeing stronger vitality and improvement in technological innovation, operations and manufacturing.

The above are the main features of the three-year action plan for SOE reform, which have brought tangible progress. In the next step, we will follow the decisions of the CPC Central Committee and the State Council as well as the requirements of the Leading Group of the SOE Reform of the State Council, strive to complete 70% of the goals by the end of this year, and meet all the reform targets of the action plan by July 1 next year.

Xing Huina:

As there are no more questions, today's press conference is hereby concluded. Thank you to Mr. Peng and friends from the media. Goodbye.

Translated and edited by Xu Xiaoxuan, Wang Qian, Xiang Bin, Huang Shan, Qin Qi, Yuan Fang, Wang Yiming, Wang Yanfang, Zhang Jiaqi, Wang Zhiyong, Dong Qingpei, Huang Shan, Zhang Rui, Chen Xia, Zhu Bochen, Yang Xi, Liu Qiang, Guo Yiming, Li Huiru, 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:

Tian Yulong, a member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson

Huang Libin, MIIT spokesperson and director general of the MIIT's Performance Inspection and Coordination Bureau

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

Chairperson:

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

Date: 

July 16, 2021

Shou Xiaoli:

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. Tian Yulong, a member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson. He will introduce the development of industry and information technology in the first half of 2021 and answer your questions. Also present at today's press conference are Mr. Huang Libin, MIIT spokesperson and director general of the MIIT's Performance Inspection and Coordination Bureau, and Mr. Zhao Zhiguo, MIIT spokesperson and director general of the MIIT's Information and Communications Administration Bureau.

Now, let's give the floor to Mr. Tian.

Tian Yulong:

Friends from the media, good morning! First of all, thank you all for your concern and support for the development of industry and information technology in China. I will first briefly introduce the overall situation of industrial and information technology development in the first half of this year, and then I will join my colleagues to answer your questions.

General Secretary Xi Jinping delivered an important speech at a ceremony marking the centenary of the Communist Party of China (CPC), which pointed out the direction for building a great modern socialist country in all respects. The industrial and information sectors have earnestly studied and implemented the guiding principles of General Secretary Xi Jinping's important speech, strived to build China's strength in manufacturing and cyberspace, and made unremitting efforts toward the second centenary goal of building China into a great modern socialist country in all respects. Since the beginning of this year, we have thoroughly implemented the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference, and the overall plan set out in the government work report. We have worked to ensure the six priorities of employment, people's livelihoods, development of market entities, food and energy security, stable operation of industrial and supply chains, and smooth functioning at the community level, and ensure stability in six areas: employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. The industrial sector continued its steady recovery, while the information technology sector enjoyed sound development. The economy showed steady and robust growth, laying a solid foundation for achieving the annual goal and ensuring a good start of the 14th Five-Year Plan (2021-2025).

There are four main highlights in the development of industry and information technology in the first half of the year.

First, the industrial economy regained its strength and demonstrated resilience. Since the beginning of this year, China's industrial economy continued to steadily recover; supply and demand grew progressively; the rebound of domestic and external demand accelerated and broadened; market expectations continued to improve; internal growth drivers were boosted; and corporate profits in the industrial sector rose significantly. In the first half of the year, the value-added of industrial enterprises above designated size increased by 15.9% year on year, and the two-year average growth rate was 7%. In the first five months, the profits of industrial enterprises above designated size increased by 83.4% year on year, and the two-year average growth rate stood at 21.7%, which was a historical high.

Second, we have continued to advance industrial upgrading and foster new drivers of growth. Since the beginning of this year, we have actively ensured supplies when conducting epidemic prevention and control on an ongoing basis and comprehensively increased China's vaccine production capacity to ensure vaccine supply. As of July, China's annual production capacity for COVID-19 vaccines reached 5 billion doses, with over 1.4 billion doses of vaccines administered in China and over 500 million doses provided to other countries around the world. Meanwhile, we have accelerated the transformation of our manufacturing industry to be green and low carbon and developed innovative applications of intelligent manufacturing and the industrial internet. We have implemented special actions for the development of advanced manufacturing clusters and built national-level internet of vehicles pilot zones and national artificial intelligence innovation application pilot zones. In the first half of the year, the value-added of the high-tech manufacturing sector increased by 22.6% year on year, and the two-year average growth rate was 13.2%. New drivers of growth and new industries continued to facilitate innovative development.

Third, production and business operations have been improved and the vitality of enterprises continues to increase. Multiple departments jointly issued guidelines on accelerating the cultivation of high-quality manufacturing enterprises to vigorously promote the development of leading manufacturers and technologically advanced "little giants," which refer to the industry leaders recognized by the MIIT with specific market orientation, excellent innovation capabilities, large market shares, core technologies, and high product quality and profitability. We have continued to improve the "321" work system for facilitating the development of small- and medium-sized enterprises (SMEs), that is, providing support in the three aspects of policy, services and the environment, focusing on the two key tasks of addressing financing difficulties and enhancing the protection of their legitimate rights and interests, and aiming for the target of making them more innovative and professional. We have implemented structural tax reduction measures, promoted the reduction of guaranty fees for small and micro businesses, and improved the long-term mechanism for preventing and dealing with the problem of defaults on payments to SMEs. In these ways, we continued to improve the policy environment for SMEs. In the first half of the year, the value-added of small- and medium-sized industrial enterprises increased by 18% year on year, and the two-year average growth rate was 8.1%.

Fourth, information and communications have accelerated development, while innovation and industrial integration keeps driving growth. At present, a total of 961,000 5G base stations have been set up. As of the end of June, these stations covered all cities at the prefecture level and above across the country, with approximately 365 million 5G terminal connections. Meanwhile, we have accelerated the construction of "dual gigabit" networks, and the number of gigabit broadband users has reached 13.62 million. The application scenarios of "5G plus industrial internet" continue to expand, and great progress has been made in key demonstration areas, industries and regions. 5G empowers industries to improve quality, increase efficiency, reduce costs, and pursue green and safe development. With the collaboration of multiple departments, we made great efforts to address hidden information security risks, and officially launched the 12381 Fraud Prevention Message System. Significant results have been achieved in actions to protect personal information on apps and to adapt telecommunications services to better suit senior users. People's sense of gains and security has been significantly improved.

Of course, we are keenly aware that there are still great uncertainties, risks and challenges regarding the global pandemic and the external environment. There are still uncertain factors concerning the sustained economic recovery; and the microeconomic operation still faces difficulties and challenges. Meanwhile, small and medium-sized enterprises in particular are confronted with many difficulties. The MIIT will study and implement the guiding principles of an important speech by General Secretary Xi Jinping at the ceremony marking the Party's centenary on July 1. We will firmly implement the decisions and plans of the CPC Central Committee and the State Council, ground our work in this new stage of development, apply the new development philosophy, and foster a new pattern of development. We will jointly work with other departments to focus on priorities and deepen supply-side structural reforms, prevent and defuse risks, and tackle structural problems. We will stay focused, and ride the momentum to speed up a sustained and steady recovery and ensure the high-quality development of the industrial economy. We will work hard to ensure all tasks and goals set throughout this year are accomplished, in order to achieve a good start in the 14th Five-Year Plan period (2021-2025) and write a new chapter of the new journey toward the second centenary goal of building China into a great modern socialist country in all respects. 

This is all for now. Next, my colleagues and I will answer your questions.

Shou Xiaoli:

The floor is now open for questions. Please identify your news outlets before asking questions.

CCTV:

At the ceremony marking the Party's centenary on July 1, General Secretary Xi Jinping said, "The Communist Party of China is rallying and leading the Chinese people on a new journey toward realizing the second centenary goal." What plans and measures will be formulated on the new path of industrialization to help realize the goal? Thank you.

Tian Yulong:

Okay, I will answer your question. General Secretary Xi Jinping has stressed on many occasions that "manufacturing is the foundation on which to build the country and make it strong." Promoting the country's industrial modernization and working faster to make China strong in manufacturing concerns the goal of building China into a great modern socialist country. According to the decisions and plans of the CPC Central Committee and the State Council, we are now formulating the development plans for the industrial and information technology sectors for the 14th Five-Year Plan (2021-2025) and the medium- and long-term periods. They will be promulgated in the second half of the year. With a focus on the second centenary goal, these plans aim to speed up developing a new type of industrialization. During the 14th Five-Year Plan (2021-2025) and the medium- and long-term periods, we will set out comprehensive plans concerning the goals, approaches and tasks of building China's strength in manufacturing and cyberspace. Specifically, we will take strong measures in five areas.

First, we will further implement an innovation-driven development strategy. We will promote industrial innovation led by enterprises and work hard to create new advantages for the innovative development of manufacturing. We will carry out projects to achieve breakthroughs in core technologies in key areas, and develop key technologies, products and equipment. We will implement the project of developing a national network for manufacturing innovation and establish an open, collaborative and efficient generic technology platform.

Second, we will build a modern industrial chain. We will continue to implement projects to rebuild our industrial foundation, and work faster to upgrade it. We will focus on strategic areas concerning the national economy, people's livelihoods, national security and high technology. We will give full play to the strengths of the industrial and supply chains, and strengthen our weakness in this regard. We will promote the transformation and upgrading of the whole industrial chain in traditional sectors. With a focus on a new generation of information technology, new materials, new processes and new equipment, as well as aviation, aerospace, marine, and other emerging industries, we will develop industrial digitalization and digital industrialization, make a forward-looking layout of future industries, and seize the initiative of industrial development.

Third, we will promote the development of manufacturing and make it high-end, smart and eco-friendly. We will accelerate the implementation of the strategy to make China a country strong with quality, expand the supply of high-quality products, and build high-end manufacturing brands with international influence. We will promote smart manufacturing, build smart factories and a smart industrial chain, and cultivate and develop new business forms and new models of smart services. With focus on the goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060, we will develop a system of eco-friendly manufacturing, speed up the green and low-carbon transformation of manufacturing, and build new engines for green growth.

Fourth, we will move forward with the integrated development of small, medium-sized, and large enterprises. We will work faster to cultivate excellent enterprises, including those that can take the lead and maintain dominance. We will implement projects to enhance the innovation capabilities of small- and medium-sized enterprises; cultivate a number of "little giants"; and achieve the integrated and innovative development of small, medium-sized, and large enterprises. We will upgrade the collaborative system to support the industrial chain in key areas, sectors and regions, and accelerate the cultivation and development of world-class advanced manufacturing clusters.

Fifth, we will foster a sound ecosystem for the development of manufacturing. We will work with other departments to improve and innovate fiscal and taxation supportive policies, enhance multi-level capital markets, optimize the supply of financial products and services, and establish systems and mechanisms for the financial sector to effectively support the real economy. We will comprehensively improve the skills of our workers and the professional qualities of our manufacturing talent. We will support capable enterprises to go global and deeply integrating themselves into the global industrial chain. We will build a win-win community of shared interests connected by industry and supply chains, and create new advantages in international cooperation and competition.

Next, we will formulate plans in the above five aspects and take effective measures to promote them. Thank you.

China National Radio:

We have noticed that the industrial economy maintained a steady recovery in the first half of the year. What is the assessment of the spokesperson on the current performance of the industrial economy? Also, what specific measures has the MIIT taken to drive the steady recovery of the industrial economy, and how do you predict the situation will develop in the second half of the year?

Tian Yulong:

Thank you, Mr. Huang Libin will answer these questions.

Huang Libin:

Thank you for your questions. Mr. Tian just presented in his opening remarks the overall situation of the industrial economy and development of information technology in the first half of the year. The main characteristics of the economic performance in the first half of this year can be summarized as "solidifying and gaining better quality and brighter prospects, while maintaining stability." As for "solidifying while maintaining stability," we mean that the momentum of steady recovery of industrial economy has become more solidified, and economic growth has become more stable, balanced and endogenous. 

Speaking of stability, excluding the impact of last year's base, the two-year average growth rate remained stable overall. The industrial added value above designated size saw a year-on-year growth of 15.9% in the first half of this year, putting the two-year average growth rate at 7%. The two-year average growth rates in the first and second quarters were 6.8% and 6.6% respectively, not showing much fluctuation. The utilization rate of industrial capacity reached 78.4% in the second quarter, which is 1.2 percentage points higher than in the first quarter. Economic indicators such as the delivery value of exports and proportion of products sold all reached relatively higher levels seen in recent years. 

Speaking of being balanced, among the 41 main industrial categories, 39 of them, or more than 90% of them, saw growth in the first half of the year. The policy of expanding domestic demand and boosting consumption was implemented and results were achieved. Investment was increased to make up for weaknesses; domestic demands played a stronger role in boosting industrial growth; and consumer goods manufacturing sector saw the two-year average growth in added value reach 4.8% in the first half of the year, a 0.6 percentage point higher than in the first quarter. 

Speaking of being endogenous, various policies aimed at aiding and benefiting enterprises continued to deliver dividends. Market entities further restored their vitality. In the first five months, industrial enterprises above designated size saw a big growth rate of 83.4% in the total amount of profits over the same period last year. The operating profit ratio also reached a high level of 7.11%. 

Based on the significant improvement of profitability of enterprises, investment in manufacturing sector grew 19.2% year-on-year in the first half of the year. Investor confidence in the market continued to strengthen. 

As for gaining better quality while maintain stability, we mean that the industrial economy was running within a reasonable range. The industrial structure continued to optimize and high-quality development reached a new level. Efforts to transform and upgrade traditional industries continued to intensify. We cemented the success in cutting capacity in the steel industry and pushed for green, low-carbon development. The energy consumption per unit of industrial added value of enterprises above designated size decreased 5.7% year-on-year over the first five months. Meanwhile, implementation was deepened in the project of intelligent manufacturing and project of innovative development of the industrial Internet. The manufacturing sector became increasingly digitalized, smart and internet-powered. As of the end of May, the popularity of digitalized tools used in R&D and design reached 73.5% among enterprises, and the numerical control rate of key processes reached 52.4% among enterprises. The development of new industries and new growth drivers was accelerated. In the first half of the year, the added value of high-tech manufacturing sector grew 22.6% year-on-year, with the two-year average growth rate reaching 13.2%, notably higher than the overall industry. The output of new energy vehicles and industrial robots increased by 2.1 times and 69.8% year on year respectively. New industries in the digital economy such as big data, cloud computing and blockchain flourished, and new models such as live-streaming e-commerce, online medical treatment and remote work grew rapidly.

As for gaining brighter prospects while maintaining stability, we mean that positive factors supporting the sustained and steady recovery of the industrial economy accumulated and the sustainability of the economic recovery further strengthened. Our country led the world in epidemic prevention and control and economic recovery and this advantage has continued to strengthen. The industrial system exhibited its resilience; efforts to foster a new pattern of development was accelerated; the potential of the domestic market was continuously unleashed; and the fundamental situation that the industrial economy is looking good in the long term has continued to expand. As the vaccination work accelerates, the world economy is steadily recovering, household consumption continues to recover, construction of new-type infrastructure is accelerated, and the periodical economic rebound continues to gain strength. We have the capability and resources to keep the industrial economy running within a reasonable range. 

In the meantime, we should see that we are currently facing an international environment that is complicated and stern with numerous factors of instability and uncertainty. Rising commodity prices, chip shortages and other issues have put new pressures on the recovery of the industrial economy. Next, we will attentively implement the decisions and arrangements of the CPC Central Committee and the State Council, make serious efforts in implementing various policies and measures, address all sorts of difficulties and challenges proactively, and push for the sustained and steady recovery of the industrial economy and its high-quality development. Thank you.

China Daily:

More than 1.4 billion doses of COVID-19 vaccines have been taken in our country. How is the situation regarding the production and supply of COVID-19 vaccines in our country? Can we manage to meet the demands for vaccine exports? What measures has the ministry taken to secure the production and supply of vaccines? Thank you.

Tian Yulong:

Thank you for your questions. I will answer these questions. The ministry has deepened its efforts to implement the spirit of a series of important directions and instructions by General Secretary Xi Jinping regarding epidemic prevention and control and vaccine production and supply. Under the overall arrangements and demands of the Joint Prevention and Control Mechanism of the State Council, the ministry led relevant departments to increase efforts in organizing and coordinating the production and supply of vaccines. We offered guidance for seven enterprises to quickly expand their capability and output, and accelerate the industrialization of vaccine production. As of this year, efforts to expand the capability and output of vaccine production have been remarkably accelerated, and the capability of vaccine production and supply has been significantly improved. Everybody can see this. As of July, vaccine production capability reached 5 billion doses, effectively meeting domestic demand. As you just mentioned, we have supplied 1.4 billion doses of the vaccine now. We also supplied 570 million doses of vaccine overseas. The production capability and output of COVID-19 vaccines has continued to expand, the supply capability has continued to improve, and the growth has been significant, which has well met domestic demands for epidemic prevention and control and vaccination, and also supported other countries for epidemic prevention and control in our best abilities. 

We have high demands for vaccine quality and safety because people's lives are of supreme importance. It takes three months for a vaccine to go from production to inoculation due to technical difficulty, a number of control links and procedures. The MIIT and relevant departments have worked together to coordinate the whole chain of production and supply, including research and development, production, review, approval and transportation and effectively guaranteed production and supply. There are mainly several specific measures.

First, we have accelerated the building of production capacity for all types of vaccines. Progress has proceeded according to plan. On the basis of ensuring quality and safety, we have made great efforts to expand production capacity and guarantee supply. Second, we have guided vaccine companies to strengthen quality and safety control. In particular, higher requirements have been put forward concerning the supply of raw and auxiliary materials, inspection and quality. Ensuring quality and safety is our first priority. Third, we have strengthened connection between supply and demand. Domestically, we have guaranteed supply for key cities and regions in urgent need for vaccines. Internationally, we have communicated with the WHO and other countries to provide support, which is also a very important task.

In the second half of the year, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, the MIIT will continue to organize and coordinate with relevant departments, and guide enterprises to guarantee the quality and safety of vaccines and maintain stable production. We will also coordinate domestic and international demands, and support vaccine enterprises to carry out international production capacity cooperation in multiple ways to expand vaccine accessibility and affordability and make more contributions to the global fight against COVID-19. Of course, we will still give priority to domestic epidemic prevention and control and vaccination needs. We are confident that we will accomplish this task. Thank you.

Hong Kong Commercial Daily:

Nowadays, almost everyone has a mobile phone with many apps installed. The management of apps, relating to the vital interests of the public, is a hot issue of common concern. What important measures has the MIIT taken recently to manage apps? Thank you.

Tian Yulong:

Thanks for your question, Mr. Zhao Zhiguo will answer it.

Zhao Zhiguo:

Thank you for your question. The MIIT pays great attention to the protection of app users' rights and interests. In recent years, we have adopted a holistic approach to improve our management system. Through the following four areas of work, we have achieved new progress and effects.

First, problem-addressing actions on apps' infringement of users' rights and interests were continued. We have organized communication authorities in Guangdong, Zhejiang, Jiangsu, Shanghai, Tianjin, Sichuan, Anhui and Inner Mongolia to carry out six batches of random inspections. In total, 760,000 apps were examined, 748 apps were reported to be violating rules, and 245 apps that refused to make corrections were disposed. We have maintained high-pressure deterrent against violations.

Second, supervision of key responsibility chains was strengthened. App stores were asked to strengthen self-examination, dispose faulty apps, and check new apps. By the end of May, there were 3.02 million apps in the Chinese market, 13% down from the 3.5 million before the campaign. With these efforts, the quality of apps has improved, and we have promoted the healthy development of apps that conform to rules. At the same time, the problem-finding rate of random inspections in app stores has steadily declined. 

Third, special campaigns to address app pop-ups were carried out. One campaign focused on pop-ups which appear as an app opens and are difficult to close as well as on those which mislead users to click to another page. These two problems received the most complaints from users. In the second quarter, complaints about open screen pop-ups fell by 50% from the previous quarter. Among the top 100 most-used apps, only 1% were found to have pop-ups showing up as they open, down from 69%. Also only 12 percent of them were found to have pop-ups appearing to mislead users to click to another page, down from 90%.

Fourth, the ability of technical examination was significantly advanced. With big data, artificial intelligence and other technologies, the capability of automatic examination, monitoring and data analysis of the national app technical examination platform has improved constantly. At present, the platform can examine 150,000 apps each month, and it is expected to cover 1.8 million apps by the end of this year.

Next, the MIIT will continue to improve app governance as a specific measure to solve practical problems for the people and strengthen efforts in the following three areas. With sustained momentum and work rhythm, we will strive to create a safer, healthier and cleaner app environment for the general public. 

First, we will push ahead efforts to improve management policies and industry standards. Together with other relevant departments, we will issue the interim provisions on the protection and management of personal information on mobile apps. We are now studying and incorporating opinions and suggestions solicited from the public after the drafts went online and will issue the provisions as soon as possible. We will also make efforts to formulate and improve relevant industry standards. By doing so, we can better guarantee app governance with policies and industry standards.

Second, we will launch a campaign to improve service. The campaign will focus on several major issues, including fixing undesirable services and improving user experience for apps, and adopt effective measures to improve the quality of service in those apps. We will launch the campaign in the second half of this year and adopt strong and effective measures to improve user experience.

Third, we will conduct follow-up inspections for key issues and businesses on a timely basis while ensuring routine supervision. For companies who have been found repeatedly accessing users' address books and geographical locations illegally, we will enhance law enforcement efforts to ensure those problems won't happen again. Thank you.

Cover News:

We've noticed that auto production and sales have been declining year-on-year since May compared to the strong momentum of growth in previous months. What's your comment on this? Is the decline related to factors such as the auto chip shortage? What will MIIT do in response? What's your forecast for trends in this year's auto market? Thank you.

Tian Yulong:

Thanks for your questions. As you know, auto production and sales in China maintained steady growth in the first half of 2021, especially in new energy vehicles (NEVs), which registered rapid development. According to statistics, the production and sales of automobiles in the first half of 2021 totaled 12.57 million and 12.9 million, respectively, up by 24.2% and 25.6%, demonstrating a strong momentum of growth. The production and sales of NEVs were 1.22 million and 1.21 million, respectively, double the figures in the same period last year.

Of course, as you said, auto production and sales declined in May and June due to reasons like chip shortages and the transition of vehicle emission standards. In June, auto production and sales were 1.94 million and 2.02 million, respectively, down by 4.8% and 5.3% month-on-month as well as a decline of 16.5% and 12.4% year-on-year.

MIIT has set up a special workforce for the promotion and application of auto semiconductors to respond to the auto chip shortage. We have held several coordination meetings and formulated measures with targeted goals to bring the role of local government, auto manufacturers, and chip foundries into full play, enhance the synergy between the supply and demand side, and increase the supply of auto chips. Our efforts are gradually paying off. In the next step, we will continue to bring synergy between the supply and demand side, actively identify alternative measures to strengthen China's manufacturing capacity to contribute to the stable and healthy development of the auto industry.

Looking at the domestic and international economic situation together, we expect the auto industry to maintain steady and long-term growth, based on continuous macroeconomic recovery, the policies bolstering auto consumption, as well as other strategic goals for peak emissions and carbon neutrality. According to industry analysis, this year's auto production and sales will enjoy mild growth. NEVs, in particular, are expected to enjoy high-speed growth, with sales on course to hit 2 million. In general, the auto industry is playing its part to boost industrial and economic growth. Our goal is to maintain this steady and rapid growth. Thank you.

Red Star News:

Online mobile app stores have been notified to remove ride-hailing service app Didi Chuxing due to its serious violations of laws and regulations regarding the collection and use of personal information. In recent years, MIIT has been promoting data protection in mobile apps. Could you share with us the progress made regarding these issues in 2021, especially with the rectification of the apps in violation of users' rights? What will MIIT do next to improve data protection? Thank you.

Tian Yulong:

Thank you. Mr. Zhao Zhiguo will take your questions.

Zhao Zhiguo:

This year, we launched a special campaign and adopted a series of measures to rectify the infringement of users' rights in mobile apps. The measures have been quite effective. We have noticed that the Didi Chuxing app has been taken down from online stores. We will work with related departments, with each of us assuming our respective responsibilities, in order to rectify problems in mobile apps.

In the next step, given the current situation, we will work on the following three aspects in response to issues of wide public concern. First, we will enhance institutional development and standard-setting. Specifically, we will launch an interim regulation on the protection of personal information on mobile apps along with several other departments. The regulation is targeted toward the protection of user information and is based on opinions and common ground reached by various knowledgeable circles. This will be one of our priorities for the next step. Moreover, with more and more types of mobile apps seen in the market, we will improve standard-setting and routine testing in order to form a solid foundation for better management.

Second, we will launch a campaign to improve user experience among mobile apps. By screening apps that offer undesirable services and poor user experience, we will identify those that have received more user complaints, and further take strong, targeted, and effective measures to improve the quality of service among those apps. We believe that it is necessary to conduct such a campaign as mobile apps are used widely and are an important part of people's lives, studies, and work. 

Third, on the basis of regular supervision, we will carry out follow-up checks on the problems that occurred in the previous rectification period and establish a ledger and responsibility list system for key issues and key enterprises, especially for the recurring issues that people are most concerned about, such as accessing the address book, users' location information, among others. We will increase punishments for those who access these databases when they are not necessary for usage scenarios, as they do not meet the minimum necessary principle of access of information collection. For entities whose rectification is not in place and the implementation results are poor, we will incorporate them into our credit management based on rectification. All in all, we will make sure that the rectified problems of the apps do not rebound or repeat so that people can have a better sense of gain and security and can use all kinds of apps in a safe and clean internet environment, ideally to meet the needs of ordinary people in all aspects of life, study, and work.

Yicai:

We all know that everybody is now concerned about data security. What specific work has the MIIT implemented in data security management this year? In addition, the MIIT recently said that it will establish a sound management mechanism and technical protection system for data security protection and strictly enforce every step from the collection and storage to flow and use of data resources. Could you tell us how exactly these tools will be implemented? Thank you.

Tian Yulong:

Thank you for your questions. Please let Mr. Zhao Zhiguo answer your questions. 

Zhao Zhiguo:

Thank you for your questions. Data is one of China's basic strategic resources and features several important production factors. General Secretary Xi Jinping has emphasized that the country's data security must be effectively guaranteed. Based on its responsibilities, the MIIT has steadily promoted data security management in the information and communication industry, issued the guidelines for the construction of data security standard systems in the telecommunications and internet industries, published a number of industry standards such as the classification of online industry data and the identification of important data, launched a special campaign to improve the capabilities for protecting online industry data, issued the "Key Points of Compliance Assessment on Online Data Security of Telecom and Internet Enterprises (2020)," established a public service platform for online data security, strengthened industry data security supervision and inspection in accordance with the law, and organized 133 enterprises including Tencent and Baidu to sign data security self-discipline conventions. We have also guided enterprises to implement their main responsibilities, carried out trials and demonstrations, and strengthened the research and development, promotion, and application of key data security technologies. It is fair to say that we have undertaken a series of tasks to ensure the implementation of these key points.

Next, the MIIT will carry out work in the following areas in accordance with its responsibilities under the framework of relevant laws and mechanisms, which are: industry data security supervision, improving data security supervision capability building, and promoting the development of the data security industry.

First, we will introduce a data security management system. We will speed up the formulation of data security management policies in the industrial and information fields to better facilitate the implementation of the "Data Security Law" among industries. We will carry out related work such as the classification of industry data, the development of important data catalogs, build a standard system in the field of industry data security, and formulate important data security standards in the fields of the internet of vehicles (IoV) and the industrial internet.

Second, we will establish a data security certification system. We will organize research on the data security protection certification system and formulate assessment specifications for industry data security protection capabilities. We will establish an evaluation and certification mechanism involving industry organizations, scientific research institutions, and key enterprises to guide related certification work.

Third, we will carry out data security supervision and inspections. We will combine security assessments of basic telecommunications enterprises with "Two Randoms and One Disclose" inspections (that is, during the supervision process, the inspection objects are randomly selected, law enforcement inspectors are randomly selected, and the results of random inspections and investigation will be disclosed to the public in a timely manner) and other regulatory methods to establish and improve the industry's acceptance mechanism for complaints and reports, and urge enterprises to implement obligations of data security protection. We will establish mechanisms for monitoring and reporting industry data security situation and improve capacity building for risk information analysis, study, and handling.

Fourth, we will promote the development of the data security industry and support breakthroughs in key data security technologies through measures such as building key laboratories and innovative technology centers. We will cultivate backbone enterprises through multiple channels such as supporting the leading champion in a certain field, supporting "specialized, refined, distinctive, and innovative" small- and medium-sized enterprises, as well as integrating industry and finance. We will explore the development of disciplines related to data security and encourage colleges and enterprises to jointly cultivate data security talent.

The Paper:

Under the guidance of the carbon peak and neutrality goals, many energy-intensive industries have begun to explore green transformation. How will the MIIT guide their green transformation? What's next for directing the green development of industrial industries? Thank you.

Tian Yulong:

Thank you for your questions. Mr. Huang Libin will answer these questions.

Huang Libin:

Thank you for your questions. Industry is one of the major areas of China's energy consumption and carbon emissions. Promoting green industrial development is an active and effective measure to fulfill the promise on achieving carbon emissions peak and carbon neutrality. MIIT will soon release the Plan for Green Industrial Development during the 14th Five-Year Plan Period and the Plan for Raw Material Industry Development during the 14th Five-Year Plan Period to promote the green and low-carbon transformation of industry, especially their energy-intensive sectors, strengthen the supporting role of the green manufacturing system, and amplify emission and carbon reductions at the source and from the aspects of industrial structure, energy consumption, production process, resource utilization, and product supply, etc.

The MIIT will speed up its advance toward reaching peak carbon in the industrial sector, and work with relevant departments to formulate action plans for carbon peaking in key industries such as nonferrous metals, building materials, steel and petrochemicals. We will also clarify the path for cutting industrial carbon emissions, promote major low carbon technologies, and carry out major demonstration projects for reducing carbon emissions to encourage all industries to achieve carbon peak targets.

Next, we will focus on the following six areas:

First, we will promote the high-end transformation of the industrial structure. We will resolutely curb the blind development of high energy consumption and high emission projects, improve and strictly implement policies on replacing production capacity, close down outdated production facilities, and develop strategic emerging industries and high-tech industries.

Second, we will accelerate the transition to low-carbon energy consumption. We will increase the proportion of clean energy consumption, boost energy utilization efficiency, improve energy management and service mechanisms, and build a clean, efficient and low-carbon industrial energy structure.

Third, we will promote the transition to recycled resources utilization. We will promote the coordinated use of primary energy resources, the recycling of renewable resources, the large-scale and comprehensive utilization of industrial solid waste, and the economical use of water resources, and reduce the output of industrial solid waste and waste water.

Fourth, we will promote the transition to clean production processes. We will vigorously promote green design, encourage existing enterprises to implement cleaner production technologies, promote the use of advanced and suitable environmental protection equipment in key industries, and promote stable and efficient governance capabilities.

Fifth, we will guide the green transition of product supply. We will increase the supply of green, low-carbon products and environmentally friendly equipment, so that we can provide a solid guarantee for a green and low-carbon transition in all sectors.

Sixth, we will improve the support system for green manufacturing. We will build a green public service platform, improve the green manufacturing standard system, implement green supply chain management, and improve the long-term mechanism for green and low-carbon industrial transition. Thank you.

Shou Xiaoli:

The last two questions, please.

People's Posts and Telecommunications News:

How has the 5G situation developed in the first half of 2021? As the most innovative 5G application areas, what are the next priorities for "5G + industrial internet"? Thank you.

Tian Yulong:

Thank you for your questions. 5G is an important area that many people are paying attention to. In accordance with the decisions and deployments of the CPC Central Committee and the State Council, the MIIT has vigorously promoted the construction and development of 5G new infrastructure. With the joint efforts of all departments, local governments and industries, China's 5G industry has gradually expanded its ecosystem, become increasingly active in integrated applications, and has formed competitive systematic advantages. These include three main aspects:

First, we have maintained a leading position in 5G network construction. At present, we have built the world's largest 5G independent network. In total, 961,000 5G base stations are in operation, over 400,000 5G base stations have been jointly built and shared, and the number of 5G terminal connections has reached 365 million. Second, the advantages of the 5G industry continue to increase. Chinese companies continue to lead the world in the claiming of 5G standard essential patents, and Huawei and ZTE have more than 50% of the 5G equipment market share. Shipments of 5G cellphones in China stood at 128 million units in the first half of this year, accounting for 73.4% of the country's total cellphone shipments during the period. Third, the trend of 5G applications integrating into thousands of industries has become prominent. Since its commercialization two years ago, 5G technology has played an important role in such fields as industrial production, energy and medical services. It has also opened up a new path and provided a new engine for digital transformation in China's economy and society and development of the digital economy.

The industrial internet will be the focus of our work this year. We have relied on industrial internet innovation and development projects, focused on the 5G application industry, and worked hard on the research and development and industrialization of key system equipment. Especially in the application of "5G + industrial internet," we held on-site meetings to carry out demonstrations and promotions in key industries, key areas and advantageous regions. We have also presented typical cases to promote the application of "5G + industrial internet" and speed up the development of its integration. Therefore, a number of achievements have been made and we have gradually deepened the development of "5G + internet." At present, nearly 1,600 projects have been completed in building "5G + industrial internet," covering more than 20 key industries and fields of the national economy, which play an important role in transforming and upgrading the real economy to digital, networked and intelligent industries.

"5G plus industrial internet" will continue to be the focus of our work. We have issued two action plans: one is the "Sailing" action plan for 5G applications, and the other is the industrial internet innovation and development action plan. We will focus on four areas.

First, we will continue to strengthen the network foundation. Adhering to the principle of appropriately leading the way, we will promote the construction of 5G networks, speed up the coverage of 5G networks in key areas and industries such as factories and industrial parks, carry out trials of 5G private networks, and enhance the network supply capacity of the industry.

Second, we will strengthen industrial support. We will accelerate the development of integrated application standards for "5G plus industrial internet" in the vertical industry and continue to promote the development of customization. In particular, we will make great efforts to provide high-quality technical products in the R&D and industrialization of 5G chips, modules, terminals, and other key products and devices.

Third, we will continue to enrich integrated applications. We will carry out the construction of pilot demonstration applications for the industrial internet and pilot areas for integrated applications, continue to release the second batch of application scenarios and industrial practices, and guide local governments, based on their distinctive and competitive industries, to create a batch of industry and field benchmarks through a series of on-site meetings and further deepen integrated applications.

Fourth, we will focus on improving the 5G ecosystem. We will coordinate with other departments to create synergy and promote the innovative development of "5G plus industrial internet." We will continue to encourage local governments to provide support in areas such as 5G construction sites, electricity, and human resources. At the same time, we also encourage enterprises to keep innovating, give full play to their subjective initiatives, create synergy, make collaborative innovation, and achieve win-win cooperation so that "5G plus industrial internet" will play a leading role in the digital economy. Thank you.

The Poster News APP:

Data shows that in the first half of this year, PPI rose by an average of 5.1%, 3 percentage points higher than that in the first quarter. How does the Ministry of Industry and Information Technology view the cost pressure brought by the rise of PPI on the middle and downstream enterprises? Also, will there be further measures to help micro, small and medium-sized enterprises cope with the crisis? Thank you.

Tian Yulong:

Thanks. Mr. Huang Libin will answer your questions.

Huang Libin:

Thanks for your questions. Due to the rapid economic recovery and multiple internal and external factors, the price of raw materials has risen sharply and fluctuated at a high level since the beginning of the year. In the first half of the year, PPI rose by 5.1% on average. In the second quarter, the year-on-year increase in PPI was significantly higher, putting great pressure on the costs of middle and downstream industries and related enterprises and squeezing their profit margins. Among them, most small and medium-sized enterprises are in the middle and lower reaches of the industrial chain, and their bargaining power is not strong. Therefore, it is difficult for them to absorb the pressure of rising costs caused by the sharp rise of prices in raw materials in a short time. The impact of rising costs on the production and operation of small and medium-sized enterprises is relatively more prominent.

The reasons for recent rising commodity prices are complicated. On the whole, global demand is recovering faster than supplies, domestic demand is recovering faster than international demand, and liquidity is happening faster than the real economy is recovering. Therefore, prices increases are, to a large extent, the result of the mismatch between supply and demand, the influence of external inputs, and speculation. Judging from the later trend, unlike the "supercycle" of rising commodity prices in the 1970s and the beginning of this century, this round of prices increase is more the result of the superposition of short-term factors. Deep-seated barriers such as high global debt, polarization between the rich and the poor, and the aging population make it difficult for demand to expand over a long time, and the possibility of a significant contraction in supply is relatively small. Therefore, it is difficult to form a "supercycle."

The CPC Central Committee and the State Council attach great importance to the impact of rising raw material prices on middle and downstream industries as well as micro, small and medium-sized enterprises. The executive meeting of the State Council has made a special study on the issue of rapid commodity prices increases. Recently, it has used monetary policy tools such as lowering the reserve requirement ratio to further strengthen financial support for the real economy, especially for micro, small and medium-sized enterprises, to hedge the impact of rising commodity prices on the production and operation of those enterprises.

In the next step, we will cooperate with relevant departments to ensure the supply and price of bulk commodities; strengthen publicity and guidance and policy interpretation; support upstream and downstream industries in establishing a long-term stable cooperative relationship; guide upstream and downstream industries to stabilize the supply of raw materials and the coordination of production, supply, and marketing; coordinate to deal with the risk of market price fluctuation; and resolutely crack down on hoarding, malicious speculation, and price hiking. Thank you.

Shou Xiaoli:

Thanks to our speakers, and thank you, friends from the press. That's all for today's press conference. Goodbye.

Translated and edited by Wang Yiming, Wang Wei, Wang Qian, Liu Sitong, Yang Xi, Lin Liyao, Yuan Fang, Guo Yiming, Li Huiru, Zhang Liying, Zhang Rui, Liu Qiang, Yan Xiaoqing, Xiang Bin, 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:

Yao Jingyuan, special researcher of the Counselor's Office of the State Council

Xu Xianchun, professor at the School of Economics and Management at Tsinghua University, and director of China Data Center at Tsinghua University

Chairperson:

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

Date: 

July 15, 2021

Xing Huina:

Friends from the media, good afternoon. Welcome to this briefing held by the State Council Information Office (SCIO). This morning, the SCIO held a press conference to brief you on China's economic performance in the first half of 2021, which attracted a lot of media attention. In order to help you gain a deeper understanding of the national economy, we are joined by two experts today who will give you an in-depth interpretation of the economic situation in the first half of this year.

Let me first introduce the two experts: Mr. Yao Jingyuan, special researcher of the Counselor's Office of the State Council, and Mr. Xu Xianchun, professor at the School of Economics and Management at Tsinghua University and director of China Data Center at Tsinghua University.

In today's briefing, we have invited the two experts to briefly introduce their interpretations of the economic situation in the first half of the year, and then take your questions. 

Yao Jingyuan:

In the first half of the year, seeking progress while maintaining a stable performance has been an effective method in carrying out economic work. We can clearly see that the national economy in the first half of the year has continued its stable and sound performance. We can understand the situation from the following aspects:

First, the fundamental of the economic work lies in people's livelihoods. Therefore, whether the economy is performing well is first reflected in changes to people's livelihoods. With people's livelihoods as the priority, employment is the cornerstone of their wellbeing. In the first half of this year, 6.98 million new urban jobs were created in China, accounting for 63.5% of the annual target. I think this has been a very important achievement.

Second, the fundamental criterion of economic performance is economic benefits. How should we understand it? We often look at three sources of money: the corporate profits of companies; fiscal revenue of the government; and the income of urban and rural residents of ordinary people. First, let me talk about corporate profits. From January to May, the profits of industrial enterprises above designated size increased by 83.4% year on year, and the profits of service industry enterprises above designated size increased by 1.5 times year on year, which is a high point in recent years. The government's source of money is fiscal revenue. Under the circumstances when we cut taxes and fees substantially, government fiscal revenue in the first half of this year still increased by over 20% year on year. Third, the growth in income of urban and rural residents basically kept pace with that of the national economy. Another important point is that the per capita disposable income of rural residents continues to rise faster than that of urban residents. Therefore, an important result of economic growth in the first half of this year is that the income gap between urban and rural residents has narrowed, which is in line with the new development concept.

Furthermore, China's economic structure and growth model were optimized in the first half of the year. For example, the tertiary industry accounted for 53% of the entire national economy, and consumer spending contributed 61.7% to overall economic growth. The proportion of China's industry, especially the manufacturing industry, has been declining in recent years. The outline of the 14th Five-Year Plan (2021-2015) clearly states that we must stabilize the proportion of manufacturing during the 14th Five-Year Plan period. Looking at the figure now, the proportion of manufacturing in the first half of the year increased by 1.6 percentage points compared with the same period last year, which is a very positive sign. The industrial structure has also been optimized. For example, the output of new energy vehicles has increased by more than 200%, industrial robots nearly 70%, and integrated circuits nearly 50%. Therefore, the industrial structure is optimizing, indicating that innovation is increasingly becoming an internal driving force of economic development. Another important thing is that energy consumption per unit of GDP fell in the first half of the year, which I think is not an easy achievement. Promoting peak emissions, carbon neutrality and green development have been hot topics. Energy consumption per unit of GDP fell by 2% in the first half of this year.

Indeed, despite so many major achievements in the first half of the year, there are still some problems. These problems are reflected more in terms of the structure, such as employment. I just talked about employment. We completed 63.5% of the annual target for new urban employment in the first half of the year. However, from a structural point of view, there are difficulties for college students in finding jobs. We must pay attention to this structural problem. In the second half of the year, we should develop solid policies to help college students find jobs. Another structural problem is that although the profit growth rate of industrial enterprises above designated size was not low, reaching 83.4%, the profits were made more in upstream industries, such as steel, coal, nonferrous metals, chemicals and petroleum, which is related to the rise of raw material prices in the upstream industries. In addition, from the perspective of the overall economic operations in the first half of the year, consumption should be further increased in the second half of the year so that it plays a greater role in economic growth. Looking forward to the second half of the year, I think that the main targets for China's economy set out at the beginning of the year can be successfully achieved. That is all from me for now.

Xing Huina:

Thank you, Mr. Yao Jingyuan. Next, I will give the floor to Mr. Xu Xianchun.

Xu Xianchun:

Thank you, Chairperson. Journalists, good afternoon.

It is a great pleasure and a privilege to attend this briefing and exchange my views with you. Just now, Mr. Yao shared his view on the economic situation in the first half of 2021 and the structural problems in the economy. I would like to talk about some features of the economic situation in the first half of the year from two perspectives: production and demand.

In terms of production, I would like to focus on four features. First, gross domestic product (GDP) grew faster in the first half of 2021 than it did over the same period last year, showing the momentum of continued economic recovery. According to data released by the NBS at the press conference this morning, in the first half of the year, China's GDP expanded 12.7% year-on-year. The figure puts average H1 growth for the past two years at 5.3%, a 0.3 percentage point faster than the two-year average of Q1 growth from the 2019 level. This shows that China's economic recovery continues to consolidate.

Second, the value added of the secondary industry increased faster than that of the primary and tertiary industries, which significantly powered economic growth. In the first half of 2021, the value added of the secondary industry went up 14.8% year-on-year, while the average H1 growth for the past two years stood at 6.1%. Both figures were higher than those of the primary and tertiary industries, supporting economic growth significantly in the first half of the year.

Third, the tertiary industry became the main driver of and biggest contributor to economic growth. In the first half of 2021, the value added of the tertiary industry went up 11.8% year-on-year. The figure puts the average growth for the first halves of the past two years at 4.9%. The value added of the tertiary industry accounted for 55.7% of GDP and contributed 53% of economic growth. According to my calculation, the tertiary industry drove economic growth up by 6.7 percentage points in the first half of the year – that is to say, the tertiary industry contributed to 6.7 percentage points of the 12.7% economic growth of the first half of the year.

Fourth, the secondary industry recovered relatively quickly, while the tertiary industry recovered relatively slowly in the first half of 2021. The average H1 growth for the past two years of the value added of the secondary industry stood at 6.1%, 1.1 percentage points higher than the two-year average of first-half growth from the 2019 level before COVID-19, which indicates a relatively fast recovery. In contrast, the average growth for the first halves of the past two years of the value added of the tertiary industry stood at 4.9%, 2.3 percentage points lower than the two-year average of H1 growth from the 2019 level, showing a slower recovery. In short, I think these are the four features, in terms of production, that deserve attention.

In terms of demand, I would like to focus on the following three features. First, there are three demands jointly driving economic growth, with consumer demand being the primary engine. In the first half of 2021, consumer demand contributed 61.7% to economic growth, and drove economic growth up by 7.8 percentage points – that is to say, consumer demand contributed to 7.8 percentage points of the 12.7% economic growth of the first half of the year. These figures contrast sharply with those of the same period last year. In the first quarter and first half of 2020, the economic growth was driven down by low consumer demand.

Second, the recovery of investment demand continues to consolidate and plays an important role in driving the economic growth. In the first half of 2021, investment demand contributed 19.2% toeconomic growth, and drove economic growth up by 2.4 percentage points.

Third, net export demand has shown a good performance, driving economic growth effectively. In the first half of 2021, net export demand contributed 19.1% to economic growth, and drove economic growth up by 2.4 percentage points.

To summarize, all the above are features of China's economic performance in the first half of this year in terms of production and demand. Thank you.

Xing Huina:

Thanks to the two speakers for their brief and clear explanations. Now, the floor is open for questions. Friends from the media, please state the news outlet you belong to and then ask your questions.

The Beijing News:

My question is for Mr. Yao. You mentioned just now that greater efforts will be made to promote consumption in the second half of this year, so that it will contribute to economic growth. Do you have any suggestions to make this work? Moreover, talking about foreign trade, as the COVID-19 pandemic gradually comes under control abroad, what are your thoughts regarding the trend of China's foreign trade? Thank you. 

Yao Jingyuan:

It is important to ensure China's economic growth is more reliant on domestic demand instead of exports when it comes to transforming economic growth patterns. What is domestic demand? It is composed of two aspects — investment and consumption. We used to depend on investment to stimulate domestic demand. However, we need to ensure consumption's leading role in the "three-horse troika" pulling the economy ahead. The Central Economic Work Conference has identified the specific roles that investment, export and consumption will play in boosting economic development. In terms of consumption, the conference considers it as the foundation, emphasizing its importance in leveraging the fundamental role of consumption in promoting economic growth. We are building a new development paradigm in which domestic circulation will play the primary role, and domestic and international circulations will reinforce each other. But why do we need to build such a new paradigm? In terms of domestic circulation, the largest strength of the Chinese economy lies in its vast domestic market. China, with its population of 1.4 billion, has realized a moderately prosperous society in all respects, with around 400 million people classed in the middle-income category, which is equal to the combined populations of the United States and Japan. The principal contradiction facing the Chinese economy has evolved to exist between unbalanced and inadequate development and the people's ever-growing needs for a better life. Given this, we need to focus on China's second centenary goal, and meet people's needs for a better life, as this is the most powerful internal driving force for China's economic growth. 

Obviously, the largest strength of the Chinese economy lies in its huge domestic market and great potential for domestic demand. General Secretary Xi Jinping has said that the ultimate goal for advancing economic development is to meet people's needs for a better life. In this regard, consumption should play its fundamental role in boosting economic growth while China is striving toward its second centenary goal.

Talking about consumption, we all know that it was the hardest hit area by the pandemic last year. In the first quarter of 2010, China's total retail sales of social consumer goods dropped 19% year on year. A fall of 19% was the slowest growth rate in six decades. Human contact is necessary when it comes to consumption activities, but due to the quarantine measures adopted to address the pandemic, consumption was seriously affected last year. During the recovery later on, we put our focus on the resumption of work and production. In addition, we also managed to reopen businesses. The positive role of consumption in boosting economic growth did not completely resume last year. In the first quarter of this year, consumption remained weak, but in the second quarter, its contribution to economic growth improved. These represent China's huge consumption potential.

In terms of China's future economic development, why can we achieve economic upgrading and transformation? Consumption is vital to achieving the second centenary goal. How can consumption be promoted? I think reform is the solution. To expand consumption, the ultimate solution is to increase people's incomes. In the first half of this year, China's per capita disposable income increased basically in line with the growth in GDP, which is also one of the targets of the 14th Five-Year Plan. I think it is important to further increase the incomes of urban and rural residents through reforms. For example, the Fifth Plenary Session of the 19th CPC Central Committee formulated that we will raise the proportion of labor remuneration in the primary distribution. We used to pursue high-speed growth under the past growth pattern, which is why capital and land played more important roles in promoting economic growth. Therefore, in the primary distribution, we prioritized capital and land, and the proportion of labor was relatively low when it came to labor. In this case, we need to tackle this problem through reforms.

Moreover, since we are building a complete domestic circulation market, instead of a closed internal loop, I think we should eliminate regulations that are hampering consumption activities. I think China has great consumption potential, and I'd like to use an example to illustrate why. Take the production of automobiles as an example, which was also talked about during the press conference this morning. In 1978, China's total auto production was 150,000. Now, that number has surpassed 20 million thanks to four decades of rapid development. There have been some problems facing us in terms of production and sales over the past two months, about which some people are concerned. There is still a gap in car ownership per 1,000 people between China and developed countries. The U.S. has more than 800 cars per 1,000 people, and Japan has around 600, while China's current level is about 200. As such, there is huge potential in the Chinese market. Given this, we need to make concrete efforts in the future to expand consumption. Thank you. 

CCTV:

We learnt from this morning's press conference that the service sector continued to recover in the first half of this year. What's your opinion on the role of service sector in the overall economic recovery? Since the start of the pandemic, modern service industry, including information transmission, software and information technology services, have demonstrated favorable momentum, but the growth rate of added value of some parts of the service sector has been relatively low. How would you evaluate that? Thank you.

Xu Xianchun:

Thank you! The National Bureau of Statistics (NBS) released the statistics of the national economy for the first half of the year this morning. During the first half of this year, the tertiary industry increased by 11.8% year-on-year, with an average two-year growth of 4.9%. This was lower than the secondary industry, as the secondary industry increased by 14.8% year-on-year, with an average two-year growth of 6.1%. However, the total added value of the tertiary industry accounts for a relatively high proportion of GDP, which was 55.7% in the first half of the year, and its contribution to economic growth reached 53%. So, it plays a vital role in stimulating the economic growth. 

The growth of added value of the tertiary industry was polarized in the first half of the year. The growth rate of modern service industry was relatively fast. Specifically, the added value of information transmission, software and information technology services increased by 20.3% year-on-year, with an average two-year growth of 17%. In the first five months of the year, the total profits of large high-tech services businesses went up by 27.4% year-on-year, with an average two-year growth of 12.5%, 4.2 percentage points higher than that of large services businesses as a whole. At the same time some parts of the service sector had lower growth rates in added value, such as wholesale and retail trades. The average two-year growth was relatively low, which is significantly lower than the growth rate in the same period in 2019 before COVID-19 outbreak. The contact services sector, such as accommodation, catering, rental and business services, was more severely affected by the epidemic and still grew negatively on average over this two-year period. In short, during the first half of the year, the growth of added value in the service sector was polarized. The growth rate of modern service industry was relatively fast, while the growth rates of contact type and traditional services were relatively low, with some still witnessing negative growth.

In fact, modern service industry has been demonstrating favorable momentum in recent years. For example, from 2017 to 2019, the added value of information transmission, software and information technology services grew at an average annual rate of about 23%. We know that the economic growth rate has fallen back during this period. China's GDP increased 6.9%, 6.7% and 6% respectively in 2017, 2018, 2019. The added value of information transmission, software and information technology services maintained a growth rate of more than 20%, which played an important role in slowing down the decline in economic growth. Hobbled by the coronavirus, China's GDP shrank 6.8% in the first three months of 2020. Under these circumstances, information transmission, software and information technology services rose by 13.2% against the tide and bucked the trend during the epidemic, contributing 0.6 percentage point to the GDP growth. If there was no 13.2% growth in information transmission, software and information technology services, the GDP decline would not be 6.8%. If this sector had also grown negatively, the decline in GDP would have been even greater. The added value of information transmission, software and information technology services maintained rapid growth in the second quarter, the third quarter and the fourth quarter. They were up by 15.7%, 18.8% and 19.7% respectively. The increasing quarter-on-quarter trend played an important role in the quarterly recovery of economic growth.

Therefore, the modern service industry has played an crucial role in stimulating economic growth, inhibiting the declining economic growth rates in previous years, slowing down the economic decline in the first quarter of last year, and making contributions to resuming economic growth in the following three quarters of 2020. With the rapid development of information technology, I believe that the modern service industry will maintain a relatively rapid growth, and will be a vital driving force for China's economic growth in the future. Thank you!

The New York Times:

I have two questions. First, in the past decade, we have never seen such a huge difference between nominal GDP growth and real GDP growth as during this year. What's the reason behind the difference, and does it indicate severe inflation? Second, how can retail sales maintain a relatively high growth when auto sales are so weak? Thank you.

Xu Xianchun:

For your first question, I think it's normal to see an obvious difference between nominal GDP growth and real GDP growth in the first half of this year. As we know, China's PPI registered a high growth, as the index is greatly affected by international bulk commodity prices. Our study suggested that China's PPI is closely related to PPI of OECD countries and international bulk commodity prices. The rise in international bulk commodity prices has pushed up China's PPI. Since the value-added of industry accounts for more than 30% of GDP, the increase in PPI is bound to create a difference between nominal GDP growth and real GDP growth. The CPI grew by only 0.5% in the first half of the year, while the growth of PPI was relatively high. A rise in PPI will drive up the GDP deflator. That's my answer to the first question.

Yao Jingyuan:

Automobiles are not the most important part of China's consumption. From the perspective of the Engel's coefficient, food accounts for 30% of household spending in China. Therefore, food is the most important part of China's consumption, as it constitutes the largest bit of people's basic expenses. Generally, to assess China's overall consumption situation, including the trend of CPI, we need to focus on changes in the food sector. 

Red Star News:

My questions involve two issues. The first is pork prices. According to the press conference this morning, pork prices in China went down by 19.3%. Will the decline cause the prices to be lower than the cost of pig breeding? What's the reason behind the downward trend? What measures should be taken if the prices further drop? Will the country's purchase and storage policies effectively keep the market stable? Second, in the first half of the year, China's PPI went up by 5.1% year-on-year. What's the reason behind the increase? Will this increase lead to higher industrial costs and losses for industrial enterprises? What impact will a high PPI and a low CPI have on the national economy? Will it cause ripple effects to consumer prices? Thank you.

Yao Jingyuan:

Both issues are of great concern to the people. There is an economic law called the cobweb theory. To put it simply, the theory means that the current output of a product determines its current price, which in turn determines its output in the next period. When the current output of a product is large, its price will fall, and so will its output in the next period. The decrease in output will in turn lead to an increasing price.

There has already been much research worldwide about cobweb theory and its application for agricultural products. Over the past decade, we have accumulated numerous positive experience. In the beginning of 2018, there was a rebound in pork prices. According to my research in 2019, each pig can make a profit of 2,000 yuan, and profits can reach 20 million yuan when raising 10,000 hogs. Pork prices have now risen to 80 yuan per kilogram, and the public complains. This is mainly due to the decrease in the supply of pigs, i.e., the number of pigs available for slaughter. In 2019 and 2020, there was a drop in the number of pigs available for slaughter — down by almost a third — resulting in a rise in pork prices. Therefore, people increased their spending on raising pigs, and the number of pigs available for slaughter rose. There were also some other factors in 2019 that affected prices, for example, swine flu. Over the past two years, we have witnessed a rapid recovery in the number of pigs available for slaughter and growing piglet replenishment. At the end of June, pig stocks numbered 439.11 million, recovering to historically normal levels. So pork prices began to decrease. From June to August, the summer months, the decline in meat consumption leads to a drop in pork prices. 

You asked about whether the pork prices dropped to the cost price. Indeed, individual pig farmers have already sold pigs at below-cost prices, while large-scale pig breeding farms continue to make profits. We usually take several measures to stabilize pork prices. Besides increasing pig imports, we now put more effort into expanding government reserve purchases. We have already summarized many helpful experiences, and the National Development and Reform Commission is actively working on implementing these measures. Now, pork prices have dropped too sharply. People living in urban areas hope to purchase pork at the lowest possible price. But for farmers and the pig breeding industry, we need to stabilize prices. So the government has taken measures to purchase pork as part of its effort to stabilize the market and prices. In the next round, when the pork prices go up, the government will sell the pork from state reserves at a lower price in a bid to moderate pork prices. We have now accumulated much more experience and this will not be a matter of concern. 

As to your second question, the price of upstream raw materials has now risen. China's producer price index (PPI) increased 8.8% year on year in June, the highest level seen over the past few years. Increasing prices in upstream raw materials are due to loose fiscal and monetary policies that the U.S. and some countries have taken. So there has been a rise in the prices of bulk raw materials in the international market, such as oil, steel, and non-ferrous metals. Raw materials have also witnessed rising prices in the international market. China is the world's biggest bulk commodity importer, and the rising prices of raw materials in the international market will surely affect the domestic market through imports. In the domestic market, the downstream manufacturing companies will be most pressured, which will require us to pay more attention to prices in the second half of this year. The rising prices of upstream raw materials such as oil, coal, steel, non-ferrous metals, and chemicals will definitely influence downstream companies, and that's exactly what sparks concerns. 

I see that people are worried about how changes in the PPI may affect the CPI (consumer price index), which may eventually lead to growing inflation. I don't think this is a major issue. What concerns us most is that if manufacturing companies find difficulty in moving out and the prices of upstream raw materials can not be stabilized, these companies will face additional difficulties and challenges. I also believe that manufacturers should turn the pressure resulting from soaring prices of upstream raw materials and power resources into driving forces for the innovation and technological advances in companies. However, boosting the capacity for innovation, technological advances, and management doesn't happen overnight. So what measures should we take? In accordance with the deployment and decisions of the CPC Central Committee and the State Council, we will strengthen work to ensure supplies and stabilize the prices of major upstream raw materials and power resources. There is no problem with that, and it is not a matter of concern. According to the guiding principles, since we are committed to peaking carbon emissions and achieving carbon neutrality, to some extent, we don't support expanding steel production. However, once we lift restrictions, there will be a rise in steel production, as well as in coal. Coal prices have recently increased, but prices will stabilize as long as we encourage production and expand production while ensuring supply. We have confidence in our production capacity, and prices will stabilize. China's PPI increased 8.8% year on year in June, down by 0.2 percentage point from May, which is a hard-won achievement. I'm confident that we will stabilize prices in upstream raw materials and maintain a stable trend in the second half of this year. I know many people are worried about inflation. The CPI may edge up during the second half of the year, especially in September, when there is increased meat consumption during the Mid-Autumn Festival and National Day holiday. Even so, CPI growth is expected to stay below 3% throughout the whole year. I suggest that we should now place more focus on easing manufacturing companies' difficulties. 

Global Times:

I have two questions. The first question is: the data released this morning shows that China's economic growth rate in the first half of the year reached 12.7% — how do you view this level of economic growth compared to the rest of the world? What do you predict for the whole year? My second question is: Mr. Yao just mentioned the goal of building a moderately prosperous society and the second centenary goal. It took China only 40 years from proposing to build a moderately prosperous society to finishing building a moderately prosperous society in all aspects, so I would like to know, what do you think of China's economic achievements over the past 40 years? Do you think China can continue to create such an economic miracle or achieve higher levels of growth on its path toward its second centenary goal? Thank you.

Xu Xianchun:

Thank you for your questions! Regarding your question of how to evaluate the 12.7% economic growth in the first half of the year in comparison to the rest of the world, here is my answer: the period most severely hit by the COVID-19 epidemic in China was the first quarter of last year, and it also affected the first half of last year, so the base number for the same period last year was low, and the 12.7% growth rate in the first half of this year appears to be relatively high. The epidemic has hit different countries at different times, so it is not easy to compare them directly. If you want to compare, I think it might be better to use the two-year average growth data proposed by the NBS. Why do I say this? We know that year-on-year growth has a base number issue. Although year-on-year growth also reflects the actual situation and is illuminating, it is a longitudinal comparison. If comparing the year-on-year growth rates between two quarters, an issue will arise as to whether the two base figures are comparable. For example, when the NBS releases the value-added of industrial enterprises above the designated size and the total retail sales of consumer goods, it often combines January and February figures. Why? Because in some years, the Lunar New Year occurred in January and others, February. If we compare two years back to back and the Lunar New Year period does not happen in the same calendar month, differences in the base numbers will be significant. The NBS puts these two months together in order to reduce the impact of incomparable base figures.

We know that the impact of the COVID-19 epidemic on economic growth in each quarter of last year was different. Since the impact in the first quarter of last year was the greatest, the economy grew 18.3% year-on-year in the first quarter of this year, which was actually due to the 6.8% drop during the same period last year. In the second quarter of last year, the growth rate returned to 3.2%, a rebound of 10 percentage points. Therefore, last year's base figures for the two quarters are completely different. One had a decrease of 6.8%, and the other had an increase of 3.2%. If the base numbers were not built on a comparable basis, the data will be incomparable. The NBS used 2019, which was not affected by the epidemic, as the base period for comparison and conducts two-year average figures. When the base numbers are comparable, the growth rates can be comparable. In the first quarter, GDP's two-year average growth rate was 5%, and in the second quarter, it was 5.5%, an increase of 0.5 percentage point. This is comparable.

I believe the next step of economic growth will also be affected by the base number. For example, the economic growth in the third quarter of last year was 4.9%, an increase of 1.7 percentage points from the second quarter, but still lower than the growth for a normal year. That is to say, it was lower than the potential economic growth. Therefore, economic growth in the third quarter of this year is still based on a relatively low base and is likely to remain relatively high. Of course, there are many other uncertain factors, such as how the pandemic plays out overseas. China's current export situation is relatively good. An important reason is that there is a gap in supply and demand overseas due to the impact of the pandemic. China can make up for this gap because of the better control of the epidemic. After the pandemic situation improves, if overseas production resumes, this supply-demand gap may narrow, and China's exports may decrease. Taking these factors into consideration, I project that the economic growth rate in the third quarter will still be relatively fast, but it will definitely be lower than that in the second quarter of this year. The economy grew by 6.5% in the fourth quarter of last year, exceeding the growth rate in the same period in 2019. So I estimate the growth rate in the fourth quarter this year may continue to decrease. This year, GDP growth will likely decline from quarter to quarter, but the annual growth rate will still remain relatively high, and will definitely exceed the economic growth rate of recent years.

I have preliminarily calculated that the 12.7% economic growth in the first half of the year will drive the annual economic growth by about 5.7 percentage points. Therefore, even if the economic growth rate declines in the second half of the year, I think it will still drive the annual economic growth by about 3 percentage point. The annual economic growth may be between 8.5-9%. Of course, this is entirely my personal prediction. I have also seen relevant international organizations such as the World Bank (WB), the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the Asian Development Bank (ADB) estimate that China's economic growth rate will exceed 8% in 2021. Some domestic institutions may have higher estimates. However, this is no cause for thinking that China's current economic growth is too high because this growth rate is based on a relatively low base figure from last year. If we remove the base figure factor, the two-year average growth rate is not really high. This is an estimate for this year's economic growth. It is entirely a personal estimate and is for reference only. Please correct me if I am wrong. Thank you!

Yao Jingyuan: 

Your second question is about China's economic development. Over the last 40 years, in 1978, China's economy totaled 367.9 billion yuan, while last year the figure stood at 101 trillion yuan. Judging from this, I agree with you that China's economy has created a miracle over the past four decades. I once served in the National Bureau of Statistics (NBS), and to be honest, I was often asked whether the statistics were accurate. I gave them an accurate and undoubted indicator as an answer, which is the country's foreign exchange reserves.

I don't know if you are aware of this, China's foreign exchange reserves in 1978 were less than $200 million. While I was learning the history of the Communist Party of China some time ago, I read a story about Comrade Deng Xiaoping and his visit to France in 1975. The day before he returned to China, he recalled a small cafe in Paris where he had a cup of coffee during his work and studies in France. After he told the story, a staff member found the cafe was still there. Deng Xiaoping drank the coffee of that cafe again and mentioned that the French bread tasted good. At this time, someone suggested that before returning to China, he should buy some bread to take back as a small gift, but Comrade Deng Xiaoping said that it would cost foreign currency to buy bread. Even Comrade Deng Xiaoping had to worry about the foreign exchange when buying bread abroad at that time, but who needs to be concerned about it now? The latest data shows that as of June 30, China's foreign exchange reserves had reached $3,214 billion, a figure that can't be falsified. In the past 40 years, the country's foreign exchange reserves have increased tremendously from $200 million to $3,214 billion. Therefore, I think it's appropriate to describe China's economy in the past four decades as a miracle. 

We have achieved the first centenary goal and are now marching towards the second, which will take about 30 years to fulfill. The 30 years are divided into two phases, with each one lasting 15 years. Our goal by 2035 (after the first 15 years) is to basically realize socialist modernization. As I said some time ago, the simplest but multifaceted way to view socialist modernization is to focus on the main economic indicators like the economic aggregate. In the next 15 years, by 2035, our total economy is expected to double to more than 200 trillion yuan, based on the 101 trillion yuan last year. Our per capita GDP is $10,000 now, and doubling it means an increase to $20,000. Another important indicator is the market scale. The total retail sales of consumer goods last year registered 39 trillion yuan, and doubling it means a rise to about 80 trillion yuan. If we are to double the main indicators in the next 15 years, an economic growth rate of 4.72% or 4.73% is enough. 

To achieve the second centenary goal, the principal contradiction won't lie in speed. Mr. Xu said just now that China can achieve an economic growth rate of 8% this year. I think the growth rate could be lowered a bit during the 15th and 16th Five-Year Plan periods (2026-2030 and 2031-2035), as this will help us concentrate more on the quality of economic growth. While we were making efforts to fulfill the first centenary goal in the past four decades, we created a miracle more in terms of the growth speed. At that time, we had yet to eliminate poverty and meet the basic needs of the people, hence we needed to achieve an extraordinary economic growth rate. But from now on, as we are striving to realize the second centenary goal, we should create a miracle in growth quality, namely the high-quality development. Judging from the economic data of the first half of this year, I believe the miracle in the future will be made in high quality development. For example, we should take innovation as the fundamental driving force. Future development should be green by achieving peak carbon emissions and carbon neutrality; it should be coordinated across the eastern, central and western regions, between urban and rural areas, and among various industries; and it should be more open and shared by all to ensure that each and every one of our 1.4 billion people can fully enjoy the benefits of development. Therefore, in this respect, I quite agree with you that when we achieve the second centenary goal, China's economy will still be a miracle. However, this miracle will be different from that of the past 40 years, as the past one was more about quantity and speed and the new one will be reflected in quality. Thank you.

Hong Kong Economic Herald: 

The World Bank expects China's economy to grow by 5.4% next year, returning to its long-term trend before the COVID-19 epidemic. Mr. Yao and Mr. Xu, how do you see China's economic forecast next year? Thank you.

Xu Xianchun: 

The World Bank predicted that China's economy will grow by 5.4% next year. The World Bank is an important international institution, its forecasts are closely watched, and we often follow its predictions as well. Nonetheless, its forecasts are often revised. When the NBS issues new data, the World Bank may adjust its projections. 

How should the World Bank's prediction of 5.4% economic growth in 2022 be viewed? I agree with Mr. Yao's comments just now that China will not maintain a very high growth rate as China's GDP gradually increases. For example, China's GDP was around 10 trillion yuan in 2000, while the number exceeded the 100 trillion yuan threshold in 2020, which is 10 times higher than 20 years ago, or more than six times that in 2000 when the price factor is excluded. What does this mean? It means that one percentage point increase now is equivalent to growth of six percentage points in 2000. Therefore, we cannot count on GDP continuing at such a high speed. The CPC Central Committee and the State Council have attached high importance to high-quality economic growth, and China is shifting from high-speed growth to high-quality development. We need a certain growth rate as development is the foundation for and the key to addressing almost every problem. Economic growth is an important part of development, but instead of blindly pursuing growth rate we need high-quality development.

Looking back over the previous economic growth data: China's economic growth rate reached a peak of 14.2% in 2007; the figure was 10.6% in 2010, 6% in 2019 and last year saw a 2.3% growth due to the pandemic. Obviously, China's growth rate is gradually dropping, which I believe is quite normal. China's economy has expanded remarkably after a long period of acceleration, and one percentage point growth now is not the same as it was before. In addition, we are pursuing high-quality development. I think China's potential growth rate is between 5.5% and 6%, and it is normal for our GDP to be within this range. Over time, economic growth may decrease, but we should not be surprised at this and should be confident in achieving our future targets as long as the data is controlled within a reasonable range and we adhere to high-quality development. Thank you.

Yao Jingyuan:

I'd like to add something. I have an example to explain that different economic phases should match with different growth rates: My family welcomed in a baby granddaughter, weighing 3 kg. After a month she had reached 4.5 kg, which the doctor said was normal. However, I questioned that figure because she is just a baby and gained 50% of her weight in a single month. If we as adults, gained 50% of our weight in one month, then we should definitely go see a doctor. As such, we should understand that different growth stages face different health indexes. What Mr. Xu Xianchun said just now is quite clear: that it was reasonable to reach a high-speed growth rate in the past as we faced problems such as poverty, and a lack of food and clothing. Now we have realized our first centenary goal and are marching toward the second centenary goal, amid which China's economy has shifted from high-growth to high-quality development. Just like my granddaughter is growing up and we need to pay more attention to her studies and her ethics and morals. So, I want to say that we shouldn't be too sensitive about the speed of economic growth, whether it is an average of 4.7% in the coming 15 years, exceeds 6% or even drops below 4% in certain years. In general, the quality of growth will determine whether we can reach our second centenary goal.

Xing Huina:

One hour has now passed, but we still have two journalists with their hands raised. We'll spend the last 10 minutes to give each journalist the opportunity to ask their questions.

Cover News:

My question is on CPI. The data released this morning shows that CPI is up 0.5% year on year, lower than the inflation-control target of 3% this year. So, which are the main control policies that have taken effect? What are your predictions for the CPI trend for the whole year? And do you believe that inflation will not be a main contradiction for China's economic performance this year? Thank you.

Yao Jingyuan:

China's Consumer Price Index (CPI) rose 1.1% year-on-year in June and 0.5% year-on-year in the first half of 2021. The CPI's moderate rise can still be attributed to the intensified efforts on supply-side structural reform. How can we keep the rise of the CPI under control? Food prices account for 30% of the CPI, which is the biggest component. To ensure the stability of food prices, the prices of pork are of utmost importance. We have attached great importance to pork prices since 2019. Governments at all levels have introduced favorable policies on land use for hog production, tax reduction and exemption, and encouragement of large-scale hog breeding, to name a few of them. As of the end of June, the number of pigs available for slaughter increased to 439.11 million, returning to the historically normal level. The supplies have thus been increased. Thanks to the supply-side structural reform, the CPI can be kept stable.

In terms of the CPI, if problems emerge in the overall market sales, then they are also related with structural issues. The principal contradiction facing Chinese society has evolved and is now that between the people's ever-growing needs for a better life and unbalanced and inadequate development. The supply of things to meet the people's needs for a better life is insufficient. For example, we all need green products, but the supply is far from sufficient.

Regarding the trend of the CPI in the second half of this year, I believe that it is likely to rebound especially in September. Due to the consumption peak brought about by the Mid-Autumn Festival and the National Day holiday as well as the consolidated progress of epidemic prevention and control, consumption and demand in September will increase, which may lead to a rise in prices. At the beginning of this year, China's CPI was set to rise no more than 3% year-on-year. There shouldn't be any problems accomplishing this target. However, we should also be aware that the rise in raw material prices will lead to the rise of the CPI; that the rise of oil prices will result in the rise of chemicals prices; and that the rise of fertilizer prices will cause the rise of food prices. People are concerned about a series of problems like these. The measures we take currently to ensure the supply of commodities and keep their prices stable have been rather effective. Therefore, although the CPI may rise for one or two months in the second half of 2021, I believe that its rise can be kept within 3% throughout this year. 

Xing Huina:

We will have the last question.

China Youth Daily:

My question is about employment. In the first half of 2021, China achieved 63.5% of its annual target of creating new urban jobs. Still, the employment pressure remains relatively high in the second half of this year, as there are 9.09 million new graduates from universities and colleges. The surveyed unemployment rate among those aged between 16 and 24 also stood at around 15%. How can we cope with such employment pressure in the second half of 2021? Thank you.

Yao Jingyuan:

In the first half of this year, China achieved 63.5% of its annual target of creating new urban jobs, but the employment of college graduates is indeed a big issue. This year, there are 9.09 million new graduates from China's universities and colleges, which is a record high. The figure last year was 8.74 million. Due to the impact of the pandemic, the employment of some graduates was delayed to this year. Thus, we also need to address the employment issue of some of last year's graduates. In addition, if there weren't the pandemic, hundreds of thousands of graduates would pursue further study overseas. But this figure also plummeted now. At the end of last year, I suggested that more graduate students be enrolled so as to provide opportunities and conditions for their further study. This year, the total number of the employment supply is unprecedented. As the graduation season is underway, I suggest Party committees and governments at all levels attach great importance to the employment of graduates and spare no efforts to create jobs. Flexible employment is an excellent measure as it provides sufficient choices for every young person. Flexible employment requires further policy support, such as the social security, so that young people in this sector can feel reassured when chasing their dreams. Measures should be taken to allow every graduate to land their ideal jobs and a satisfactory salary. 

You've raised a very important question, and this should be a major task for Party committees and governments at all levels in the second half of this year. Currently, the CPC Central Committee and the State Council has attached great importance to the issue. I believe the next six months will see solid and effective results.

Xing Huina:

Today's briefing is hereby concluded. I thank the two experts for their excellent explanations, which I believe is of great help for all the friends from the media. Goodbye.

Translated and edited by Wang Yiming, Wang Qian, Li Xiao, Zhang Rui, Gong Yingchun, Li Huiru, Wang Mengru, Huang Shan, Zhang Liying, Zhang Junmian, Cui Can, He Shan, Yuan Fang, Xu Xiaoxuan, Wang Zhiyong, Zhu Bochen, Zhang Tingting, Liu Qiang, 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:

Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

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

Date:

July 15, 2021

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). We are joined by Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS. Ms. Liu will first introduce the details concerning China's economic performance in the first half of 2021 and then answer your questions. 

Now, let's give the floor to Ms. Liu.

Liu Aihua:

Good morning, I'll start by briefing you all on China's economic performance in the first half of this year and then take your questions.

In the first half of the year, the steady and sound growth momentum of the national economy was further consolidated. In the first half of this year, faced with a complicated and changing environment both at home and abroad, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, continued to consolidate the achievements made in the epidemic prevention and control and the economic and social development, and implemented accurate macro policies. China's economy sustained a steady recovery with both production and demand picking up, employment and prices remaining stable, new driving forces beginning to quickly thrive, quality and efficiency enhancing, market expectations improving and major macro indicators staying within a reasonable range. The steady and sound growth momentum of the national economy was further consolidated.

According to the preliminary estimates, the gross domestic product (GDP) of China in the first half of the year was 53.22 trillion yuan, a year-on-year increase of 12.7% at comparable prices, 5.6 percentage points lower than that of the first quarter. Meanwhile, the average two-year growth was 5.3%, a 0.3 percentage points faster than that of the first quarter. By quarter, the year-on-year GDP growth for the first quarter was 18.3%, with an average two-year growth of 5%; and it was 7.9% for the second quarter, with an average two-year growth of 5.5%. By industry, in the first half of the year, the value added of primary industry was 2.84 trillion yuan, a year-on-year growth of 7.8%, with an average two-year growth of 4.3%; secondary industry was 20.72 trillion yuan, a year-on-year growth of 14.8%, with an average two-year growth of 6.1%; and the tertiary industry was 29.66 trillion yuan, a year-on-year growth of 11.8%, with an average two-year growth of 4.9%. The quarter-on-quarter GDP growth of the second quarter was 1.3%.

First, summer grain witnessed another bumper harvest, while production of animal husbandry grew steadily.

In the first half of the year, the value added of agriculture (crop farming) went up by 3.6% year-on-year, a 0.3 percentage points faster than that of the first quarter, with an average two-year growth of 3.7%. Specifically, in the second quarter it grew by 3.7%, a 0.4 percentage points faster than that of the first quarter. The overall output of summer grain was 145.82 million tons (291.6 billion jin), 2.97 million tons (5.93 billion jin) higher than that of last year, an increase of 2.1%. The structure of crop farming continued to be optimized, as sown areas for cash crops like rapeseeds increased. In the first half of the year, the output of pork, beef, mutton, and poultry was 42.91 million tons, up by 23% over the same period last year. Specifically, the output of pork increased by 35.9%; milk rose up by 7.6%; and eggs were down by 4.1%. By the end of the second quarter, 439.11 million pigs were registered in stock, a year-on-year growth of 29.2%. Specifically, 45.64 million were breeding sows, up by 25.7%.

Second, industrial production grew steadily and high-tech manufacturing grew fast.

In the first half of the year, the total value added of industrial enterprises above the designated size grew by 15.9% year-on-year, with an average two-year growth of 7%, a 0.2 percentage points faster than that of the first quarter. Specifically, that of the second quarter went up by 8.9% year-on-year. In June, the total value added of industrial enterprises above the designated size grew by 8.3% year-on-year, with an average two-year growth of 6.5%; and a month-on-month growth of 0.56%. In terms of sectors, in the first half of the year, the value added of mining went up by 6.2% year-on-year, with an average two-year growth of 2.5%; manufacturing was up by 17.1%, with an average two-year growth of 7.5%; and production and supply of electricity, thermal power, gas and water went up by 13.4%, with an average two-year growth of 6%. The value added of high-tech manufacturing went up by 22.6% year-on-year, with an average two-year growth of 13.2%. In terms of products, the production of new-energy automobiles, industrial robots and integrated circuits increased by 205%, 69.8%, and 48.1% year-on-year respectively, with average two-year growth all exceeding 30%. An analysis by types of ownership showed that the value added of the state holding enterprises went up by 11.9% year-on-year; share-holding enterprises went up by 15.8% year-on-year; enterprises funded by foreign investors and investors from Hong Kong Special Administrative Region (SAR), Macao SAR, and Taiwan were up by 17% year-on-year; and private enterprises were up by 18.3% year-on-year. In June, the Manufacturing Purchasing Managers' Index of China was 50.9%, staying above the threshold for 16 months in a row. The Production and Operation Expectation Index was 57.9%.

In the first five months, the total profits made by industrial enterprises above the designated size were 3.42 trillion yuan, up by 83.4% year-on-year, with an average two-year growth of 21.7%. The profit rate of the business revenue of industrial enterprises above the designated size was 7.11%, 2.05 percentage points higher than that of the first five months of 2020.

The service sector recovered steadily with market expectation picking up.

The first half of the year witnessed a steady recovery of the tertiary industry. Specifically, the value added of the tertiary industry for the second quarter increased by 8.3% year-on-year, with an average two-year growth of 5.1%; that for the first quarter increased by 15.6% year-on-year, with an average two-year growth of 4.7%. Specifically, in the first half of the year, the value added of transportation, storage and postal services and information transmission, software and information technology services increased by 21% and 20.3% year-on-year respectively, with average two-year growth increasing by 6.9% and 17.3% respectively. In June, the Index of Services Production increased by 10.9% year-on-year, with an average two-year growth rate of 6.5%. In the first five months, the business revenue of service enterprises above the designated size went up by 31.9% year-on-year, with an average two-year growth of 11.1%, a 0.2 percentage points higher than that of the first four months.

In June, the Business Activity Index for services was 52.3%, staying above the threshold for 16 months in a row. Specifically, the Business Activity Index for sectors closely related with online consumption such as express mail services, telecommunication, broadcast, television and satellite transmission services, internet, software and information services stayed within the expansion range of 57% and above. Monetary and financial services and insurance stood within the expansion range of 60% and above. In terms of market expectation, the Business Activities Expectation Index was 60.4%, continuing to stay within the expansion range.

Fourth, market sales improved gradually and sales of upgraded consumer goods witnessed accelerated growth.

In the first half of this year, the total retail sales of consumer goods reached 21.19 trillion yuan, up by 23% compared with the previous year, registering a two-year average growth of 4.4%, 0.2 percentage point faster than that of the first quarter; and the total retail sales of the second quarter went up by 13.9% year-on-year, with a two-year average growth of 4.6%. In June, the total retail sales of consumer goods reached 3.76 trillion yuan, up by 12.1% year-on-year, with a two-year average growth of 4.9%, and up by 0.70% month-on-month. In the first half of this year, in terms of regions, the retail sales of consumer goods in urban areas reached 18.41 trillion yuan, up by 23.3% year-on-year, with a two-year average growth of 4.4%, and the retail sales of consumer goods in rural areas stood at 2.78 trillion yuan, up by 21.4%, with a two-year average growth of 4%. Grouped by consumption patterns, the retail sales of goods reached 19.02 trillion yuan, up by 20.6% year-on-year, with a two-year average growth of 4.9%; catering revenue was 2.17 trillion yuan, up by 48.6% year-on-year and basically the same as that of the first half of 2019. Grouped by categories, the year-on-year growth rates for 18 categories of goods by enterprises above the designated size all exceeded 10%, among which, over 70% of categories of goods witnessed year-on-year growth rates exceeding 20%. In terms of the two-year average growth, excluding petroleum products, retail sales of other categories of goods all witnessed positive growth, among which, the two-year average growth rates of nine categories, including sports and recreational articles, communication equipment, cosmetics, and cultural and office supplies, exceeded 10%. Online retail sales reached 6.11 trillion yuan, with a year-on-year growth of 23.2% and a two-year average growth of 15%, 1.5 percentage points faster than that of the first quarter. Specifically, the online retail sales of physical goods reached 5.03 trillion yuan, up by 18.7%, with a two-year average growth of 16.5%, 1.1 percentage points faster than that of the first quarter. This accounted for 23.7% of the total retail sales of consumer goods, 1.8 percentage points higher than that of the first quarter.

Liu Aihua:

Fifth, investment in fixed assets continued to recover and the two-year average growth of investment in manufacturing sector accelerated.

In the first half of this year, the investment in fixed assets (excluding rural households) reached 25.59 trillion yuan, up by 12.6% year-on-year, and it grew by 0.35% month-on-month in June. The two-year average growth rate reached 4.4%, 1.5 percentage points faster than that of the first quarter. In terms of sectors, in the first half of this year, investment in infrastructure was up by 7.8% year-on-year, with a two-year average growth of 2.4%, a slight decrease compared with the first five months. Investment in manufacturing was up by 19.2% year-on-year, with a two-year average growth of 2.0%, 1.4 percentage points faster than that of the first five months. Real estate development was up by 15% year-on-year, with a two-year average growth of 8.2%, a slight decrease compared with the first five months. The floor space of commercial buildings sold reached 886.35 million square meters, up by 27.7% year-on-year, with a two-year average growth of 8.1%. The total sales of commercial buildings reached 9.29 trillion yuan, up by 38.9% year-on-year, with a two-year average growth of 14.7%. In terms of industries, investment in the primary industry went up by 21.3% year-on-year, with a two-year average growth of 13.2%. Investment in the secondary industry was up by 16.3% year-on-year, with a two-year average growth of 2.9%. Investment in the tertiary industry was up by 10.7% year-on-year, with a two-year average growth rate of 4.8%. Private investment was up by 15.4% year-on-year, with a two-year average growth rate of 3.8%. Investment in high-tech industries grew by 23.5% year-on-year, with a two-year average growth of 14.6%, of which the investment in high-tech manufacturing and high-tech services increased by 29.7% and 12% year-on-year respectively and their average two-year growth rates reached 17.1% and 9.5% respectively. In terms of high-tech manufacturing, investment in the manufacturing of computers and office equipment and in the manufacturing of medical equipment, measuring instruments and meters grew by 47.5% and 34.2% year-on-year respectively and their two-year average growth rates reached 26.3% and 18.7% respectively. In terms of high-tech services, the investment in e-commerce services and in research, development and design services went up by 32.9% and 28.4% year-on-year and their two-year average growth rates reached 32.5% and 15.9%. The investment in social sectors went up by 16.4% year-on-year, with a two-year average growth rate of 10.7%, among which the investment in health and education went up by 35.5% and 14.2% year-on-year, with a two-year average growth of 24.9% and 12.5% respectively.

Sixth, imports and exports of goods grew fast and the trade structure continued to optimize.

In the first half of this year, the total imports and exports of goods expanded by 27.1% year-on-year to reach 18.07 trillion yuan. The total value of exports was 9.85 trillion yuan, up by 28.1% year-on-year. The total value of imports was 8.22 trillion yuan, up by 25.9% year-on-year. The trade balance was 1.63 trillion yuan in surplus. The trade structure continued to improve. In the first half of this year, the exports of mechanical and electrical products accounted for 59.2% of the total value of exports, up by 0.6 percentage point over the same period last year. The imports and exports of general trade accounted for 61.9% of the total value of imports and exports, up by 1.7 percentage points over the same period last year. The imports and exports by private enterprises accounted for 47.8% of the total value of imports and exports, up by 2.8 percentage points over the same period last year. In June, the total value of imports and exports was 3.29 trillion yuan, an increase of 22% year-on-year. The total value of exports was 1.81 trillion yuan, up by 20.2% year-on-year. The total value of imports was 1.48 trillion yuan, up by 24.2% year-on-year.

Liu Aihua:

Seventh, consumer prices rose mildly and producer prices for industrial products remained at a high level.

The consumer price index (CPI) went up by 0.5% year-on-year in the first half of this year, while remaining flat year-on-year in the first quarter. In June, consumer prices went up by 1.1% year-on-year, 0.2 percentage point slower than May, and down by 0.4% month-on-month. In the first half of this year, consumer prices went up by 0.6% in urban areas and 0.4% in rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol were up by 0.4% year-on-year; clothing remained the same year-on-year; housing was up by 0.2%; articles and services for daily use were up by 0.1%; transportation and communication were up by 1.9%; education, culture and recreation were up by 0.9%; medical services and health care were up by 0.3%; and other articles and services went down by 1.1%. In terms of food, tobacco and alcohol prices, prices for pork went down by 19.3%, grain was up by 1.2%, fresh fruits were up by 2.6% and fresh vegetables were up by 3.2%. Core CPI, excluding the prices of food and energy, went up by 0.4%, after remaining the same year-on-year in the first quarter.

In the first half of this year, producer prices for industrial products went up by 5.1% year-on-year, 3 percentage points faster than the first quarter. In June, it grew by 8.8% year-on-year, 0.2 percentage point slower than in May. In the first half of this year, the purchasing prices for industrial producers went up by 7.1% year-on-year, 4.3 percentage points faster than the first quarter. It went up by 13.1% year-on-year and 0.8% month-on-month in June.

Eighth, the surveyed unemployment rate in urban areas was the same as last month and employment was generally stable.

In the first half of this year, 6.98 million new jobs were created in urban areas, which meant that 63.5% of the whole year target was achieved. In June, the surveyed unemployment rate in urban areas was 5%, the same as in May and 0.7 percentage point lower than the same period of last year. The surveyed unemployment rate of the population with local household registration was 5% and that of the population with non-local household registration was 5.1%. Specifically, the surveyed unemployment rates of the population aged from 16 to 24 and from 25 to 59 were 15.4% and 4.2%, respectively. The urban surveyed unemployment rate in 31 major cities was 5.2%, the same as that of May. The employees of enterprises worked 47.6 hours per week on average, 0.3 hours more than in May. By the end of the second quarter, the number of rural migrant workers totaled 182.33 million.

Liu Aihua:

Ninth, resident income continued to grow and the ratio of per capita disposable income between urban and rural residents narrowed.

In the first half of this year, China's per capita disposable income of residents was 17,642 yuan, a nominal increase of 12.6% over that of last year, which was mainly due to a low base in the first half of last year. The two-year average growth rate reached 7.4%, 0.4 percentage point faster than that of the first quarter. The real growth was 12% year-on-year after deducting price factors, registering a two-year average growth of 5.2%, which was slightly slower than overall economic growth but generally growing at the same pace. In terms of permanent residence, the per capita disposable income of urban residents was 24,125 yuan, a nominal growth of 11.4% and a real growth of 10.7% year-on-year. The per capita disposable income of rural residents was 9,248 yuan, a nominal growth of 14.6% and a real growth of 14.1% year-on-year. In terms of sources of income, the income from wages and salaries, net operative income, net property income and net transfer income grew by 12.1%, 17.5%, 15%, and 9% year-on-year nominally. The per capita income of urban residents was 2.61 times that of rural residents, 0.07 less than the same period last year. The median of the nationwide per capita disposable income was 14,897 yuan, an increase of 11.6%.

In general, the national economy has sustained a steady recovery in the first half of the year, delivering a stable performance with a consolidated foundation and good momentum of growth. However, we are also aware that the global epidemic development brings many external instabilities and uncertainties, and the unbalanced recovery of the domestic economy demands more efforts to enhance the foundation for steady recovery and growth. Next, we will uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guide, and stay committed to the general principle of pursuing progress while ensuring stability in accordance with policy decisions and plans of the Central Economic Work Conference and the Report on the Work of Government to better coordinate epidemic prevention and control with economic and social development. We will continue to deepen supply-side structural reforms and unlock the potential of domestic demand. We will step up efforts to bail out enterprises. We will accelerate reform and opening-up, and coordinate all work to ensure that the economy operates within an appropriate range. We must make solid progress in high-quality development, and redouble our efforts to fulfill the targets and tasks for economic and social development this year. 

That's all for my introduction. I will now answer your questions.

Xing Huina:

Thank you, Ms. Liu. Now the floor is open to questions. Please state the name of the news outlet you work for before asking questions.

CCTV:

From the data just released, we note that China's average two-year growth in the first half of the year is faster than that in the first quarter. What are the factors that are driving economic growth? What's your opinion on the general performance of China's national economy in the first half of the year? Thank you.

Liu Aihua:

Thank you for your questions. The newly released data of all sectors shows that in the first half of the year, we continued to expand and consolidate the achievements in coordinating epidemic control with economic and social development, and China's economy sustained a steady recovery, delivering a stable performance with a consolidated foundation and a good momentum of growth. Its characteristics can be reflected in five aspects.

First, China's economy continued to resume growth. China's GDP expanded 12.7% year-on-year in the first half and rose 7.9% year-on-year in the second quarter, with a 1.3% increase quarter-on-quarter. Average two-year growth stood at 5.5%, 0.5 percentage point higher than that in the first quarter. Judging from the relevant indicators, the total freight volume in the first half of the year jumped 24.6% year-on-year, bringing the average growth for the past two years to 7.2%. Total electricity consumption climbed by 16.1% year-on-year, putting the average two-year growth at 7%.

Second, the economic structure was adjusted and improved. First of all, the support of industries has been enhanced. The contribution of the value added of the service sector to economic growth reached 53% in the first half of the year, 2.1 percentage points higher than that in the first quarter. The manufacturing sector cut a larger share of the GDP. The value-added of the manufacturing sector accounted for 27.9% of the GDP in the first half of the year, 1.3 percentage points higher than that in the same period last year. Besides, consumption played an increasing role in driving economic growth. In the first half of the year, the final consumption expenditure contributed 61.7% to economic growth, 42.5 percentage points higher than the contribution of the total capital formation. The consumption of upgraded consumer goods saw rapid growth. In the first half of the year, retail sales of sports and entertainment goods, communication appliances and cosmetics enterprises above designated size all registered an average two-year growth of more than 10%. Meanwhile, investment in sectors of weakness grew fast. In the first half of the year, the average two-year growth of the investment in high-tech industries and the social domain stood at 14.6% and 10.7% respectively, 10.2 percentage points and 6.3 percentage points higher than the total investment respectively. Fourth, the gap between urban and rural incomes has narrowed, with the ratio of urban and rural per capita disposable personal incomes falling to 2.61 in the first half of the year, 0.07 lower than the same period last year.

Third, innovation drivers were strengthened. First of all, new market entities registered rapid growth. The Basic Unit Database compiled by the National Bureau of Statistics at the end of June shows that the number of legal entities exceeded 30 million for the first time, up 16.6% year-on-year. Besides, new industries and new products witnessed fast growth. In the first half of the year, the value-added of hi-tech manufacturing enterprises above designated size saw an average two-year growth of 13.2%, 0.9 percentage point higher than that in the first quarter. From January to May, the total profits of hi-tech enterprises above designated size in the service sector jumped 27.4% year-on-year, with an average two-year growth of 12.5%, 4.2 percentage points higher than that of the total service enterprises above designated size. In terms of products, the output of new-energy automobiles, industrial robotics and integrated circuits sustained rapid growth year-on-year in the first half of the year. Third, new forms and models of business was growing. In the first half of the year, online retail sales of goods registered an average two-year growth of 16.5%, accounting for 23.7% of total retail sales of consumer goods. Express delivery services exceeded 50 billion items in the first half of the year, close to the level of the entirety of 2018.

Fourth, the quality and efficiency of economic performance improved in general. First of all, the ability of enterprises to make a profit was enhanced. From January to May, the total profits of industrial enterprises above designated size surged by 83.4% year-on-year, with an average two-year growth of 21.7%. The profit rate of their revenues reached 7.11%, 2.05 percentage points higher than that in the same period last year. From January to May, the total profits of enterprises above designated size in the service sector skyrocketed by 1.5 times year-on-year. Besides, the fiscal revenue continued to increase. From January to May, revenue in the general public budget grew by 24.2% year-on-year. Third, the capacity utilization rate also rose. The rate of the industrial capacity utilization stood at 78.4% in the second quarter, 4 percentage points higher than that in the same period last year, or 1.2 percentage points higher than that in the first quarter.

Fifth, the people's wellbeing continued to improve. First of all, the overall employment situation remained stable. In the first half of the year, the survey-based urban unemployment rate registered 5.2% on average, 0.6 percentage point lower than that in the same period last year, or 0.2 percentage point lower than that in the first quarter. The figure is lower than the expected target of roughly 5.5%. A total of 6.98 million new urban jobs were added, accomplishing 63.5% of the targets and tasks over the whole year. By the end of the second quarter, the number of rural migrant workers reached 180 million, basically recovering to the level of the same period in 2019. Besides, consumer prices posted a modest growth, up 0.5% year-on-year in the first half, a relatively low level of growth. Third, growth in personal income was basically in step with economic growth. In the first half of the year, per capita disposable income climbed by 12% in real terms year-on-year, with an average two-year increase of 5.2%, basically in keeping with economic growth.

Based on the five aspects mentioned above, the national economy in the first half of the year sustained a steady recovery and witnessed the consolidation of its firm growth and sound momentum. At the same time, faced with the volatile pandemic situation and many uncertainties internationally, the domestic economic recovery remains uneven and more efforts are needed to consolidate steady recovery development. In the next step, following the decisions and plans of the Central Economic Work Conference and the government work report, we will continue to deepen supply-side structural reforms, release the potential of domestic demand, help bail enterprises out, promote high-quality development, and endeavor to complete the economic and social development target and tasks throughout the year. That's all about the first question. Thank you.

Bloomberg:

You mentioned the income just now. My question is about the income growth. The real growth of income in the first half was 5.2% on a real average, also on a two-year average basis, which was slower than the economic growth. The Ministry of Commerce said last week in the five-year plan the retail sales will grow 5% a year through 2025. How can the economy rebalance and the dual circulations be successful, if the income and retail sales grow much slower than the overall economy? Thank you. 

Liu Aihua: 

Thank you for your question. Your question was mainly about income in the first half of the year. According to the statistics we just released, the nationwide per capita disposable income of residents in the first half of the year grew by 5.2%, almost the same as the average 5.3% two-year growth of GDP during the same period. Considering the impact of the pandemic, it was not easy to realize a per capita income growth of 5.2%. From the perspective of structure, there were three structural elements propelling the income growth rate to reach 5.2%.

First, with the continuous and steady recovery of the economy, the employment situation was generally stable, and growth of income from wages and salaries advanced swiftly. In the first half of the year, the income from wages and salaries grew by 12.1% year on year, with an average two-year growth of 7.2%.

Second, local governments have stepped up measures such as raising pension standards, improving basic living security for people in difficulties, and providing social relief and temporary assistance timely to meet people's living needs. Per capita net transfer income grew by 9%, with an average two-year growth of 8.6%.

Third, with the epidemic now under control, business activities gradually resumed. The statistics reflect the situation, with net business income growing by 17.5% year on year in the first half of the year and by 5.6% on a two-year average basis. The growth was attributed to the economic recovery, which propelled the increase of employment and income, policy support from local governments for ensuring people's living needs, and also endeavors from every economic entity. Based on the above-mentioned aspects, we consider these achievements remarkable as the income growth was generally in step with the economic growth. 

Judging from these aspects, the internal driving force of the Chinese economy is increasing and the vitality of market entities is also growing. We hold that income growth at the next phase will also have a solid basis to provide strong support for consumption.

Bauhinia Magazine:

The statistics from the NBS showed that the added value of the "three new" economy, namely, new industries, new business formats, and new business models, have accounted for an increasing share of the GDP in recent years. What's your comment on the propelling effect of the "three new" economy on the overall economy? How should we promote the sustained and rapid development of the "three new" economy in the future?

Liu Aihua:

Thank you for your question. We released the statistics on the proportion of the "three new" economy against GDP last year. Here, I'll brief you first on their conditions in 2020.

Generally, against the backdrop of the great impact of the COVID-19 pandemic and the severe and complicated international situation, the new industries, new business formats, and new business models maintained rapid growth in 2020. The added value of the "three new" economy accounted for 17.08% of the country's GDP, up 0.7 percentage point year on year. The nominal growth of the "three new" economy grew by 4.5% year on year, 1.5 percentage points higher than that of the GDP growth during the same period. According to the statistics, their sustained and rapid growth and the increase of their proportion were attributed to four aspects.

First, a significant increase of scientific and technological investments. In 2020, China's R&D expenditure accounted for 2.4% of the GDP, 0.34 percentage point higher than that in 2015.

Second, the continuous expansion of scientific and technological talents. China has had the highest total number of R&D personnel in the world for the past eight consecutive years.

Third, the acceleration of scientific and technological industrialization. The integration of industrialization and informatization continues to deepen, and we have accelerated the application of research findings so that new industries keep developing rapidly. During the 13th Five-Year Plan period (2016-2020), the output of high-tech manufacturing saw an annual average growth of 10.3%, much higher than the output of industrial enterprises with annual revenue of 20 million yuan or more from their main business operations.

Fourth, the increasing support from government policies. The pandemic is a challenge but also an opportunity for the development of new industries. Our country addressed the challenge positively and turned the crisis into an opportunity by releasing a series of support measures targeting key sectors, such as accelerating the improvement of the technological innovation system with enterprises as the main body, and adopting tax reduction and exemption measures on R&D expenditure and other support policies to step up innovation and entrepreneurship. The leading role of innovation has been significantly enhanced, hence promoting the growth of new industries and new business models.

Judging from the situation in the first half of this year, the rapid growth of the "three-new" economy (new industries, new formats, and new business models) has continued. Just now I introduced to you the growth of the added value, and new products of the high-tech industry, as well as the growth of new business models. As you can see, the rapid growth of the "three-new" economy played an important role in the sustained and stable recovery of the national economy in the first half of this year. From a longer-term perspective, it also provides strong strategic support for accelerating the construction of a new development pattern. Thank you.

Hong Kong Economic Herald:

How should we look at the pressure of achieving peak carbon emissions and carbon neutrality targets ("dual carbon" targets) on economic operations? Some places are taking more radical measures to reduce energy consumption, such as restricting production on high-energy-consuming enterprises. Take coal power as an example, if the output limit is too large in the short term, it may cause instability in the supply of coal power, which would lead to power shortages in some regions, and also affect stable economic growth. How do you think local governments should handle the relationship between green transformation and stable growth? Thank you.

Liu Aihua:

Thank you for asking. Regarding the impact of the "dual carbon" targets on the economy in the short term, I think the current Chinese economy has shifted from a stage of rapid growth to a stage of high-quality development. Peak carbon emissions and carbon neutrality are not only our solemn commitment to the world, but also an inevitable requirement for high-quality development, and the only way to make progress in further modernization. Based on our current stage of development, we are still the largest developing country in the world and have not yet completed the process of industrialization. Given this, achieving peak carbon emissions and carbon neutrality is indeed a very heavy task with a lot of pressure.

We should realize that promoting green transformation and development may curb the short-term growth of some high-energy-consuming and high-emission industries. But at the same time, green transformation and development will also create new demands and give birth to new industries. Green industries such as energy conservation, environmental protection, and clean energy, will create new development opportunities. The green transformation and upgrading of traditional industries will also create huge market demands, so we should still seize this historical opportunity, actively respond to challenges, and promote China's economy to move steadily forward. Thank you.

Cover News:

I'd like to ask the spokesperson how she assesses the employment data in the first half of the year, and what the employment situation of college graduates is for this year? The data shows that the surveyed unemployment rate for those aged 16-24 reached 15.4%, an increase of nearly 2 percentage points from the end of the first quarter. How do you see this change in trend? Thank you.

Liu Aihua:

Thank you for your questions. You have just read our press release in great detail, and you have paid attention to the overall employment and structural issues. From the overall perspective of the first half of this year, the employment situation is generally stable. In the first half of the year, under the effects of a series of policies to reduce burdens, stabilize jobs, and expand employment, the surveyed national urban unemployment rate averaged 5.2% in the first half of the year – a decrease of a 0.6 percentage point from the same period last year, and a decrease of a 0.2 percentage point from the first quarter. Looking at the situations of each month, except for 5.5% in February, the other months were all below 5.5%.

The statistics of new urban job employment nationwide have already completed 63.5% of the annual target task. The surveyed unemployment rates in cities and towns in May and June were both 5%, which was a 0.7 percentage point lower than the same month of the previous year. The decline in the surveyed unemployment rate in cities and towns is mainly attributable to the continuous and stable economic recovery and employment stabilization policies. From the perspective of the unemployment rate of the main working-age population, it is even more outstanding. The unemployment rate of the main working-age population aged 25-59 fell to 4.2% in June. This was 1 percentage point lower than the same month of the previous year. From the perspective of month-to-month, it has also continued to fall.

Of course, while seeing the stability of the total amount, we must also see that there are prominent structural problems regarding employment. As you mentioned just now, with the arrival of the graduation season in June, more and more college graduates are entering the labor market for jobs, which will significantly increase the employment pressure and lead to a significant rise in youth unemployment rate. In June, the surveyed unemployment rate among urban youths aged 16-24 was 15.4%, an increase of 1.6 percentage points over the previous month, which is the same as the same month of the previous year.

Looking forward to the next stage, on the one hand, we should see that we are in a situation of epidemic prevention and control normalization, the economy is continuing to recover steadily, and the labor market is continuously picking up. Therefore, from what we currently have learned, this year's graduates have greater determination and anticipation of being employed than last year, and their job search activity has been significantly higher. But on the other hand, it is true that the number of college graduates this year has reached 9.09 million, a record high, so the employment pressure is indeed relatively high. Therefore, in the next stage, we give top priority to employment and continue to implement the policy of reducing burdens, stabilizing jobs, and expanding employment, as well strengthening employment aids to key groups, optimizing employment services, expanding employment capacity, and consolidating employment stability. Thank you.

CNR:

Having noted the sustained recovery of fixed-asset investment in the first half of 2021, what do you think of investment's role in stimulating economic growth? The two-year average investment growth rate still shows significant disparities compared with pre-epidemic levels. What measures should be taken to expand effective investment in the next phase? Thank you.

Liu Aihua: 

Thank you for your question. You focused on the estimation of China's investment and its trends in the next phase. In terms of monthly changes, the country's investment has seen a sustained and stable recovery in the first half of this year. The two-year average growth of fixed-asset investment in the first six months was 4.4%, up 1.5 percentage points from the first quarter, which was an acceleration. Investment has played a key role in further optimizing the supply structure regarding three aspects. First, the investment in high-tech industries grew rapidly. In the first half of 2021, the two-year average growth of investment in high-tech industries rose 14.6%, up 4.7 percentage points from the first quarter, among which the growth of investment in high-tech manufacturing and service industries sped up. Second, the investment in social sectors grew rapidly, with an average two-year growth of 10.7%, 1.1 percentage points faster than that of the first quarter, among which the investment in the health sector and social work went up by more than 20%. Third, the growth of private investment also accelerated. In the first half of the year, the two-year average growth of private investment grew by 3.8%, up 2.1 percentage points from the first quarter. Investment in high-tech industries has strong kinetic energy, while the investment in the social sectors shores up weaknesses, and the private investment reflects the market vitality. With the acceleration of all of these areas, effective investment has shown to play a key role in further optimizing the supply structure.

As for the next phase, the advantages supporting continued investment recovery are increasing. First, market vitality has gradually increased. According to the profits of industrial enterprises and service enterprises above the designated size from January to May, the performance of enterprises has improved, which will enhance their confidence and ability in investment. Second, financial support is relatively strong. In the first half of the year, the funds in place for fixed-asset investment rose by 16.8% year-on-year, and the growth rate exceeded that of the investments. Third, policies to stabilize investment continue to show positive effect. A batch of major projects set out in the 14th Five-year Plan is being deployed and advanced. As we know, in June, more than 10,000 large-scale projects worth 50 million yuan ($7.74 million) and above were newly included, an increase of 11.6% from the previous month. Fourth, in the long run, new industrialization, IT application, urbanization, and agricultural modernization all offer enormous opportunities for investment. There is huge potential for investment in promoting the renovation of urban infrastructure, implementing the rural vitalization strategy, optimizing and stabilizing the industry chains and supply chains, and accelerating the transformation and upgrading of traditional industries. Therefore, we believe that investment in the next phase will continue to maintain sustained recovery on the whole. Thank you.

CNBC: 

My question is about the impact of data in the second half of 2021, such as whether exports will continue to grow. We saw growth in the automobile consumption, which is somewhat different from June's data for the industry. What are the main factors behind this discrepancy? Thank you.

Liu Aihua: 

Thank you. Let me clarify the two questions. The first is about the estimation of the growth of foreign trade. The second is about the development of the automobile industry. First of all, with regard to foreign trade outlook, relevant departments announced the data for the first half of this year a few days ago. The figures showed that China's foreign trade in the first half registered rapid growth, which is a result of many factors, including the sustainable economic recovery both at home and abroad and a relatively low base last year. The country's foreign trade rose 27.1% year on year in the first six months, an increase of 22.8% from the same period in 2019 and a two-year average growth rate of over 10%. Foreign trade in the first half of this year performed well. As for the second half, we need to pay attention to two aspects: on the one hand, we will face a certain impact on the foreign trade environment resulting from the complex situation of the global COVID-19 pandemic, the relatively high pressure of rising prices in bulk commodities, as well as the unstable external environment and many uncertain factors. On the other hand, there are more favorable conditions for foreign trade. At present, global demand is recovering, and the domestic demand is rebounding. Meanwhile, Chinese enterprises' ability to adjust to external changes has increased over the years, showing strong resilience in development. Taking these factors into full consideration, China's foreign trade is expected to maintain rapid growth for the entire year.

Second, regarding your question about the automobile industry, data in the first six months showed that, despite having fallen in the last two months, the added value of the automobile industry in the first half of 2021 increased by 21.8% year-on-year, and the two-year average growth rate increased by 8.6%. Both are faster than the growth rate of China's value-added industrial output. However, the growth of the automobile industry is also facing certain constraints spanning from chip shortages to policy adjustments, which might bring about short-term constrains such as long supply cycles and rising costs. Nevertheless, for now, there is still a gap in car ownership per thousand people between China and developed countries, which shows the automobile industry still has plenty of room to grow. In the short run, driven by the signals of rising demand and prices, the production of integrated circuits will gradually step up in spite of the complicated external environment and the time-consuming recovery of the global production capacity. Generally speaking, we assume that the automobile industry will maintain relatively fast growth in the long run. Thank you.

Yicai: 

Since the beginning of 2021, prices of bulk commodities have been increasing, which has had an impact on the middle-and-down stream of the industrial chain and caused small and medium-sized enterprises (SMEs) to come under pressure in regards to earning profits. What are your views on price trend of bulk commodities and how should SMEs respond to this? In addition, prices of pork are continuously declining and have become the main drag for CPI. Do you believe that the pork prices have bottomed out? How do you view inflation throughout the year? Thank you.

Liu Aihua:

Thank you for your questions. You talked about at least two issues: one is about price trends among bulk commodities, and the other is related to the CPI trend.

In regard to price trend of bulk commodities: in the first six months, China's producer price index (PPI) growth averaged 5.1% year-on-year, 3 percentage points higher than that in the first quarter, according to current data. The accelerated PPI growth in the second quarter was mainly affected by the following factors: first, the economy is continuing recovering, while demand is expanding; second, it was influenced by the spike in prices of bulk commodities on the international market. This June, the global energy price index rose 92.6% year-on-year, and the non-energy price index climbed by 43.2%, with both being high; third, it was impacted by a low base over the same period last year. Affected by the pandemic, from February 2020, the PPI saw consecutive falls throughout the second quarter of last year, and the figure decreased by over 3% year-on-year for each month of the quarter. Therefore, the year-on-year growth of the PPI obviously rose in the second quarter of this year, bringing mounting cost pressures to middle-and-down stream enterprises and micro, small, and medium enterprises (MSMEs). Judging from the general situation, China boasts a strong industrial productive capacity and a sufficient supplying power in industrial products, although there remains some upward pressure caused by the surging prices of bulk commodities on the international market. Meanwhile, initial effects have been appearing as some departments recently implemented policies on safeguarding supply and stabilizing prices for bulk commodities. In June, the PPI rose 8.8% year-on-year, 0.2 percentage point slower than that was recorded in May. Therefore, the impacts of PPI growth can be generally controlled.  

Your second question relates to CPI trends and the prediction of pork prices. The CPI went up moderately by 0.5% year-on-year in the first half of the year, dropping 3.3 percentage points compared to the same period in 2020, and maintained its relatively low level over the past few years. In June, the consumer prices went up by 1.1% year-on-year, 0.2 percentage point slower than in May. Declining food prices may be the main reason for the drop in CPI growth rate. Food prices decreased 0.2% year-on-year in the first half of the year, while the figure in the same period of the last year was an increase of 16.2%. Declining food prices pushed down consumer inflation in the first half of the year by 0.04 percentage point and became a main influencing factor in price fluctuations. Pork prices, as you mentioned, have been continuously decreasing for nine consecutive months, with an average drop of 19.3% in the first half of the year, pushing down consumer inflation by 0.45 percentage point. We could say that the consumer prices rose mildly in the first half of the year, with the food prices, pork prices in particular, being the main reason for the slower CPI growth.

Non-food prices, meanwhile, rose 0.7% in the first half of the year, demonstrating a similar scale with the same period of last year, pushing up the CPI by 0.57 percentage point. Energy price surges were most prominent among non-food prices, with gasoline and diesel prices rising 8.5% and 9.2% respectively in the first half of the year, which jointly push up the CPI by 0.24 percentage point. Mild CPI growth in the first half of this year resulted from the declining food prices as well as a stable growth in non-food prices.

Regarding the three categories affecting CPI in the following phases: first, food prices. China reaped a bumper summer harvest in 2021 as we noted in yesterday's announcement, and grain prices are expected to be stable this year. Pork prices are expected to remain stable as hog production continues to recover and the country's purchase and storage policies provide support. Generally speaking, food prices will face mild upward pressure under the background of a bumper summer harvest and stable pork prices.

Second, the prices of industrial consumer goods. Price hikes in bulk commodities on the international market can drive a price increase in some industrial consumer goods. However, in the long run, the market supply of industrial consumer goods will remain generally sufficient, and the prices will not generate a large-scale increase as China boasts a strong supply and industrial production capacity as well as a complete industrial system .

Third, service prices. Service prices in the first half of this year were continuously affected by the sporadic resurgence of COVID-19 cases and rose 0.3% year-on-year, remaining at a low point in recent years. In the next stage, service prices will resurge to a certain extent as the nation's pandemic prevention and control situation continues to improve; the consumption demands in catering, accommodation, and tourism gradually recover; and the market gains more confidence as well as residents' income growth rates accelerate. But in general, service prices are expected to generate a small-scale increase considering the impact of regular epidemic prevention and control.

Taking into consideration development trends in the above three categories, the prediction that prices will register a moderate rise this year is based on necessary basis and conditions, so is meeting the consumer inflation target of around 3% for the year. Thank you!

Xing Huina:

Due to the time limit, we will take the final two questions.

21st Century Business Herald:

China's central bank recently announced cutting the reserve requirement ratio (RRR), which is interpreted as a move to ease policies in advance so as to address the significant downward pressure that the economy will be faced with in the second half of the year. What's your comment on this? At a symposium attended by experts and entrepreneurs held a couple of days ago, Premier Li Keqiang said that we should step up cross-cyclical regulation and address some particular cyclical risks. How to make the cross-cyclical regulation work? What are the cyclical risks currently facing the Chinese economy? Thank you. 

Liu Aihua:

Thank you for your question. I think your question is actually focusing on two aspects. One is about the economic outlook in the second half of this year, and the other is about the trajectory of macroeconomic policies. 

Let me begin with the first question. Regarding the economic outlook, we can see from the data that the economy continued to recover steadily in the first half of this year, and the supply-demand cycle was unimpeded. The economic fundamentals have laid a good foundation for the economic performance in the second half of this year. In terms of the factors affecting the economic trajectory in the second half, the factors supporting the further recovery and improvement of the economy, in general, are gradually accumulating and increasing. First, the internal driving force for economic growth is becoming more powerful. In the first half of this year, the contribution of domestic demand to economic growth reached 80.9%, up 4.9 percentage points from the first quarter. Market sales also witnessed a steady recovery. The average growth of the total retail sales of consumer goods in the first half-year over the past two years has been 4.4%, 0.2 percentage points higher than that of the first quarter. Investment has also been recovering steadily, with investment in fixed assets seeing a two-year average growth of 4.4% in the first half-year, up 1.5 percentage points from the first quarter. It shows that domestic demand is increasingly important in promoting economic growth. Second, growing confidence among market entities has been seen. In June, the Manufacturing Purchasing Managers' Index (PMI) was 50.9%, staying above the threshold for 16 months in a row. The non-manufacturing PMI and the composite PMI output index were both considerably above the threshold, indicating greater confidence among market entities in economic growth and growth dynamics. Third, the global economy has continued on its recovery trajectory, laying a foundation for the growth of external demand. The global composite PMI for June was 56.6%, which was among the best registered over the past 15 years. Global merchandise trade volume is expected to increase by 8% in 2021, according to the World Trade Organization's most recent forecast. An 8% projection shows that global trade recovery is getting faster, which ensures that external demand will maintain rapid growth. 

While the economic fundamentals, as well as supply and demand, have maintained a stable performance with good momentum for growth, macroeconomic policies have continued to provide support for the real economy and more policies have gradually been adopted to support individually-owned businesses as well as small and micro businesses. These are conducive to alleviating difficulties and solving the problems enterprises are faced with and will also inject new momentum to the market. Looking ahead to the second half of the year, many external destabilizing factors and uncertainties remain. Domestically, we have to face the reality of unbalanced economic growth, caused in part by the rising prices of the raw materials that you mentioned, which have put pressure on small and micro businesses, especially those in the middle and lower reaches, in terms of their production and operation. However, considering the general fundamentals, supply-demand cycle, market confidence, and the increasingly strong domestic demand, China's economy is expected to maintain a sustained and stable recovery in the second half of the year.

Regarding future macroeconomic policies, as I said just now, this year's overall economy will deliver a stable performance with a consolidated foundation and a good momentum for growth. On the one hand, we should be aware that the overall trend is positive. On the other hand, we should also understand that the current environment at home and abroad is complicated and that the rise in bulk commodity prices in particular, is putting great pressure on enterprises in terms of costs. Given the prominent operational problems, we should act in accordance with the decisions and deployments of the CPC Central Committee and the State Council, and focus on the present while keeping an eye on the future, ensuring cross-cyclical regulation and properly address possible cyclical risks. With a focus on fostering and boosting market entities, we need to press ahead with reforms to streamline administration, delegate power, improve regulation, and upgrade services to improve the business environment and provide more development opportunities for micro, small, and medium-sized enterprises, and lay a solid foundation for steady and sound economic growth. Thank you.  

Ta Kung Pao and Wen Wei Po:

The data shows that the value added to enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan increased by 17% year on year from January to June. What is your comment on this figure? Thank you. 

Liu Aihua:

Thank you for your question. You've checked the data very carefully. As you said, the value added to enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan increased by 17% year on year. Such a growth rate is higher than that of the industrial enterprises above the designated size. In the first half of this year, the total value added to the industrial enterprises above the designated size grew by 15.9% year on year. The 17% growth rate indicates that the investment from foreign investors and those from Hong Kong, Macao, and Taiwan have shown flexibility in responding to the economic fallout of the pandemic and adapting to the market changes. Moreover, our policies have been providing more support to enterprises and the real economy. In general, the increase of enterprises and industries invested in by foreign investors and those from Hong Kong, Macao, and Taiwan also confirms the recovery of our overall economy and indicates that the business performance of market entities is also improving. Thank you.

Xing Huina:

Thank you, Ms. Liu. Today's press conference is hereby concluded. Thank you to all of our friends from the media. Goodbye. 

Translated and edited by Wang Yiming, Wang Qian, Cui Can, Yuan Fang, Duan Yaying, Chen Xia, Mi Xingang, Wang Wei, Zhang Rui, Wang Zhiyong, Zheng Chengqiong, Li Huiru, Zhang Tingting, Huang Shan, Gong Yingchun, Liu Qiang, Jay Birbeck, and Tom Arnstein and Geoffrey Murray. 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

Sun Guofeng, director general of the monetary policy department at the PBC

Zou Lan, director general of the financial market department at the PBC

Chairperson:

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

Date:

July 13, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to this press conference about China's first-half financial statistics of 2021. We are delighted to invite Ms. Ruan Jianhong, spokesperson of the People's Bank of China (PBC) and director general of the statistics and analysis department at the PBC; Mr. Sun Guofeng, director general of the monetary policy department at the PBC; and Mr. Zou Lan, director general of the financial market department at the PBC, to meet with you to introduce the financial statistics and answer your questions.

Now, I give the floor to Ms. Ruan.

Ruan Hongjian:

Friends from the media, good afternoon. Since 2021, the PBC has resolutely implemented the deployments of the CPC Central Committee and the State Council; adopted a prudent monetary policy that is accurate, flexible, proper, and stable; maintained reasonable and ample liquidity; reduced the required reserve ratio; optimized the funding structure of financial institutions; and given full play to the targeted guiding role of structural monetary instruments such as refinancing, rediscount, and direct tools. We have continued to release the dividends of LPR reform, kept the increases in money supply and aggregate financing generally in step with economic growth in nominal terms, maintained the macro-leverage ratio basically stable, and built support for key areas and weaknesses in the real economy. 

First, total financial resources have grown appropriately and maintained reasonable and ample liquidity. In 2021, the financial system consolidated its achievements in coordinating epidemic control with economic and social development. We have put the real economy in a more prominent position, and the total financial resources increased appropriately. RMB loans for the first half of the year increased by 12.76 trillion yuan, a year-on-year increase of 667.7 billion yuan. The balance of the M2 money supply was 231.78 trillion yuan, an increase of 8.6% year-on-year and 0.3 percentage points higher than at the end of the previous month. The balance of aggregate financing was 301.56 trillion yuan, an increase of 11% year-on-year, and the same as seen at the end of the previous month. The growth rate of M2 and aggregate financing were generally in step with economic growth in nominal terms.

Second, significant results have been achieved in maintaining the basic stability of the macro-leverage ratio. In the first half of the year, the overall national economy continued to recover stably and the order of production and life was steadily restored, providing a basic guarantee for the stability of the macro-leverage ratio. In the first quarter of 2021, China's macro-leverage ratio was 276.8%, 2.6 percentage points lower than at the end of the previous year. The leverage ratios of non-financial enterprises, government departments, and households declined by 0.9, 1.3, and 0.4 percentage points, respectively, all of which fell by varying degrees. Judging from the economic recovery and debt growth in the second quarter, we expect the macro-leverage ratio to remain stable in the second quarter.

Third, the overall financing cost of the real economy has steadily decreased. Since the beginning of the year, the PBC has continued to improve the market-based interest rate formation and transmission mechanism and the PBC's policy interest rate system, optimize supervision over deposit interest rates, release the potential for LPR reform, and promote further reductions in actual loan interest rates. Meanwhile, two monetary policy tools directly concerning the real economy were also leveraged to reduce the financing costs of micro and small enterprises. In the first half of the year, the contract interest rate of new loans issued to micro and small enterprises was 5.18%, down by 0.3 and 1.06 percentage points than during the same period in 2020 and 2019. The contract interest rate for manufacturing loans was 4.13%, down by 0.25 percentage points, compared to the same period last year. In addition, the universal RRR cut has reduced capital costs among financial institutions by about 13 billion yuan per year, and transmission through financial institutions has promoted the reduction of overall financing costs.

Fourth, the financial sector has bolstered support for high-quality development. The financial system has implemented an innovative, coordinated, green, open, and shared development philosophy and built on the new development paradigm to promote high-quality economic development and increased support for technological innovation. As of the end of May, the rate of obtaining loan for small and medium sci-tech enterprises were 41.8%, while the loan balance increased by 8.75% over the beginning of the year, and the development of green finance was solidly promoted. We have improved the green financial standard system, established a climate and environmental information disclosure system, and encouraged the financial sector to increase support for green industries. We have also continued to develop inclusive finance. At the end of June, the balance of inclusive loans for micro and small firms reached 17.7 trillion yuan, a year-on-year increase of 31% and 18.7 percentage points higher than the growth rate of various loans in the same period. At the end of June, 38.3 million micro and small firms had received inclusive loans, a year-on-year increase of 29.2%.

Fifth, we have effectively controlled financial risks in key areas. By the end of the first quarter, the shadow banking assets, non-standard credit assets, and non-standard capital in the financial system dropped by about one-fifth, one-fourth, and one-fifth, respectively, compared to historical records. We have been exploring risk control mechanisms in small- and medium-sized financial institutions, and made progress in installing risk control mechanisms in small- and medium-sized financial institutions with high risks. We are also improving and establishing long-term financial regulation mechanisms for the real estate sector with a focus on stabilizing land prices, property prices, and people's expectations.

To sum up, the finance sector has been progressing smoothly with continued improvement in its structure. In the next step, the PBC will conscientiously implement the principles of the fifth plenary session of the 19th CPC Central Committee as well as the Central Economic Work Conference, uphold the underlying principle of pursuing progress while ensuring stability, keep a prudent monetary policy that is consistent, stable, and sustainable. We will deepen structural supply-side reforms in the finance sector, increase financial support for key sectors such as the private sector, small- and micro-businesses, rural vitalization, and green and low-carbon. We will continue to improve the adaptability and inclusiveness of the financial system and financial services and make contributions to reaching the second centenary goal.

Chen Wenjun:

Thank you, Ms. Ruan. The floor is now open to questions. Please identify the news organizations you represent before raising questions.

China Securities Journal:

What are the structural features of total social financing (TSF) in the first half of the year? How will they change in the second half of the year? Thank you.

Ruan Jianhong:

The TSF grew by 17.74 trillion yuan in the first half of the year, a drop of 3.13 trillion yuan year-on-year, but a 3.12 trillion yuan increase than the same period in 2019. At the end of June, the growth rate of TSF was 11%, leveling the same period in May, and was consistent with the nominal GDP growth. Therefore, our financial support toward the real economy is consistent with the overall economic growth.

Let's take a look at the TSF structure. We can see from the statistics that the structure shows some signs of divergence, which may affect our impression on the overall scale. Two reasons have contributed to the decelerated growth or accelerated decline compared to last year. The first is that shrinking shadow banking assets have led to a drop in off-balance-sheet financing. In the first half of the year, off-balance-sheet financing, including entrusted loans, trust loans, and undiscounted bankers' acceptances, declined by 843.6 billion yuan, a drop of 869.9 billion yuan year-on-year. Second, compared to last year's expanded government and corporate bonds to offset the impact of COVID-19 on the economy, this year's bond issuance has been normalized. At the same time, the reason for an accelerated growth in TSF compared to 2019 is the rise in RMB-denominated loans and stock financing. Specifically, RMB loans rose by 613.5 billion yuan in the first half of the year compared to the same period last year. In comparison, stock financing by non-financial companies reached 495.5 billion yuan, up by 249.4 billion yuan year-on-year.

In the second half of this year, we will continue to implement prudent monetary policies that are flexible, precise, reasonable, and moderate and will serve the development of the real economy. We expect the TSF to grow steadily and consistently with the nominal GDP growth. Thank you.

Thecover.cn:

In the financial statistics of the first half of the year, we noticed that RMB loans have increased by 12.76 trillion yuan, up by 667.7 billion yuan year-on-year. Loans to enterprises and public institutions increased by 8.37 trillion yuan. What's your opinion on the scale of loans to those enterprises? What will PBC do to further increase financial support to the real economy. Thank you.

Ruan Jianhong:

The RMB loans increased by 12.76 trillion yuan in the first half of the year, up by 667.7 billion yuan. In the end of June, the growth rate of RMB loans was 12.3%, up by 0.1 percentage points month-on-month and a decrease of 0.9 percentage points year-on-year, representing a steady growth over the high baseline last year. This year, our credit policy continues to serve the real economy, providing powerful support for high-quality economic growth.

You mentioned that loans to enterprises and public institutions rose by 8.37 trillion yuan in the first half of the year, down by 402.1 billion yuan. Specifically, short-term loans increased by 1.23 trillion yuan, a drop of 1.6 trillion yuan year-on-year, representing that the liquidity demand for businesses is returning to normal. At the same time, medium- and long-term loans increased by 6.62 trillion yuan, up by 1.77 trillion yuan year-on-year, indicating that financial institutions have provided strong support for the medium- and long-term investment in businesses.

According to the structure of medium- and long-term investment, the financial sector has provided steady and strong support to manufacturing, infrastructure, and the service industry (not including real estate). The structure of credit supply has continued to improve. 

Medium- and long-term loans to manufacturers increased rapidly. At the end of June, the outstanding balance of medium- and long-term loans to manufacturers grew by 41.6% year-on-year, up by 16.9 percentage points from the same period last year, and 24.8 percentage points higher than that of all industries, increasing by more than 40% for the fourth straight month. Specifically, medium- and long-term loans to high-tech manufacturers increased by 46.3%, continuing a relatively high growth rate. 

Medium- and long-term loans to the infrastructure industry also increased rapidly. At the end of June, the outstanding balance of medium- and long-term loans to the infrastructure industry increased by 17.3% year-on-year, up 5.4 percentage points from the same period last year. In the first half of the year, medium- and long-term loans to infrastructure increased by 2.49 trillion yuan, up by 967.4 billion yuan year-on-year. 

Support for the service industry (not including real estate) continued to grow. At the end of June, medium- and long-term loans to the industry grew by 19.1% year-on-year, 2.3 percentage points higher than that of all industries. Thank you. 

Economic Daily:

Micro, small and medium enterprises (MSMEs) have played an important role in promoting economic growth and stabilizing employment. In recent years, the PBC has rolled out a series of measures. What have been the results of these measures? What other innovative measures will be adopted to further support the development of MSMEs? Thank you. 

Zou Lan: 

This year, the PBC has firmly implemented the arrangements and decisions of the CPC Central Committee and the State Council to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and maintain security in the six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations). We have adhered to the principles of adopting long- and short-term policies and have addressed both the symptoms and root causes in order to improve financial services for market entities such as small and micro enterprises. We have made achievements in the following aspects. 

First, the financing of small and micro enterprises saw an increase in amount and scope and a decrease in cost. At the end of June, the outstanding balance of loans to small and micro businesses under inclusive financial services, as introduced by Ms. Ruan, amounted to 17.7 trillion yuan, increasing 31% year-on-year. A total of 38.3 million small and micro businesses were supported, increasing by 29.2% year-on-year. In May, the interest rate of loans to small and micro businesses with single-client credit lines under 10 million yuan was 4.93%, down by 0.3 percentage point year-on-year. 

Second, the two monetary policy instruments that can directly stimulate the real economy exerted remarkable effects. From 2020 to May of 2021, the financial institutes in the banking industry have postponed principal and interest repayments across China on 10.9 trillion yuan of loans and issued 6.3 trillion yuan in credit loans to small and micro businesses under inclusive finance services. 

Third, support for enterprises in key industries has been further expanded. By the end of May, a key enterprise database, including 383,000 key enterprises across China, was established. The financial institutes have provided loans of 7 trillion yuan to 180,000 enterprises, creating about 30 million jobs. 

Besides, in terms of reducing fees and making interest concessions, since this year, the PBC has been unleashing dividends of the LPR reform, improving supervision on deposit interest rates, and reducing the costs of debt for banks. We have launched 12 measures to cut fees for five categories of services, namely bank account services, RMB settlements, e-banking, bankcard use, and payment account services. We have decreased service charges for cash withdrawals across ATMs of different banks with the China Banking and Insurance Regulatory Commission. According to our estimates, annual service charge reductions following implementation of the measures will amount to 24 billion yuan, of which over 16 billion will be saved among small and micro enterprises and self-employed workers. In the first six months, the average interest rate in enterprise contracts was 4.41%, down by 0.28 percentage point year-on-year. In general, the financial system has intensified support for the real economy and made financing more convenient for enterprises; total financing costs decreased while ensuring stability. 

For the next step, the PBC will ensure the continuity and stability of policies and carry out the program to improve financial services for MSMEs. We will also introduce a specialized program themed “providing loans for small businesses, improving people's well-being” to scale up financial support for self-employed workers. We will continue to improve financial services for small and micro enterprises and other market entities. Thank you. 

CCTV:

At the end of last year, the Central Economic Work Conference required a prudent monetary policy that is flexible, precise, reasonable and appropriate. What direction will the monetary policy take in the second half of 2021? What will be the difference compared to the first half? Thank you. 

Sun Guofeng:

This year, the prudent monetary policy has been flexible, precise, reasonable, and appropriate, emphasized stability, and provided strong support for the real economy, achieving good results. 

First, the supply of money and credit and aggregate financing grew reasonably. At the end of June, the M2 money supply increased by 8.6% year-on-year. Aggregate financing grew by 11%. In the first six months, new RMB loans totaled 12.76 trillion yuan, an increase of 667.7 billion yuan compared to the same period last year, providing strong support for the real economy. 

Second, precise support was provided to key sectors and weak links such as small and micro enterprises and manufacturing. At the end of June, the outstanding balance of all-inclusive loans of small and micro businesses increased by 31% compared with the same period last year, up by 0.7 percentage point from the end of last year; the number of market entities supported by all-inclusive loans of micro and small businesses was 38.3 million, up by 29.2% compared with the same period last year; medium- and long-term loans to manufacturers increased by 41.6% compared with the same period last year, increasing by over 40% for four consecutive months. 

Third, overall financing costs have steadily dropped. The interest rate of business loans from January to June was 4.63%, down 0.16 percentage point compared to the figure of the previous year. The weighted average interest rate of inclusive finance lending to micro and small businesses was 4.93% in May, down 0.15 percentage point compared with last December. Currently, China's economy has maintained the momentum of stable and sound development, and overall price trends are under control. During our response to the pandemic last year, we persevered in implementing normal monetary policies, and the intensity gradually returned to normal after May 2020, and by the first half of this year had almost returned to its normal pre-pandemic state. China has been leading the world in macro policies. 

Next, the PBC will make stability a top priority, giving prominence to domestic situation and implementing policies with proper intensity and pace mainly according to economic situation and price trends at home. We will take into consideration the balanced domestic and external development and give better support to the real economy, creating an appropriate monetary and financial environment for the high-quality economic development. In terms of aggregate, the PBC will ensure that money supply and aggregate financing are generally in step with economic growth in nominal terms. In terms of structure, the PBC will support the green development and scientific and technological innovation of small and medium enterprises. In terms of prices, the PBC will consolidate the outcomes of lower loan interest rates in real terms and ensure that overall financing costs steadily drop. Thank you.

Nihon Keizai Shimbun:

Since the autumn of 2020, the PBC has expanded trials of the digital RMB. Last week, a vice-governor of the PBC mentioned that the number of selected users in the trial had reached 10 million. Up to now, how does the PBC assess the effectiveness of the trial? Thank you. 

Ruan Jianhong:

I will answer this question. In 2019, the digital currency trial was launched in the cities of Shenzhen, Suzhou and Chengdu, Xiongan New Area and Beijing 2022 Winter Olympic Games venues. In October 2020, the trial expanded to the cities of Shanghai, Changsha, Xi'an, Qingdao and Dalian, and Hainan province. The selection of participants in the digital RMB R&D pilot is based on major national development strategies, the coordinated regional development strategy, and the characteristics of local industries and economies. At present, the pilot provinces and cities cover the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei region, central, western, northeast, and northwest China, which are broadly representative and conducive to testing and assessing promising prospects of the digital RMB in different regions. 

The trial of the digital RMB follows the principle of stability, safety, and controllability, focusing on small and retail payments for some selected groups of users. During the trial, various sectors have shown a keen interest in the digital RMB, and users in the pilot areas are very active. The testing scenarios have included living costs, catering services, transportation, shopping, and government services. The digital RMB pilot programs are expanding in an orderly manner, with a gradual increase in application scenarios and innovations in application modes. The system is in a stable operation overall. Thank you. 

China Daily:

My question is about the achievements of financial measures for targeted poverty alleviation. How can we ensure that financial support can consolidate and expand the achievements in poverty alleviation and advance rural vitalization? Thank you. 

Zou Lan: 

Thanks for your question. In recent years, the PBC implemented the decisions and deployments of the CPC Central Committee and the State Council, improved the policy system and organizational system of financial measures for targeted poverty alleviation, and encouraged the financial sector to increase support to poverty-stricken areas. Since the battle against poverty, micro credit provided to the poor amounted to more than 710 billion yuan; poverty alleviation re-lending totaled 668.8 billion yuan; and targeted loans for poverty alleviation reached 9.2 trillion yuan, giving strong support to the complete victory in the battle against poverty. 

As of this year, the PBC also introduced a number of policies and measures and made solid efforts to make sure that financial support can consolidate and expand the achievements in poverty alleviation so as to help achieve rural vitalization. 

First, this includes strengthening top-level design. In June, the PBC issued opinions on financial support for consolidating achievements in poverty alleviation and comprehensively advancing rural vitalization, which adjusted and improved financial assistance policies. The PBC also introduced measures on appraisals and evaluations for financial institutions serving rural vitalization, stressing the incentive role of assessment and guiding more financial resources to be invested in the areas relating to agriculture, rural areas and the wellbeing of farmers. As of the end of June, the loans to agriculture, rural areas and farmers totaled 41.66 trillion yuan, up 10.1% year on year. 

Second, by giving full play to the guiding role of monetary policy tools. The PBC issued a notice to further give full play to the stimulating and guiding role of re-lending, saying that poverty alleviation re-lending can be extended in accordance with regulations. It also guides financial institutions to expand credit supply for rural vitalization by using monetary policy tools such as re-lending to agriculture, rural areas and farmers and small businesses. 

Third, by increasing support in key areas. In May, the PBC took the lead in issuing opinions on extending financial support for the development of new types of agribusinesses to promote the integrated development of primary, secondary, and tertiary industries in rural areas. 

Next, the PBC will promote the implementation of the measures that have already been introduced, focus on key areas such as key counties assisted in the country's rural vitalization drive, and increase financial support for them. We will ensure financial services for new-type agricultural business entities and strengthen financial support for food security, seed industry development, and other fields. We will also work hard to ensure risk prevention and strive to form a long-term, effective mechanism for financial support for rural vitalization. Thank you.

Phoenix TV:

We noticed that the year-on-year increase of PPI in June dropped by 0.2 percentage points from May to 8.8%, but it remained running at a high level. What do you project for the next PPI trend? Do you think this decrease will continue and, on the basis of the recent comprehensive RRR cut, is there any need for further RRR cuts or even interest rate cuts in the future? Thank you.

Sun Guofeng:

Recently, China's PPI has risen rapidly. This is due to the low base factor of the negative growth of PPI caused by the impact of the epidemic in the same period last year, as well as the imported impact of rising international bulk commodity prices. This year's phased increase in PPI should be viewed objectively. On the one hand, this is a high reading based on last year's low base. In this regard, we can use the overall perspective of three consecutive years - last year, this year, and next year - to observe the changes in PPI. On the other hand, historically, the PPI indicator itself has relatively large fluctuations, so it is not uncommon to see peaks and troughs over a period of a few months. Generally speaking, the rise of China's PPI is temporary, and it may remain relatively high in the second and third quarters of this year. But, with the gradual decline of the base effect and the weakening of the imported impact brought about by the recovery of global supply, PPI is expected to decline in the fourth quarter of this year and into next year.

The recent RRR cut is a regular liquidity operation after the monetary policy returned to normal, and the stance of prudent monetary policy has not changed. Thank you.

South China Morning Post:

Regarding the RRR cut, with the U.S. Federal Reserve has hinted a signal of policy tightening, is the central bank worried about the risks brought about by the differentiation of China's and the US' monetary policies, including RMB depreciation or capital outflow? What measures will be taken to handle these risks? Thank you.

Sun Guofeng:

Since 2020, China has always adhered to and implemented a prudent monetary policy, which not only strongly supports the real economy but also refrains from resorting to a deluge of strong stimulus policies. At the same time, in the light of the domestic epidemic prevention and control and the economic and financial situation, we have appropriately adjusted the intensity and pace of the policies. From February to April last year, due to the severe impact of the epidemic on the domestic economy, the monetary policy response was relatively large. Since May last year, the intensity of monetary policy has gradually stabilized. In the first half of this year, it has basically returned to the normal state before the epidemic, maintaining a leading position in global macro policies.

In the context of global economic integration, the economy and finance of various economies have mutual effects on one another. However, due to differences caused by their various states of epidemic prevention and control and economic recoveries, it is normal that the U.S. and China have different operations of their monetary policy. Currently, China's economy is stable and improving, and the stance of prudent monetary policy has not changed. The RRR cut is mainly in place to optimize the capital structure of financial institutions, improve financial service capabilities, and better support the real economy.

In the next stage, the monetary policy will focus on the domestic situations and prioritize stability. We will stick to a normal monetary policy, and maintain monetary policy independence. We will adjust the intensity and pace of our policies in the light of the domestic economic situation and price trends, take into account internal and external balances, and strongly support the real economy. At the same time, we will also pay close attention to the changes in the international economic and financial situations, taking ourselves as the mainstay and carry out international macro policy coordination to jointly foster a positive environment in order to promote the stable recovery of the global economy. Thank you.

CNBC:

I have two questions. The first question is about consumer loans: what can you tell us about the different types of consumer loans, especially in the context of varying consumer income? The second question is about non-performing assets: some recently published analyses and reports indicate that there are relatively large gaps in non-performing assets of banks across different regions. Has the central bank conducted research on this issue, and what risks need to be considered to protect the national financial system? Thank you.

Ruan Jianhong:

Let me answer your second question first. The statistics of non-performing assets are released by the supervisory authorities, so you can stay tuned with them for information updates.

Zou Lan:

In recent years, China's consumer loans have grown steadily, which is basically consistent with the growth trend of household consumption. At the end of June, the balance of RMB personal consumption loans increased by 13% year on year. Among them, short-term consumer loans increased by 11.1% and medium- and long-term consumer loans increased by 13.4%. With the economic and social development and the improvement of people's living standards, there is still much room for improvement in household consumption. The PBC will actively guide commercial banks to conduct consumer finance businesses in a prudent and standardized manner and strengthen the management of consumer loan use, giving full play to the positive role of consumer finance in supporting upgrades in household consumption and promoting "dual circulation." Thank you. 

Bloomberg:

I have two questions. First, will green finance re-lending be the new monetary policy tool to support the decarbonization policy? Second, how is the PBC preparing to handle the external shocks and also the impact of the Fed's policy tightening in the future? Thank you.

Sun Guofeng:

I will first answer your question regarding our tools to support carbon emission reduction. To implement the policy decisions and plans made by the CPC Central Committee and the State Council on accelerating green and low-carbon development and solidly carrying out work to achieve carbon peak and neutrality goals, the PBC is now working in an orderly manner to set up tools to support carbon emission reduction in accordance with the government work report and the requirements of the State Council executive meetings. The tools will provide targeted and direct support to the development of clean energy, energy conservation, environmental protection, and carbon emission reduction technologies, and will encourage more social funds to promote carbon emission reduction. As structural monetary policy tools that can provide direct support to the real economy, our tools will provide eligible financial institutions with low-cost funds and encourage them to offer financing at preferential interest rates for key projects with significant effects in carbon emission reduction.

The tools to support carbon emission reduction are being devised under the principles of marketisation, the rule of law and internationalization, and fully demonstrate openness and transparency. The tools are feasible, computable and verifiable, and provide targeted and direct support. "Feasible" means the tools will definitely provide support to key projects with significant carbon reduction effects, including those regarding clean energy, energy conservation, environmental protection, and carbon emission reduction technologies. "Computable" means financial institutions can calculate emission cuts supported by loans, and then disclose the information for public supervision. "Verifiable" means third-party organizations will be invited to verify the authenticity of the information released by financial institutions to ensure the effectiveness of the policies.

The tools to support carbon emission reduction give full play to the role of monetary policy tools in policy proclamation, enabling financial institutions and enterprises to better understand the importance of green transition. The tools also promote a green and low-carbon lifestyle and a circular economy among the public. They encourage investment and financing from non-government sources to flow into green and low-carbon sectors to help achieve carbon peak and neutrality goals. This is my answer to your first question.

As for your second question regarding the impact of the Fed's monetary policy shift, I have just covered this when answering previous questions. We have noticed the recent discussions about the Fed's tightening monetary policy. As for the Chinese financial market, the interest rate of 10-year government bonds now stands at about 3%, lower than that of the previous period. The RMB exchange rate is floating both ways and financial markets are running smoothly. As I just said, our economy has maintained steady and sound performance. Therefore, I think the discussion about the Fed's monetary policy shift has a relatively small impact on China's monetary policies and financial markets. Next, the PBC will carry out international macro-policy coordination, giving prominence to China's domestic situation and jointly making a positive voice in stabilizing and reviving the world economy. Thank you.

hb.dzwww.com:

Medium- and long-term household loans, which reflect the changing trend of property loans, increased by 3.43 trillion yuan ($529.6 billion) in the first half of 2021, the highest in recent years. However, the same period has witnessed at least two rounds of lending policies being tightened in the real estate market. Do these two facts contradict each other? What should we make of this data? Thank you.

Ruan Jianhong:

I will answer this question. According to the latest data, the outstanding balance of RMB loans to the real estate sector stood at 50.8 trillion yuan at the end of June, up 9.5% year on year. The growth rate of real estate loans was 2.2 percentage points lower than that at the end of last year, and 2.8 percentage points lower than that of total loans over the same period. The balance of real estate loans was 2.4 trillion yuan higher than that at the beginning of this year. The growth accounted for 18.9% of that of total loans over the same period, and was 569.9 billion yuan less than the same period last year.

Among them, the balance of real estate development loans was 12.4 trillion yuan, up 2.8% year-on-year. The growth rate was 3.3 percentage points lower than that at the end of last year. The balance was 343.3 billion yuan higher than that at the beginning of this year. The growth accounted for 2.7% of that of total loans over the same period, and was 401.2 billion yuan less than the previous year.

At the end of June, the balance of individual housing loans was 36.6 trillion yuan, up 13% year-on-year. The growth rate was 1.6 percentage points lower than that at the end of last year. The balance was 2.1 trillion yuan higher than that at the beginning of this year. The growth accounted for 16.7% of that of total loans over the same period, and was 160.2 billion yuan less than the previous year. Thank you.

Chen Wenjun:

Thanks to our speakers. Today's press conference concludes here. Thank you everyone.

Translated and edited by Wang Yiming, Wang Qian, Guo Yiming, Li Huiru, Liu Jianing, Yuan Fang, Yang Xi, Huang Shan, Zhang Rui, Zhang Junmian, Li Xiao, 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:

Li Kuiwen, spokesperson of the General Administration of Customs (GACC) and director of the Department of Statistics & Analysis of the General Administration of Customs 

Chairperson:

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

Date:

July 13, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning! Welcome to this press conference from the State Council Information Office (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 General Administration of Customs (GACC) and director of the Department of Statistics & Analysis of the General Administration of Customs, who will introduce China's import and export performance in the first half of 2021 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 2021, and then answer your questions.

In the first half of this year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China continued to consolidate its achievements in coordinating epidemic control with economic and social development. Foreign trade continued its stable and sound performance and registered a historical high. According to statistics from the GACC, China's total foreign trade expanded 27.1% year on year to 18.07 trillion yuan (about $2.79 trillion) in the first half of the year. Exports grew by 28.1% to 9.85 trillion yuan, while imports increased by 25.9% to 8.22 trillion yuan. Compared with the same period in 2019, foreign trade, exports and imports increased by 22.8%, 23.8%, and 21.7% respectively. Specifically, there were six main features which I will outline now

First, imports and exports have continued to increase year on year for 13 consecutive months. In June, the country's imports and exports went up 22% year on year to 3.29 trillion yuan, marking a positive growth for the 13th month in a row since June of 2020.

Second, China's trade with its main trading partners maintained sound growth. In the first half of the year, China's trade with its top three trading partners, the Association of Southeast Asian Nations, the European Union, and the United States, stood at 2.66 trillion, 2.52 trillion, and 2.21 trillion yuan, up 27.8%, 26.7%, and 34.6% respectively. Meanwhile, trade with Japan reached 1.18 trillion yuan, an increase of 14.5%. During the same period, China's trade with countries along the Belt and Road rose 27.5% year on year while trade with countries of the Regional Comprehensive Economic Partnership grew 22.7% year on year.

Third, China's general trade grew rapidly. In the first half of the year, China's general trade stood at 11.19 trillion yuan, an increase of 30.7%, accounting for 61.9% of the country's total foreign trade value, an increase of 1.7 percentage points over the same period last year. Meanwhile, exports reached 6.02 trillion yuan, up 32.1%, while imports reached 5.17 trillion yuan, up 29.2%. During the same period, the imports and exports of processing trade climbed 15.8% to 3.89 trillion yuan, accounting for 21.5%.

Fourth, the main role of the private sector has been consolidated. In the first half of the year, the imports and exports of the country's private businesses reached 8.64 trillion yuan, an increase of 35.1%, which accounted for 47.8% of the total foreign trade value, up 2.8 percentage points over the same period last year. It continued to rank as China's biggest foreign trade entity. In the same period, the imports and exports of foreign-invested enterprises marked 6.61 trillion yuan, an increase of 19%; while state-owned enterprises accumulated 2.75 trillion yuan in imports and exports, an increase of 23.8%.

Fifth, the proportion of exports of electromechanical products has increased. In the first half of the year, China's exports of electromechanical products increased by 29.5% to 5.83 trillion yuan, making up 59.2% of the total exports, and increasing 0.6 percentage points year on year. Exports of automatic data processing equipment and its parts, mobile phones, and automobiles increased by 17%, 23.3%, and 101.4%. In the same period, exports of labor-intensive products increased by 17.1%, and pharmaceutical materials and medicines increased by 93.6%.

Sixth, imports of iron ore, natural gas and other bulk commodities increased. In the first half of the year, China imported 561 million tons of iron ore, up 2.6%; 59.82 million tons of natural gas, up 23.8%; 48.96 million tons of soybeans, up 8.7%; 15.3 million tons of corn, up 318.5%; and 5.37 million tons of wheat, up 60.1%. During the same period, imports of crude oil stood at 261 million tons, down by 3%.

Generally speaking, in the first half of the year, China's foreign trade has stayed on an upward trajectory since the latter half of last year, with a relatively rapid growth rate, laying a solid foundation for the steady and high-quality growth of foreign trade throughout the whole year. China Customs will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and implement the spirit of the speech made by General Secretary Xi Jinping at the ceremony celebrating the CPC's centenary. China Customs will stick to its new development philosophy and foster a new development paradigm in the new development stage; ensure the six priorities and stability in six areas (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations); and strive to achieve higher-level opening-up and quality development of foreign trade. GACC will contribute to ensure a good start of the 14th Five-Year Plan (2021-2025) in the development of foreign trade.

Next, I'll be answering your questions.

Shou Xiaoli:

Thank you, Mr. Li. Now the floor is open to questions. Please identify your news outlet before raising questions.

CCTV:

You just introduced that China's foreign trade achieved double-digit year-on-year growth in the first half of this year, demonstrating positive growth for 13 consecutive months. In your opinion, what are the main drivers of China's continuous growth in foreign trade? Is China able to maintain such steady and positive trend in foreign trade in the second half of the year? And what's your forecast for China's foreign trade in the second half of the year? Thank you.

Li Kuiwen:

Thank you for your questions. In the first half of this year, China's domestic economy has been stable, strong, and improved steadily, and foreign trade increased rapidly. In the first half of this year, China's total imports and exports hit record high of 18.07 trillion yuan. The nation's total foreign trade expanded by 22.8% compared with the same period of 2019, posing positive growth for 13 consecutive months. The momentum of steady growth in foreign trade was further consolidated. Specifically, the main reasons driving the continuous growth include:

First, thanks to the stable and growing domestic economy, the vitality of market entities has been stimulated, which provided strong support for the steady growth of foreign trade. In the first half of the year, the Chinese economy steadily recovered; major economic indicators, including industrial added value, fixed asset investment, and total retail sales of consumer goods improved continuously; and production and demand continued to rebound. This has laid a solid foundation for the steady growth of foreign trade. In particular, relying on China's policies to ensure steady growth in foreign trade, the number of platforms of high-level opening up increased rapidly, and the advantages of new trade forms and models became more prominent. The data shows that in the first half of the year, imports and exports from comprehensive bonded zones increased by 29.1%, imports and exports from pilot free trade zones increased by 32.1%, and imports and exports of the Hainan Free Trade Port increased by 46.1%, all significantly higher than the country's overall growth rate. In the same period, imports and exports of cross-border e-commerce grew 28.6%, and exports of market purchases increased by 49.1%. In the first half of the year, the number of Chinese enterprises with actual import and export performance increased from 36,000 to 479,000. Meanwhile, Chinese foreign trade enterprises spared no efforts to maintain stability in production and foreign trade, and the amount of imported and exported goods increased by 16% and 29%, respectively. This bolstered the security and stability of international industrial chain and supply chain and further consolidated the sound momentum of China's foreign trade development.

Second, the sustained recovery of the global economy has boosted external demand. In the first half of the year, several international organizations upgraded their forecasts for this year's global economic growth. For example, in April, the International Monetary Fund (IMF) raised its global growth forecast for 2021 to 6%. In June, the World Bank raised its estimate to 5.6%. The global economic recovery has boosted international trade and China's exports. In the first half of the year, China's exports to the U.S., the EU, and ASEAN countries increased by 31.7%, 25.5%, and 27.8%, respectively, while China's exports to Latin America and Africa grew by 47% and 27.7%, respectively.

In addition, last year's lower base and price factors also, to some extent, helped drive the growth of foreign trade. In the first half of last year, China's import and export volume fell by 3.3% year-on-year, only equivalent to the same period in 2018. This year, the overall price of global commodity markets has shown an upward trend. At the end of June, the CRB index, a representative indicator of global commodity markets, increased by over 25% since the beginning of 2021 and more than doubled compared with the lowest point in the first half of last year. Influenced by the rising prices of global major commodities, China's import price index is estimated to be 108.5 for the first half of this year, while the contribution rate of price to import growth is estimated to be 35.4%.

As for China's foreign trade outlook in the second half of the year, in general, as COVID-19 keeps wreaking havoc in many parts of the world, China's foreign trade still faces uncertainties in a complex global epidemic environment. In the second half of last year, China's total imports and exports grew 27% compared with the first half of last year. With a higher base, the growth rate of China's foreign trade may slow down in the second half of this year. However, imports and exports are still expected to maintain relatively rapid growth throughout the year. Thank you.

Nikkei: 

In the first half of the year, only imports of crude oil declined among major commodities. What's the reason according to the GACC? Thank you.

Li Kuiwen:

As I mentioned just now, international commodity prices grew rapidly in the first half of the year. Since the second half of 2020, the prices of international crude oil and iron ore have skyrocketed. Customs statistics show the average price of crude oil imports in China in the first half of the year stood at 2,888.5 yuan per tonne, up by 20.5% year-on-year, while that of iron ore imports into China jumped 67.3% to 1,075.8 yuan per tonne. We should recognize that the Chinese economy continues its stable and sound performance, and factors conducive to the stable operation of prices are increasing. Recently, the State Council has made policies to ensure the stable supply and price of commodities, and the policies are beginning to pay in terms of helping stabilize the market. Rising international commodity prices have temporarily increased enterprises' production costs, but the risks posed by imported inflation are manageable on the whole. Thank you.

BRTV:

Regarding consolidation of primate enterprises' leading role, as was just introduced, what factors support this development? What are the characteristics and highlights of private enterprises? Thank you. 

Li Kuiwen:

Thank you for asking. In recent years, internal forces driving China's foreign trade have strengthened and private enterprises have gradually become the top actor in China's foreign trade. In the first half of the year, foreign trade in the private sector increased by 35.1% to 8.64 trillion yuan, accounting for 47.8% of the total Chinese foreign trade, or a 2.8 percentage points increase. Specifically, exports increased by 35.6% to 5.59 trillion yuan, while imports rose 34.3% to 3.05 trillion yuan. The characteristics and highlights of China's private sector in the first half of the year are as follows:

First, imports and exports in the private sector have become more vibrant and resilient. Private enterprises have given full play to their advantages in initiative and flexibility of production and business operations to capture market opportunities. They also demonstrate a quick response to domestic and international market demand, showing greater vitality and resilience in foreign trade development. In the first half of the year, the growth of foreign trade, imports, and exports was 8, 7.5, and 8.4 percentage points higher than overall growth, respectively. Specifically, exports of household appliances, computers, pharmaceutical materials, and medicines rose by 46.2%, 38.7%, and 70.8%, respectively. Meanwhile, exports of metallic ores and ore sand, unwrought copper and copper materials, and cosmetics jumped by 66%, 65.2%, and 38.8%, respectively.

Second, the number of private enterprises witnessing record import and export performances has been increasing. In the first half of the year, that number rose by 37,000 year-on-year to 397,000, with records being witnessed by 82.8% of the total enterprises.

Third, regional development has become more balanced. Imports and exports of private enterprises in China's Midwest registered a 44.6% growth, 9.5 percentage points higher than the overall growth in the private sector. Eight of the top 10 private enterprises in import and export growth come from the Midwest.

Fourth, market expansion has been strengthening. In the first half of the year, imports and exports of private enterprises for the EU, the US, Japan, South Korea, and other traditional markets grew 31.4%, 45.7%, 19.8%, and 28.3%, respectively. Meanwhile, imports and exports among private enterprises for the BRI partner countries climbed 34.5%, of which imports and exports to ASEAN countries increased 37.3%. Thank you.

Commercial Radio Hong Kong:

Guangdong province saw a COVID-19 outbreak in May and June, and commodity prices continued to rise. What impacts did the two factors have on China's exports in the second quarter, especially in June? Thank you.

Li Kuiwen:

Thanks for your question. In late May, COVID-19 hit Guangzhou and Shenzhen, causing congestion in some ports. Feedback shows that the port congestion had a certain impact on deliveries and taking deliveries by some enterprises, and the freight rates of relevant air routes fluctuated to some extent. As the epidemic prevention and control situation improves in the relevant regions, port capacity is also gradually recovering. On June 24, the overall operations in Yantian Port had fully resumed, and other ports are also resuming their full operations.

The GACC acted rapidly to reduce congestion in some ports. By strictly enforcing epidemic prevention and control measures and guaranteeing the clearance efficiency of imports and exports, GACC mobilizes personnel to ensure frontline supervision. For instance, Shenzhen customs has taken a series of measures to improve clearance efficiency, reduce congestion, and relieve operating pressure through innovations in logistics modes, speeding up the allocation of ships and containers between ports, optimizing examination modes, extending time limits for advance declarations, and flexibly using integrated customs clearance. Guangzhou customs, together with other local departments, has activated emergency plans to promote interconnection between ports in its jurisdiction, enhancing clearance time limit monitoring, optimizing regulatory resources, and speeding up examination and regulatory work to accelerate goods clearance. Now, at the main ports of southern China, the whole export clearance process by sea can be completed in one hour on average. There is no backlog due to customs supervision.

Next, customs will continue to improve the port business environment, and work hard to implement epidemic prevention and control measures and offer security clearance services. Thanks. 

CNBC:

I have two questions. Can you provide more details of European car exports, especially in the second quarter. The second question is about cross-border e-commerce: What is your analysis of the second-quarter data, especially that of June. 

Li Kuiwen:

I will first provide some data about trade between China and the European Union (EU). We are mutually main economic and trade partners with highly economic complementarity and huge potential for cooperation. Greater economic and trade cooperation between China and the EU will be beneficial to improving people's wellbeing, jointly addressing global challenges, and shoring up the recovery of the world economy. 

According to customs statistics, bilateral trade volume reached 2.52 trillion yuan in the first half of this year, a year-on-year increase of 26.7%, with exports hitting 1.51 trillion yuan, up 25.5%, and imports reaching 1.01 trillion yuan, up 28.5%. China-EU trade accounts for 13.9% of China's total foreign trade, making the EU China's second-largest trade partner after ASEAN. From April last year to June 2021, monthly bilateral trade maintained positive growth for 15 consecutive months, with almost eight months posting double-digit growth. In the first half of this year, 16.6% of our electromechanical products and 15.4% of labor-intensive products were exported to the EU, and 35.1% of our importing consumer goods, including cars, as you mentioned, were from the EU. The rapid growth of bilateral trade shows the vitality and resilience of China-EU trade cooperation.  

As for the cross-border e-commerce data, I have presented my findings during the general introduction just now. Thanks. 

South China Morning Post:

Could you please give us the latest news about China-U.S. trade and China's purchases of U.S. goods under the phase-one economic and trade agreement? A previous study shows that less than 70% of the phase-one agreement has been completed in the first five months of this year. What other measures are there to promote the accomplishment of purchasing goals in the deal? Thanks. 

Li Kuiwen:

Thank you for your questions. I will first brief you on China-U.S. trade in the first half of this year: Bilateral goods trade volume reached 2.21 trillion yuan, a year-on-year increase of 34.6%, and exports hit 1.64 trillion yuan, up 31.7%. Specifically, electromechanical exports reached 1.01 trillion yuan, up 34.2%, and labor-intensive exports hit 372.2 billion yuan, up 24.1%. As for specific products, exports of computers, cellphones, home appliances, garments, plastic products, and furniture have all increased.  

Imports from the U.S. reached 570.65 billion yuan in the first half of this year, up 43.9%, including 238.86 billion yuan in electromechanical products, up 13.4%, and 136.01 billion yuan in agricultural products, up 120.8%.

As for the progress for implementing the first phase of the China-U.S. trade agreement, related departments have already made statements, and I have no more information to add. Thanks.

China Daily:

Can you elaborate on the situation and the highlights of trade between China and Belt and Road countries in the first half of 2021? Thanks.

Li Kuiwen:

Thank you for your question. Since the Belt and Road Initiative was launched, China has seen an increase in trade with Belt and Road countries. Especially since last year, we have achieved fruitful outcomes as we offered mutual assistant and protection, and jointly overcame difficulties to deepen our trade and cooperation despite the impact of COVID-19. Official data from the GACC showed that China's imports and exports with Belt and Road countries expanded 27.5% year on year to 5.35 trillion yuan in the first half of the year, which was 0.4 percentage point higher than the growth of the country's overall foreign trade. It accounted for 29.6% of China's total imports and exports during this period. Specifically, the nation's exports with Belt and Road countries surged 29.1% year on year to 3.03 trillion yuan and its imports grew 25.6% to 2.32 trillion yuan. The main highlights are as follows.

First, China continues to stay active in trade, featuring a fast growth in its imports and exports with the Association of Southeast Asian Nations (ASEAN), India, and the United Arab Emirates (UAE), among others. In the first half of 2021, China's imports and exports with ASEAN climbed by 27.8% to 2.66 trillion yuan. There was a 30.7% increase with Vietnam and 33.1% with Malaysia respectively. China's imports and exports with India and the UAE jumped by 50.5% and 32.8% respectively. In addition, there was an increase of 40.6% with Poland and 39.4% with Turkey.

Second, exports of "stay-at-home economy" products, steel and automobiles to Belt and Road countries have become a major driving force for export growth. In the first half of the year, China's exports of "stay-at-home economy" products, such as computers, home appliances and furniture, registered 187.3 billion yuan, up 35.1%; exports of steel jumped by 47.8% to 127.87 billion yuan; exports of automobiles and relevant parts rose by 54.6% to 105.02 billion yuan; and exports of pharmaceutical materials and drugs surged by 95% to 42.56 billion yuan.

Third, China has deepened its cooperation in the energy, agricultural and mining industries, witnessing a steady growth of imported crude oil, agricultural products and metallic minerals. In the first half of the year, China imported 511.46 billion yuan of crude oil from Belt and Road countries, up 15%. Meanwhile, imported agricultural products and metallic minerals reached 162.57 billion yuan and 109.16 billion yuan respectively, with an increase of 30.9% and 56.1%. In addition, the imports of coal and copper products reached 58.58 billion yuan and 52.05 billion yuan, rising by 38.5% and 40.6% respectively.

Fourth, China-Europe freight trains have shown great advantages and become a pillar force in stabilizing trade between China and Belt and Road countries. The trains, with their unique strength in safety and stable operation, have safeguarded smooth logistic flow during the pandemic. According to data released by China Railway Group, 7,377 China-Europe freight trains were handled and 707,000 standard packing boxes of goods were sent in the first half of the year, up 43% and 52% year on year respectively, with the comprehensive loaded container ratio hitting 98%. Customs figures showed that China's imports and exports with Belt and Road countries registered 209.78 billion yuan in terms of railway transport in the first half of the year, up 43.1% year on year, which was 15.3 percentage points higher than the growth by water transport, 13 percentage points higher than that by land transport, and 21.3 percentage points higher than that by air.

Fifth, China's central and western regions have stepped up efforts to build the Belt and Road, registering a rapid increase in trade with Belt and Road countries. In the first half of the year, the trade of China's central and western regions with Belt and Road countries reached 1.02 trillion yuan, rising by 30.3% and accounting for 19% of the country's total imports and exports with them during the same period. The growth saw an increase of 0.4 percentage point compared with the figure for the first half of last year. Among them, Guangxi Zhuang Autonomous Region, Chongqing Municipality, Yunnan, Anhui and Hubei provinces all recorded a foreign trade growth of more than 30% with Belt and Road countries.

Beginning this year, the GACC has faithfully implemented the principles from General Secretary Xi Jinping's major addresses and fully promoted the pilot cooperation on “smart customs, smart borders, and smart connectivity.” The GACC and the Belgian Customs signed a Memorandum of Understanding (MoU) to conduct the first demonstration project in Europe. The GACC has given great support to the development of China-Europe freight trains. China and Belarus entered into the protocol on the Partnership Program of Customs-Railway Operators for Promoting the Safety and Rapid Customs Clearance of China Railway Express (PPCR) at the end of June, part of the efforts to further promote the PPCR. Next, the GACC will continue to implement the Action Plan of the Customs for Promoting the High-Quality Development of the Belt and Road during the 14th Five-Year Plan Period (2021-2025) and build more demonstrative projects for the joint construction of the Belt and Road Initiative to achieve high-quality development of the Belt and Road. Thanks. 

Bloomberg:

You spoke earlier about the disruptions in Yantian Port. Can you give us an actual figure about how much trade was disrupted or how many exports didn't happen because the port was shut for the whole of June. Secondly, there is been an increasing number of outbreaks of COVID-19, especially due to the Delta variant globally, do you expect this to further disrupt trade in the second half of this year? Thank you. 

Li Kuiwen:

I have answered the questions about the impact of COVID-19 on Yantian Port and introduced suitable measures that the customs office has taken. As for how the prevention and control measures in Yantian Port will influence the transportation market, related departments have given information. As for your second question about the impact of COVID-19 on foreign trade, as I mentioned before, uncertainties remain surrounding the global pandemic in the second half of this year, which may affect China's foreign trade. Overall, however, we expect relatively rapid growth of China's foreign trade in the second half of this year. Thanks. 

Hong Kong Bauhinia Magazine:

According to the GACC's latest regulations, the pilot program to boost cross-border e-commerce business-to-business (B2B) exports has been rolled out across the country since July 1. My question is how the pilot program went on over the past year, and what measures will be taken to promote the development of e-commerce? Thanks. 

Li Kuiwen:

Thanks for your questions. First, I would like to release the latest data regarding cross-border e-commerce. According to preliminary data from the GACC, in the first half of this year, China's cross-border e-commerce imports and exports maintained the momentum of sound development and reached 886.7 billion yuan, up 28.6% year on year. The exports grew by 44.1% to 603.6 billion yuan and imports expanded by 4.6% to 283.1 billion yuan. 

On the basis of summarizing the practice and consolidating the progress achieved from the previous works, the GACC recently issued an announcement (No.47 [2021]) to faithfully implement the guidelines of the national teleconference on issues including deepening reforms to streamline administrative approval, delegate power to lower levels, and improve regulations and services; to further promote the healthy and orderly development of cross-border e-commerce; and to better support the enterprises to expand the international market. Since July 1, the experience of pilot projects in cross-border e-commerce B2B export supervision has been replicated and promoted in customs offices across the country. Since July 1 of last year, the GACC has conducted pilot reforms on cross-border e-commerce B2B export supervision for a whole year, making remarkable achievements which are demonstrated in the following four aspects. First, the pilot program improved clearance services for companies. Second, the pilot program developed new ways for the supervision on exports to overseas warehouses in cross-border e-commerce. Third, the pilot program actively expanded logistics channels. Fourth, the pilot program enhanced regulation and prevented risks. Implementing of the pilot program will boost the development of e-commerce in the next stage, which is also helpful for companies to reduce costs and increase efficiency and expand the international market. It is also conducive to a more balanced development of cross-border e-commerce among different regions. Thanks. 

National Business Daily:

What measures has the GACC taken to promote the development of foreign trade this year? What results have been achieved so far? Thank you.

Li Kuiwen:

Thank you for your questions. Since the beginning of this year, the GACC, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, has conscientiously implemented the guiding principles of the Central Economic Work Conference and plans of the Report on the Work of the Government, focusing on high-level opening-up, continued optimization of port business environment, streamlining of customs clearance procedures, and support of the development of new trade forms in order to further improve customs clearance facilitation and earnestly serve the high-quality development of foreign trade. We have focused on the following tasks:

First, we have continued to optimize the business environment at ports. We concentrated on special campaigns to promote cross-border trade facilitation, and carried out a four-month special campaign in eight cities across six provinces and municipalities, including Beijing, Tianjin and Shanghai. We jointly launched 18 reform and innovation measures with relevant departments, focusing on the concerns of main market players and undertaking benchmarking against internationally advanced levels. We worked with relevant departments to study and draft measures to further deepen cross-border trade facilitation reforms and optimize business environment at ports. The measures have been submitted for examination and will be implemented upon approval in accordance with relevant procedures. We have continued to implement the action plan for cleaning up and regulating maritime port charges and guide local governments to earnestly implement the publication of port charges list. We made in-depth changes to the "single window" system in international trade, realizing connection and data sharing with the systems of 25 departments. We launched 18 types of basic service functions and provided more than 700 service items, basically covering the entire field of port law enforcement.

Second, we have further simplified customs clearance process. We closely followed high-quality development to promote the integrated reform of all customs operations; actively promoted coordinated management of the operations of various customs; strengthened the coordination and interaction of departments with frequent contact with other agencies; and improved the level of system integration. We simplified customs procedures such as filing, approval, declaration and inspection; and comprehensively promoted facilitation measures such as "two-step declaration," "advance declaration," "green channel," "exemption of on-site inspection,” and "appointment for inspection, priority inspection,” in order to improve the efficiency of customs clearance. We vigorously promoted reform works such as the supervision of conglomerates' processing trade and on the destruction, disposal and other practices related to processing trade's defective products; and continuously optimized supervision model to promote the stable development of processing trade. We set up a WeChat platform for credit management, established a "problem clearing" mechanism, and took the initiative to solve problems for import and export enterprises.

Third, we have vigorously supported the development of new trade forms. We solidly promoted the construction of cross-border e-commerce pilot projects and optimized the supervision process for the return of imported cross-border e-commerce retail goods, fully replicating and promoting the "cross-border e-commerce return center warehouse" model. We also carried out special rectification actions against inbound cross-border e-commerce smuggling to break criminal chains and thoroughly solve the problem, thus promoting the healthy development of cross-border e-commerce. At the same time, we actively promoted the healthy development of market procurement trade trials, and guided the customs in charge of these trials to strengthen their publicity, improve customs supervision process, and cooperate with the competent local authorities to start market procurement exports as early as possible. 

Fourth, we have actively facilitated the building of a high-level opening-up platform. We vigorously supported the construction of the Hainan Free Trade Port and promoted the implementation of the "zero tariff" policy system. Centering on the implementation of national strategies such as the coordinated development of Beijing-Tianjin-Hebei region and the integrated development of the Yangtze River Delta, we actively guided the customs of pilot free trade zones to carry out integrated innovation and collaborative innovation. We promoted the innovation and upgrading of comprehensive bonded zones and supported the establishment of four new comprehensive bonded zones in Yangling in Shaanxi province, Xiangyang in Hubei province, Wanzhou in Chongqing municipality, and Haikou Airport in Hainan province. We actively supported major expos such as the China International Import Expo (CIIE), China Import and Export Fair (Canton Fair), and China International Fair for Trade in Services (CIFTIS), and made every effort to do customs clearance, supervision, service and guarantee works for inbound and outbound exhibits.

While promoting the steady growth of foreign trade, customs did not relax its efforts in routine port epidemic prevention and control. We have persisted in preventing people and goods carrying viruses from entering the country and resolutely built a port shield against possible imported cases. Thank you.

Jiemian:

Just now you talked about the export of private enterprises and cross-border e-commerce businesses. I would like to ask what portion was taken by private enterprises in the cross-border e-commerce sector? I would also like to know the growth rate of CNY-denominated export in June alone. Also how does the GACC view the change in the new export order index in May and June? Thank you.

Li Kuiwen:

Thank you for your questions. We have just provided the latest purchasing managers' index (PMI) statistics. As shown by the latest economic data we have been following, the economy is now strengthening and improving steadily. As for the fluctuations, we have been monitoring them and analyzing their impact on foreign trade. 

Regarding the latest data on cross-border e-commerce, I have just now given the H1 data. Thank you.

Phoenix TV:

I would like to ask about China's export of COVID-19 vaccines. What measures have the customs departments taken to ensure their speedy clearance? Thank you.

Li Kuiwen:

Thank you for your question. China has always adhered to the vision of a global community of health for all and actively participated in COVAX (COVID-19 Vaccines Global Access). In the face of massive domestic demand and a tight supply, we have done our best to provide vaccines to other countries, contributing to global equitable distribution and use of vaccines and global cooperation against the pandemic and winning praises from the international community.

The GACC has rolled out an array of measures to ensure the speedy clearance of COVID-19 vaccines this year. We actively contacted COVID-19 vaccine export enterprises to explain export procedures and provide full-chain guidance. We also sped up clearance of urgently-needed major production equipment to help expand vaccine production capacity. Meanwhile, we contacted export enterprises to help them address practical difficulties and needs in a timely manner. We built a whole-process tracking platform as part of our efforts to shorten the clearance time. Currently, the time for health and quarantine approval has been shortened from 20 working days to two hours for exported vaccines, and the clearance time has been reduced to less than three hours. While ensuring the safe and speedy clearance of vaccines, the GACC has also taken multiple measures to crack down on illegal exit of COVID-19 vaccines. According to statistics, in the first half of this year, China provided over 500 million doses of COVID-19 vaccines and concentrates to 121 countries and international organizations, accounting for one-sixth of the current global COVID-19 vaccine production and making important contributions to international cooperation against COVID-19 and economic recovery. Thank you.

Shou Xiaoli:

Today's press conference is hereby concluded. Thank you, Mr. Li and friends from the media. See you next time.

Translated and edited by Wang Yiming, Wang Qian, Lin Liyao, Li Huiru, Duan Yaying, Wang Zhiyong, Zhang Tingting, Wang Wei, Cui Can, Huang Shan, Zhang Rui, Chen Xia, Qin Qi, Yuan Fang, 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 Yousheng, deputy head and spokesperson of the United Front Work Department of the Communist Party of China (CPC) Central Committee

Zhang Jian, director of the Research Office of the United Front Work Department of the CPC Central Committee and spokesperson of the United Front Work Department of the CPC Central Committee

Sang Fuhua, head of the Bureau of Non-CPC Political Parties Work of the United Front Work Department of the CPC Central Committee

Wang Lianhai, head of the Theory Bureau of the Research Office of the General Office of the National Committee of the Chinese People's Political Consultative Conference

Chairperson:

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

Date: 

June 25, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office (SCIO). As the Communist Party of China (CPC) celebrates its centenary, the SCIO issued a white paper today titled "China's Political Party System: Cooperation and Consultation." The white paper reviews the creation, development and constant improvement of China's political party system, elaborates on its distinctive characteristics, and shares China's achievements and experience in developing the system over the years, particularly since the 18th CPC National Congress in 2012. Based on a previous white paper titled "China's Political Party System" issued by the SCIO in 2007, the new one demonstrates new progress in multiparty cooperation in the new era and provides a comprehensive picture of China's political party system.

The white paper, which extends to around 14,000 Chinese characters, consists of a preamble, the main body of text, and a conclusion. The main body is divided into nine parts: China's Political Parties, A Unique Political Creation, Close Cooperation Between Political Parties, China's Political Party System Has Distinctive Characteristics and Strengths, the CPC Consults with Other Political Parties and Non-Affiliates, the CPC Supports Other Political Parties and Non-Affiliates in Conducting Democratic Oversight, the CPC Cooperates with Other Political Parties and Non-Affiliates in Governing the Country, Non-CPC Political Parties and Non-Affiliates Provide Advice on Economic and Social Development, and the CPPCC Is an Important Political and Organizational Platform in China's Political Party System.

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 an accurate and deep understanding of the white paper, we are holding this press conference. We have invited Mr. Xu Yousheng, vice minister and spokesperson of the United Front Work Department of the CPC Central Committee; Mr. Zhang Jian, director of the Research Office of the United Front Work Department of the CPC Central Committee and spokesperson of the department; Mr. Sang Fuhua, head of the Bureau of Non-CPC Political Parties Work of the United Front Work Department of the CPC Central Committee; and Mr. Wang Lianhai, head of the Theory Bureau of the Research Office of the General Office of the National Committee of the Chinese People's Political Consultative Conference.

Xu Yousheng:

Ladies and gentlemen, good morning. In a few days, we will celebrate the 100th anniversary of the founding of the CPC. During its century of exploration and struggle, the CPC has succeeded in applying the basic principles of Marxism to the Chinese context, rallied all the forces that could be united into a united front, and developed China's political party system, which is a system of multiparty cooperation and political consultation under the leadership of the CPC. This system has demonstrated its unique advantages and strong vitality in both the political and social life of our country.

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core, with the aim of developing socialist democracy and realizing the Two Centenary Goals and the Chinese Dream of national rejuvenation, has laid out a series of new ideas, new thinking, and new strategies for developing and improving China's political party system. It has also made a series of major policy decisions and plans to ensure standardized consultation between political parties, strengthened participation and deliberation in the administration of state affairs, and improved democratic oversight. By doing this, it has given full play to the important role of China's political party system in helping modernize China's system and capacity for governance. 

China's political party system is rooted in the best of Chinese traditions and began during the democratic revolution. The system took shape during political consultations in preparation for the founding of the PRC and has developed in the course of socialist revolution, economic development, and reform. It is improving in the new era of Chinese socialism. The system is a unique political structure created by the CPC, the Chinese people, the non-CPC political parties, and non-affiliates. According to the white paper, China's political party system sprouted from Chinese soil and evolved over time based on China's historical heritage, cultural traditions, and economic and social development.

Under the system of socialism with Chinese characteristics, the essence of people's democracy is that problems should be solved through consultation, and anything that concerns the public should be discussed by the public, through which the people are able to build the broadest possible consensus that reflects the aspirations and expectations of the entire society. The white paper has stressed that based on cooperation, participation and consultation, and by following the principle of unity, democracy and harmony, China's political party system plays an important role in encouraging the people to participate in politics, voice their views, and achieve social integration, democratic oversight and sustained stability. The system embodies the interests of the widest range of social groups, reflects the shared goals of all, promotes sound decision-making and implementation, and ensures effective state governance. It is a major institutional channel for socialist consultative democracy through which the people's position as masters of the country is ensured.

While striving for the goals of achieving national independence, the people's liberation and wellbeing, and the prosperity of the country, the CPC has worked together and shared a common destiny with the non-CPC political parties, forming a new type of relationship featuring cooperation, unity and harmony. In this system, the CPC represents the leadership of socialism with Chinese characteristics, which was confirmed and consolidated in the course of China's revolution, economic development, and reform. It is the choice of history and of the people. The non-CPC political parties accept the leadership of the CPC. They carry out cooperation with the CPC and are close friends to the CPC. They participate in state governance under Chinese socialism, and their basic functions are to discuss and participate in the administration of state affairs, and to engage in democratic scrutiny and political consultation. Non-affiliates, an important force in Chinese politics, perform their duties by reference to that of the non-CPC political parties. The CPPCC is an important political and organizational platform in China's political party system. It offers platforms for the non-CPC political parties and non-affiliates to conduct political consultation, exercise democratic oversight, and deliberate on and participate in the administration of state affairs. The white paper offers a detailed introduction to the subjects, forms, institutional support, and achievements of consultation with the non-CPC political parties and non-affiliates performing their three major duties. It better explains the strengths of China's political party system and provides Chinese ideas to the world in terms of developing political party systems. 

Over the past seven decades and more, China's political party system has grown and matured. However, China will not stop exploring and moving forward. The white paper proclaims that China will, as always, learn and draw from the positive experiences of other countries but will not imitate other political party systems mechanically or impose its own on any other country. China respects the right of other countries to choose a political party system best adapted to their own realities. Based on equality and mutual respect, China is willing to strengthen cooperation and mutual learning with other countries, promote democracy on the international stage, and eventually build a global community of shared future.

My colleagues and I would now like to answer your questions. 

Chen Wenjun:

Thank you, Mr. Xu Yousheng. The floor is now open for questions. Please identify the news organization you represent before asking your question. 

CCTV:

Around the world, some countries adopt a multiparty system, some adopt a two-party system, and others adopt a one-party system. China adopts a system of multiparty cooperation and political consultation under the leadership of the Communist Party of China (CPC), a new model known as China's political party system. My question is: what are the characteristics and strengths of this model compared with other political party systems? Thank you.

Xu Yousheng:

Thank you. I will answer your question. As we all know, the political party system is a major component of a country's political framework and makes a critical contribution to modern democracy. The system best suited to a country is determined by its history, traditions, and realities. There are many types of political party systems around the world, and there is not a single system that is good for all countries. I just said that China adopts a system of multiparty cooperation and political consultation under the leadership of the CPC. Grown out of the soil of China, it is prominently characterized by the CPC's leadership role in governing the country with cooperation from and participation of all the other parties. On one hand, as the ruling party, the CPC represents the strong core leader of socialism with Chinese characteristics. On the other hand, eight non-CPC political parties work closely with the CPC as advisers, helpers and partners, and participate in governance under socialism with Chinese characteristics. So, there are no opposition parties or parties not in power in China. In this system, the ruling party shares one mind and stands together in the face of every challenge with other parties, following the principles of long-term coexistence, mutual oversight, sincerity, and sharing the rough times and the smooth.

China's political party system enjoys two strengths. First, this system extensively and unfailingly represents the real and fundamental interests of the overwhelming majority of the Chinese people. It pools ideas and suggestions to ensure informed and democratic decision-making. By doing so, it avoids the weakness of some party systems where political parties act in their own interests or the interests of the classes, regions, and groups that they represent; oppose for opposition's sake and hold deliberations without reaching decisions, dividing society. Second, this system closely unites all political parties and non-affiliates towards a common goal of national rejuvenation, effectively preventing the risks of inadequate oversight in one-party rule and destructive competition of multi-party system. In this regard, China's political party system offers China's approach to the world and is a great contribution to the political advancement of mankind.

That reminds me of a famous saying from Mr. Deng Xiaoping, the chief architect of China's reform and opening-up: "It doesn't matter if the cat is black or white; what matters is how well it catches mice." China's significant achievements during the past seven decades fully demonstrate that its political party system is "the best cat that catches mice." Thank you.

Cover News:

Since the 18th CPC National Congress, what achievements have been made in China's political party system? What are the new measures and highlights with regards to the system? Thanks. 

Xu Yousheng:

I would like to invite Mr. Zhang to answer your questions.

Zhang Jian: 

Thanks for your questions. Since the 18th CPC National Congress, focusing on the requirements of upholding and improving the system of socialism with Chinese characteristics, the CPC Central Committee with Comrade Xi Jinping at its core has stepped up to strengthen the top-level design of the system of multiparty cooperation and political consultation under the leadership of the CPC and made major headway in promoting innovation in areas of theory, policy, and practice. Regarding theoretical innovation, the CPC Central Committee has made it clear that the system of multiparty cooperation and political consultation under the leadership of the CPC is included in the CPC's governance strategies and is the political party system in China. The CPC Central Committee has made it clear that the other political parties are participants in governance under the framework of socialism with Chinese characteristics and that their basic functions are to participate in the deliberation and administration of state affairs and to engage in democratic oversight and political consultation under the leadership of the CPC. Innovation in theory serves as the essential theoretical reasoning behind multiparty cooperation. 

On innovation in policy, since the 18th CPC National Congress, the CPC Central Committee has formulated a series of documents on promoting socialist consultative democracy, reinforcing the role of the CPPCC, and improving the other political parties' participation in state governance, providing important policy support for the multiparty cooperation. 

On the innovation in the practice of multiparty cooperation, we have achieved much progress. I'd like to introduce three major aspects.  

First, political consultation. Since the 18th CPC National Congress, political consultation has become more standardized and orderly. According to statistics, since the 18th CPC National Congress, the CPC Central Committee and the State Council have organized or entrusted relevant departments to organize 172 consultative meetings and symposiums, 37 of which were presided over by General Secretary Xi Jinping. Discussions on strategic and overarching issues with regard to state affairs were held with the other political parties and prominent individuals without party affiliation (non-affiliates).

Second, participation in the deliberation and administration of state affairs. In this respect, more targeted and effective measures were carried out. Since the 18th CPC National Congress, the other political parties and non-affiliates have put forward a series of major opinions and suggestions with regard to implementing the new development philosophy, establishing a new development paradigm, achieving high-quality development, the Belt and Road construction, and coordinated development in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. According to statistics, there were more than 730 proposals, many of which have been adopted by the CPC Central Committee and the State Council, making great contributions to scientific and democratic decision-making. 

Third, democratic oversight. Since the 18th CPC National Congress, new practices have been put in place to promote democratic oversight. In 2016, the CPC Central Committee entrusted the other eight political parties to pair with eight central and western provinces and autonomous regions to monitor their progress in fighting poverty over the next five years. These political parties presented a lot of opinions and suggestions, making a great contribution to securing victory in the campaign against poverty. 

Next, entrusted by the CPC Central Committee, the other political parties and non-affiliates will conduct democratic oversight on the ecological and environmental protection of the Yangtze River. Thanks. 

China News Service:

We know that political consultation is a major part of China's political party system. What is the content and form of political consultation? And how does the CPC conduct political consultation with the other political parties in practice? Thanks.

Xu Yousheng:

This question goes to Mr. Sang. 

Sang Fuhua:

Thank you for your question and your interest in China's political party system and political consultation. According to the white paper, political consultation is an important form of democracy in which the CPC and other political parties, on the basis of common political goals, carry out direct consultation on major policies and affairs of the state before making decisions and during policy implementation. It is an important part of the system of socialist consultative democracy. Non-affiliates also participate in the consultation. The above is the full and standard definition of political consultation. Now, with clear content, standard procedures, sound systems, and strengthened protection, political consultation has become a highlight of China's political practice. 

As for the subjects and forms of political consultation that you mentioned just now, the white paper includes a detailed explanation. Since everyone has just received the white paper, and is not familiar with its content, I will briefly introduce it so that you can better understand. There are four aspects of political consultation. The first is the formulation and revision of important documents from CPC congresses and CPC committees. Second, proposals on amendments to the Constitution and on the creation or amendment of important laws and local regulations. Third, advice on the candidates for national leadership posts. Fourth, major issues concerning the united front and multiparty cooperation. We all know that the above four aspects are extremely important issues in China's political life. 

The white paper has stipulated three forms of consultation. The first is forums, including forums on specific subjects, forums on personnel matters, and forums on fieldwork. The second form, talks, involves leaders from CPC committees and leaders from other political parties inviting each other to hold discussions and to communicate, negotiate, and exchange ideas face to face. Third, consultation in writing means that CPC committees solicit written advice on major documents and affairs from other political parties, or other political parties submit proposals on major issues in writing to CPC committees. 

As for how political consultation is carried out in practice, which, in my view, may not be widely known to the general public, I would like to thank you for raising the question so that we can provide an introduction to all of you. I will briefly introduce how forum consultation at the central level is organized and practiced. There are four main steps. 

First, making plans. At the beginning of every year, with the help from the United Front Work Department of the CPC Central Committee, the General Office of the CPC Central Committee puts forward an annual plan of political consultation on the basis of soliciting opinions and advice from the central committees of non-CPC political parties and non-affiliates. Then the plan is submitted to a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee and executed after deliberation. Second, preparation for consultation. With assistance from the United Front Work Department of the CPC Central Committee, and according to the consultation plan passed by the meeting of the Standing Committee of the Political Bureau of the CPC Central Committee, the General Office of the CPC Central Committee makes specific plans and takes charge of implementation. That involves a lot of work. For example, the central committees of non-CPC political parties and non-affiliates should be invited in advance and gather to read the documents that need consultation. The drafting group should be invited to interpret the documents. Persons in charge from relevant departments should brief the other political parties and non-affiliates about major issues in China's social and economic development so that they are well informed on China's conditions. We should also support other political parties and non-affiliates to go deep in communities and conduct surveys and research concerning major issues. In this way, they can give more accurate, practical, and helpful advice. That's the second step before the forums. The third and most important part is forum consultation. Every year, at least seven political consultation forums are held at the central level. General Secretary Xi Jinping will host at least four forums, while Comrade Li Keqiang will host one, and Comrade Wang Yang will host two. The CPC Central Committee will also commission relevant departments to host ten to twenty additional forums as circumstances require. The general forum procedure is as follows. Persons in charge from the CPC Central Committee will introduce the consultation issues. Then the central committees of non-CPC political parties and non-affiliates give their suggestions and discuss the issues. Fourth, dealing with advice. Assisted by the United Front Work Department of the CPC Central Committee, the General Office of the CPC Central Committee will sort out the views and proposals from the other political parties and non-affiliates before submitting them to the relevant departments for implementation in due time. They should provide an explanation as to why any of the proposals cannot be carried out. Some suggestions given by the other political parties and non-affiliates are valuable but may not be able to be put into practice due to limited conditions, while others may need additional research in order to be more applicable. In a word, if a suggestion is unable to be put into practice in due course, an explanation must be provided. 

That was my brief introduction on the full procedure of forums, one of the forms of consultation between political parties. I hope this will help journalists and the public to understand more about political party consultation. Thank you.

Red Star News:

The CPPCC is an important political and organizational platform in China's political party system. Could you please make an introduction about its membership features? What mechanisms guarantee the right of CPPCC members from the non-CPC political parties to express views and raise proposals on behalf of their own parties? Thank you.

Wang Lianhai:

Thank you for your question and your concern regarding the work of the CPPCC. The CPPCC is a key mechanism for multiparty cooperation and political consultation under the leadership of the CPC, and its membership has distinctive features. Members of the non-CPC political parties and non-affiliates account for a substantial percentage of members of each CPPCC committee at all levels. They must constitute no less than 60 percent of the members of each CPPCC committee and no less than 65 percent of the members of the standing committee of each CPPCC committee; they must constitute no less than 50 percent of the vice chairpersons of each CPPCC committee at all levels (excluding those in ethnic autonomous areas). I would like to provide you with a set of figures to help you understand more. Since the First Session of the 13th CPPCC National Committee in 2018, 1,299 non-CPC individuals have served as members of the CPPCC National Committee, or 60.2%; 195 as members of the Standing Committee of the CPPCC National Committee, or 65%; and 13 as vice chairpersons of the CPPCC National Committee, or 54.2%. Nationwide, over 410,000 non-CPC individuals have been serving as members of CPPCC organizations at all levels. The CPPCC National Committee and provincial committees have members of the non-CPC political parties and non-affiliates serving as full time deputy secretary generals. Non-CPC individuals also make up a proper proportion of heads, deputy heads and members of the special committees under CPPCC committees. 

The CPPCC respects and protects the right of its members from the non-CPC political parties to express views and raise proposals on behalf of their own parties, and supports them to carry out discussions and consultations on major policies of the state. During the conference on the work of the CPPCC held by the CPC Central Committee, General Secretary Xi Jinping stressed that the role of the CPPCC as an important political and organizational platform in China's political party system must be given full play and mechanisms to guarantee the right of CPPCC members from the non-CPC political parties to express views and raise proposals on behalf of their own parties should be in place. To implement the guiding principles of General Secretary Xi Jinping's instructions and the conference on the work of the CPPCC held by the CPC Central Committee, the CPPCC National Committee has further enhanced mechanisms to leverage the strengths of China's political party system. It has established mechanisms for its members from the non-CPC political parties to submit proposals, deliver addresses at conferences, and report on social conditions and public opinion. These mechanisms are articulated in the relevant regulatory documents, such as the rules of consultation of the CPPCC National Committee, the general rules of the special committees, measures for selecting key proposals and overseeing their execution, and rules for making addresses at conferences. The proposals, addresses at conferences, and reports on social conditions and public opinion submitted by the non-CPC political parties have been dealt with, settled and reported meticulously. 

I will offer another series of statistics. Since 2013, the eight non-CPC political parties have submitted nearly 3,000 proposals, presented 525 speeches including 81 oral presentations, and delivered over 30,000 reports on social conditions and public opinion. They have made a positive contribution to leveraging the strengths of China's political party system, promoting harmony among all political parties, and serving national development in the new era. Thank you. 

Beijing Youth Daily:

I want to know more about non-affiliates. What role does this group play in China's political party system? Thank you.

Zhang Jian:

Thank you for your question. Regarding prominent individuals without affiliation to any political party, which we call "non-affiliates" for short, there may be many people in society who have the same question as you; they know non-affiliates exist but are unclear about the precise definition of those non-affiliates or who they are. Regarding this question, a clear definition was made in the regulations on the united front work of the CPC, promulgated by the CPC Central Committee on Dec. 21 last year and publicly published on Jan. 5 this year. What is the definition of non-affiliates in the regulations? Non-affiliates refer to those who have not participated in any political parties but have the desire and the ability to discuss and participate in the administration of state affairs and have made active contributions to and have a certain influence in society. Their main body is intellectuals. This is the entire definition of non-affiliates.

How to understand this definition? It should be said that non-affiliates are a political concept and a political identity. Why do we say that? Because they are an important part of multiparty cooperation and play an important role. In other words, not all intellectuals without party or affiliation are non-affiliates. Only those who play an important role in multiparty cooperation and assume important functions are considered non-affiliates. Their basic functions shall follow the same three basic functions of the non-CPC political parties, which are: to discuss and participate in the administration of state affairs and to engage in democratic scrutiny and political consultation led by the CPC.

Non-affiliates have played a very important role in our country's political party system. They are not only the co-founders of the multiparty cooperation system but also important participants in this system. Examples of famous non-affiliates in history include Guo Moruo, who made contributions during the War of Resistance Against Japanese Aggression (1931-45) with his literary works; Li Dingming, who put forward the idea of "excellent troops and a streamlined administration”; "people's writer" Ba Jin; and the "father of hybrid rice" Yuan Longping, who passed away not long ago. Some of these individuals played an important role in the establishment of China's political party system, while others played an important role in promoting the development of China's political party system. It should be said that, for a long time, especially since the 18th CPC National Congress, our Party has attached great importance to supporting non-affiliates in playing their roles and has adopted a series of measures. For example, in consultations and symposiums convened by the CPC Central Committee and the State Council, or those entrusted to relevant departments, non-affiliate delegates would be invited to participate. Thank you.

China Daily:

China's political party system includes the CPC, non-CPC political parties, as well as prominent individuals without affiliation to any political party. As important components of the system, what role do these non-CPC political parties and non-affiliates play in China's economic and social development? Thank you.

Sang Fuhua:

Thank you for your question. I appreciate the attention you've paid to the important role of non-CPC political parties and non-affiliates. Over the years, non-CPC political parties and non-affiliates have fully employed their strengths in gathering talent, pooling wisdom, being widely and well connected, and enjoying a uniquely detached position. They are significant contributors to China's economic and social development. The white paper has already elaborated on this topic, so I'll give you a brief introduction to help you better understand this issue. The role non-CPC political parties and non-affiliates have played can be summarized in three broad areas.

First, non-CPC political parties and non-affiliates have offered suggestions and proposals, and helped improve the decision-making process. For years, they have actively conducted inspections, researches and studies and provided consultancy and advice on major economic and social issues which are of overall, strategic and pioneering importance. As my colleague Mr. Zhang Jian mentioned earlier, when discussing and participating in the administration of state affairs, they have provided many valuable and important opinions and suggestions concerning the development of the BRI, the Beijing-Tianjin-Hebei coordinated development, the development of the Guangdong-Hong Kong-Macao Greater Bay Area, as well as major issues and strategies on strengthening China's strategic sci-tech capacity. Their suggestions have provided important references and consultancy for the decision-making of the CPC Central Committee and the State Council.

Second, non-CPC political parties and non-affiliates have played their part in providing services to the society. They have launched initiatives such as intellectual support to underdeveloped areas, built schools, and worked proactively to help win the battle against poverty. Here, I'd like to take an example from the white paper. Bijie used to be a deeply impoverished region in Guizhou province. For a long time, non-CPC political parties and non-affiliates have worked hard to establish Bijie Pilot Zone and made great contributions to the city's poverty-alleviation undertaking. I'll present a group of statistics here. Over the years, non-CPC political parties and non-affiliates have injected funds of 2.19 billion yuan, facilitated 2,665 programs, created 287,800 training opportunities for various professions, helped construct, renovate or expand over 200 schools of various kinds, and helped build 235 town/township health centers and village clinics. Through the joint efforts of all parties concerned, the pilot zone has helped 6.75 million people, while seven national-level poor counties, and 1,981 poor villages rise above poverty. The city's GDP exceeded 202 billion yuan. These are all tangible achievements. As parties participating in the administration of state affairs, these non-CPC political parties spare no efforts to consistently support the ruling CPC and address the development and reduction of poverty in a once deeply impoverished region. This can only be accomplished under China's political party system.

Third, non-CPC political parties and non-affiliates have stood together with the CPC to meet challenges. During the SARS outbreak in 2003, non-CPC political parties immediately took actions to make donations and offer proposals. Many of their party members fought the disease on the frontlines. After the Wenchuan earthquake in 2008, non-CPC political parties and non-affiliates made donations of funds and supplies worth of over 500 million yuan within the very first month, which won widespread acclaim from all sectors of society. After the COVID-19 pandemic broke out, they responded to the call of the CPC Central Committee immediately, standing firmly alongside the CPC and acting together to battle against the virus. Partial data indicates that more than 60,000 frontline medical workers were either members of non-CPC political parties or non-affiliates. Over 4,000 opinions and proposals were submitted to the CPC Central Committee and the State Council by the non-CPC political parties and non-affiliates. Many of these have become concrete policies. They also actively donated funds and supplies worth around 5.11 billion yuan. Through their practical actions, they have proven themselves to be outstanding advisors, assistants, and colleagues of the CPC. Therefore, these non-CPC political parties deserve our appreciation, and China's political party system deserves our acclaim. Thank you.

CRNTT:

You often say that non-CPC political parties are part of China's political party system, but why should they accept the leadership of the CPC? Thank you.

Xu Yousheng:

Thank you for your question. As I said earlier, a very important feature of China's political party system is the leadership of the CPC. Why should other political parties accept the leadership of the CPC? I think it can be explained from two perspectives: realistic needs and historical choices. As is well known, China is a large country with a vast territory, many ethnic groups and a population of 1.4 billion. In such a large country, if there is no core leadership that exercises overall leadership and coordinates the efforts of all, it will inevitably end up falling apart and nothing will get accomplished.

We say that the leadership by the CPC is the defining feature of socialism with Chinese characteristics. The CPC has rallied all other political parties and led the Chinese people of all ethnic groups during its 100 years of hard work. From the founding of the Party, to the establishment of the People's Republic of China, to reform and opening up, the Party has created remarkable achievements that Chinese people can feel proud of. As a result, the Chinese nation has made a historic leap from standing up, to growing rich and to becoming stronger. It's fair to say that the Party has won the heartfelt love and support of people of all ethnic groups in the country, including non-CPC political parties.

As I said earlier, the CPC's role in leading the country was not confirmed by itself. It is the choice of history, of the people, and also of non-CPC political parties. Mr. Cheng Siwei, former chairman of the Central Committee of the China National Democratic Construction Association, once said that China's political party system is like singing in a "chorus," and there must always be a conductor. From the perspective of history and reality, only the CPC is qualified for the work. I think that Mr. Cheng's words are very much to the point.

I want to make it clear that the CPC exercises leadership over other political parties through political guidance, mainly on political principles, direction, and major policies. The CPC respects the status of non-CPC political parties to participate in state governance under socialism with Chinese characteristics. Each political party has its own charter, political program, and organizational structure, and performs its functions and conducts activities independently as per the Constitution and laws. Thank you.

Chen Wenjun:

One last question.

Xinhua:

Over the past 70-plus years, what experience and inspiration has the CPC drawn from its cooperation with other political parties and non-affiliates?

Xu Yousheng:

China's political party system has experienced more than 70 years of development. As you just mentioned, many good experiences and practices have been had during the years when the CPC worked together closely with other political parties. They can be summarized in the following four aspects:

First, upholding the leadership of the CPC. As I mentioned just now, this acts as a fundamental guarantee for the sound development of multiparty cooperation. Leadership by the CPC is the defining feature of socialism with Chinese characteristics. It is also the most distinctive feature of China's political party system. As I just mentioned, the CPC's role in leading the country is the choice of history, of the people, and of other political parties. We must unswervingly uphold CPC leadership so that the system of multiparty cooperation can be continuously improved and develop in the right direction.

Second, upholding and developing socialism with Chinese characteristics, which is the common ideological and political foundation for the sound development of the multiparty cooperation system. We say that the multiparty cooperation system is derived from consensus. History and reality have proved that only socialism can save China, and only socialism with Chinese characteristics can develop China and realize the Chinese Dream of national rejuvenation. It should be said that this is also the common ideal and common cause of the CPC as well as other political parties.

Third, making solid progress in improving the institutional framework for multiparty cooperation, which is an important guarantee for the sound development of the multiparty cooperation system. When talking of a system, we speak of long-term and stable goals. Through prolonged practices and explorations, we have gradually established a complete set of theoretical and institutional systems, which are based on the Constitution of the People's Republic of China, with the CPC's internal regulations and documents and the consensus documents of other political parties as the criteria, comprehensively and systematically regulating the work of multiparty cooperation. For example, the consultation between political parties that Mr. Sang just introduced involves many institutional regulations, which are very complete. These institutional regulations are conducive to the scientific, standardized, and systematic development of multiparty cooperation and have effectively improved the efficiency of the multiparty cooperation system.

Fourth, focus on party building of both the CPC and non-CPC political parties, as this is the organizational foundation for the sound development of the multiparty cooperation system. The CPC, together with non-CPC political parties, is the main body of the multiparty cooperation system. In order to give better play to its advantages and function, we must strengthen the party building of the CPC as well as non-CPC political parties. Only by learning from each other and promoting common progress can the quality and level of the multiparty cooperation system be improved. Thank you for your question.

Chen Wenjun:

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

Translated and edited by Zhang Liying, Wang Qian, Gong Yingchun, Li Xiao, Wang Yanfang, Cui Can, Zhou Jing, Liu Jianing, Liu Qiang, Mi Xingang, Yuan Fang, Zhang Rui, Huang Shan, Zhu Bochen, Wang Yiming, Li Huiru, Zhang Junmian, 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:

Lu Guangjin, secretary-general of the China Society for Human Rights Studies and professor at the School of Law of Jilin University

Li Xiao, first-level inspector of the Research Office of the Supreme People's Court

He Zhipeng, dean of the School of Law of Jilin University and director of Jilin University Human Rights Research Center

Zhang Wanhong, executive dean of the Institute of Human Rights Studies of Wuhan University

Chairperson:

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

Date: 

June 24, 2021

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Today, the State Council Information Office (SCIO) released a white paper titled "The Communist Party of China and Human Rights Protection – A 100-Year Quest." We are holding a briefing here today to introduce relevant information on the CPC's philosophy and practice of respecting and safeguarding human rights. We will also take questions. Today, we are joined by Mr. Lu Guangjin, secretary-general of the China Society for Human Rights Studies and professor at the School of Law of Jilin University; Ms. Li Xiao, first-level inspector of the Research Office of the Supreme People's Court; Mr. He Zhipeng, dean of the School of Law of Jilin University and director of Jilin University Human Rights Center; and Mr. Zhang Wanhong, executive dean of the Institute of Human Rights of Wuhan University. 

Next, I will give the floor to Mr. Lu.

Lu Guangjin:

Friends from the media, good afternoon!

This morning, the SCIO issued a white paper titled "The Communist Party of China and Human Rights Protection – A 100-Year Quest," which systematically explains the achievements of the CPC in respecting and protecting human rights over the past 100 years. On the occasion of celebrating the CPC centenary, the release of such a white paper is of special significance and will help the international community gain a comprehensive and multi-dimensional understanding of the CPC and the logic of China's human rights development. We hope this will help them have a panoramic view of China. Today, four scholars from the China Society for Human Rights Studies would like to communicate with journalists here on the practice of the CPC in respecting and protecting human rights.

As you all know, the CPC's founding mission was to seek happiness for the Chinese people, rejuvenate the Chinese nation, and do common good for the world. The CPC was born to advance human rights and has continued to grow and develop because of human rights progress. Over the past 100 years, under the leadership of the CPC, China has made great achievements in the area of human rights. I would like to summarize the progress from the following three aspects.

First, China has made new achievements in respecting and protecting human rights. Over the past 100 years, the CPC has united and led the people in toppling the "three mountains" of imperialism, feudalism and bureaucratic capitalism, founded the People's Republic of China (PRC), completed the New Democratic Revolution and the Socialist Revolution, carried out reform and opening up, and ushered in a new era of building socialism with Chinese characteristics. The CPC adheres to the principle of the people's democracy, established a national system ensuring the people's position as masters of the country, and guaranteed that all power in the country belongs to the people. The CPC has led the people to achieve a comprehensive victory in the fight against poverty and build a moderately prosperous society in all respects. The people's basic rights such as the right to life and health, the right to employment, and the right to education are better protected.

Second, China has framed a new concept of respecting and protecting human rights. The CPC has always adhered to the people-centered approach to human rights, and has continuously enhanced the people's sense of gain, happiness, and security. The CPC regards the rights to subsistence and development as the primary and basic human rights and believes that living a life of contentment is the ultimate human right. It promotes comprehensive progress in human rights, the well-rounded development of all the people, and the coordinated development of civil rights, political rights, and economic, social and cultural rights, and ensures that people have equal opportunities for development and possess dignity and value of life.

Third, China has blazed a new path of human rights protection. The CPC believes that human rights are the gains of the progress of human civilization and are universal. At the same time, human rights are also historical, specific, and in a constant ongoing process of development. There is no end to human rights development, and human rights protection is an ongoing cause. There is no universal human rights standard or model, and each country should apply the principle of universality of human rights in the context of its own national conditions. The CPC has enriched and developed Marxist human rights doctrine with its own successful practices, showing a new successful model of human rights progress in the 21st century.

We often say that without the CPC, there would be no new China. Likewise, without the CPC, there would be no progress in China's human rights protection today. At present, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Chinese people are working hard to realize the Chinese Dream of national rejuvenation and the second centenary goal: to build China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful by the centenary of the PRC (2049). We will promote China's human rights protection to a higher level and make new progress. 

This is the basic introduction. We would like to communicate with you on issues of your concern and on this white paper. Please ask your questions.

Shou Xiaoli:

Thank you, Professor Lu Guangjin. Now, the floor is open for questions. Please identify your news outlets before asking questions.

CGTN:

We noticed that the 47th session of the United Nations Human Rights Council (UNHRC) is being held in Geneva, Switzerland, and representatives of the Chinese government and social organizations have actively participated in the event. Can you tell us about China's long-term efforts to promote global human rights governance? Thank you.

Lu Guangjin:

The conference is being held currently and all parties are concerned about China's efforts in advancing global human rights progress over the years. Professor He Zhipeng is an expert in this field. He will take your question. 

He Zhipeng:

I feel honored to have the opportunity to exchange views with you on this issue. If you have read our white paper, you may have seen that this topic is discussed in part six. I will elaborate more on that basis. China's contribution to the governance of human rights in the world can be understood from two aspects: the human rights systems and mechanisms in a narrow sense and in a broad sense. The systems and mechanisms for respecting and protecting human rights in a narrow sense refers to the UNHRC you mentioned just now, which was previously called the United Nations Commission on Human Rights (UNCHR). We all know that China was once excluded from the UN system for a long time, so during that time we did not have the opportunity to have direct contact with the UN's human rights mechanism. Since China recovered its legitimate seat at the UN in 1971, it has played an active role in relevant events. In 1979, we joined the UNCHR as an observer and attended its annual meetings for three consecutive years. In 1982, China became an official member state of the UNCHR and has maintained this position ever since. China's participation in UNCHR activities not only demonstrated China's own human rights views and propositions, but also made known to the world China's efforts to respect and protect human rights. From 1981 to 2006, we were fully involved in the activities of the UNCHR. In 2006, the UNCHR was replaced with the UNHRC due to a series of problems that many of you may know. For example, the UNCHR had long been used as a tool for political struggles, that is to say, some Western countries including the United States often used the Commission as a platform to criticize China. Every time, we gave effective responses to such issues during the annual session of the Commission. In fact, at the UN level, everyone realized that such a human rights governance system was unsustainable. In other words, the human rights protection goals couldn't be achieved. Therefore, starting in 2006, amidst the call for reform, the UNHRC was established. China has always participated in the activities of the UNHRC since then. In addition to the formal meetings when official representatives exchange views and concerns and respond to questions raised by countries around the world, we also introduce our views and actions on human rights in China by holding a series of sideline meetings including those held by the China Society for Human Rights Studies. This is a brief introduction to human rights governance in a narrow sense.

In a broader sense, human rights governance includes several aspects in addition to the human rights system within the United Nations. First, some ideas China put forward to the international community, such as a community with a shared future for mankind, they are relevant to human rights. The proposal emphasizes lasting peace, universal security, common prosperity, openness, tolerance, cleanliness, and beauty, which are all directly related to human rights. Within international mechanisms, including the human rights system, these ideas are translated into international languages so that they can be understood and accepted by all. At the same time, on the economic level, everyone may know we are carrying out cooperation with many countries along the Belt and Road and have made great efforts so far. Whether in terms of cooperation in infrastructure or other economic cooperation, our efforts in this domain will actually be conducive to human rights development in China and countries along the Belt and Road. 

Also, we have actively advanced international cooperation systems regarding the environment, climate change, labor and all fields of the economy, such as the Paris Agreement. Of course, we have joined many international organizations. Especially since the outbreak of the pandemic in 2020, the advancements we have made in human rights in the field of public health is actually part of the broadly defined human rights governance. My own understanding may not necessarily be comprehensive. Mr. Lu and other speakers can correct me if there is something wrong with what I have said. I'm going to stop here, thank you. 

CNR:

We all know that respecting and safeguarding human rights is the consensus of human civilization, however, different countries have different views on human rights and the path of development often differs from country to country. How shall we see the notion in the white paper that China has added diversity to the concept of human rights? Thank you. 

Lu Guangjin:

I will answer this question, and other professors may give additional remarks. I think that China's progress in human rights, which is indeed different from that of Western or other countries, is a typical example. Regarding the need to understand China, I think we should focus on the following three aspects. First, China is the world's largest developing country, which is a basic national condition we often talk about. Second, China is the world's most populous country, which is also a national condition that has lasted for hundreds of years. Third, China is the world's fastest developing country. Its speed of development since the 1970s is unprecedented. The journalists here, who were generally born after the 1980s and 1990s, have also experienced a huge change. China after 1970 is totally different from that before 1970, its development is the progress of civilization and quite representative. 

Looking at this progress of civilization from the human rights perspective, I think the following three aspects in particular are worth thinking about. 

First, China's human rights development has exceeded Western liberal views on human rights and the development of their practice. The progress was made under the guidance of China's people-centered approach to human rights. In my opinion, the approach has transcended the narrowness and limitations of the Western capitalist view of human rights, focusing on people-centered human rights rather than men's natural rights, socialist collective human rights rather than liberal individual human rights, and specific and vivid human rights rather than abstract, empty human rights. So, it is a particularly representative model of human rights and the new manifestation of human rights civilization. 

Second, China has developed the Marxist theory of human rights. Upholding the basic positions and views of the Marxist theory of human rights, the CPC is grounding its efforts in the new century, new development stage, new era, China's development features of the times and the future development trend. China attaches great importance to the position of the people, authenticity, development, specificity and the comprehensiveness of human rights, which is the great progress and development of the Marxist theory of human rights under the new historical conditions. We can also call it the 21st-century Marxist human rights theory.

Third, we have opened new frontiers of human civilization. The CPC upholds historical materialism and dialectical materialism, and has always viewed and developed human rights from a historical perspective, development perspective and the standpoint of the people, which enabled the CPC to open a new path of human rights protection based on China's national conditions. The development path in fact exploded the myth that only the Western model could develop human rights, and has also opened up a new path for the development of human rights. My thinking is summarized in those three points for your reference. 

Phoenix TV:

Some Western countries have been making a lot of fuss about China's human rights issues for years, especially smearing China on issues related to Xinjiang, Hong Kong and Tibet. As the ruling party, how does the CPC view this issue? Thank you. 

Lu Guangjin:

Indeed, China is a socialist country under the leadership of the CPC where people became masters of the country. As China is different from Western countries in the value orientation of human rights, Western countries believe that human rights in China are not up to their standards. So, any progress of China's human rights may not draw their attention. Regarding this issue, spokespersons of the Foreign Ministry have made several systematic, comprehensive and clear statements, so I will not elaborate on some specific issues. Here I would like to stress the following points: 

First, in my opinion, Western countries are not really concerned about China's human rights, they just use it to interfere in China's internal affairs. If they are really concerned about China's human rights, especially human rights in Xinjiang, I am wondering why they did not speak up and condemn the activities of extremists when Xinjiang suffered terrorism and extremism. They did not condemn the acts of mutilation of human beings. In contrast, as we know, some violent terrorist organizations in Xinjiang were supported and sheltered by some Western forces. We believe that this is entirely the result of double standards on human rights. If they really care for human rights in China, why didn't they recognize China's progress and development of human rights, especially the great achievements in reducing poverty, which lifted more than 800 million people out of poverty? They become better off and are now heading towards a higher level of prosperity, which gave a great boost to people's rights to subsistence and development. We have also noticed that they never focused on these progress in their news reports. I am afraid that there is some prejudice and misunderstanding. More importantly, there are political purposes. Some Western countries, in particular, used the so-called double standards on human rights to smear China's human rights situation to defame China, tarnish its image in the world, achieve their political purposes, and contain China's rise and development.

Second, if some Western countries really care about human rights, they should not only look at China, but instead examine themselves. Just as our Foreign Ministry spokesperson put it, we urge these countries to take a look at themselves in the mirror and see what human rights are like in their own countries. In the face of their own increasingly prominent human rights problems, it is time for them to reflect, face up to their own issues and find solutions to address their problems. In the long run, these problems are detrimental to the improvement of human rights in these countries. Recently, I have been reading a book that some of you may be reading, too. It is a book written by an influential black American journalist with the New York Times. It is called "Caste: The Origins of Our Discontents." If you are interested in it, you are recommended to buy it to read. The author made a thorough analysis of the serious racial problems in the U.S. I have read some books of this kind, but I don't think there have been any with a more thorough analysis than in this book. Why? The author believes that the racial problems in the U.S. relate to neither racialism, racial discrimination nor racist policies. What's the problem? It's all about the caste system according to the author. We know what the caste system is. It is obviously a racial problem far more serious than racialism and racist policies. In reading this book, I realized that its analysis of the most pressing human rights problems in the U.S. today enables us to view from a more profound perspective the origins, complexity, long-term existence and dangers of these problems, to which we should pay attention with an alert mind. We should not simply listen to what they say, but pay attention to their actions. Thank you.

China Daily:

Could you share what major efforts the judicial organs have made in protecting human rights? Thank you.

Li Xiao:

Thanks for your question. As a bottom line for defending fairness and justice, the administration of justice indeed plays an important role in protecting human rights. After working in the court system for 37 years, I am well aware that respect for and protection of human rights is one of the main lines that run through the work of the people's courts. With the aim that the people can see in every judicial case that justice is served, judicial bodies adhere to carrying out justice for the people, seeking judicial justice, and protecting the lawful rights and interests of the interested parties according to law so as to increase the people's sense of gain, happiness and security. I'd like to share with you some highlights of our efforts in the following keywords, namely, judicial reform, judicial accountability, the case-filing register system, the safeguarding of the right to defense, judicial openness, guaranteeing the right to fair trial, and judicial relief. As you know, judicial bodies have been carrying out judicial reform in recent years. Why? Its ultimate goals are to ensure the people's courts independently and fairly exercise judicial power according to the law; improve the allocation of judicial powers and responsibilities; and improve category-based management of judicial personnel and job security for the judicial profession. People's courts across administrative boundaries have been established. In some provinces and cities, there are also courts that handle intellectual property and financial cases as well as online courts. This is a brief summary of judicial reform.

Regarding fully implementing judicial accountability, we have improved the list of well-defined adjudicative powers and responsibilities, strictly held illegal adjudication accountable, and fully implemented the three regulations on preventing intervention in judicial activities, by which the judges hear the cases to reach verdicts and bear related responsibilities.

Regarding the case-filing register system, it is a replacement for the former case-filing review system and was established in 2015. It ensures litigants' right of action and has solved the difficulties in filing lawsuits, with an on-the-spot case-filing registration rate of more than 95%. As you know, science and technology have made rapid progress in recent years, which has accelerated the establishment of smart courts. Now filing is much easier. A click on WeChat Court, a mini program of WeChat, enables litigants to file cases online, submit evidence, and attend trials as well as deal with some cross-region litigations, making litigation services available online round the clock.

Another noteworthy highlight is the promotion of judicial openness. We have improved judicial transparency by establishing four platforms for releasing information on judicial processes, trial livestreams, written judgments, and the execution of judgments. I checked these platforms this morning. A total of more than 13 million trials nationwide have been livestreamed on the platform for trial livestreams, with 38 billion visits in total. There are more than 100 million written judgements at the platform for written judgements, with over 64.6 billion visits by this morning. The data keeps updated and changing all the time.

With regards to the guaranteeing of the right to defense, pilot work has been launched to ensure legal defense is provided in all criminal cases. Legal aid stations can now be found at all courts and detention houses to ensure that defendants in all criminal cases can obtain legal defense and support in trial. The state protects defense lawyers' rights to meet their clients, to read case files, to investigate and obtain evidence, to conduct cross-examination, and to debate and defend, and other litigious rights.

Regarding the guaranteeing of the right to fair trial, we have made significant efforts. For example, we have promoted the reform of the criminal litigation system with a focus on adjudication, strictly enforced the principles of "no penalty without a law", presumption of innocence, evidence-based verdicts, and exclusionary rules, and strengthened the role of court trials, ensuring that no one should be prosecuted without criminal evidence and those guilty of an offence are subject to fair punishment. From 2016 to 2020, people's courts at all levels acquitted 5,479 defendants. A number of wrongful verdicts including those concerning Hugjiltu for rape and murder and Nie Shubin for rape and murder were overturned in accordance with the law. The wrongly-convicted all received state compensation in accordance with the law.

Another keyword is judicial relief. It covers the state compensation system and the state judicial assistance system. We have improved the state compensational system and developed compensation alongside the economic and social development of the country. The daily compensation for violation of a citizen's personal liberty has risen from 17.16 yuan in 1995 to 373.10 yuan in 2021. China has improved the state judicial assistance system to safeguard victims' right to judicial assistance. In 2020, courts at all levels handled a total of 37,852 judicial assistance cases, helping 44,350 people with 910 million yuan of judicial relief. In addition, we have made many other efforts. As time is limited, I am not going to elaborate on them. Thank you.

HKTKWW:

My question is for Mr. He. You've mentioned before that we need to pay great attention to the spatial and temporal dimensions of historical development and social environment during human rights research and analysis. How shall we understand this concept? How shall we think about the internationalization of human rights on the premise of a community with a shared future for mankind? Thank you.

He Zhipeng:

Thanks for your question. First of all, I have to admit this idea is just a point of view I personally raised during my academic research after discussing it with my colleagues and students. Here is the reason behind the idea. When having dialogues on human rights internationally or having exchanges on human rights domestically, some people believe that there is a common and universal standard for human rights. That means that every country, wherever it is located and whatever historical period it is in, should act in accordance with the same rule or standard. During the illegal "Occupy Central" movement, some people cited the International Covenant on Civil and Political Rights (ICCPR). We later commented that some rules are not applicable in China, because not all rules apply to all countries.

On this basis, I would like to put forward an idea. The real situation of human rights in a country depends on what historical position and period it is in. The so-called space-time condition, on the one hand, is "time", that is to say, in this sense we should understand that what are considered human rights change with the development of the times. They are not static. If we can see from the overall historical trend that human rights are constantly improving, we can also see from a certain historical section, for example, in the event of an epidemic, the situation of human rights protection may fluctuate. This is the so-called historical dimension. We cannot simply hold fast to the conclusion that human rights have just come and gone.

The other one is the spatial dimension, that is, different cultural traditions and national customs lead to different actualizations of human rights. As we all know, China has a system of regional autonomy for ethnic minorities, which is actually a different way of safeguarding the rights of different cultural traditions. If you accept my basic understanding, what conclusion do we reach? I think there are two aspects.

First, the level of human rights protection should be decoupled from the political dynamics. There was a question just now saying that some countries say that there are problems in China's human rights. In fact, they are making a fuss out of nothing and fabricating rumors to stir up trouble. As Professor Lu said just now, the objective is very simple. It is to achieve political containment. That is to say, China's rapid, balanced and stable economic, political and cultural development has deeply worried many countries. You may all have heard of a concept called "Thucydides Trap". They believe that major Western powers and China are destined for conflict. If they don't contain China now, then they won't have a chance in the future. This, in my opinion, is the first decoupling, which is to decouple human rights issues from political struggles.

Second, human rights should be decoupled from economic competition. Some countries have raised the so-called "cotton issue" in Xinjiang as a human rights issue and then used it to curb China's development. In fact, anyone with a clear vision knows that their objective behind the issue is very simple. From their point of view, China is developing too fast economically and we have competitive advantages in many aspects. Anyone who has studied economics knows that the basic operating rule of international competition is acquiring absolute advantage or comparative advantage. We have an advantage in this respect and they feel they are no match for us. What can they do? They began to use various human rights excuses to suppress China, which in my opinion should be kept in mind after understanding the spatial and temporal scale of human rights.

What does the building of a community with a shared future for mankind mean in terms of human rights? To put it simply, it means that human society faces more and more common risks and has many areas of common concerns. For example, a global panic is likely caused by climate change, global warming, epidemics, and the internet. Under such a premise, we should recognize the possible risks, actively cooperate globally, work for a common future, and promote human rights in the dimension of governance cooperation. That is my understanding. Thank you.

CRI:

What effective measures has the CPC explored to respect and protect human rights in the pursuit of people's freedom, equality and happiness? What are the similarities and differences compared with other countries, especially in guaranteeing equal rights for special groups? Thank you.

Zhang Wanhong:

Thank you for your questions and for your focus on the situation of specific groups after others focused on the larger issues. With the liberation and happiness of the people as its mission, the Communist Party of China (CPC) has, over the past 100 years, continuously explored ways to realize the state system of freedom and equality for the people, and gradually established the basic system of overall law-based governance. The CPC abides by historical materialism and recognizes and exalts the historical subjectivity of human beings. First of all, the equality we seek in the practice of respecting and safeguarding human rights is not the abstract equality of all men, or the so-called equality of natural rights. Our pursuit of equality is in the specific practice of history, in the specific time and space, with the sustainable development of the economy and the overall prosperity of the people as the material basis, with national independence and social harmony and stability as the institutional basis, and with the individual's feasible ability and substantive right of choice as the content of equality.

As for specific groups, in the process of realizing the equal protection of the rights of specific groups, we should emphasize the concrete practice of history, that is, the importance of their basic needs, such as clothing, food, housing and transportation, should be recognized by the system. For example, as a part-time vice chairman of the Hubei Disabled Persons' Federation, I pay close attention to the issue of people with disabilities. More than 80 million of them have been lifted out of poverty. Another example is the issue of gender equality. As a basic state policy, the CPC attaches great importance to protecting women's freedom of marriage, and established the no-fault divorce system very early. We have also carried forward the fine tradition of respecting the elderly and actively responded to population ageing. This is the first aspect.

Second, in the system of socialist rule of law with Chinese characteristics, the logic of rights has unique advantages in balancing the rights of individuals and communities, ensuring equal rights for specific groups, promoting overall personal development and integrated social development, and achieving common prosperity for the people. Understanding this point will help us adhere to the perspective of well-rounded human development. We advocate the equal right to participation, and the comprehensive and coordinated development of specific groups such as the disabled, women, and the elderly. It shows great awareness of the diversity of human nature and the equality of human dignity in socialist humanism, and the recognition and guarantee of the substantive equality of specific groups in the socialist political and legal systems.

Altogether, the theme of today's white paper is the substantial progress made in human rights by the Chinese people under the CPC's leadership. From the New Democratic Revolution and the socialist revolution to the building of a moderately prosperous society in all respects and comprehensive modernization, it is the people who have always been the centrality of enjoying and fulfilling all the human rights. So, we have come to an important conclusion that people's well-being is the greatest human right. The conclusion solves the questions: Who does the progress of human rights depend on, and who is it for? Everyone, regardless of physical or mental disabilities, gender, age, or other factors, can develop oneself with dignity, contribute to society, share the opportunity to shine in life, and make their dream come true. Thank you.

Shangyou News:

I would like to ask Mr. Li this question. With the continuous overall deepening of judicial reforms, China's judicial transparency is constantly upgrading, and its judicial human rights protection system is gradually improving. In recent years, the Supreme People's Court (SPC) has done a lot of work on the applicable standards of the death penalty. Can you give us some details on this? Thank you.

Li Xiao:

This is a very informed question, thank you. First of all, as for the applicable standards of the death penalty, let's take a look at how to control the application of the death penalty through legislation. As we all know, the application of the death penalty is a consistent criminal policy that China retains, strictly controls, and prudently applies. Paragraph 1 of Article 48 of the Criminal Law stipulates that the death penalty shall only be applied to criminals who have committed extremely serious crimes, while Article 49 states that the death penalty shall not be imposed on persons who have not reached the age of 18 at the time the crime is committed or on women who are pregnant at the time of trial, and that the death penalty shall not be given to a person who is 75 years old at the time of trial unless they have caused the death of another person by especially cruel means. In other words, there are three statutory conditions for restricting the death penalty.

In 2011, 13 crimes applicable for the death penalty were removed as part of the eighth amendment to the Criminal Law. In 2015, nine more crimes were removed in the ninth amendment. It shows that China has tightly limited the use of the death penalty through legislation. Over the years, massive efforts have been made to reform the judicial system, mainly in the following aspects: 

First, by taking further steps to strictly control the death penalty and employ it with prudence. It is widely known that since the SPC invoked the right to approve all death sentences on Jan. 1, 2007, courts at various levels have firmly upheld the concept of attaching equal importance to punishing crimes and protecting human rights. More attention has been paid to the penalty policy of tempering severity with mercy, and the death penalty is strictly controlled and prudently applied. This requires increased care when handling cases, increased caution when prescribing death sentences, and enhanced fairness in trial procedures. In the process of death penalty review, the SPC employs the highest standards and strictest requirements to check on the facts and evidence, laws and policies, and trial procedures of each case, making sure that the death penalty is only administered for convicted criminals in extremely severe offenses.

Second, by continuously adopting judicial interpretations and normative documents over the years to detail the application of laws and policies and tighten the procedures of case handling. The SPC, acting alone or together with other departments, has issued documents including Some Advice on Implementing the Criminal Policy of Combining Leniency with Rigidity, Provisions on Several Issues Concerning the Examination and Judgment of Evidence in Death Sentence Cases, and Provisions on Several Issues Concerning the Exclusion of Illegal Evidence in Criminal Cases. This year, we issued a long judicial interpretation regarding the implementation of the Criminal Procedure Law, in which special chapters and sections have been established to make comprehensive revisions and regulations on the death penalty. These documents have played an active and important role in guiding the lower courts to try death penalty cases in a fair manner, and further tightening and unifying legal and policy standards, rules of evidence, and trial procedures applicable to the death penalty.

Third, by strengthening human rights protection during death penalty review and ensuring defendants' right to defense and other legitimate rights. In August 2019, the SPC issued the Provisions on the Review and Execution Procedures for the Death Penalty to Protect Convicts' Lawful Rights and Interests. It stipulates that defendants have the right to be represented by a lawyer when the SPC is reviewing their death sentences and that convicts have the right to meet relatives before the execution of the death sentences, providing a strong guarantee for the rights of the accused in death penalty cases.

Fourth, by formulating criminal justice concepts that meet the requirements of the new era and unceasingly increasing the level of criminal justice. In 2019, the seventh conference on works related to criminal trials asked courts at various levels to strictly observe China's policy of retaining, strictly controlling, and prudently applying the death penalty. Efforts were also required to be made to ensure that the death penalty is only administered for a very small number of convicted criminals who have been found guilty of extremely severe offenses and have caused great harm to society, and that the death penalty is given with sufficient evidence according to law. The people's courts will resolutely implement the policy and ensure all death sentences are employed with ironclad evidence. Thank you.

Beijing Review:

Based on China's conditions, the CPC creatively put forward that the rights to subsistence and development are primary and basic human rights. In this regard, China has indeed achieved enormous progress. But in other areas of human rights, are there any prominent achievements that we can tell the world? Could you illustrate with some specific examples? Thank you.

Lu Guangjin:

This is an overall question on human rights, which is not only about the rights to subsistence and development. In accordance with the principle of universality, human rights also incorporate economic, social, and cultural rights as well as civil and political rights. In recent years, environmental rights and the right to peace have also arisen. Actually, the progress of human rights in China is not a single item that comprises the rights to subsistence and development but a comprehensive and integrated advancement. Great progress has been achieved in the judicial system, as Judge Li just mentioned, especially in the strict control of the death penalty and employing it with prudence. It is basically identical to international standards from a human rights perspective. I will not expand on this, as Judge Li has already spoken about it at length. We can observe that the progress of human rights protection is remarkable in the process of judicial system reform, ranging from strictly implementing the legal principles of no punishment without law and presumption of innocence to protecting the legitimate rights of criminal suspects and prohibiting extortion of confessions by torture. I think the progress made in this area is obvious.

In addition, the protection of civil rights has improved in various aspects, including the basic rights and personal rights of citizens. As for political rights, civic engagement is increasing, and the right to participate in state and autonomous affairs are better protected. There are plenty of specific examples in this regard.

Next, I'd like to invite Dean He to make some additional remarks.

He Zhipeng:

Let me just say a few words about the question. I think the reason why China particularly emphasized the rights to subsistence and development in the 1990s is because China faced a lot of pressure in terms of survival for a long time, as well as many bottlenecks in terms of its economic, social, cultural and individual development. The rights to subsistence and development can be understood as a "bunch of rights," which means that there are many concrete rights under these rights.

I would like to add a few more words to what Professor Lu was saying. Under the leadership of the CPC, China has gradually explored the development of human rights in a gradual manner. We all know that China put forward the goal of achieving moderate prosperity in all respects. In fact, the idea of building a moderately prosperous society reflects the implications of human rights. We studied this problem some time ago. In the late 1970s and early 1980s, the economic standard of per capita GDP was regarded as the sole measure of a well-off life. At the beginning of the 21st century, around the 16th CPC National Congress, China achieved its goal of a "well-off" standard of living, referring to the GDP growth target that we previously mentioned. However, can we say that China successfully achieved its goal? The answer is no. The report of the 16th CPC National Congress pointed out that, the well-off life we were leading was inadequate; and the goals of the well-off life were not only to meet people's basic needs, but also to achieve demands for democracy, the rule of law, a better environment and educational opportunities. Therefore, we found that the scope of human rights was gradually expanded under a comprehensive understanding of a well-off life.

We all have some personal experiences when we talk about building a moderately prosperous society in all respects from a perspective of human rights. We have witnessed an all-round improvement in China's economic, political and cultural life, including improvements to our living environment, educational opportunities, employment, and people's rights to know and participate in all fields of society. As the chairperson just mentioned, China is in a new period in which the timeframes of the Two Centenary Goals are converging. China's human rights situation is not perfect yet. We look forward to reviewing and summarizing at this stage, and doing better in the future. Thank you. That is all from me. Thank you, Mr. Lu.

Zhang Wanhong:

I would like to add something. I noticed that the reporter from Beijing Review wanted to hear some vivid examples. I come from Wuhan and would like to talk about the efforts and achievements that the Party and the government made in fighting the epidemic based on Wuhan's experience. Last year, China faced two major battles: poverty alleviation and epidemic prevention and control. As a resident of Wuhan, your question reminds me of the days and nights when China's top epidemiologist Zhong Nanshan visited Wuhan and the city was under lockdown. At the commendation meeting on the fight against the COVID-19 epidemic, General Secretary Xi Jinping summarized by saying that China's great spirit of combating the epidemic could be characterized by putting people's lives first, nationwide solidarity, sacrifice, respecting science, and a sense of mission for humanity. However, from the perspective of human rights, I would like to tell the story of combating the COVID-19 epidemic from my own experience. For example, on the basis of protecting people's lives and health, we ensured that people fully enjoyed their economic, social and cultural rights, fulfilled the right to participate equally, and promoted social integration and well-rounded personal development. A pandemic of such magnitude represents a litmus test in terms of human rights. In terms of protecting people's rights to education and employment, we initiated a policy of "suspending classes without stopping learning" and boosted the resumption of work, production and business activities. During the epidemic, schools and teachers worked together to overcome the software and hardware limitations. Meanwhile, all sectors of society, including network operators, network course platforms, and platforms for journals, books and data, also made contributions. In the early period of lifting the lockdown and resuming work in Wuhan, many enterprises introduced measures to solve the worries of their employees, such as sending vehicles to pick up their employees and arranging accommodation and food for employees and their families. These are examples with rich human rights implications.

In terms of protecting people's cultural rights, major online platforms provided free online services including movies, TV dramas and online books. Various non-governmental organizations carried out online cultural activities in communities to increase public cohesion and spread positive energy. In terms of protecting people's marriage and family rights, the government attached great importance to solving marriage and family disputes during the epidemic. Joining hands with charity organizations, women's federations in Hubei helped mediate and defuse family disputes during the epidemic. China attaches great importance to ensuring equal participation rights and barrier-free information access for specific groups. Barrier-free measures were adopted, such as by providing sign language interpretation at press conferences. Meanwhile, My volunteer team and I provided barrier-free communication services for hearing-impaired people and medical personnel of Huoshenshan Hospital and Leishenshan Hospital. We also launched epidemic prevention videos in sign language. From these examples, we can see the concrete details of human rights rather than abstract concepts of the rights to subsistence and development. In short, the CPC has made comprehensive progress over the past century in human rights. This is my answer for your question by using stories and experiences.

The Poster News APP:

Some experts believe that when constructing a national human rights discourse system, we should be wary of taking Western experience as a universal human rights standard and avoid "self-Easternization" in human rights discourse. How should we build a Chinese human rights discourse system that is both national and universal? Thank you.

Lu Guangjin:

This topic is indeed a topic that everyone is thinking about. Let me try to introduce it first. When talking about human rights, what we emphasize is the upholding of the principle of universality of human rights. At the same time, what we are opposed to is a universal view of human rights. The principle of universality and the universal view of human rights are two different concepts in our understanding. The universality view of human rights is to realize human rights by following the basic principles of human rights recognized by the United Nations documents or by everyone. The universal view of human rights was put forward by some people in the West during the Bourgeois Revolution, which means that human rights are determined according to their ideological logic, and that actually the standard definition of human rights is of uniqueness. Because we know that "the universal view" itself is a concept of Christianity. After expanding the view of natural human rights to include social and political life, it has become the only human rights standard in social and political life. We think this is inappropriate and unrealistic because different countries have different national conditions, different cultural backgrounds, different historical traditions, different social systems, and different national systems. Under such circumstances, using a single human rights standard to measure more than 200 countries and regions in the world is obviously not in line with actual situations. We have always held a negative attitude towards this; that is, we believe that there is no universal human rights standard in the world.

We mainly adhere to three principles in the development of human rights . First, we adhere to the principle of universality of human rights. We have signed and ratified several human rights conventions and comply with the universality requirements of international human rights. Second, we have to proceed from China's actual conditions and national conditions. This cannot simply be copied. Otherwise, copying will not solve the problem, and it will cause major problems instead. China is the biggest developing country with the largest population and fastest growth -- these are the realities that will affect the fundamental basis of China's development of human rights. Third, we oppose "human rights preachers" who use human rights to start a confrontation, or those who play the human rights card, use human rights as a big stick, and beat others if they don't meet their standards. We think this is unacceptable.

Regarding the connection of human rights discourse, how can China's human rights discourse be connected with the world's human rights discourse, maintaining both nationality and globality? This is indeed a question that scholars and experts should think carefully. We are also exploring this aspect. I think several points are important.

First, it must be characterized by the times. It is impossible to go back to the past when human rights discourse is raised in this era. Mr. He just said that every era has its own human rights. I said that every era has its own human rights discourse. Taking today's discourse back to the 17th and 18th centuries, during Europe's revolutionary years, I'm afraid it obviously would not work and it won't work to use human rights discourse from that era. This is called the evolution of history, the progress of history, and it also reflects the specificity of human rights.

Second, the principle of universality of human rights. Talking about human rights discourse must conform to the principle of the universality of human rights, and it must not be mentioned indiscriminately, otherwise it will not be easy to accept and does not conform to the universality of human rights. We must also pay attention to this aspect.

Third, we need to make some development and improvement on the basis of Chinese culture. Our culture has its own advantages and characteristics, which is also the root of our nation. We need to provide China's values and human rights views to the world and we must have a national characteristic because ethnic nationalities constitute the world. Of course this is a process. I mean that China has to build its own human rights discourse and that the process will take a long time. It will involve the use of both soft and hard power. It will mainly depend on the development and strength of the country. To build a powerful modern socialist country, it must have a strong material basis, and it must also include the development and progress of political civilization, spiritual civilization, and legal civilization, among other aspects. Only when these are integrated together can we truly improve cultural soft power, including human rights culture. Thank you.

China Women's News:

For a long time, the issue of how to protect the educational rights of migrant and left-behind children has received widespread attention. As the ruling party, how can the CPC ensure that these individuals can enjoy basic rights in life? Thank you.

Zhang Wanhong:

This question can be answered on several levels. First, we will adhere to the concept of equal protection. At the beginning of the 2000s, our Party and the State determined a basic strategy whereby local governments should be responsible for the migrant children in their jurisdiction and that full-time public primary and secondary schools should be mainly responsible for hosting migrant children to ensure the rights of migrant children to receive compulsory education. Secondly, I think it is necessary to give full play to the protection granted by the rule of law. In fact, we actually did that: in addition to laws such as the Compulsory Education Law and the Law on the Protection of Minors, the State Council, the Ministry of Education and other departments have issued various normative documents related to the balanced development of compulsory education, the improvement of the urban and rural compulsory education funding guarantee mechanism, and the resolution of issues such as enrollment of migrant workers' children to provide systematic and legal guarantees for the basic education rights of left-behind children and migrant children. For example, the city of Wuhan, where I live, arranged to admit children of migrant workers in urban areas to public schools in accordance with the principle of relative proximity, which means they can go to schools near where they live. In 2010, Wuhan waived fees for the compulsory education of migrant students. Finally, we have another institutional advantage, which is the joint effort of multiple departments to protect the rights to education of left-behind children and migrant children. First, General Secretary Xi Jinping, Premier Li Keqiang, and other national leaders have repeatedly issued instructions on the issue of left-behind children. Premier Li Keqiang stressed that "it is necessary to strengthen the main responsibility of family guardianship in accordance with the law, and implement the safety management, supervision, education, and other responsibilities of the grassroots government, village committees, and schools." Second, we have institutional cooperation. The Ministry of Civil Affairs takes the lead, while the relevant departments of education, public security, and justice coordinate and cooperate with each other. At the same time, we give full play to the forces of the All-China Women's Federation, the Communist Youth League, and other organizations. Third, we have support from society. Various media outlets and public opinion channels publish opinions and provide measures and suggestions. By seeing the big picture from a small angle, we can see the advantages of our system in solving this problem. With the Party's leadership, government guidance, social participation, and multilateral interactions, we can solve the problem of protecting the rights of specific groups one after another. Thank you.

Red Star News:

This year marks the 100th anniversary of the founding of the CPC. My question is, in terms of protecting the people's rights to know, participate, express, and supervise in society, what concepts does the CPC want to share? What can the world learn from China's experience in human rights protection? Thank you.

He Zhipeng:

The rights you mentioned just now are generally considered particularly important aspects of civil rights, such as knowing, participating, expressing, and supervising. In terms of concepts, what I personally understand are:

First, the concept of rule of law. As everyone knows, we have progressively promoted law-based governance in a bid to build a country of socialist rule of law. Now, we have rolled out the outline for developing the rule of law in China. Ensuring people's rights to know, to be involved, to express views, and to supervise the exercising of power in a legal manner is probably the most stable method. History tells us that these rights can only be well protected by establishing a sound legal system. China's Constitution has relevant provisions in those regards. As such, the State Council in 2007 launched the regulation of government information disclosure to ensure people's right to know. The rights to be involved, to express views and to supervise the exercising of power have been realized through the working processes of the National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC). All these actions are based on the rule of law. That's my interpretation of the first concept.

Second, the concept of gradualism, that is to say, things are not accomplished in a single stroke. As we discussed before, human rights are developing. If the development of human rights is not compatible with the economic, social and cultural development level of a particular time, it will hinder the development of human rights and society, or even subvert the whole society, just like with the one-sided human rights campaigns in some Middle Eastern countries. Therefore, over the last few decades, we have progressively developed the legal framework and law-based governance, continuously enriching relevant contents. This is an important principle which deserves to be promoted and shared with the rest of the world.

Third, as the saying goes, "actions speak louder than words." We often talk about grassroots democracy, which is decided by concrete actions rather than what is said or preached. In other words, every organization at the grassroots level, including the law school of Jinlin University where I work, is actively promoting democracy by various means, such as establishing various committees, through which people can express their opinions and participate in the decision-making process. As we all know, the rights to know, to be involved, to express views, and to supervise the exercising of power at different levels from grassroots institutions to the NPC and CPPCC have been constantly improved. This is a result of practices. When people get information online, many of them ask the government to disclose relevant information. This progress in the awareness of rights has been brought about by actual practice. We have raised the public awareness of human rights and improved the social atmosphere through actual practices. That is my preliminary understanding.

Lu Guangjin:

In fact, you have raised two questions. Mr. He has answered the question regarding concrete actions. Now, I will answer the question regarding the abstract issues. Under the leadership of the CPC, we have created a miracle in the global human rights cause over the past century. What made China's success possible? What can we learn from history? Since we might hold different perspectives, I will talk about my understanding.

First, China applies the universal principles of human rights in light of the national context. This is the most valuable experience we can learn from history. We should apply the universal principles of human rights, which means we cannot deny human rights, nor deny that it is a product of human civilization and social development. Therefore, we should explore a path of human rights development that suits China's national reality. Under this principle, we have joined many international treaties on human rights and combined the spirits of these treaties with our national conditions, exploring the correct path for China's development of human rights. For example, we have successfully applied such international concepts as the rights to subsistence, development, life, health, peace, the environment and many others into China's practices.

Second, we have persisted in promoting human rights through development. This is the "secret" behind China's successes in human rights. The white paper has also adopted the word "secret." As Mr. He said, it is a progressive process. How can this process be realized? Development has to be utilized as the driving force. I mentioned several "mosts" at the beginning. As the world's most populous country, what should we do? We have to solve the subsistence issues for 1.4 billion people, allowing them access to adequate food and clothing. Development is the only solution. Driven by development, other social programs will make progress as well. Advancements in other social programs will strengthen the protection of human rights. We believe this is China's most successful experience, however, some Western countries don't understand and often make improper comments.

Third, from my personal point of view, we should take a people-centered approach to human rights and promote the all-round development of people. This is also a precious experience accumulated from our Party's practices on human rights protection. In 2018, General Secretary Xi Jinping sent a congratulatory letter to the 70th anniversary of the Universal Declaration of Human Rights. He specifies that China adheres to a people-centered vision of human rights and, on that basis, puts forward that living a happy life is the primary human right. Over the years, General Secretary Xi Jinping has also stressed to "promote the all-round development of people" and "build a community with a shared future for humanity." Therefore, I believe that the development of China's human rights cause has followed four pieces of logic. First, the rights to subsistence and development are both primary and fundamental human rights. Second, living a life of contentment is the ultimate human right. Third, we strive to promote the well-rounded development of human rights in China. Fourth, we aim to build a community with a shared future for humanity.

The last point I want to make is about China's experience on its human rights development. I believe that China's most fundamental experience and its systematic advantage lie in upholding CPC leadership and the socialist system in promoting human rights. China is the world's largest socialist country. Under the leadership of the CPC, China has leveraged the strength of its socialist system to promote and protect human rights. After years of exploration, we have found the internal logic on this issue and certain laws, as well as things that will benefit our future development. This includes upholding CPC leadership, adhering to the socialist system, resolutely respecting and protecting human rights, and promoting coordinated development. In the meantime, I also believe that developing, respecting, and protecting human rights, or pursuing human rights protection on a higher-level, is conducive to the Party's leadership and the development of our socialist system. To fully leverage these strengths is the reason behind the progress of China's human rights cause. Thank you.

Shou Xiaoli:

The CPC's respect for and protection of human rights has attracted wide attention. Thank you very much for the participation of all the experts and friends from the media. Today's briefing is hereby concluded. Goodbye.

Translated and edited by Wang Yiming, Wang Wei, Yang Xi, Li Huiru, Duan Yaying, Yuan Fang, Xiang Bin, Liu Qiang, Zheng Chengqiong, Chen Xia, Dong Qingpei, Fan Junmei, Zhang Rui, He Shan, Qin Qi, Huang 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.

Read in Chinese

Speakers:

Li Xiaojun, head of the Publicity Department of the Bureau of Human Rights Affairs of the State Council Information Office (SCIO)

Li Xiaomei, special representative for human rights at the Department of International Organizations and Conferences of the Ministry of Foreign Affairs

Li Xiao, first-level inspector of the Research Office of the Supreme People's Court

Chang Jian, director of the Research Center for Human Rights of Nankai University

Zhang Yonghe, executive dean of the Human Rights Institute of Southwest University of Political Science and Law

Chairperson:

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

Date:

May 31, 2021

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this briefing held by the State Council Information Office (SCIO). The briefing is on the implementation of the National Human Rights Action Plan of China (2016-2020). Today, we are joined by Mr. Li Xiaojun, head and second-level inspector of the Publicity Department of the Bureau of Human Rights Affairs of the SCIO; Ms. Li Xiaomei, special representative for human rights at the Department of International Organizations and Conferences of the Ministry of Foreign Affairs; Ms. Li Xiao, first-level inspector of the Research Office of the Supreme People's Court (SPC) and SPC senior judge; Mr. Chang Jian, professor and director of the Research Center for Human Rights of Nankai University; and Mr. Zhang Yonghe, professor and executive dean of the Human Rights Institute of Southwest University of Political Science and Law. First, our speakers will take turns to brief you on the issues and will then take questions.

Now, let's give the floor to Mr. Li Xiaojun.

Li Xiaojun:

Good afternoon, everyone. The National Human Rights Action Plan of China (2016-2020) is the third plan of its kind formulated and implemented by China since 2009. It is also the first action plan that meshes with China's five-year plan for national economic and social development. Over the past five years, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, central and local government bodies, departments and all sectors of society have worked together to secure a decisive victory in building a moderately prosperous society in all respects. China has won a complete victory in its fight against poverty, and effectively safeguarded people's lives and health in its fight against the COVID-19 pandemic. Given this, the action plan has been implemented in a comprehensive manner. The main targets and tasks have been met as scheduled, and dozens of indicators have been completed ahead of schedule or surpassed. The Chinese people's sense of gain, happiness and security has been significantly enhanced.

Living a happy life is the primary human right. The action plan espouses a people-centered development philosophy, striving to address the difficulties and shortages in developing human rights in China. It highlights efforts to remedy deficiencies and strengthen weak links, focusing on safeguarding the rights of poor people, disadvantaged groups and vulnerable groups, in a bid to achieve fairness and justice. The implementation of the plan has strengthened China's capacity to safeguard people's economic, social and cultural rights. People's civil rights and political rights have been protected more effectively, and the rights of ethnic minorities, women, children, the elderly and people with disabilities have been fully safeguarded. Human rights knowledge has been publicized, and human rights education has been ingrained into people's minds. International communication and cooperation on human rights have also been fruitful.

We have also gained new experience through implementing the action plan. This includes adhering to the leadership of the CPC, the guidance of the government, legal protection, public participation, as well as supervision from multiple sectors. The SCIO and the Ministry of Foreign Affairs took the initiative to set up the joint meeting mechanism for the National Human Rights Action Plan, which functions as a coordinating body. Over 40 central departments and people's organizations have taken their due responsibility to implement and supervise the action plan in an orderly manner. Media outlets, national human rights education and training centers, social organizations and enterprises have all played vital roles in the cause.

China's formulation and implementation of national human rights action plans has been well recognized by the international community. Currently, more than 60 countries have formulated national human rights action plans, and China is one of the few countries that has formulated more than three phases of such plans. In November 2018 when China's human rights record was examined for the third time by the Universal Periodic Review (UPR) mechanism of the UN Human Rights Council (UNHRC), more than 20 countries spoke highly of China's efforts to formulate and implement national human rights plans. For the UPR session of the UNHRC, this is not common. China is willing to share our useful experiences in promoting and safeguarding human rights with the rest of the world. Meanwhile, China is also working toward making new contributions to the sound development of international human rights and global governance on human rights.

The implementation of the action plan could not happen without effective supervision and evaluation. The joint meeting mechanism for the National Human Rights Action Plan has conducted periodic research, examinations and evaluations on the action plan's implementation, continuously strengthening the efforts. Last year, we also commissioned a third-party research body to evaluate the implementation situation, and detailed reports will soon be published.

As the world's biggest developing country, China completed the eradication of extreme poverty — one of the targets of the UN 2030 Agenda for Sustainable Development — 10 years ahead of schedule. China is also moving up on the UN's Human Development Index. Chinese people enjoy extensive and real democracy and freedom, and China has made remarkable progress in its protection of human rights. In order to provide all Chinese people with better and happier lives, we still need to make efforts in the field of human rights.

China is currently formulating the fourth phase of its National Human Rights Action Plan. We will work in accordance with the target of "promoting the comprehensive development of the human rights cause" put forward by the fifth plenary session of the 19th CPC Central Committee and the 14th Five-Year Plan (2021-2025). As China embarks on a new journey toward fully building a modern socialist country, we will better put into practice the principles of respecting and protecting human rights as stipulated in the Constitution of the People's Republic of China and the Constitution of the CPC. The fourth phase of the action plan will soon be published and implemented.

There is no best, only better human rights protection. We have faith that China's human rights cause will see a brighter future. Thank you.

Shou Xiaoli:

Next, let's give the floor to Ms. Li Xiaomei.

Li Xiaomei:

Ladies and gentlemen, friends from the media, good afternoon. I'm very pleased to be taking part in this briefing on the implementation of the National Human Rights Action Plan of China (2016-2020) on behalf of the Ministry of Foreign Affairs. Formulating and implementing the National Human Rights Action Plan of China is an important move for the Chinese government in practicing the constitutional principle of "respecting and protecting human rights," comprehensively promoting the development of China's human rights cause and fulfilling its international human rights obligations. Over the past five years, China has achieved remarkable accomplishments in terms of international communication and cooperation of human rights, making great contributions to the sound development of the international human rights cause. These achievements can be outlined in four main aspects:

First, we have been taking an active part in international human rights governance. In 2020, China was once again elected as a member of the UNHRC. Being one of the very few nations that have been elected as a member five times, China firmly upholds multilateralism, safeguards the purposes and principles of the UN Charter, actively participates in the multilateral human rights mechanism work and advocates promoting human rights through peace, development, cooperation and justice. We have proposed a series of proposals and initiatives at the U.N., and advanced the establishment of a fair, just, rational and efficient international human rights system. Thanks to China's efforts, the concept of building a community with a shared future for mankind has been written into resolutions of the UNHRC a dozen times.

Second, we have firmly defended national interests and image. China advocates conducting human rights dialogue and cooperation on the basis of equality and mutual respect, and opposes the politicization of human rights, double standards, and interfering in other countries' internal affairs under the pretext of human rights. China has firmly safeguarded national interests and dignity, winning support from other friendly and developing countries.

Third, we have earnestly performed our international human rights duties. In 2018, China underwent its third cycle of Universal Periodic Review (UPR) at the UNHRC. The development notions, practices and achievements with Chinese characteristics were highly commended by more than 120 countries and China accepted 284 suggestions proposed by other countries. We timely submitted the implementation reports on several human rights conventions, such as the International Covenant on Economic, Social, and Cultural Rights, the Convention on the Rights of Persons with Disabilities, and the Convention on the Elimination of All Forms of Racial Discrimination. Considering China's national conditions, we accepted and implemented reasonable and plausible suggestions. 

Forth, we conducted a wide range of communication and cooperation on human rights matters. Over the past five years, we have held human rights dialogues and negotiations with over 20 countries and organizations. We have communicated and cooperated with the Office of the UN High Commissioner for Human Rights, received the UNHRC special rapporteur on extreme poverty and human rights, and an independent expert on the enjoyment of all human rights by older persons on visits to China. We hosted important activities like the 10th Anniversary Meeting of the Adoption of the Convention on the Rights of Persons with Disabilities and the International Symposium on the 30th Anniversary of the Adoption of the United Nations' "Declaration on the Right to Development."

Friends from the media, this year marks the 50th anniversary of the restoration of China's lawful seat at the United Nations. Being a responsible member of the U.N. family, China has always been an important participant, contributor and constructor in the field of international human rights. This February, State Councilor and Foreign Minister Wang Yi took part in the 46th Session of the UNHRC and delivered a speech by video. He put forward four proposals, namely, that we should embrace a human rights philosophy that is people-centered, uphold both the universality and particularity of human rights, systemically advance all aspects of human rights, and continue to promote international dialogue and cooperation on human rights, which were received enthusiastically.

In the future, we will be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and Xi Jinping Thought on Diplomacy, continue to earnestly fulfill our international human rights obligations, comprehensively get involved in global human rights governance, advocate common values featuring peace, development, fairness, justice, democracy and freedom, voice words of justice on international occasions, inject positive strength into international cooperation, help all countries join hands to promote and protect human rights and advance building a community with a shared future for mankind. Thank you.

Shou Xiaoli:

Now, let's give the floor to Ms. Li Xiao.

Li Xiao:

Friends from the media, good afternoon. I'd like to brief you on major measures taken by the judiciary to implement the National Human Rights Action Plan (2016-2020) and the progress of its implementation. 

The judiciary have always attached great importance to the implementation of the action plan and have incorporated the action plan into the work plans of their systems and departments in accordance with the principle "each performing its own functions and sharing the work and responsibilities,"and adopted effective measures to actively push for implementation. The Supreme People's Court has closely focused on the work goal of ensuring that citizens feel fairness and justice in every judicial case and espoused a people-centered view of human rights to implement the constitutional principles of respecting and protecting human rights. They have promoted the rule of law in safeguarding human rights and fulfilled the targets and tasks of the judicial work set in the action plan as scheduled.

In order to guarantee the right to fair trial for all parties, the judicial system of China has made the following efforts:

First, they have carried out reform of the judicial system and enforced judicial accountability in all respects. By strictly implementing the Regulations on the Recording, Notification, and Accountability Investigation of Leading Officials for Interventions in Judicial Activities and Handling of Specific Cases, the Regulations on the Recording and Accountability Investigation of Staff Members of Judicial Organs for Their Intervention in Case Handling, and Provisions on Further Regulating the Contact and Association between Judicial Officials and the Parties Concerned, Lawyers, Special Interested Parties, and Intermediary Organizations, they have defined their functions and duties clearly and improved the supervision mechanism to ensure the independence of judicial power in accordance with the law.

Second, they have further promoted the reform of the criminal litigation system with a focus on adjudication. They have strictly enforced the principles of "statutory crime and penalty," "no punishment in doubtful cases" and "evidentiary adjudication," and "exclusionary rule" so as to realize the substantive reform of court trials and prevent and correct unjust, false and wrong cases. From 2016 to 2020, China's courts acquitted 5,479 defendants.

Third, they have fully guaranteed defendant's rights to defense and legal assistance. They have protected lawyers' rights to meet their clients, to read case files, to investigate and obtain evidence, to conduct cross-examination, and to debate and defend, and other litigious rights. They have also improved the work mechanism for lawyers to perform their duties by law.

Fourth, they have improved the system of right remedy and assistance. They have raised standards of compensation to increase the daily compensation from 17.16 yuan ($2.69) in 1995 to 373.1 yuan in 2021. From 2016 to 2020, courts at all levels concluded 87,152 cases involving state compensation. By implementing the Opinions on Carrying out Victim Relief Work, they have established the Judicial Assistance Committee. From 2016 to 2020, they handled 205,600 legal aid cases, and the level of judicial protection for human rights was continuously improved. Thank you.

Shou Xiaoli:

Next, I will give the floor to Mr. Chang Jian.

Chang Jian:

Good afternoon. It is a great pleasure to meet with you all at this briefing regarding the implementation of the National Human Rights Action Plan. I'd like to brief you on our study of civil and political rights in China.

Generally speaking, the Chinese government has further stepped-up efforts to guarantee civil and political rights. Specifically, they have taken a series of measures to safeguard citizens' personal freedom, freedom of religious belief, property rights, the right to information, the right to participation, rights of expression and the right to supervision. They have achieved results. 

In terms of safeguarding personal freedom, China has established a system of archiving the entire law-enforcement process, and revised the Administrative Penalties Law, which clearly defines that "the power of administrative penalty involving restriction of personal freedom shall only be exercised by the public security organs" and other organs as prescribed by law.

As for guaranteeing the freedom of religious belief, China has revised the Regulations on Religious Affairs to add a section covering religious schools. From 2016 to 2020, 12 new religious schools were established in China, bringing the total number to 95.

In terms of guaranteeing the right to property, China has amended the Land Administration Law, the Urban Real Estate Administration Law, the Law on Rural Land Contracting, the Copyright Law and the Patent Law to improve the protection of the property rights of rural collectives and individual citizens, as well as the intellectual property rights in China. 

In terms of the rights to information, participation, expression and supervision, more than 90 draft laws have been made available for public consultation since 2018. The system of publicity for administrative law enforcement was rolled out in 2019. During the past five years, non-Communist parties and the All-China Federation of Industry and Commerce have submitted more than 1,800 proposals. A draft of the revised Administrative Reconsideration Law has solicited public opinion since the end of last year. In 2020, the administrative review organs at all levels handled around 242,000 applications for administrative reconsideration and the proportion of direct error correction decisions made reached 14.6%. Thank you.

Shou Xiaoli:

Next, I will give the floor to Zhang Yonghe.

Zhang Yonghe:

I'm very glad to attend this briefing today. As scholars, we participated in the implementation of the plan. I have done research on economic, social and cultural rights, and I am willing to communicate with you in this regard.

First, generally speaking, our action plan is consistent with the basic framework of the U.N. International Covenant on Economic, Social and Cultural Rights and International Covenant on Civil and Political Rights, which means that our action plan meets the U.N. requirements. 

Second, the third action plan is completely consistent with our 13th Five-Year Plan (2016-2020), and they complement each other. In the past five years, the Chinese government has taken practical measures to actively promote the successful completion of the goals and tasks of the National Human Rights Action Plan (2016-2020).

In terms of economic, social and cultural rights, the Chinese government has continuously deepened reforms, implemented the requirements of the 13th Five-Year Plan in the economic, social and cultural fields, and adopted a series of major measures to promote development and benefit people's livelihoods. For example, we have implemented the annual paid leave system, strictly standardized the special working hours system, and established vocational education and continuing education systems. We have implemented targeted poverty reduction and alleviation strategies and accomplished the targets and tasks for eliminating poverty. We have completed the compilation of the Civil Code, which further improves the property rights of civil subjects, as well as the specific system whereby the property rights of the state, collectives, individuals and other rights holders are equally protected by law.

With regard to the rights of specific groups, the Chinese government has adopted a series of major measures to provide preferential protection for the rights of specific groups, raising the level of protection for the rights of ethnic minorities, women and children. More than 50 autonomous regulations and 240 separate regulations have been formulated and revised in 155 ethnic autonomous areas, providing legal support for protecting the legal rights of ethnic minority citizens in accordance with the law. We have issued the Circular about Further Regulating Recruitment and Promoting Women's Employment, specifying six types of gender discrimination in employment that shall not be committed, and establishing a working mechanism for joint departmental interviews to provide safeguards for women's equal employment. The Law of the P.R.C. on the Protection of Minors was revised in 2020 and ensures a mandatory reporting system for violations of minors' lawful rights, a prevention and control system for school bullying, and a cybersecurity system.

In general, the third action plan has played a very important role in promoting the cause of human rights in China. Thank you.

Shou Xiaoli:

Thank you. Now, the floor is open for questions. Please identify your news outlets before asking questions.

CGTN:

Just now you mentioned that significant progress has been made in implementing this action plan, including poverty alleviation. Can you please tell us about the improvement in the protection of the rights of the people in Xinjiang, Tibet and other regions where ethnic minorities live? Thank you.

Zhang Yonghe:

We have done a lot of research in Xinjiang and Tibet, and from our research, it should be said that the entire economy, society and culture of Xinjiang and Tibet have undergone tremendous changes in the past five years, and in fact it is the people who have changed even more. In this process, we focused not only on the "development of people," but also "helping people develop." Over the past five years, the promotion of their human rights has been enhanced, both spiritually and in many of ways. The results are very obvious, so I think the Chinese government has done a very good job in this regard. Thank you.

People's Daily:

What are the new highlights in the implementation of this plan in terms of safeguarding civil and political rights compared to the two previous human rights action plans? Thank you.

Chang Jian:

Let me answer this question. Much progress has been made in the protection of civil and political rights. We recently went to Zhejiang, Shanghai, and other places to conduct research. From my personal experience, I feel that there has been more prominent progress in the construction of grassroots democracy.

The improvement of community-level democracy mainly includes the construction of urban residents' committees, rural villagers' committees, and meetings of workers' representatives of enterprises and institutions. During the implementation process, China revised the organic law of the urban residents' committees. About 28 provinces, autonomous regions, and municipalities nationwide formulated or revised the implementation methods of the organic law of villagers' committees, and villagers' supervisory committees were established in various places. Village affairs were made public by counties and the procedures and time for disclosure also ensured transparency. Labor unions at all levels have also basically established a democratic system of dealing with enterprise affairs with meetings of workers' representatives as the basic form, which includes a system for transparency of enterprise affairs, a workers' director system, a workers' supervisor system, and a collective contract system for equal consultation. These are all legal forms that ensure democracy within enterprises. Other specific forms such as workers' democratic management committees, democratic councils, talks between labor and capital, and democratic consultation meetings were also set up. 

In particular, we made investigations in Houchen village, Wuyi county of Jinhua city, Zhejiang province, China's first village to establish a village affairs supervision committee, starting in 2004. This is a vivid example. At that time, village officials worked hard for the villagers, however, due to a lack of information being disclosed, residents were skeptical about the village finances and thought that the officials might be embezzling money. Later, the village affairs disclosure system and the village affairs supervision system were set up, publishing details of how every yuan was spent. The move had a great effect. Now, the officials believe that as long as they work hard to disclosure all information for the villagers to supervise, the villagers will trust them more, since people will be able to observe and recognize their work. In 2016, the revised Organic Law of the Villagers Committees incorporated the village affairs supervision system, which has been adopted nationwide, delivering good results. Thank you. 

Cover News:

The National Human Rights Action Plan stipulates strictly controlling application of the death penalty and intensifying the procedures for reviewing death penalty cases. What work has the Supreme People's Court done in this regard in recent years? What proportion of death penalty cases are not approved? Some law scholars have called for open trials or hearings in reviewing death sentences cases. What is the Supreme People's Court's take on this? Thank you. 

Li Xiao:

Thank you for your questions. I see you have a strong interest in death sentences cases. I will answer your questions one by one. 

First, the Supreme People's Court has done a lot of work to strictly control the approval of death sentences. For example, in terms of legislation, those who perform major meritorious services should be given lesser punishments, and we approve as few death penalty cases as we can. For defendants over 75 years old, unless they committed crimes of intentional homicide or the circumstances were heinous, they should not be sentenced to death. In reviewing death penalty cases, we have strengthened human rights protection by entrusting lawyers to give them every opportunity to conduct their defense. The Supreme People's Procuratorate has regulations related to the supervision of death penalty cases. 

Your second question was about the proportion of cases that result in the death penalty. In reviewing capital punishment cases, the Supreme People's Court sticks to the highest standards, strictest rules, and the principle of seeking truth from facts, approving those should be approved, and rejecting those that should be rejected. From time to time, we also release details of typical cases. Therefore, there is no certain proportion — it all depends on seeking truth from facts. 

Reviewing death penalty cases, as a special hearing procedure, is different from the lawsuit procedures of first and second instance judgments. The Supreme People's Court considers the defense of lawyers during the review as much as possible, and is also supervised by the Supreme People's Procuratorate. Thank you. 

CCTV: 

In recent years, what specific measures have been taken in terms of human rights information popularization and education? What experiences can you share? Thank you. 

Li Xiaojun:

Over the past five years, China has scaled up efforts to publicize, educate and train people about human rights and spread the concept of human rights. We have hosted various themed publicity campaigns, especially on such occasions as the national two sessions, International Women's Day, International Workers' Day, International Children's Day, National Day for Helping the Disabled, National Constitution Day, Human Rights Day, as well as during the seventh five-year plan to publicize law period (2016-2020), focusing on the formulation, revision, and implementation of important laws and regulations related to human rights, so as to increase society's awareness of respecting and protecting human rights. 

Over the past five years, the SCIO and national human rights education and training bases supported by eight universities, have held 220 national training classes on human rights and trained more than 31,000 people. In the law system, around 200 training sessions have been organized, inviting experts on human rights to give lectures. Human rights education has been intensified for students in colleges, as well as middle and elementary schools. Human rights content has been included in teaching materials and classes, with more than 60 colleges creating classes on human rights, and chapters about respecting and protecting human rights added to books for junior high schools and high schools. The media is active in reporting about human rights. Through the magazine "Human Rights," the "Chinese Journal of Human Rights," and humanrights.cn, organizations like the China Society for Human Rights Studies have publicized human rights knowledge and spread the idea of human rights protection. The concept of protecting human rights according to the law has taken deep root in people's hearts. Thank you.

Chang Jian:

I have some points to add. With regard to the dissemination of knowledge and training on human rights, we have made a lot of effort in the area of human rights education in universities and colleges. On one hand, we set up public elective courses to popularize basic knowledge of human rights, which are accessible to all students. For example, Nankai University set up the public elective course on basic knowledge and literacy of human rights. In addition, specialized courses in human rights are offered in various faculties, with the School of Law offering courses in international human rights law and the Zhou Enlai School of Government offering courses in the politics of human rights. 

Meanwhile, we have also explored ways of promoting human rights education at primary and secondary schools. On one hand, the basic knowledge of human rights, especially that involved in the Law on Protection of Minors, was integrated into courses and textbooks of primary and secondary schools. Moreover, we have also sought to add human rights related knowledge into out-of-class reading materials. A special working group set up by Nankai University compiled a book named "The Story of Nannan and Kaikai," a comic for extracurricular reading for primary and secondary school students. We have different versions for primary school students, secondary school students and teachers respectively, which enables students to have a basic understanding of human rights at primary and secondary schools. Thank you. 

Zhang Yonghe:

I would also like to add some information. Mr. Chang just talked about the situation of Nankai University. I think China's human rights education is probably the most distinctive. We have a master's program, a doctoral program, international students, post-doctoral students, and now we also offer undergraduate education in human rights, forming a basically complete education system. In this way, we have cultivated a lot of high-end talents on human rights, who are the backbone of our human rights cause. Thank you. 

Lianhe Zaobao:

My question is about human rights issues in Xinjiang. What is your response to the perception of some international opinion that the human rights of the Uygurs there are being violated? Also, what are the priorities for the next phase in terms of human rights for ethnic minorities? Are there any more prominent issues that you will focus on next? Thank you.

Li Xiaojun:

Let me say a few words first and then I will give the floor to Mr. Zhang. There has been a large amount of hype about human rights in Xinjiang. When I was attending a United Nations meeting in 2018, some countries were engaged in political manipulation of human rights issues related to Xinjiang. They are still making irresponsible remarks on Xinjiang. In fact, the past five years have been the best five years for the development of human rights in China's Xinjiang, with significant improvements in people's living standards and great achievements in poverty eradication, with all poor counties removed from the poverty list and all people in absolute poverty lifted out of poverty. Therefore, the achievements in human rights development in Xinjiang have been great, and deliberate smears by some members of the international community are purely unfounded.

The same is true with regard to ethnic minorities. China's ethnic minorities, whether in terms of economic development, social development or ethnic unity, culture and education, freedom of religious belief and many other aspects, can also be said to have reached the best level in recent decades. 

Zhang Yonghe:

I have some points to add about this question. Some Western countries have questioned the guarantee of human rights in Xinjiang, and their accusations are purely unfounded. I have been doing research in Xinjiang for more than a decade, focusing on primary construction in rural areas and employment issues. I hope you can give your attention to the official website of the Human Rights Institute of Southwest University of Political Science and Law (SWUPL), where you can find many published paper reports responding to the issue. We are working on other related reports, which will be released on our website when available, so please stay tuned.

Li Xiaomei:

Just now the reporter mentioned international public opinion, and I would like to add a figure. During the 46th Session of the UNHRC, in response to some countries' attacks and smears against China on Xinjiang-related issues, a total of 64 countries made a joint statement to support China's justified position and measures on Xinjiang-related issues. Together with those countries that supported China through separate speeches and statements, nearly 100 countries voiced their support for China's policies on Xinjiang at the UNHRC, and they opposed interference in China's internal affairs, which fully reflects the trend of popular sentiment in the international society and indicates that people can tell right and wrong. Thank you. 

CRNTT:

The third National Human Rights Action Plan (2016-2020) added the principle of collaborative promotion, emphasizing that human rights development relies on the joint participation of all parties. In the past five years of implementation, how have the various social forces joined together to promote the development of human rights? Thank you.

Chang Jian:

I'll answer this question. I am glad that you have paid attention to the principle of collaborative promotion we proposed while formulating the National Human Rights Action Plan (2016-2020). As we know, the National Human Rights Action Plan (2009-2010) and the National Human Rights Action Plan (2012-2015) focused on three principles: advancement in accordance with the law, coordination and pragmatic advancement. In the third action plan we have added two more principles, one is the collaborative promotion that we have just talked about, and the other is the equal promotion.

Regarding promotion with joint efforts, we mainly emphasize that governments, enterprises, public institutions and social organizations work together to facilitate the development of human rights. We have noticed that enterprises and public institutions have done a lot in this regard. During our recent inspection trip to Zhejiang province, we noticed an interesting phenomenon that many communities there have set up community development foundations to provide services for the elderly, education for minors, and assistance for ethnic minorities. These foundations are mainly funded by local enterprises. The government has launched a number of projects where assistance is needed and has also implemented specific measures for the protection of human rights. An important program is called "Spring Mud Plan", which aims to help meet the educational and living needs of minors at school, especially of left-behind children and children of migrant workers, among others. At the grassroots level, volunteer organizations have developed vigorously. For example, in the fight against the COVID-19 epidemic, volunteer groups have played an essential role in providing community, transportation and hospital services.

At the local level, many regions have paid special attention to the role of social organizations in carrying out public welfare activities, especially in protecting the rights of the elderly, people with disabilities, minors and ethnic minorities. A host of relevant figures are available in such localities, and I have seen a substantial increase in the figures compared to previous years. Thank you.

China Daily:

What constitutes a good human rights situation? Is there an international consensus on it? What is the connection between China's human rights concept and the global consensus on human rights? What does China's human rights concept focus on? Are human rights universal? Thank you.

Li Xiaomei:

Thank you for your questions. In a congratulatory letter to a symposium marking the 70th anniversary of the Universal Declaration of Human Rights (UDHR) on Dec. 10, 2018, President Xi Jinping said that living a happy life is the primary human right. Since the day of its foundation, the CPC has set its goal to work for the wellbeing of the Chinese people and for human progress. China respects the principle of human rights' universality reflected in the UN Charter and the UDHR. At the same time, China upholds that every country enjoys the right to and must independently choose its own path of human rights development in light of its national conditions and social development level. This is also what China has been practicing. As I mentioned in my briefing just now, at the high-level meeting of the 46th session of the United Nations Human Rights Council convened in February this year, Chinese State Councilor and Foreign Minister Wang Yi once again called for integrating the principle of human rights' universality with the practices of different countries. We also admit that countries have various views on this issue, which is why China has always been an active advocate of human rights dialogue and cooperation. China calls on all countries to engage in dialogue and cooperation regarding human rights on the basis of equality and mutual respect. Thank you.

Chang Jian:

I would like to add a few more words on this point. The so-called universal consensus is also widely discussed here in China. Looking into the history of human rights development, I believe that human rights were originally developed in different countries and nationalities. For example, China has always upheld Confucianism emphasizing benevolence towards fellow human beings. In the West, there is a tradition of natural law and natural rights. Africa holds a utopian view and thinks that one should treat others like brothers, while Buddhism advocates that all beings are equal. So, human rights are inherently permeated by different cultures. As for the formation of a consensus on human rights, it was actually with the globalization of the economy, especially since the Second World War, when fascism victimized humanity, that a certain consensus was reached among different national cultures on the issue of human rights, as highlighted by the UDHR and various international human rights covenants. In this regard, China was one of the drafters of the UDHR. At that time, Zhang Pengchun, then vice president of the United Nations Commission on Human Rights, jointly drafted the UDHR with Mrs. Roosevelt (the wife of former U.S. President Franklin Delano Roosevelt) and others. In recent years, China has acceded to a total of 26 international conventions on human rights and a raft of International Labor Organization (ILO) conventions. China safeguards and facilitates the current internationally recognized of human rights concepts.

On the other hand, we observe that different countries have different conditions, different cultures, different political systems, and different levels of economic and social development, so there are certainly many differences in how human rights are understood and how they are implemented. For example, in terms of the perception of human rights, it became obvious during this COVID-19 pandemic that China puts the right to life and right to health as the top priority, while some other countries may put economic development, political votes and personal freedom as their top priority, which may lead to different results. In addition, China is a developing country, so it puts the rights to subsistence and development in the priority place, while some developed countries have different priority rankings in regards to human rights. Just as Ms. Li Xiaomei mentioned a moment ago, there are different development paths in the world. We now emphasize dialogue and inclusiveness in the international community, advocating that you should not use your own country's human rights implementation measures as universal standards. Otherwise, there will be problems. But how do you test whether a country's human rights situation is good or bad? China's point of view is this: it's not enough to just write human rights in the law. The most important examination criteria are people's senses of gain, happiness, and security, and we should use people's actual sense of satisfaction to examine whether the human rights situation is good or bad in a country. Thank you.

Guangming Daily:

In recent years, some unjust, false and wrong cases have been corrected, and the society has paid broad attention. Since the implementation of the third National Human Rights Action Plan, what new measures have been taken to strengthen the judicial protection of human rights and prevent unjust, false and wrong cases? Thank you.

Li Xiao:

Thank you for your question. Since the implementation of the third National Human Rights Action Plan (2016-20), judicial organs have continuously established and improved relevant mechanisms to prevent unjust, false or wrong cases at the source. There are five main measures:

First, we have standardized the procedure for excluding illegal evidence. We have improved the mechanism for effectively preventing and correcting unjust, false and wrong cases in a timely manner, and strengthened the prevention of interrogation by torture and illegal collection of evidence at the source. 

Second, we have implemented a system of synchronous audio and video recording throughout the interrogation of criminal suspects. Public security organs at all levels across China have now generally implemented full-process audio and video recording of every interrogation process in all criminal cases. People's procuratorates have also implemented synchronous audio and video recording of the entire process of interrogating suspects of work-related offences.

Third, we have launched pilot work to ensure legal defense is provided in all criminal cases, and established and improved a duty lawyer system, which means that every defendant in every criminal case will receive legal assistance from a lawyer.

Fourth, we have standardized the case-filing review standards of criminal appeal cases, and improved the procedures and requirements for reviewing criminal appeal cases. We have sought truth from facts, looked into any mistakes, and corrected any wrongs we discovered. From 2016 to 2020, courts nationwide allowed retrials and revised verdicts of 8,310 criminal cases through the trial supervision procedure.

Fifth, we have continued to promote standardization in meting out punishment, regularize the judges' sentencing discretion and enhance openness and impartiality in sentencing.

Regarding the establishment of a long-term judicial relief mechanism in the future, efforts are mainly reflected in two aspects: First, we have continued to advance the reform of the criminal litigation system with a focus on adjudication, and adhered to the principles of "statutory crime and penalty," "no punishment in doubtful cases" and "evidentiary adjudication". We have given full play to the basic role of the first-instance procedure and the reviewing role of the second-instance procedure, continuously improved the evidence review mechanism, and resolutely maintained the bottom line of preventing unjust, false and wrong cases. Second, we have improved the right remedy mechanism. Thank you.

Xinhua News Agency:

What shortcomings and deficiencies in the protection of economic, social and cultural rights have been remedied during the third National Human Rights Action Plan period? Thank you.

Zhang Yonghe:

In the course of our research, we found that the implementation of the third National Human Rights Action Plan has made up for the shortcomings and deficiencies in many areas. The first was the implementation of a real-name registration system for dynamic management and categorized assistance for people with employment difficulties, with particular attention being paid to families with no one holding a job. The second was comprehensive efforts to address the issue of wage arrears for migrant workers. The third was efforts to ensure equal basic housing rights for holders of residence permits with locally registered residents. In addition, there were other aspects such as improving the food safety credit system. Thank you.

Beijing Daily:

How was the right to health guaranteed in the fight against COVID-19 in 2020? During the regular prevention and control phase, how will the prevention and control of sudden outbreaks be strengthened in terms of human rights protection, and will new indicators be added regarding the prevention and control of outbreaks? Thank you.

Zhang Yonghe:

Regarding the Chinese government's prevention and control of the COVID-19 pandemic and its protection of human rights, the Human Rights Institute of Southwest University of Political Science and Law made a special report in February last year, which was published on our website in both Chinese and English. In the prevention and control of the COVID-19 pandemic, the Chinese government has made the protection of the right to life its top priority. The results and effectiveness of our country's fight against the pandemic are obvious to all. Thank you.

Shou Xiaoli:

Please continue with your questions, the last two questions.

Southern Metropolis Daily:

The National Human Rights Action Plan has proposed refining the system of pleas for leniency. What can be done to ensure that defendants' confessions are made voluntarily and that their punishments are accepted willingly? Thank you.

Li Xiao:

Thank you for your question. The system of pleas for leniency was included in the Criminal Procedure Law in 2018. I will answer your questions from four aspects. First, in terms of legislation, the personnel in charge of cases should perform the duties of disclosure, granting the right to information to all suspects and defendants. Second, we have established a duty system to ensure that defendants can make correct decisions with the help of a lawyer, either designated by legal aid agencies or entrusted by themselves. Third, at the trial stage, the courts should comprehensively review whether confessions were made voluntarily and punishments were accepted willingly. If the statements and actions were not made voluntarily by the defendants, the case should be transferred to the trial of ordinary procedure. Fourth, defendants are granted the right to go back on their word. We will ensure the voluntariness from these four aspects. 

Regarding the long-term mechanism you mentioned, the newly added Chapter 27 of the judicial interpretation of China's revised Criminal Procedure Law released by the Supreme People's Court in February elaborates on the careful handling process of guilty-plea cases. Thank you. 

Global Times:

In recent years, China has become increasingly active in multilateral human rights governance and raised proposals related to human rights on many occasions, especially at the UNHRC. Many Western media and think tanks have stated that China is redefining the concept of human rights which has long been defined by the West. I would like to know, how do you evaluate China's performance in global human rights governance? Thank you. 

Li Xiaomei:

Thank you for your question and your interest in China's participation in the global human rights cause. As I mentioned before, this year marks the 50th anniversary of the restoration of China's legitimate rights in the United Nations. Peace, development and human rights are the three pillars of the U.N.'s work. China has always firmly supported multilateralism, safeguarded the purposes and principles of the UN Charter, and participated in depth in the work of the UNHRC and the General Assembly Third Committee. China is one of only a few nations to have been elected as a member of the UNHRC five times. In the past few years, we have made a string of proposals based around international situations and domestic contexts, including a 2016 initiative to bolster public health capacity building to combat the Ebola outbreak in West Africa. In 2017, UNHRC adopted two resolutions on the question of the realization in all countries of economic, social and cultural rights, and the right to food. Both the resolutions called for efforts to build a community with a shared future for mankind. Incorporated in a number of the council's resolutions since then, the concept of "community with a shared future for mankind" has increasingly become a key component in the global discourse on human rights matters.

China has repeatedly put forward the proposal titled "The Contribution of Development to the Enjoyment of All Human Rights" at the UNHRC, which proposes including the idea of "promoting human rights through development" in the international human rights system. On May 28, a seminar on The Contribution of Development to the Enjoyment of All Human Rights was held by the Office of the United Nations High Commissioner for Human Rights (OHCHR), bringing together representatives from over 200 countries and organizations. In March, the UNHRC adopted a China-initiated resolution calling on all parties to strengthen win-win cooperation in the field of human rights, forge a new type of international relations featuring mutual respect, fairness, justice and win-win cooperation, and build a community with a shared future for mankind.

When it comes to global human rights governance, China opposes egotism and bullying and supports fairness and justice, and win-win cooperation. Certain countries have adopted an expedient attitude toward multilateralist human rights groups and attempted to tweak international rules for their own interests, which is typical unilateralism. China proposes integrating the universality and particularity of human rights, respecting other countries' right to independently choose human rights development path and defending democratic and law-based international relations. In a manner of speaking, the human rights concepts China championed have constantly enriched the global discourse on human rights affairs, promoted the sound development of international human rights governance, and gained positive responses and wide support from the international community, especially developing countries. Thank you. 

Shou Xiaoli:

That is all for today's policy briefing. Thank you to all the speakers, and thank you to all of our friends from the media.

Translated and edited by Zhu Bochen, Wang Wei, Mi Xingang, Li Huiru, Duan Yaying, Zhang Rui, Wang Yiming, Wang Qian, Liu Jianing, Huang Shan, Yang Xi, Zhang Junmian, Xu Xiaoxuan, Yuan Fang, Qin Qi, Fan Junmei, 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:

Wu Yingjie, secretary of the Tibet Autonomous Regional Committee of the Communist Party of China (CPC)

Qizhala, deputy secretary of the CPC Tibet Autonomous Regional Committee and chairman of the People's Government of Tibet Autonomous Region

Chairperson:

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

Date: 

May 22, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. On the occasion of the 70th anniversary of Tibet's peaceful liberation, we have invited Mr. Wu Yingjie, secretary of the Tibet Autonomous Regional Committee of the Communist Party of China (CPC), and Mr. Qizhala, deputy secretary of the CPC Tibet Autonomous Regional Committee and chairman of the Tibet autonomous region to today's press conference. They will brief you about the economic and social development of the autonomous region and answer your questions.

Next, I will give the floor to Mr. Wu.

Wu Yingjie:

Thank you, Mr. Chen. Friends from the media, ladies and gentlemen, good morning. It's a great pleasure to meet you. Thank you for your long-term interest in and support for Tibet. Also, thank you for attending this press conference on the weekend.

The CPC Central Committee has always attached great importance to the development of Tibet and shown great care for the people of all ethnic groups in the region. In the past 70 years, the CPC peacefully liberated Tibet, carried out democratic reform, established the socialist system, pressed ahead with reform and opening-up, and implemented the Party's policies on ethnic and religious affairs. The CPC Central Committee has held seven central symposiums on Tibet work, formulating and adopting a series of major principles, policies and measures. The central government has set aside a total of 1.63 trillion yuan, and partner provinces and municipalities have provided 69.3 billion yuan to Tibet in recent years to support the region's development. Among this, more than 590 billion yuan was channeled into the construction of major projects including the Sichuan-Tibet Highway, the Qinghai-Tibet Railway, Gongkar Airport in Lhasa, and the Zam Hydropower Station. These efforts have propelled Tibet's economic and social development, created miracles of progress, and profoundly transformed the region. Since the 18th CPC National Congress, General Secretary Xi Jinping has set the direction and made overall plans for the development of Tibet. He delivered related speeches and gave important instructions on various occasions, presided over two central symposiums on Tibet work, proposed guidelines for governing Tibet in the new era, made dedicated action plans and drew up an overall strategic blueprint. With General Secretary Xi's support, Tibet has resolved many long-standing hard problems, achieved many notable successes that were unimaginable in the past, and made all-round progress in all endeavors.

The past 70 years has witnessed solid progress in enhancing socialist democracy. The people of Tibet broke free from the fetters of invading imperialism for good, abolished Tibet's feudal theocratic serfdom, and liberated millions of serfs, bringing historic changes to Tibetan society. In the new era, we have been actively developing socialist democracy, promoting comprehensive law-based governance of Tibet, and consolidating and developing the patriotic united front. Among deputies to the National People's Congress and members of the National Committee of the Chinese People's Political Consultative Conference from Tibet, more than 75% and 90%, respectively, are from Tibetan and other ethnic minority groups. We have formulated 44 local regulations in recent five years. People of all ethnic groups in Tibet enjoy extensive democratic rights, participate in the management of state and social affairs in accordance with the law, and love and support General Secretary Xi Jinping and the CPC Central Committee from the bottom of their heart.

The past 70 years has witnessed an increasingly stable social environment. We have firmly adhered to the central authorities' policies on the fight against the 14th Dalai Lama and his supporters, intensified the anti-separatism battle, and continued to expose the "reactionary nature" of the 14th Dalai group, vigorously safeguarding national security and social stability. In the new era, we have adopted a holistic approach to national security and increased our awareness of potential dangers. With focus on safeguarding national unity and promoting ethnic solidarity, we have taken preventive measures, cracked down on all kinds of separatist, infiltration and sabotage activities, and comprehensively enhanced our ability and the quality of law-based governance. The people of all ethnic groups in Tibet have become more active in maintaining stability. The social environment has maintained long-term stability on every front, with people's satisfaction regarding security above 99%.

The past 70 years has witnessed new approaches being adopted for work related to ethnic and religious affairs. We have fully implemented the Party's policies on ethnic and religious affairs, heightened public awareness of ethnic unity and progress, and overseen religious affairs in accordance with the law. Socialist ethnic relations featuring equality, unity, mutual assistance and harmony have been continuously enhanced. Freedom of religious belief and normal religious activities have been protected in accordance with the law. In the new era, we have taken "forging a strong sense of community for the Chinese nation" as our main task. We have formulated regulations and plans on building model areas for ethnic unity and progress, carried out a publicity and education campaign on the history of the relationship between Tibet and the rest of the motherland, and vigorously promoted communication and exchanges between different ethnic groups. The "five identities" (meaning that the people of all ethnic groups recognize the great motherland, the Chinese nation, Chinese culture, the CPC, and socialism with Chinese characteristics) have been strengthened among people of all ethnic groups and the notion that all ethnic groups in China, including the Han and minority groups, are interdependent has been fully adopted. We have been developing religions in the Chinese context and putting more emphasis on guidance. No tolerance is shown in eliminating the negative influence of the 14th Dalai Lama's use of religion. We have been guiding believers to take a rational attitude towards religions and diminish their negative influence. Policies and regulations on the management of the reincarnation of living Buddhas have become deeply rooted in people's hearts. Governance in the field of religion has gained understanding and support from believers. More and more believers are changing from "pursuing rebirth" to "living this life well." Religions are increasingly adapting themselves to the socialist society.

The past 70 years has witnessed rapid and sound economic and social development. Tibet's GDP surged from 129 million yuan in 1951 to 190.27 billion yuan in 2020, a 322.5-fold increase in comparable terms. In the new era, we have been focusing on improving people's lives and strengthening unity in socioeconomic development. Based on the new development stage, we have been following the new development philosophy, integrating into the new development paradigm, and properly handling the "13 relationships." The regional economy is transiting from high-speed growth to high-quality development. Efforts to construct major projects such as the Sichuan-Tibet Railway are picking up pace. All the counties, townships and villages have been connected to the road network, with the length totaling 118,800 km. Tibet now has 140 domestic and international air routes in operation, reaching 66 cities. The Qinghai-Tibet, Sichuan-Tibet and Ngari prefecture-central Tibet power grid interconnection projects have been completed, with the main power grid covering all counties and major townships, and the total installed power capacity reaching 4.23 million kilowatts. A total of 99% of administrative villages have access to 4G network and optical cable broadband. The construction of all well-off border villages has been completed. We are vigorously developing businesses that leverage local strengths. Our annual grain yield has exceeded 1 million metric tons. In the past, livestock was available for slaughter during a certain season, but now is available year-round. The tourism industry is booming.

The past 70 years have witnessed an overall improvement in living standards of the people. We have always stood in the position of the people and made great efforts to improve their lives. The disposable income per capita of rural residents reached 14,598 yuan last year, an increase of more than 416 times than in 1959 when it was 35 yuan. In the new era, we have insisted on people-centered development, focusing our efforts on people's livelihoods. In the past, the question was if the people were living well, and now the question is if the people are living a better life. All ethnic groups have felt the growing sense of gain, happiness and security. All the 628,000 impoverished people and all the 74 poverty-stricken counties and districts have been lifted out of poverty. We have deepened the implementation of the 15-year publicly-funded compulsory education. Last year, the completion rate for compulsory education has reached 95.03%, and new entrants to the region's workforce have an average of 13.1 years of education. The employment rate of higher-education graduates reached 99%. We have built a social security system that covers both urban and rural residents. The coverage rate of old age insurance surpassed 95%. Groups of medical professionals made a lot of effort to aid Tibet. There are health centers in every township and clinics in every village. Endemic diseases, such as echinococcosis, Kashin-Beck disease, congenital heart disease, and cataracts, have been eradicated or brought under effective prevention and control. Major results have been gained in the prevention and control of the Covid-19 pandemic. The average life expectancy has risen to 71.1 years. Public cultural undertakings have seen continued development, villages/communities have organized art groups to offer performances and towns/townships have built comprehensive cultural centers. The coverage rates of radio and television have both surpassed 99%.

Over the past 70 years, we have seen remarkable results in eco-environmental protection. When planning economic and social development, we have always planned for the protection and improvement of the ecology and environment at the same time. We proactively advanced projects regarding the protection of natural forests, reclaiming forests from farmlands, and reclaiming grasslands from grazing lands. The undertaking of environment protection continued to make progress and the ecology and environment kept on improving. In the new era, we cemented the belief that lucid waters and lush mountains are invaluable assets, as are the scenic sights of ice and snow. We formulated the Regulations on Developing Ecological Highlands in the Tibet Autonomous Region and we expedited the implementation of plans to protect and improve the environmental safety barriers in Tibet. We coordinated the systematic treatment of mountains, rivers, forests, farmlands, lakes, grasslands and sand lands. We pushed for the construction of various nature reserves and gave no access to enterprises and projects with high pollution, high energy consumption and high water consumption. We stopped approving new prospecting rights and mining rights. Great efforts were made to plant new trees. In terms of eco-environment improvement, we used to focus on protection, but now our practices have become more proactive. The environment has been improved. The sky is bluer, mountains are greener, and waters are clearer. A total of 1,079 villages and 105,000 households have ended their history of being deforested. The forestation rate reached 12.31%. The water quality of key rivers and lakes reached Class III or above, and the rate of good air quality days in cities at prefecture level and above reached 99.4%. Tibet has become one of the places with the best ecological environments in the world.

Over the past 70 years, the Party has continued to reinforce itself. We continued to advance new great projects to strengthen the Party. The number of primary-level Party organizations increased from 57 in 1952 to 21,900. The number of Party members grew from 877 to more than 410,000, with ethnic minorities taking up 81.36% of the total. Meanwhile, the number of cadres rose from 1,791 to 204,700. In the new era, we implemented the general requirements and the organizing principles of reinforcing the Party. We have firmly established the socialist ideals and beliefs with Chinese characteristics and the ideas of life-long learning, and have continue to research further reforms and innovations. We thoroughly comprehended and implemented Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. The great thought has been engraved in the hearts of all ethnic groups. We strictly implemented the requirements for a good cadre in the new era and requirements for cadres working in regions inhabited by ethnic groups to be particularly sober-minded when dealing with major issues of principle, to safeguard ethnic solidarity with particularly firm actions, and to cherish cordial love for all ethnic groups. We comprehensively enhanced the leadership and cadres at all levels. We vigorously promoted the time-tested "Old Tibetan spirit," the "two roads" spirit that has been shaped in the construction and maintenance of the Sichuan-Tibet Road and Qinghai-Tibet Road, and the spirit of Kong Fansen, a model of the leading cadres who died on duty when working in Tibet. Party organizations and Party members and cadres at all levels have become a powerful political force that has led all ethnic groups to manage risks, conquered difficulties and challenges, and served the people with all their hearts. We have done more regarding the CPC history learning and education, and have done more than 100,000 practical things for the public. We made great efforts to consolidate the primary-level Party organizations which were weak and lax, prioritizing the improvement of organizations and emphasizing their political functions. The Party branch committees and the villagers' committees are now completely comprised of Party members. In agricultural and pastoral areas, the primary-level Party organizations have been acting as anti-separatism strongholds, striving to maintain ethnic unity, and leading the people to achieve prosperity. These primary-level Party organizations follow the Party's guidance and know how to maintain solidarity whiling boosting growth. They have gained the capability to bring prosperity while maintaining stability, and can function effectively and sensibly when facing critical events. The Party's governing status in Tibet has been further cemented. We have deepened the efforts to strengthen the working style of the Party, build a clean and honest administration, and fight against corruption. We have created a sound and healthy political ecosystem. 

Over the past 70 years, we have gotten through difficulties and gained fruitful results. Since the peaceful liberation of Tibet, we have attained many successes and glorious achievements, which fully display the brilliance and greatness of the CPC, and shows the unparalleled advantage of the socialism with Chinese characteristics, the strong vitality of the system of regional ethnic autonomy, and the huge strength of the Party's guidelines for governing Tibet when practiced. The cadres and masses of all ethnic groups in Tibet have felt for themselves the care and love of the CPC Central Committee, the warmth of the motherland as a big family, and the profound feelings of friendship among the Chinese people. Previous practices have fully demonstrated that without the CPC, there would not be the People's Republic of China, let alone the new socialist Tibet. Tibet's prosperous present and even brighter future requires unswerving insistence on the leadership of the CPC, the socialist system with Chinese characteristics, and the system of regional ethnic autonomy.

The glory of the Party shines across the border region. People who live there look up to the Party. We must unite more closely around the CPC Central Committee with Comrade Xi Jinping at its core; insist on the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guidance; and fully implement the Party's guidelines for governing Tibet in the new era. We must better maintain political integrity, think in big-picture terms, follow the leadership core, and stay in alignment with them. We must cement the confidence in the path, theory, system, and culture of socialism with Chinese characteristics; and uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and uphold the Party Central Committee's authority and its centralized, unified leadership. We must stay unified and work hard to press ahead. We must resolutely push forward with the four major tasks: comprehensive rural revitalization; seizing the initiative on food security; enhancing the top design and advancing the rural revitalization strategy with more powerful measures and greater strength; and cementing the overall leadership of the Party towards efforts concerning agriculture, rural areas, and farmers. We must make all efforts to ensure national security and long-term peace and stability, the continued improvement of people's living standards, a sound eco-environment, and solidified border defense and border security. We will devote more efforts to building a modern socialist country and realizing the Chinese Dream for the great rejuvenation of the Chinese nation, in accordance with the arrangements of the seventh Central Symposium on Tibet Work.

This is all for now. Mr. Qizhala and I will answer your questions. 

Chen Wenjun:

Thank you, Mr. Wu. The floor is now open for questions. Please identify your news outlets before asking questions.

Russia Today:

Could you elaborate a bit more on the poverty alleviation projects implemented in Tibet? How many Tibetan people have shaken off poverty over the past ten years? What is the per capita income in Tibet? Also, what infrastructure projects will soon be launched in the region? What are the region's strengths in attracting investment, including foreign investment? Thank you.

Wu Yingjie:

Thank you. As we know, due to objective conditions, Tibet has a relatively large poor population and a higher poverty headcount ratio. Thus, poverty alleviation is of great importance in the region. General Secretary Xi Jinping and the CPC Central Committee have paid great attention to this issue in Tibet, identifying the region, in the first place, as the only provincial-level contiguous area of dire poverty amongst all areas of extreme poverty in China. Thanks to the care of General Secretary Xi Jinping and the support from the CPC Central Committee, Tibet has seen uniquely preferential policies, including financial support and projects.

Second, in accordance with the requirements of the CPC Central Committee, we have carried out both similar and different poverty reduction work compared with other regions. Similar to other regions, our Party secretaries of five levels (provincial, municipal, county, township and village) have taken poverty reduction as the top priority. What's different is that based on such a five-level scheme, we also set up poverty reduction command centers at each level, where commanders lead their staff members to implement relevant work with the full support of various departments.

In addition, based on the central government's requirements of assuring adequate food and clothing for those living in poverty and guaranteeing their access to compulsory education, medical care, and safe housing, we have provided more financial resources and projects to the poor as a matter of priority. In terms of other efforts, we also make full use of assistance projects in Tibet, applying 80 to 90% of their financial resources to reducing poverty.

We have been making efforts in the following aspects. First, we have strengthened the support of industries, introduced incentive policies, prioritized employment, provided support via assistance projects, and strengthened social security to better meet people's basic needs. Of course, there are many other efforts in this regard, and frontline officials and CPC members have all been dedicated to the course.

Second, all the 628,000 poor people in the Tibet autonomous region have been lifted out of poverty. Of this total, 266,000 people have been relocated from inhospitable areas, which is due to the special favorable policies introduced by the central government. All 74 impoverished counties have shaken off poverty. We also want to share with you that Tibet has achieved excellent performance in the central government's rigorous evaluation for poverty alleviation. We have been one of the regions to receive excellent evaluation remarks over the past five years. In terms of per capita income, the per capita disposable income of rural residents in Tibet amounted to 14,598 yuan in 2020, up by 12.7% year-on-year, achieving a two-digit growth for 18 consecutive years. The growth rate has been basically kept above 13% for the past five years, ranking among the top in China.

Third, during the 14th Five-Year Plan period, with the assistance of the CPC Central Committee and all Chinese people, Tibet will work in accordance with the requirements of the central government to carry out projects concerning new infrastructure. As we know, the world-renowned Sichuan-Tibet Railway project has started construction in a bid to promote the development of Tibet. In addition, the region's utilization of water resources has become a national focus and is in the process of analysis. We are also working on new infrastructure projects to boost industries that leverage local strengths in terms of rural revitalization.

Fourth, in terms of foreign investment, Tibet has been provided with uniquely preferential policies since its peaceful liberation. This includes many policies that apply to both domestic and foreign businesses. We welcome foreign investment to start businesses in Tibet. Of course, due to the special objective conditions in Tibet, although it is our great hope to attract foreign investment, the reality of our utilization of foreign capital is not good enough currently compared with other regions. We need to improve our conditions accordingly to better make use of foreign capital. Currently, utilization of foreign investment has reached about $400 million. Thank you.

Nikkei:

My question is about the 14th Five-Year Plan of the Tibet autonomous region. What will the total investment be during this period? How many investments will be added compared to the 13th Five-Year Plan period? What are the key areas of investment? Thank you.

Qizhala:

I'm glad to answer your question. As Mr. Wu mentioned just now, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the work concerning Tibet and care for people of all ethnic groups in Tibet. General Secretary Xi Jinping also personally planned and deployed the seventh Central Symposium on Tibet Work. The symposium drew up the blueprints for building a new modern socialist Tibet, providing the fundamental basis for us to formulate the 14th Five-Year Plan and set the long-range objectives through the year 2035. 

Tibet's main targets for economic and social development in the 14th Five-Year Plan period are as follows. We will work continuously to maintain overall social stability. We will firmly take the initiative in the overall battle against secession. We will work to further forge a strong sense of community among the Chinese people in Tibet. We will pursue new progress in the development of Tibetan Buddhism in the Chinese context. We will also work to maintain a sound momentum for economic growth. By the end of the 14th Five-Year Plan period, the per capita disposable income of urban and rural residents in Tibet will reach or stay close to the national average; the main indicators of basic public services will stay close to the national average; the institutional framework for ecological conservation will be further improved; the strategic support capacity for border defense will be comprehensively improved; and the foundation of the Party's governance in Tibet will be further strengthened. As such, Tibet will work to ensure a good start for the new journey toward socialist modernization and basically achieve socialist modernization with the rest of China by the year 2035.

During the 13th Five-Year Plan period, central authorities planned to allocate an investment of 380.7 billion yuan in Tibet. The actual investment reached 393.7 billion yuan, accounting for 103.4% of the planned investment during the 13th Five-Year Plan period, which actually outstripped the overall projected target made by the central authorities. The achievements we made by carrying out the plans are just like what General Secretary Xi Jinping stressed at the seventh Central Symposium on Tibet Work. Many farmers and herdsmen in the region now enjoy much better lives thanks to easier access to water, electricity, and transportation. The investment in infrastructure construction has a direct bearing on improving people's wellbeing. On May 16, the second passageway opened to traffic in Medog county, which was previously the last Chinese county to not have access to highways. In the past, it was quite hard to enter Medog county in winter. Then we built a highway in the county. However, there still remain traffic restrictions based on even- and odd-numbered license plates. By opening the second highway, it takes less than four hours from surrounding areas with altitudes of 1,200 meters to Linzhi, which has an altitude of 3,000 meters, making life for people of all ethnic groups more convenient.

During the 14th Five-Year Plan period, we will see a significant investment increase compared to what we saw during the 13th Five-Year Plan period. Investment during the 14tht Five-Year Plan period will mainly focus on four aspects. First, ecological conservation. Many major rivers originate in Tibet. Investment in ecological conservation should focus on fully implementing the philosophy for green development made by General Secretary Xi Jinping, which is "lucid waters and lush mountains are invaluable assets and so are ice and snow." This is a big investment. Second, we will also focus on people's well-being. We will work to strengthen weak links and narrow the gaps in people's livelihoods. Third, we will take stock of social governance. Tibet is a large region with a small population. We should increase investment in this regard. Fourth, we will work on the construction of the border areas. We will keep investing in this aspect and work effectively. Based on actual investment during the 13th Five-Year Plan period, we will maintain a relatively rapid growth of investment in infrastructure construction during the 14th Five-Year Plan period, which is a fundamental investment. We firmly believe that, with the support from all ministries and people across the country, the investment in infrastructure construction during the 14th Five-year Plan period will play a pivotal role in advancing the economic and social development of Tibet. Tibet will also enjoy greater progress in terms of improving the environment and people's livelihoods, consolidating poverty alleviation achievements, and rural vitalization. Thanks.

The Paper:

The fine traditional culture of Tibet is the treasure in the garden of Chinese culture. How will the innovation-driven development of the fine traditional culture of Tibet be carried forward? Thanks.

Qizhala:

Thanks. Mr. Wu just mentioned this. Tibetan culture is a major part of Chinese culture. The fine culture of Tibet has long been developed and carried forward as a major part of Chinese culture. Chinese culture has always provided a mental bond connecting all ethnic groups in Tibet and a sense of belonging for them. Tibetan Buddhism is also a major part of Chinese culture. The idea that Tibetan culture is a major part of Chinese culture is also increasingly and deeply rooted in the hearts of the people in Tibet. The relationship between the two cultures is like the mother-child relationship. The sense of identity has grown stronger. Especially since the 18th CPC National Congress in 2012, the CPC Central Committee designated Tibet as the place of unique folk cultures, offering great support in terms of finance, policy, technologies, and talent resources, which significantly pushed forward the outstanding traditional culture to keep pace with the times and helped the region pursue innovation and integrated development while discarding unwanted elements and selecting other essential parts at the same time.

First, efforts have been made to protect places of unique folk culture in all respects. The Tibet autonomous region has formulated the Regulation of Tibet Autonomous Region on the Protection of Cultural Relics, Regulations on the Protection of Old Town of Lhasa, Measures of the Tibet Autonomous Region for the Protection and Management of the Potala Palace, and other laws and regulations. They have provided an institutional guarantee for protecting and carrying forward the fine traditional culture in Tibet. Traditional ethnic culture has been carried forward effectively. The state and the autonomous region have invested more than five billion yuan, excluding the investment in infrastructure, in the protection and renovation of 55 sites under state protection and over 610 sites under regional protection. For example, the Party and the state attach great importance to the protection of the Potala Palace's cultural relics. As world cultural heritage sites, the Potala Palace and the Barkhor Street are the major areas that attract global attention. We have strengthened the protection of this area and we are now advancing the launch of the protection of ancient books in the Potala Palace, especially the Pattra-leaf Scripture. There are special funds allocated for that purpose in the central government spending. We are uploading ancient books to an online platform every year and carrying out experiments and research on the equipment for extracting the Pattra-leaf Scripture without causing damage to the original, as well as managing cultural relics archives. Great progress has been made in this regard. 

Second, we have built over 70 cultural relics protection units at the state level. Norbulingka has been registered on the UNESCO World Heritage List. Tibetan opera, Gesar, and Lum medicinal bathing of Sowa Rigpa have been included in the UNESCO Intangible Cultural Heritage List. We have inheritors that have been put on the State and Regional List of Intangible Heritage. And there are special funds to support them. These intangible cultural heritages, combined with the cultural and tourism industry, poverty alleviation work, and rural vitalization, further leverage the role of the inheritors' skills in the new era. For example, the investment in the protection and renovation of Barkhor Street, with Jokhang Temple at its center, cost 1.3 billion yuan. On paired-up assistance for the protection of cultural relics, we have worked on strengthening the security of cultural relics, which raised people's awareness for protecting them. As China promotes a standardized system for the spoken and written Chinese language, Tibetan spoken and written language learning is protected by a set of laws and rules. Tibetan spoken and written language has become the first ethnic minority language in China to meet international standards. We have given new vigor to traditional festivals such as Tibetan New Year, the Shoton Festival, and the Nagqu Horse Racing Festival, and have combined them with public cultural activities based on protection. 

Third, the modern cultural services are flourishing in every respect. We have built libraries, people's art halls and museums at all levels, and established comprehensive cultural centers at the county/district level, comprehensive cultural stations at the town/township level and cultural rooms at all administrative villages. The coverage rates of bilingual radio and TV programs have both reached 99%. We are fully promoting the "Beautiful Tibet, Lovely Hometown" project designed to supply high-level cultural products to rural residents, which has greatly enriched people's cultural lives.

Forth, the cultural industry is developing rapidly. A batch of cultural products, including the movie "My Himalaya" and the opera "Princess Wencheng," have been released. People have actively participated in the eight Tibetan operas and various kinds of cultural activities, which are held at Norbulingka in celebration of the traditional Shoton Festival every year. A number of fine traditional cultural and art products have entered regional and national markets and even gone global, boosting the influence and reputation of the traditional Tibetan culture.

CRNTT:

As we all know, as the mainstay of the Qinghai-Tibet Plateau, Tibet has a vulnerable and fragile ecological environment with an average altitude of 4,000 meters above sea level. What measures have been taken to protect the ecological environment of Tibet? What achievements have been made? Thank you.

Wu Yingjie:

The ecological environment of Tibet is of great concern to everyone. The CPC Central Committee attaches great importance to ecological and environmental protection in Tibet. The eco-environmental issue in the Qinghai-Tibet Plateau is an indispensable part in General Secretary Xi Jinping's remarks on eco-environmental protection. As General Secretary Xi said at the Seventh Central Symposium on Tibet Work, conserving the ecology of the Qinghai-Tibet Plateau is the greatest contribution to the survival and development of the Chinese nation. It requires us to take a responsible attitude toward the history, the people and the world, placing the ecological progress in a more prominent position. 

As we all know, the protection of wildlife, rivers and mountains in the Qinghai-Tibet Plateau is highly relevant to all countries in Asia, rather than being solely an issue for China. Many major rivers originate in Tibet, including the Yarlung Zangbo River, Nujiang River, Jinsha River, Lancang River and many others. Guided by Xi Jinping's Thought on Ecological Progress, we have always regarded ecological and environmental protection as being of the utmost importance. As I mentioned before, first, we are improving all kinds of institutional systems. Over 60 rules and regulations represented by the Regulations on Protecting Environment in Tibet Autonomous Region have been released. These also include opinions on constructing national ecological security shields and promoting ecological conservation. On Jan. 24, lawmakers in the Tibet autonomous region passed the region's first comprehensive regulations on ecological conservation, Regulations on Developing Ecological Highlands in Tibet Autonomous Region, which came into effect on May 1. 

Second, we are taking concrete actions to protect the ecological environment in Tibet. The concept of harmonious coexistence between humans and nature has been deeply rooted in the minds of the over 3 million Tibetan compatriots. Therefore, environmental protection has become a tradition in Tibet. The implementation of laws and regulations has further encouraged locals to play their part in protecting the ecological environment. Local governments have also played a role in regulating. The central government has allocated funds to Tibet as well. For example, a total of 4,464 million yuan was invested to establish the river chief and lake chief systems to improve the ecological functions. As a result of the concerted efforts, 11 national nature reserves, four national scenic spots, three national geological parks, nine national forest parks and 22 national wetland parks have been established in the region, with its nature reserves accounting for 38.75% of the region's total land area of 1.2 million square kilometers. So far, Tibet has designated a total of 608,000 square kilometers for ecological conservation, accounting for half of the region's land area. Moreover, we are working hard to meet the newly emerged needs. As modern society is developing so rapidly, much more household waste and sewage is being produced. This requires us to invest more funds in the household waste management and sewage disposal. Pilot programs have been carried out in the areas along rivers. As most of the seven prefectures and cities in Tibet lie along the upstream of rivers, household waste management and sewage disposal are of huge significance for protecting the ecological environment. We will continue to invest in this area every year.

Third, we need to balance environmental protection with economic development. The economy should be developed and the ecology must also be well protected. We have unswervingly followed the path of developing production, making people better-off and maintaining a sound ecological environment. On one hand, we should maintain a proper balance between protecting the ecology and enriching the people. We have improved the transfer payment mechanism for key ecological function zones, the compensation mechanism for forest ecological benefits and the subsidizing mechanism for grassland ecological protection, and also established ecological compensation measures. Furthermore, we have returned a number of areas where wild animals used to live in the past to them. People who lived in sparsely populated areas and regions at very high altitudes have moved to areas with better conditions, richer production materials and better infrastructure. This allowed us to return grasslands and livestock fields to wild animals. Perhaps some of you have been to Tibet. There, we call it "removing livestock to restore the grasslands," and in some places it's called "removing livestock and restoring wild donkeys." Wild animals, especially Tibetan donkeys, are reproducing very quickly now, as are Tibetan antelopes. According to the latest statistics, the population of Tibetan antelopes is now around 300,000. Various wild animals have been brought under protection in Tibet, and their habitats have also been returned to them.

In addition, we have created environment-related employment to help sustain people's lives. Since 2016, we have provided a total of 700,000 jobs in the ecological sector for locals. Many people who used to work cutting down trees are now the ones planting the forests. In places where conditions permit, with the use of science and technology, we have carried out revegetation and afforestation. Trees have been planted in more than 100,000 households in over 1,000 villages, and the results have been relatively good. There is also hope for planting trees at an altitude of over 4,000 meters. We have mainly been planting trees at high altitudes and in areas where many people congregate, such as schools, military bases, government offices and enterprises. Thanks to science and technology, people can enjoy the benefits of vegetation.

After years of efforts, according to the monitoring and evaluation work carried out by the Chinese Academy of Sciences and relevant departments, the overall structure of the various ecosystems in the Tibetan Plateau has been stable, while the ecological quality has also stabilized and improved. Last year, the air quality on over 99.4% of days in prefecture-level cities was classed as "good," and 100% of surface water met the quality standards across the entire region, while the soil was in its natural state. Due to years of protection, the climate in Tibet has also improved. The rainy season in Lhasa came earlier this year, and plants turned green earlier. This has provided local people with a more comfortable living environment. Certainly, we still face great challenges. Global warming has impacted the Qinghai-Tibet Plateau, especially bringing challenges to Tibet's glaciers and lakes. We need to attach high attention to them, monitor the changing situation using science and technology, and make timely and effective responses. Thank you.

Beijing Daily:

During the 13th Five-Year Plan period, Tibet proposed that its overall educational development level would be close to the national average by 2020, and basic public education services would be gradually equalized. What measures has Tibet taken to develop its education? What have been the outcomes? Thank you.

Qizhala:

Thanks for your attention on education. Like the rest of China, education in Tibet has been comprehensively developed during the 13th Five-Year Plan period. At the sixth and the seventh symposiums on Tibet-related work, General Secretary Xi Jinping stressed that education should be taken as the top priority in promoting the development of various undertakings of the Party and the state. Under the care and guidance of General Secretary Xi, and with support from the whole country, we have continuously prioritized the development of education. A modern education system, covering preschool education, basic education, vocational education, higher education, continuing education and special education, has been basically established in Tibet. The educational rights and interests of the people of all ethnic groups in Tibet have been fully guaranteed.

Especially since the 18th CPC National Congress in 2012, a funding system which covers from preschool education to higher education has been established and improved. Public education has been made available in Tibet. The state has implemented the "three guarantee policy" for Tibetan farmers and herdsmen, and education funds and subsidies have reached over 18 billion yuan. The number of students receiving financial support has reached 11.02 million, and there have been 40 different kinds of support policies. It could be said that in terms of education, the people of all ethnic groups in Tibet have had the best education policies. Therefore, the people's sense of educational benefits has been constantly rising. At present, wherever you go in Tibet, the best buildings are on school campuses, the best sports venues are on school campuses, and the people with the highest education in the region have also been employed by the schools.

In particular, Tibet has implemented special national plans in recent years, carried out special enrollment plans for key universities and special rural areas, and further promoted "sunshine enrollment." First of all, education is fair for students during enrollment, and everyone has been satisfied. This includes the "inland Tibet classes," which have been organized in 17 provinces and cities across the country, including Beijing, Shanghai and Jiangsu province. This has been formed over the years by the Party and the state. The policy of including food, housing and study expenses has been implemented, and the annual amount provided for each student has reached 4,200 yuan. The "sunshine enrollment" has also ensured that every child of farmers and herdsmen enjoys fairness in education.

Seventeen provinces and municipalities, as well as the central government and relevant central government departments, have accelerated their efforts to source and organize groups of educational professionals to aid Tibet. Some schools have even installed these educational professionals as their principals, deans, and key subject teachers. By doing so, the level and quality of education in Tibet have been rapidly promoted. At the same time, we have comprehensively implemented the fundamental task of fostering virtue through education and vigorously carried out education activities with the theme of "what kind of people to cultivate, how to cultivate them, and for whom they are cultivated?" among teachers and students. The education level of Mandarin has been strengthened in an all-round way. Once the nationwide unified textbooks were available, they have been used in the remotest schools in Ali prefecture, and schools in Naqu prefecture with an altitude of 4,800 to 4,900 meters. Balanced development for compulsory education at the county level has been basically achieved, with the gap between county-run primary schools and township-run primary schools within the region constantly narrowing. All primary and secondary schools now offer bilingual education; all primary schools offer math courses; all secondary schools have completed teaching plans for math, physics, chemistry, and biology courses; all secondary schools are offering physical, chemical, and biological experimental courses; and all vocational and technical schools are offering courses prescribed in the national catalog of courses for these schools. As a result, scores for physics and chemistry in the college entrance examination greatly increased both last year and this year, indicating that the overall physics and chemistry education in Tibet has obtained qualitative improvement and upgrading. The task to universalize senior secondary education has been fulfilled on schedule. A total of 1,340 new schools (kindergartens included) have been built. The "Internet Plus Education" model covers all primary and secondary schools and priority has been given to promoting smart education throughout the region. At present, Tibet has 3,195 schools of various types and at various levels, hosting more than 880,000 students. The gross enrollment rate for preschool education has reached 87%, while the enrollment rate in primary schools stands at 99.9%, and the retention rate of compulsory education is 95%.

Education has been improved in line with the progress made for poverty alleviation. In the past, some students were reluctant to return to school after the holidays because they were herding, or because they had missed too many lessons to go picking caterpillar fungus. However, with the fight against poverty, the cadres in villages, townships, and towns kept an eye on all the children in every village. After the holidays, none of the students dropped out of school except for those who were ill. Currently, our education, including preschool education and basic education, is progressing towards a higher level. During the 13th Five-Year Plan period (2016-2020), the University of Tibetan Medicine built a new campus with the support of the central government, which will be home to an incredible research base and platform as well as the training site for doctor degree candidates in China. The Tibetan Technician College's new campus is also under construction and will be fully launched in September this year. More than 1 billion yuan, excluding land acquisition fees, has been invested in each school at a time. Tibet University has made solid progress in building itself into a world-class university and developing world-class disciplines, with the advancement of many national key disciplines now in full swing. All these will provide basic education and talent support for the achievement of targets in Tibet's 14th five-year plan and its long-range goals for 2035. Thank you.

CCTV:

Given the COVID-19 pandemic, the healthcare situation in Tibet is of particular concern. Could you please brief us on the measures Tibet has taken to develop its healthcare services in recent years? What are the achievements? Considering the still grim and complex situation of pandemic prevention and control, what measures has Tibet taken in this regard? Thank you.

Qizhala:

Thank you for your care for Tibet's healthcare services. The Party and the government have always attached great importance to the development of medical and health services in Tibet. The past 70 years have witnessed many touching stories about the medical workers in Tibet, known as "menba" in Tibetan. Since the 18th National Congress of the Communist Party of China (CPC) in particular, with the care of the CPC Central Committee, Tibet's healthcare sector has been comprehensively improved and basically realized, synchronizing growth with the rest of the country, and the public health level has been significantly upgraded.

First, we have accelerated the establishment of the healthcare service system. A five-level medical and health service network covering districts, cities, counties, townships, and villages has been preliminarily built and a multi-level medical security system has been formed based on the medical system in agricultural and pastoral areas, supplemented by serious illness insurance and supported by medical assistance. The number of healthcare institutions has grown from three before 1951 to 1,642 now, while the number of beds and medical personnel has increased from less than 100 then to 17,000 now and from less than 100 at that time to more than 20,000 now, respectively.

Second, we have continuously increased the level of medical service. By upgrading the training system, organizing groups of medical professionals to aid Tibet, and pairing Grade-A hospitals to provide assistance, we have made it a reality that serious diseases can be treated within the autonomous region, moderate diseases can be handled within the prefectures and cities, and minor illnesses can be addressed within the counties. Screening for tuberculosis, hepatitis, and other diseases has been fully completed. In particular, some endemic diseases which have plagued the people of all ethnic groups in Tibet for thousands of years, such as Kashin-Beck disease, hydatid disease, and high-altitude rheumatism, have had a great impact. In recent years, with the care of the central government, we have stepped up efforts and realized comprehensive diagnosis and treatment of these endemic diseases. For example, the serious endemic Kashin-Beck disease has been largely eliminated through a combination of measures, particularly through the relocation of people from extremely high altitudes. All the people have been relocated from very high altitudes now and the disease has been treated by changing their living environments. Another example is hydatid disease. During the 13th Five-Year Plan period, we set out to eradicate hydatid disease in Tibet by 2020. The goal wouldn't have been realized in three years without the socialist system and the leadership of the CPC. Hydatid disease is transmitted through stray dogs, and shelter centers for stray dogs have been established. All the people in Tibet have been screened for this disease and the central government fully pays for the relevant treatment. The national authorities have confirmed that hydatid disease has been historically eradicated.

Regarding the health of women and children, in the past, due to traditional backward customs, Tibetan women did not go to hospitals for childbirth, their health and hygiene were not good, and the infant and child mortality rate was very high. But now the infant mortality rate has dropped from 430‰ to 7.6‰ and the life expectancy in Tibet averages 71.1 years, the highest when compared to our neighboring regions. It is a human miracle.

Third, we have innovated and developed Tibetan medicine. There are currently three national-level Tibetan medicine regional diagnosis and treatment centers, one Tibetan medicine university, and 17 Tibetan medicine companies. The Tibetan medicinal bathing method was inscribed onto the Representative List of the Intangible Cultural Heritage of Humanity by UNESCO, and the classics of Tibetan medicine such as the Four Medical Classics are included in the Second National List of Intangible Cultural Heritage of China. It can be said that Tibet's medical undertakings have been improved in all respects.

Since the outbreak of COVID-19 last year, General Secretary Xi Jinping, the Party Central Committee and the State Council have provided care and support to the people of all ethnic groups in Tibet. The Party committee and government of the autonomous region have resolutely implemented the guidelines outlined in a series of important speeches and instructions by General Secretary Xi Jinping on epidemic prevention and control. We put the people and their lives above everything else, adopted a science-based approach, and took targeted measures. With all-out effort, the only imported case was treated and discharged, and the Tibet autonomous region was the first to be declared free of COVID-19 in China. Since then, we have continued to strictly prevent the epidemic from resurgence or spread. Since April this year, the epidemic situation in China's neighboring countries has worsened, and we are facing a severe situation of preventing inbound cases. With a 4,000-km long external borderline, Tibet is faced with great pressure from the epidemic situation of surrounding countries. In accordance with the requirements of the Party Central Committee, under the unified deployment of the Party committee of the autonomous region, we analyzed the situation and made full preparations for the worst-case scenario to prevent the epidemic.

China Daily:

We know that the "old Tibetan spirit" and the "two roads spirit" are valuable spiritual assets of the people of all ethnic groups in the new era. During the peaceful liberation of Tibet, the "old Tibetan spirit" and the "two roads spirit" served as important rallying cries. Do the spirits have more profound connotations in the new era? How should Party members and cadres carry forward these spirits? Thank you.

Wu Yingjie:

The "old Tibetan spirit" was actually created under harsh circumstances by generations of Party members and cadres, including local ethnic minority cadres. Later, the essence of the spirit was summed up as being tough, brave, devoted, united and resilient. The "two roads spirit" is characterized by facing both hardship and death with great courage, and remaining tenacious and dedicated. General Secretary Xi Jinping has emphasized on many occasions that when working on the plateau, the scarcest thing is oxygen, and the most precious thing is spirit. He requires the Party members and cadres, especially Tibetan cadres, to carry forward the "old Tibetan spirit" and the "two roads spirit", stay committed, spirited, and hardworking when working in the harsh high-altitude region, continuously increase their sense of responsibility and mission, and work to improve their ability and work style.

The "old Tibetan spirit" now has more new profound connotations. I think it mainly refers to putting the people at the center and doing our work well under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. In the past, we stressed the importance of being able to endure hardship, showing perseverance, and staying united. The current conditions are no longer the same as those in the past. Now transportation is very convenient, and various medical, health care, and infrastructure facilities have undergone great changes. The key tasks now are to implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the people-centered development philosophy under the new situation; improve people's livelihood and unite people; and maintain steady economic development and preserve the ecological environment. In this regard, we will continue to carry forward the sense of dedication, mission, and responsibility in accordance with the requirements of the Party Central Committee. We will remain true to our original aspiration and keep our mission firmly in mind in Party history learning and education. We will hold firm to our ideals and convictions, fully implement the Party's mass line, address misconduct and refrain from formalism and bureaucracy. The Party members and comrades in Tibet should work together to strengthen 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 and stay confident in the path, theory, system, and culture of socialism with Chinese characteristics. Despite the special geographical features in Tibet, we will continue to study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the Party Central Committee's decisions and deployments. We will exercise full and rigorous governance over the party and fight against corruption, stand firm to ideals and convictions, and fully implement Party discipline. We will uphold political integrity, carry forward the style of working hard and plain living, fulfill the Party's requirements, strengthen the enforcement of organizational discipline, ensure the principal status of the people, and adhere to the Party's commitment to serving the public good and exercising power in the interests of the people. Taking into account both domestic and international dynamics, we will bear in mind national priorities and make contributions without considering personal gains and losses. In fact, since the 18th CPC National Congress, in accordance with the requirements of General Secretary Xi Jinping, our cadres stationed in villages and temples, and Party members of the post-80s and 90s have all worked on the front line of fighting against COVID-19 and have embodied the new connotation of the "old Tibetan spirit".

China News Service:

The peaceful liberation of Tibet opened up a new path to prosperity and development. How to exercise sound governance over Tibet has become one of the key topics among some scholars. What experience could the Tibet autonomous region share in this regard? Thank you.

Wu Yingjie:

This is a good question. During the successful practice of governing, stabilizing, and making Tibet prosperous, we are keenly aware that, to achieve prosperity and development in Tibet, we must first uphold the strong leadership of the CPC. Historically, patriots and righteous people explored suitable paths of development in Tibet. Since the peaceful liberation in 1951, people have realized that only the CPC can lead Tibet to achieve development and prosperity.

Second, we must adhere to socialism with Chinese characteristics, implement the system of regional ethnic autonomy, and pool resources to complete major missions. As I said previously, the achievements in Tibet depend on the efforts of all the ethnic peoples united and led by the CPC Tibet Autonomous Regional Committee and the local government. More importantly, they also rely on the strong leadership of the CPC Central Committee and support from the rest of China. This demonstrates the strengths of China's socialist system. Therefore, the path must be chosen correctly.

Third, we must take a holistic view of national security and safeguard national unity and territorial integrity to ensure Tibet's fundamental interests.

Fourth, we must remain committed to the people-centered philosophy of development. We must keep the aspiration of the people to live a better life as the focus of our efforts and make steady progress towards enhancing people's sense of gain, happiness, and security. Just as Mr. Qizhala and I said previously, since the peaceful liberation in 1951, the Party and the country have never taken even a single cent from Tibet; on the contrary, they have made all efforts to support us. All the ethnic peoples of Tibet have enjoyed special preferential policies that are not enjoyed by people in other parts of China. This demonstrates the implementation of the people-centered philosophy of development in Tibet.

Fifth, we must foster a strong sense of community for the Chinese nation. Tibet has been an integral part of China since ancient times. We must keep in mind a strong sense of community for the Chinese nation and pursue common prosperity and development through uniting and working hand in hand. With support from the CPC Central Committee and the rest of China, people of all ethnic groups in Tibet should also maintain the spirit of self-reliance and diligence.

Sixth, we must uphold the principle that religions in China must be Chinese in orientation. We should clarify that Tibetan Buddhism is part of Chinese culture. On religious affairs, we should adopt policies on the freedom of religious belief, manage religious affairs in accordance with the law, adhere to the principle of independence and self-management, and focus on guiding religions to adapt to the socialist society. A special situation in Tibet is that we always take a clear stand to eliminate the negative influence generated by the 14th Dalai Lama through religious affairs. In the new era, it is important that we guide the public to downplay the negative influence of religion, treat religion rationally and live a happy life in this life.

Seventh, we must strengthen Party building, especially in its political foundations. Over the years, the building of primary-level Party organizations has achieved remarkable progress and the cohesion of people in Tibet has been strengthened. This is mainly attributed to the efforts made by a large number of primary-level Party organizations and officials who are loyal to the Party, engage with the people, and dedicate themselves at grassroots levels. They have done a great deal of work.

Chen Wenjun:

Thank you, Mr. Wu, Mr. Qizhala, and friends from the media. This is the end of today's press conference. Goodbye.

Translated and edited by Zhang Liying, Zhu Bochen, Xu Xiaoxuan, Wang Yiming, Liu Sitong, Cui Can, Qin Qi, Yan Xiaoqing, Lin Liyao, Wang Wei, Yuan Fang, Li Huiru, Liu Qiang, Huang Shan, Zhang Rui, Zhang Junmian, 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:

Ning Jizhe, deputy head of the Leading Group of the State Council for the Seventh National Population Census and commissioner of the National Bureau of Statistics (NBS)

Li Xiaochao, director of the Office of the Leading Group of the State Council for the Seventh National Population Census and deputy commissioner of the NBS

Zeng Yuping, deputy director of the Office of the Leading Group of the State Council for the Seventh National Population Census and chief methodologist of the NBS

Zhang Yi, deputy director of the Office of the Leading Group of the State Council for the Seventh National Population Census and director-general of the Department of Population and Employment Statistics of the NBS

Chairperson:

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

Date:

May 11, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. The main data of the Seventh National Population Census has recently been aggregated. At today's press conference, we have invited Ning Jizhe, deputy head of the Leading Group of the State Council for the Seventh National Population Census and commissioner of the National Bureau of Statistics of China (NBS); Li Xiaochao, director of the Office of the Leading Group of the State Council for the Seventh National Population Census and deputy commissioner of the NBS; Zeng Yuping, deputy director of the Office of the Leading Group of the State Council for the Seventh National Population Census and chief methodologist of the NBS; and Zhang Yi, deputy director of the Office of the Leading Group of the State Council for the Seventh National Population Census and director general of the Department of Population and Employment Statistics of the NBS, to attend. They will brief you on the main data and relevant issues, and also field questions.

First of all, I will give the floor to Mr. Ning to introduce the situation.

Ning Jizhe:

Under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, in line with the coordinated decisions and arrangements made by the Leading Group of the State Council for the Seventh National Population Census, with the meticulous organization and cooperative advancement of all regions and relevant government departments, the concerted efforts and dedication of all census staff as well as the joint and active participation of hundreds of millions of census respondents, the field enumeration and aggregation of the main data of the Seventh National Population Census has been successfully completed. The aim of today's press conference is to brief you on the basic introduction and main data of the census.

First, the background.

In accordance with the Statistics Law of the People's Republic of China and the Regulations on National Population Census, China carried out its Seventh National Population Census (hereinafter referred to as the census) with 12 a.m. on Nov. 1, 2020, as the reference time. The main aim of the census is to offer a comprehensive understanding of the size, structure, distribution and other aspects of China's population, so as to provide accurate statistical information support for the improvement of China's population development strategy and policy, the formulation of social and economic development plans, and the advancement of high-quality economic development.

The CPC Central Committee and the State Council attached great importance to the census. General Secretary Xi Jinping participated in the on-site census registration and delivered an important speech. The State Council established the Leading Group for the census and held several plenary sessions and teleconferences to make relevant census arrangements. All member agencies of the Leading Group and local governments at all levels meticulously organized and made concerted efforts to implement the census, with 679,000 census agencies set up at provincial, municipal, county, township and village levels across China and more than 7 million census staff recruited. Census agencies at all levels and all census staff made active efforts to overcome the impact of the COVID-19 pandemic and successfully completed the field enumeration of all households and residents.

In the census, data was reported directly in real time by fully adopting digital data collection, respondents were able to fill in and submit questionnaires by scanning a QR code themselves for the first time, and the application of administrative records and big data from electricity meters and cellphones was strengthened. As a result, the quality and efficiency of the census were improved. Publicity for the census was boosted by inviting Zhong Nanshan and Yao Ming to act as ambassadors, while its slogan "Population Census, Everyone Counts," resonated powerfully with people. The census was conducted in accordance with the law and all the requirements in the census program were carefully implemented. We established a strict quality control system and improved the census data tracing and accountability mechanism. The post enumeration survey conducted in 32,000 households across 141 counties randomly selected from 31 provinces, autonomous regions and municipalities showed that the census process was rigorous and standard, and that the census results were reliable with an undercount rate of 0.05%.

Second, main data of the census.

First, national population. The national population (Note: The national population refers to the population of the 31 provinces, autonomous regions and municipalities directly under the central government and servicemen of the Chinese mainland, excluding residents of Hong Kong, Macao and Taiwan and foreigners living in the 31 provinces, autonomous regions and municipalities directly under the central government) reached 1.41178 billion, increasing by 72.06 million compared with the population of 1.33972 billion in 2010 (data of the Sixth National Population Census), up by 5.38%. The average annual growth rate was 0.53%, down by 0.04 percentage point compared with the average annual growth rate of 0.57% from 2000 to 2010. The data shows that China's population maintained a slight growth over the past decade.

Second, population by household types. Nationwide, there were 494.16 million family households with 1,292.81 million people, and 28.53 million collective households with 118.97 million people. The average size of a family household was 2.62 people, which was 0.48 lower than the 3.1 people in 2010. Family households continued to decrease in size because of increasing population mobility and the fact that young people are living separately from their parents after marriage with improved housing conditions.

Third, population by regions. The population in the eastern region accounted for 39.93% of the total, that in the central areas accounted for 25.83%, that in the western region accounted for 27.12%, and that in the northeast of China accounted for 6.98%. Compared with the data from 2010, the proportion of the population in the eastern region increased by 2.15 percentage points, that in the central areas decreased by 0.79 percentage point, that in the western region increased by 0.22 percentage point, and that in the northeast of China decreased by 1.2 percentage points. The population further congregated in economically developed regions and city clusters.

Fourth, sex composition. Among the national population, there were 723.34 million males, accounting for 51.24%, and 688.44 million females, or 48.76%. The sex ratio (males per 100 females) was 105.07, basically the same level with a slight decline compared with 2010. The sex ratio at birth was 111.3, down by 6.8 compared with 2010. The sex composition of China continued to improve.

Fifth, age composition. There were 253.38 million people in the 0-14 age group, accounting for 17.95%; 894.38 million people aged 15-59, accounting for 63.35%; and 264.02 million people aged 60 and over, accounting for 18.7% (specifically, there were 190.64 million people aged 65 and over, or 13.5%). Compared with 2010, the proportions of people in the age groups of 0-14, 15-59, and 60 and over were up by 1.35 percentage points, down by 6.79 percentage points, and up by 5.44 percentage points, respectively. The share of children rose again, proving that the adjustments to China's fertility policy have achieved positive results. Meanwhile, the further aging of the population has imposed continued pressure on the long-term balanced development of the population in the coming period.

Six, education attainment. There were 218.36 million persons with university education. Compared with 2010,  the number of people with university education went up from 8,930 persons to 15,467 persons per 100,000 persons, and the average years of schooling for people aged 15 and above increased from 9.08 years to 9.91 years. The illiteracy rate dropped from 4.08% to 2.67%. The continued improvement of the educational attainment demonstrates the achievements in promoting higher education, eradicating illiteracy among young and middle-aged adults, and raising the population quality through hard efforts over the past ten years.

Seven, urban and rural population. There were 901.99 million people living in urban areas, accounting for 63.89% of the total population, and 509.79 million people living in rural areas, accounting for 36.11%. Compared with 2010, the urban population increased by 236.42 million and the rural population decreased by 164.36 million. The shareof urban population went up by14.21 percentage points. With the in-depth development of China's new industrialization, informatization, and agricultural modernization and the implementation of policies to help people who have relocated from rural to urban areas to gain permanent urban residency, China's new urbanization has been advanced steadily and historical achievements have been made in this regard over the past ten years.

Eight, floating population. The number of people who lived in places other than their household registration areas reached 492.76 million. Specifically, 116.94 million lived in places other than their household registration areas but still in the same city and the floating population numbered375.82 million. Within the floating population, 124.84 million moved to other provinces. Compared with 2010, the number of people who live in places other than their household registration areas went up by 88.52%; the population who live in places other than their household registration areas but still in the same city increased by 192.66%; and the floating population increased by 69.73%. China's continued economic and social development has facilitated population migration and mobility, the trends of which have become increasingly evident, and the size of the migrant population has further grown.

Nine, population of ethnic groups. The population of the Han ethnic group is 1,286.31 million, accounting for 91.11% of the total population, while that of the ethnic minorities number at 125.47 million, accounting for 8.89%. Compared with 2010, the population of the Han ethnic group grew by 4.93%, while that of the ethnic minorities increased by 10.26%, and the share of the ethnic minorities increased by 0.40 percentage point. The steady increase of the population of the ethnic groups fully reflected the comprehensive development of and progress for all ethnic groups under the leadership of the Communist Party of China.

Ning Jizhe:

The population issue has always been an issue of overall, long-term, and strategic importance in China. The Seventh National Population Census offered a good understanding of the size, structure, and distribution of China's population, accurately mapped trends in demographic changes, and provided abundant and valuable information. We are working hard to compile, analyze, and develop the census data, and will follow up with more ways to publish and share the census results. We will collaborate with relevant departments to strengthen forward-looking and strategic studies on population development. All of these efforts will make full use of the census and provide strong statistical information support to advance high-quality development, formulate targeted strategies and policies on population, and facilitate long-term and balanced population development.

On behalf of the Office of the Leading Group of the State Council for the Seventh National Population Census and the National Bureau of Statistics of China, I would like to take this opportunity to express my sincere gratitude to the census agencies at all levels and census staff who fought on the front lines.Over seven million census staff worked hard and rose to challenges with a strong sense of responsibility and initiative despite the impact of the COVID-19. They have completed the field enumeration on time and covered all houses, households, respondents, and items in each enumeration area. It is because of their work that the results of the Seventh National Population Census can stand the test of history and the people. I would also like to extend my heartfelt gratitude to all sectors of society and respondents who participated in and supported the census with a spirit of cooperation. Thanks to the 1.4 billion people who performed their census duties and provided authentic information with the ownership spirit of "Population Census, Everyone Counts," the strong cornerstone of the Seventh National Population Census of such a scale was formed. I would also like to extend our sincere gratitude to all friends from the news media involved in census promotion. Your all-around publicity inspired and encouraged the census staff, boosting their confidence and motivation, and helping the respondents to understand and thus render support and cooperation for the population census. Without your dedication and diligence, the Seventh National Population Census would not have been so successful. Thank you again!

Chen Wenjun:

Thank you, Mr. Ning. Now the floor is open for questions. Please identify your news outlets before asking questions.

CCTV:

We noticed that there are some new changes and features in the statistics released by Mr. Ning. Compared with the data of the Sixth National Population Census, what are the new changes and trends regarding the gender ratio, age composition, and educational level this time around? Could you elaborate on these aspects? Thank you.

Ning Jizhe:

This issue is rather significant, and I'll take your question. The population is the most fundamental and crucial national condition of a country. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the issue of population, making key decisions such as gradually adjusting family planning policies and promoting long-term and balanced population development. China's population-related work has seen remarkable progress and there have been some active changes in the trends of population development. The census results released just now reflected the basic situation of China's population and demographic trends over the past ten years in a comprehensive and detailed way. In general, it can be summarized in a few sentences.

Over the past decade, China's population has continued to grow and it remains the world's most populous country. The quality of the population has steadily improved, and the educational level of the population has increased significantly. The population structure has changed with the gender ratio improving. Meanwhile, the age composition of the population showed an increase in the amount of people in the age groups of 0 to 14, and 60 and above and a drop in the amount of people between 15 and 59. The trend of population movement and concentration has also become more obvious, and the level of urbanization has continued to rise. There are six characteristics as follows:

First, in terms of total population, although the growth rate of China's total population is slowing down, it still maintains a steady growth. In 2020, China's population reached 1.41 billion, accounting for 18% of the world's population, meaning China remains the most populous country in the world. Over the past decade, China's population has jumped from 1.3 billion in 2010 to 1.4 billion in 2020 with an increase of 72.06 million, up by 5.38% compared with 2010. The average annual growth rate was 0.53%, slightly down from that of 0.57% from 2000 to 2010.

Second, in terms of population quality, the educational level of the Chinese population has increased significantly, and the quality of the population has been improving. The average number of years of education received by people aged 15 and above has increased from 9.08 years in 2010 to 9.91 years. The average number of years of education received by the working age population, between 16 and 59, has grown from 9.67 years in 2010 to 10.75 years. The illiteracy rate dropped from 4.08% in 2010 to 2.67%.

Third, in terms of gender composition, the sex ratio at birth has steadily declined and the gender structure has improved. According to the census, the sex ratio was 105.1, basically the same level and slightly lower than that of 105.2 in 2010. The sex ratio at birth was 111.3 in 2020, down by 6.8 compared with that in 2010, gradually converging to a normal level.

Fourth, in terms of age composition, the number of children increased and their proportion rose, with the number of children aged 0-14 increasing by 30.92 million compared to 2010 and their proportion rising by 1.35 percentage points. The number of births rebounded as a result of decisions and policy measures such as the "selective two-child" policy and the "universal two-child" policy. The birth rate of second children saw a significant increase, and the proportion of babies born as a second child rose from 30% in 2013 to 50% in 2017.

Fifth, in terms of population migration and mobility, population movement remains active and the agglomeration effect of the population has become increasingly evident. The census results showed that it has become common for people to live in places other than their household registration areas. The number of people who lived in places other than their household registration areas reached 493 million in 2020, accounting for 35% of the Chinese population. Specifically, the floating population numbered 376 million, up nearly 70% over the past decade. In terms of the flow direction, the population continues to flock to areas along the Yangtze River, coastal areas and inland urban areas. The population of major city clusters such as the Yangtze River Delta, the Pearl River Delta and the Chengdu-Chongqing city cluster is growing rapidly and the degree of agglomeration is increasing.

Sixth, in terms of the urban-rural structure of the population, China's permanent urban population continues to increase, and its share has further improved. Over the past decade, the urban population has increased by 236 million, and the share of urban population grew by 14.21 percentage points, a 0.75 percentage point increase compared with the growth of the last decade. As the census showed, we have accelerated the implementation of the new people-centered and quality-oriented urbanization strategy and made notable progress in helping people who have relocated from rural to urban areas to gain permanent urban residency.

The major changes in China's population in the past decade reflect the historical progress of China's economic, social and population development. They reflect the practical progress of promoting high-quality development and securing a decisive victory in building a moderately prosperous society in all respects. They also comply with the trend of population development and the objective laws of the interaction between the population, the economy and society. Moreover, the census data also reflects some structural contradictions in the development of China's population, such as a decrease in the population of working age people and women of childbearing age, an aging population, a decrease in the total fertility rate, and the low number of births.

We need to look at the impact of demographic changes on the economy and society dialectically. First, China's basic national conditions of a large population base and a large population have not changed; the advantages of a super-sized domestic market will persist for a long time; and the population and resources and environment will remain in a tight balance. At the same time, population growth is slowing down, and measures are needed to promote long-term balanced population development. Second, the labor resources are still abundant and the demographic dividend continue to exist, while the working age population decreases slowly year by year. The economic structure and technological development need to be adjusted and adapted. Third, the population quality is improving. New advantages of talent dividends will gradually emerge. College students are facing increasing employment pressure. Industrial transformation and upgrading needs to be accelerated. Fourthly, the proportion of children and the elderly population are both increasing. The increase in the proportion of children reflects the achievement of adjusting the family planning policies and highlights the importance of the issue regarding the elderly and children. We need to improve family planning policies and the population service system such as parenting. The proportion of the elderly population is rising rapidly and ageing has become the basic national condition in China for some time to come. The increase in the elderly population will be conducive to passing on wisdoms and traditions and also bring expanded demands. Fifth, the accelerated agglomeration of the population reflects changes in the trends of urbanization and economic agglomeration, and makes new requirements for improving the quality of urbanization and promoting regional coordinated development. Thank you.

China News Service:

China's seventh national population census can be called the largest census project in the world.How was such a large-scale census organized and conducted? Could you summarize some of its features? Thank you.

Li Xiaochao:

Thank you for your interest in China's population census. The 2020 census was the seventh national population census since the founding of the People's Republic of China, and also the world's largest. It was a major national survey on China's conditions after having faced the unexpected COVID-19 pandemic. In the past year or so, with the concerted efforts of the Chinese people, we have successfully completed the census. The achievements are attributed to the following aspects.

First, the CPC Central Committee and the State Council attached much importance to the census and had given instructions as to how we should best conduct our work.General Secretary Xi Jinpingand Premier Li Keqiang as well as other Party and state leaders signed up for the enumeration as ordinary citizens. The State Council established the Leading Group of the State Council for the Seventh National Population Census with Vice Premier Han Zheng as its head to coordinate the census. Different localities and departments had worked in synergy and offered support to each other under national centralized leadership, with departments at all levels assuming clear duties and carrying out specific jobs. Approximately 679,00 census agencies were set up at provincial, municipal, county, township, and village levels across China, and more than 7 million census staff were recruited. The CPC Central Committee and the State Council attached much importance to our work. Different localities and relevant departments made meticulous organization and cooperative advancements on the census. All of these factors guaranteed the success of the 2020 census.

Second, we made meticulous plans, including timelines and road maps for the census. On top of multiple general pilot projects and several specialized pilot projects, and after having solicited opinions from experts and people from various professional circles, we produced an outline for the census as well as seven implementing guidelines. These helped us to specify what, how, and in what order the census should be carried out as well as the tasks and requirements for the census work, which provided the know-how for staff to complete their work.

Third, we enriched the content of the census so that its findings can be more valuable. We collected the respondents' ID numbers for the first time, which provided basic information for cross-checking and verification. We also added more data about senior populations to better understand China's aging population.

Fourth, we adopted new ways and tools to increase the efficiency and quality of our census. We had, for the first time, adopted digital data collection so that respondents could fill out and submit the questionnaire and the system could record their information in real-time. Such a collection method was not used widely but involved a significant amount of data. To improve the administrative documentation and the application of big data, we fully adopted the use of the internet, cloud technologies, cloud services, and cloud applications to complete data processing. We carried out online centralized management for the 7 million-odd census staff so that we could supervise their work in real-time.

Fifth, we made sure that no one individual was double-counted or miscounted. Under certain criteria, we divided our census targets into several groups and made sure that there were no overlapping in each group. We numbered each household within each group and had the census staff collect information at each household. At the same time, we improved the selection, training, and management of the staff. Before their on-site registration, we also cleaned up any illegal hukous (China's household registration system) and conducted a pre-assessment of the conditions to lay a foundation for the work that was to follow.

Sixth, we put a lot of effort into publicity and mobilization, which helped to increase people's initiative to participate in the census. We rolled out publicity plans and arranged publicity work across every stage of the census. We filmed and broadcast promotional videos and public service advertisements and organized publicity activities through various channels and forms to raise people's awareness and enthusiasm for the census. With the slogan --"Population Census, Everyone Counts" taking root, various circles and the public have actively participated in and supported the census. Thank you.

Southern Metropolis Daily:

What do we make of the slowdown in China's population growth during the decade from 2010 to 2020, as seen in the main results of the census? Some experts predict that China's population will peak at 1.45 billion in 2027. Does the slowdown in growth mean that the year of zero population growth will come earlier? Thank you.

Ning Jizhe:

Allow me to answer this question. This is a question of trend analysis. The census data shows that China's population growth has slowed down, with an average annual growth rate of 0.53% over the past decade, which is a 0.04 percentage point decrease from the previous decade. This trend is the result of multiple factors. The main reasons are the continued decline in the number of women of childbearing age, especially those in their prime, the delay of people's chosen time for having a child, and the increase in the cost of childbirth and raising a family. All of these factors have led to a tightening of the birth population size. This is the objective result of China's economic development, especially industrialization and urbanization, which has reached a certain stage, and it is also a common problem faced by the world, especially developed countries. According to the results of this census, China's population is still the largest in the world, and has continued to grow, with an increase of 72.06 million over the past ten years. When compared to the increase of 73.9 million in the previous decade, the scale of growth is slightly decreased, but basically the same. There are mainly three factors that matter:

First, China's population has maintained a certain level of inertial growth. China has a large population base. At present, there are more than 300 million women at childbearing age, and we are able to sustain around 10 million births every year.

Second, the adjustment of the fertility policy has achieved positive results. The number of births has rebounded rapidly since the implementation of the two-child policy for couples where either the husband or wife is from a single-child family, and the universal two-child policy. According to the census data, the number of children aged 0-14 reached 253.38 million in 2020, 30.92 million more than in 2010, and the proportion of children rose by 1.35 percentage points.

Third, the life expectancy of the population has continued to increase. This is because of rapid economic and social development, continuous improvements in living standards and a significant improvement in medical and health conditions. The obvious improvement in the health conditions of the people have led to the fact that the annual number of deaths in China has been less than the number of births, and the total population has maintained its growth trend. These positive factors of population growth will continue to play a role for some time to come.

Judging from the trend of China's population development and changes in recent years, we can see that the population growth rate will continue to slow down in the future. At the same time, population growth is also affected by economic and social factors such as the age structure of the population, people's fertility choices, fertility policies, fertility costs, and public health. China's population will reach its peak in the future, but the exact timing is uncertain, and it is expected that the total population of China will remain above 1.4 billion for some time in the future. The results of the census also show that China's working age population group, aged from 16 to 59, is about 880 million, so the labor force is still abundant. Through this census, the average age of the Chinese population is 38.8 years old. On the whole, we are still a young and vigorous country. The United States recently released its latest census data, and their average age is 38, which is about the same as ours.

Next, we should continue to pay attention to changes in population growth and actively respond to the various risks and challenges that may arise in demographic development. Thank you.

CRNTT:

Recently, some people have questioned the quality of the census data. You just said that the undercount rate of the Seventh National Population Census was only 0.05%, so does this mean that this is a high-quality census? In addition, the results of the census came out relatively slowly. A spokesperson for the NBS previously said that this is because the seventh census released more detailed information than the information released in the sixth census. Can you tell us more about what information has been added? Thank you.

Zeng Yuping:

First of all, thank you for your questions. You have asked two questions, one on data quality and the other on data dissemination. Regarding the issue of data quality, we often say that data quality is the lifeline of statistical work. Similarly, the quality of census data is also the lifeline of our census work. In order to obtain high-quality census data, we adhered to conducting the census in accordance with the law, and carried out extensive publicity and mobilization, while focusing on the following measures.

First, we scientifically designed the census plan. This census has drawn on the experience of past censuses, including the experience of the population census, the economic census and the agricultural census. Meanwhile, we extensively solicited opinions from various parties, including experts and scholars, and all sectors of society. We organized and carried out six special pilots and one comprehensive pilot nationwide. In accordance with the principles of science and feasibility, demand and capability, inheritance and innovation, we formulated the Program for the Seventh National Population Census and seven implementation rules to ensure that our census program is scientific and operable.

Second, enumeration was meticulously organized. Before the start of on-site registration, census agencies at all levels carefully selected census staff and strengthened their pre-job training. We made efforts to detect any illegal hukous (China's household registration system), divided census blocks and conducted a pre-assessment of the conditions and other preparation work in a solid manner. More than seven million census workers nationwide strictly implemented the census program, which also coincided with the COVID-19 prevention and control period. We earnestly ensured we implemented the various requirements for epidemic prevention and control. We have succeeded in fulfilling the task of the field enumeration of the whole nation.

Third, we made full use of information technology. In this census, we made use of information technology to actively explore and innovate on census methods. For the first time, we had access to digital devices and our staff could directly register and report the data online; for the first time, census subjects filled in their own reports via the internet; for the first time, we could compare and verify the census data via administrative records and big data; for the first time, data processing was centrally deployed nationwide, using internet cloud technology, cloud services and cloud applications to complete data processing; and for the first time, we collectively guided more than seven million census workers online.

Fourth, we ensured the quality of the whole survey process. In accordance with the provisions of the census plan, census agencies at all levels established quality-control systems, strictly conducted the work according to the quality-control requirements, and meticulously carried out quality checks to ensure the quality of work at each stage of the census. Meanwhile, we established a traceability and accountability mechanism for census data and seriously investigated fraud practices at every local agency.

After we finished the work, the census office of the State Council, in accordance with international practice, organized nearly one thousand professional spot-check personnel for random quality checks on 32,000 households among 141 counties from China's 31 provinces, autonomous regions, and municipalities directly under the Central Government, and employed social supervisors for supervision during the whole process. The result showed that, the amount of the population that failed to register was 0.05%, lower than the international standard of 3%, demonstrating the data is true and credible and that it was a high-quality census. That's all for the first question.

The second question concerns the timing of the release of census data. The population census work is a huge systematic project involving many links and wide aspects. In order to coordinate the arrangements and ensure the smooth connection of all links, we formulated the schedule before the implementation of the census. The original schedule for the release of the census bulletins was a planned one, but in view of the strong demand for the census results from all sectors of society, we enriched the content of the release by adding a large amount of data onpopulation distribution and regions, so it took more time to prepare the data. Today, we are releasing eight bulletins, which are richer and more detailed than the previous censuses, with each set of data verified and exact. In addition, we understand that other countries also release their census one year after field enumeration. For example, the United States conducted its population census on April 1, 2020, and their results were released on April 26, 2021, almost one year later.

In the next step, we will further share, explore and utilize the census results, and in the future, we will successively edit and publish more detailed census summary materials to meet the needs of all parts of society. We also welcome you to use it. At the same time, we will use the micro data laboratory to provide desensitization micro data from the census for relevant research institutions, experts and scholars to carry out analysis and research, so as to better utilize the census data. Thank you all.

Nikkei:

Some experts said that the fifth and sixth national population censuses underwent a period of data adjustment after the censuses were completed. Were any adjustments made after this latest census such as adjusting for the undercount rate? Thank you.

Zhang Yi:

Thank you for your question. We all know that the population census is an overall survey. The seventh census covered all respondents based on a uniform standard at a uniform time. Data from this census was reported directly in real-time through the complete adoption of digital data collection, and the results can be collected and calculated directly after auditing. No data adjustment was needed afterward.

The post-enumeration survey showed that the undercount rate of the seventh census was 0.05%. According to the United Nations census recommendations, the undercount rate can or can not be added to the total population.Some countries may add it while others may not. The Chinese national population information just released is a directly summary of the population registered in the census and does not include those missed within the undercount rate. Thank you.

The Poster News APP:

China's aging population is always an issue that concerns the public. According to census findings, how is the aging population situation in our country? Given the increasing burden of elderly care in families and society, how should we best optimize the population structure and solve the problem of our aging population? When will the policy for extending the retirement age be implemented? Thank you.

Ning Jizhe:

The census shows that people in the age bracket of 60 and above accounts for 18.70% of China's total population, and people aged 65 or above account for 13.50%. The aging population in our country has the following characteristics.

First, the aging population is huge. There are 264.02 million people in the age bracket of 60 and above, including 190.64 million people aged 65 and above. In China's 31 provinces, 16 provinces have more than 5 million people in the age bracket of 65 and above, while six provinces have more than 10 million people aged above 65.

Second, the aging population is rapidly growing. From 2010 to 2020, the proportion of people in the age bracket of 60 and above increased by 5.44 percentage points, while people in the age bracket of 65 and above increased by 4.63 percentage points. The ascensional range rose by 2.51 percentage points and 2.72 percentage points, respectively, compared to the last decade.

Third, the rural-urban divide between the aging population is obvious. The proportion of people aged 60 and above and people aged 65 and above in rural areas were 23.81% and 17.72% respectively, 7.99 and 6.61 percentage points higher than that of in urban areas. Besides economic and social reasons, rural-urban differences in the aging population are also closely related to migration.

Fourth, the quality of life among aging people rose continuously. The number of people aged 60 and above with high school or university education reached 36.69 million, an increase of 20.85 million compared to 2010. That proportion accounts for 13.90% of the total population in the age bracket of 60 and above, up by 4.98 percentage points compared with a decade ago. Over the past ten years, life expectancy also increased continuously. In 2020, there were 35.8 million people in the age bracket of 80 and above, accounting for 2.54% of the total population, which increased by 0.98 percentage point to 14.85 million compared to 2010.

The aging population is an important trend in social development, and it will be China's basic national condition for a long time in the future, which brings both challenges and opportunities. For example, from the perspective of challenges, the aging population will reduce the supply of labor, increase the burdens on families concerning elderly care, and raise the pressure to provide basic public services. At the same time, the aging population has promoted the development of the "silver-hair" economy, expanded products and services consumption for elderly people, and helped boost technical advances. Moreover, among China's population aged 60 and above, people in the age bracket of 60 to 69 account for 55.83% of the total elderly population. Thanks to their advantages in knowledge, experience, skills, and good physical conditions, they have great potential to contribute their remaining energy to society.

The fifth plenary session of the 19th CPC Central Committee proposed plans for specific measures to address the aging population as a major national strategy now and for some time in the future. Next, we will develop and make good use of the census data and carry out serious studies and in-depth analysis to provide statistical support for policy-making.

Beijing Youth Daily:

Recently, the issue of a consistently decreasing working-age population in the northeast of China has drawn wide attention.The census data shows that the population in the northeast of China indeed declined. What is the reason for this decrease? What problems will that cause? How should we respond to it? Thank you.

Ning Jizhe:

People are concerned about the issues facing northeast China. From the census data, changes in the population in northeast China over the past ten years have the following features. First, the total population is still large but there was a decline. In 2020, the total population of northeast China's three provinces was 98.51 million, approaching 100 million — still quite large but decreasing by 11.01 million compared to ten years ago. Second, the birth gender ratio in the northeast of China was 106.3, which is lower than the national average but still within the normal range. Third, the aging population is serious. In northeast China, people aged 65 or above accounted for 16.39% of the total population, up 7.26 percentage points from 2010 and higher than the national average. Fourth, talent is ample. The population with university education and above accounted for 16.75% of the total population. The average number of years of education received by people aged above 15 was 10.16 years. The two indicators for the level of education in northeast China were above the national average. Fifth, the foundation for the area's development is solid. Permanent urban residents in northeast China make up 67.71% of the population, ranking in an upper bracket nationwide.

Factors regarding the natural and geographical environment, fertility rate, and social-economic development have led to a population decrease in northeast China. The winter is long and cold in the northeast of China, which is located at high latitude. Some people from the area have moved to warmer areas in the south, which is a common characteristic of population migration in many countries around the world such as those in Europe, and America. In addition, affected by factors like fertility values and behaviors, the natural population growth rate in northeast China has been lower than the national average for a long time. Furthermore, the northeast of China is undergoing a crucial period of structural adjustment. Diversified opportunities for development and career prospects in coastal developed cities and provinces are a magnet for people from other areas, including the northeast of China.

Meanwhile, we should note that economic development in the northeast of China is resilient and full of potential. There is a range of strategic industries that are vital to national security and are the lifeblood of the national economy. The northeast of China has technological talents and a reasonably solid foundation in modern agriculture, equipment manufacturing, transportation infrastructure, and so on. The number of people who have received higher education in northeast China was 16.50 million. Meanwhile, grain output accounted for more than one-fifth of the nation's total. The region has several key national enterprises such as Ansteel, Avic Shenyang Aircraft Company Limited, China FAW Group Corporation, Harbin Electric Corporation, etc. Recently, the region has been home to the development of a group of emerging high-tech enterprises. Favorable conditions for the revitalization of northeast China abound. The CPC Central Committee and the State Council have attached importance to the region's revitalization and have released a series of major measures to promote the revitalization of talent and the high-quality development of China's old industrial bases, creating a good environment for the development of real economy and industrial innovation. A new round of plans for revitalization with a focus on structural adjustment will surely bring about new demographic changes in the region.

For the next step, we will enhance research regarding population issues in the northeast of China, address the challenges brought by population changes, and seize opportunities in these changes to better serve the economic and social development of northeast China.Thank you.

Reuters:

What effect will the gradually declining working-age population and the expanding aging population have on economic development in the long run? What measures will be taken to tackle those problems? Will it be possible to relax policies to encourage fertility? Thank you.

Ning Jizhe:

This question is about the working-age population. I will invite Mr. Zeng to answer this question.

Zeng Yuping:

Thank you for your question. As for the issue of the aging population, Mr. Ning introduced it in detail just now. I will not repeat those points.

Concerning the working-age population, first, in terms of the total number, the working-age population (people aged between 16 and 59) decreased by more than 40 million compared to 2010, when China conducted the sixth national population census. But we should remember that the total population of working-age people, 880 million, is still large, and labor resources are still abundant. Dividends in the demographic still exist, which provides an important support for sustained and healthy social and economic development.

Second, the quality of the working-age population has been remarkably improved. As the census data shows, the average number of years of education received by the population aged above 15 was 9.91, up 0.83 years from 2010. Specifically, the average number of years of education received by the population aged from 16 to 59 reached 10.75 years, up 1.08 years from 9.67 years in 2010. Meanwhile, among the working-age population, people with high school education and above reached 385 million, accounting for 43.79% of the total, up 12.8 percentage points from 2010. Finally, people with university education and above accounted for 23.61%, up 11.27 percentage points from 2010.

Third, as the social and economic development accelerates, the coverage of medical service systems has expanded, people's overall physical health has improved and life expectancy has been extended. The improvement in people's health conditions has greatly bolstered labor resources, which underpins the social and economic development.

The decrease in the working-age population should be viewed comprehensively and objectively. First, despite the shrinking working-age population, the sheer size of China's labor resources remains relatively large.On the whole, China is still facing great employment pressure. Second, although the working-age population is gradually decreasing, the high-quality development of the economy means that the requirements for employees' skills will increase. Improving the skills of workers and solving the structural problem of the mismatch between job requirements and candidates' skills will become the main issue facing employment. Third, as the quality of the population improves, the demographic dividend will gradually turn into a talent dividend, and the advantages of population resources will be effectively brought into play. This will further promote the transformation of the economic development pattern, the upgrading of the industrial structure, the increase of total factor productivity, and the sustained, coordinated, and healthy development of the population, economy, and society. Thank you.

Cover News:

In the past decade, China's urbanization rate has risen rapidly but the percentage of registered urban residents is much lower than that of permanent urban residents. What are the specific reasons for this? The census results show that China has experienced a significant surge in its floating population over the past decade. How do we view this phenomenon and what impact will it have on the reform of the household registration system? Thank you.

Li Xiaochao:

According to the census, China's urbanization rate has indeed increased rapidly over the past 10 years. The share of the urban population went up by 14.21 percentage points, as Mr. Ning introduced just now. The floating population has also increased considerably, which reflects the results of sustained economic and social development as well as the effective allocation of human and talent resources. At the same time, it is also the result of a strengthened economic and social vitality in some regions and cities, which is consistent with the development trends of other countries around the world. It should be pointed out that China's urbanization rate is currently in the upper-middle-range compared to the world's average, which is similar to China's upper-middle average per capita GDP compared to the rest of the world. It is expected that with the constant development of China's economy and society and the continuous advancement of various reform measures to promote urbanization, the urbanization rate will continue to increase.

In addition, the census data further reveals that while the urbanization rate and floating population are increasing, these two aspects are also displaying some other characteristics.

First, the proportion of floating population flowing into urban areas is still rising. In 2020, the floating population flowing into urban areas reached 331 million, accounting for 88.12% of the total floating population, up 3.85 percentage points from 2010. Among them, 249 million people moved from rural to urban areas, 106 million more than in 2010—an increase of over 100 million people in a decade.

Second, the proportion of floating population flowing into areas with a high urbanization rate remains relatively high. The eastern region absorbed an interprovincial floating population of 91.81 million, accounting for 73.54% of the total floating population, while the central region absorbed 9.55 million, or 7.65%, the western region took 18.8 million, or 15.06%, and the northeast region took 4.68 million, or 3.75%.

Third, the floating population within the provinces, that is to say, the population flow within a short distance, is growing even faster. The floating population within the provinces totaled 251 million, an increase of 116 million or 85.70% since 2010. The interprovincial floating population amounted to 125 million, an increase of 38.96 million or 45.37% since 2010. This data shows that the floating population within provinces is growing much faster than the interprovincial floating population. The proportion of the floating population within the provinces increased from 61.15% in 2010 to 66.78% of the total floating population, up 5.63 percentage points. About two-thirds of the floating population chose to move just a short distance within the province.

Regarding the difference between the percentage of registered urban residents and the percentage of permanent urban residents, first we should understand that the former has also increased markedly in the past decade. By the end of 2020, China had achieved its goal of granting permanent urban residency to 100 million people living in urban areas without urban household registration. Meanwhile, we should also be aware that this difference is mainly reflected in migrant workers. Restricted by various security conditions and systems, it may still take some time for this difference to be reduced or even eliminated. Of course, some registered rural residents are less willing to gain permanent urban residency. Especially after the rural vitalization and poverty alleviation campaigns yielded results, some people want to stay in the countryside. Therefore, the reluctance of some registered rural residents to leave the countryside also explains why there is a difference.

We believe that with the sustained high-quality development of China's economy and society as well as the continuous advancement of a new type of urbanization, the country's urbanization will develop more scientifically and rationally, its population will flow in a more orderly and reasonable way, and a new situation for the coordinated development of the economy, society, and population mobility will be created.Thank you.

Chen Wenjun:

Due to the time limit, we will have the last question.

Red Star News:

My question is, what changes have occurred in the fertility rate of women and number of births in China since the comprehensive two-child policy was adopted? Is the current lack of fertility willingness among the population leading to an almost alarming low fertility rate? Will China adjust its population policies, especially family planning policies, based on the findings of the census?

Ning Jizhe:

I will take these questions. People are concerned about fertility issues and we have gained a lot of information in this regard through the census. I must first note that the two-child policy has achieved positive results and the seventh national census has found the following characteristics for new births.

First, the number of new births has been large. New births increased significantly in 2016 and 2017 to over 18 million and 17 million, respectively. This was up by more than two million and one million respectively in comparison with the number before the two-child policy was adopted. Although the number has fallen since 2018, it still reached 12 million in 2020, according to the preliminary findings of the census.

Second, the proportion of second children was high. Among the newborns between 2014 and 2017, the proportion of second children rose markedly from around 30% [M1] in 2013 to around 50% in 2017. Although the proportion has since declined, it has remained above 40%. Adjustments in the fertility policy have increased the number of newborn second children by over 10 million.

Third, the fertility rate has declined. China's total fertility rate was 1.3 in 2020, which was a low level, according to the census. This was largely caused by a continuous fall in the number of women of childbearing age and a gradual wearing-off of the effect of the two-child policy. In 2020, the COVID-19 epidemic, which added uncertainties to life and worries about in-hospital childbearing, further dampened people's willingness to have children. We should come to realize that the low fertility level is also a result of economic and social development. It is not only affected by policy factors but also by economic, social and cultural factors with impact from the latter gradually gaining. In addition, we must be aware that with economic and social development, especially when industrialization and modernization have changed people's views on birth, a low fertility rate is a common problem in most developed countries and will also become a practical issue for China.

The fertility concerns you just mentioned were also raised by the Reuters journalist in his question a moment ago. The fifth plenary session of the 19th Central Committee of the Communist Party of China has clearly asked for improvement in the fertility policy to make it more inclusive. The Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development, which was adopted at the National People's Congress, also made it clear that China will pursue an appropriate fertility rate and lessen family spending on child bearing, raising and education, to further release the potential of the fertility policy. According to a survey by the National Bureau of Statistics, the number of children that women of childbearing age are willing to have is 1.8, so as long as the proper supportive measures are put in place, the real fertility potential will be brought out. Thank you.

Chen Wenjun:

Today's press conference ends here. Thank you to all the speakers and thank you to all of our friends from the media.

Translated and edited by Wang Yiming, Wang Wei, Zhu Bochen, Yang Xi, Duan Yaying, Huang Shan, Guo Yiming, He Shan, Zhang Rui, Fan Junmei, Lin Liyao, Zhang Tingting, Liu Qiang, Liu Jianing, Xu Xiaoxuan, Li Huiru, Yuan Fang, 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:

Gan Lin, director of the Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting, and vice minister of the State Administration for Market Regulation

Tang Zhaozhi, a person in charge of the Copyright Management Division under the Publicity Department of the Communist Party of China (CPC) Central Committee

Chen Yusong, a person in charge of the Department of Treaty and Law at the Ministry of Commerce

Mao Jinsheng, a person in charge of the Intellectual Property Protection Department of the National Intellectual Property Administration (NIPA) 

Chairperson:

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

Date:

April 26, 2021

Xing Huina:

Friends from the media, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). China has attached great importance to the protection of intellectual property rights (IPR) and the building of a fine business environment. Today marks the 21st World Intellectual Property Day. We are joined by Ms. Gan Lin, director of the Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting, and vice minister of the State Administration for Market Regulation. Ms. Gan will introduce details concerning the Report on the Latest Development of IPR Protection and Business Environment in China (2020), and then answer your questions. Also present at today's press conference are Mr. Tang Zhaozhi, a person in charge of the copyright management division under the Publicity Department of the Communist Party of China Central Committee; Mr. Chen Yusong, a person in charge of the Department of Treaty and Law at the Ministry of Commerce; and Mr. Mao Jinsheng, a person in charge of the Intellectual Property Protection Department of the National Intellectual Property Administration (NIPA).

First, I'll give the floor to Ms. Gan Lin.

Gan Lin:

Friends from the media, ladies and gentlemen, good afternoon. Today marks the 21st World Intellectual Property Day, and I am delighted to be here to share with you the latest progress concerning China's IPR protection and business environment improvement. On behalf of the Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting, I would like to take this opportunity to thank our friends from the media for your consistent attention and great support for our work in protecting IPR, cracking down on IPR infringement and counterfeiting, and improving the business environment.

The year 2020 was indeed extraordinary. In face of the severe setback brought about by the sudden outbreak of the COVID-19 pandemic and the deep recession of the global economy, China has coordinated its epidemic prevention and control work with economic and social development, and continuously worked to crack down on IPR infringement and counterfeiting. As a result, China has made solid progress concerning IPR protection, and its business environment, which is based on market principles, governed by law and up to international standards, has been further improved. Today, we released the Report on the Latest Development of IPR Protection and Business Environment in China (2020). It is a comprehensive introduction of the relevant measures being taken by the Chinese government and the positive progress being made. Next, I'll brief you on its main content from four aspects.

The report analyzes new situations and challenges both in China and the rest of the world at present. Globally, due to the impact of the pandemic and other factors, international trade and investment has seen a huge contraction, and the world is experiencing a major economic recession. Protectionism and unilateralism are rising, while sci-tech innovation faces strong headwinds. Domestically, the digital economy is bursting with vitality, and new industry and business models are thriving. Self-reliant innovation is speeding up, meanwhile, more focus has been placed on quality over quantity when it comes to IPR. As the number of market entities continues to steadily grow, new requirements have emerged for improving the business environment in China.

The report presents the work on IPR protection in 2020 in the following six aspects. In terms of coordination, the Central Committee of the Communist Party of China (CPC) and the State Council have made a series of decisions and deployments, and the leading group has held nationwide audiovisual conferences to specify the work focuses for each year. The office of the leading group and all member units have proactively implemented the tasks. Given this, government departments have seen closer cooperation, and regional coordination is more efficient. In terms of legal guarantees, China has formulated and revised a set of laws, regulations and judicial interpretations, such as the Civil Code, Criminal Law, Patent Law and Copyright Law, to name a few. In doing so, China has further improved its IPR-related legal system in a way that is in accordance with international rules and is fit for China's particular situation. In terms of administrative law enforcement, China is focused on key fields, links and products, and has launched a series of targeted campaigns to crack down on IPR infringement. In terms of judicial protection, China has taken resolute action against criminals, made sufficient procuratorial and supervision efforts, and significantly improved the quality and efficiency of work when exercising judicial powers. In terms of society-wide joint-governance, China has been working to improve industries' self-discipline and strictly holding market entities accountable for their business production and operation. Dispute resolution efforts have been strengthened, and a governance system which features joint public participation is about to be established. In terms of publicity and communication work, China is focused on key efforts, and works in multiple ways to improve the influence of the issues by releasing reports and presenting typical cases.

The report showcases the main progress made in 2020 concerning the improvement of the business environment in the following four aspects. First, China has improved services for foreign investors. The role of trade platforms has been given full play, which has improved the efficiency of business activities and facilitated trade and investment. Second, China has further widened market access, and provided convenience for both enterprises and products which intend to enter the Chinese market. More efforts have been made to streamline administration and delegate power. Third, China has been continuously developing new methods of regulation and supervision, strictly practicing competition enforcement, and strengthening protection on property rights, in a bid to make law enforcement and the judiciary more efficient. Fourth, China has introduced effective support and assistance measures accordingly. The examining efficiency of registration has been continuously improved, and more taxes and fees have been cut, making government service more comprehensive.

The report elaborates on the major progress made in deepening international exchange and cooperation. This includes but is not limited to the enhancement of multilateral and bilateral exchange, boosting understanding and consensus via international conferences and forums, proactively engaging in international joint law enforcement to crack down on cross-border infringement and counterfeit crimes, and taking part in the formulation and signing of international rules and agreements in order to further improve global governance. These include the Beijing Treaty on Audiovisual Performances, the China-EU agreement on the cooperation for and protection of geographical indications, and the Regional Comprehensive Economic Partnership Agreement. 

China has persisted in the protection of intellectual rights and the improvement of its business environment, and these efforts have been recognized by the international community. In the Global Innovation Index 2020, issued by the World Intellectual Property Organization, China ranks 14th, which makes it the only middle-income economy in the top 30. As pointed out in the thematic report "China's Doing Business Success: Drivers of Reform and Opportunities for the Future" published by the World Bank, China's reform measures for bettering its business environment, which can be drawn on by other economies around the world, had been a strong driver for the overall improvement of the global business environment. We will make continued efforts to build our country into an international highland in terms of innovation and business environment. 

The introduction of the report stops here. The full text has been published on China's Website for the Campaign Against IPR Infringements and Counterfeits (ipraction.gov.cn) and on the official site of the State Administration for Market Regulation (SAMR). People can visit those sites to download the full report. 

Thank you. 

Xing Huina：

We will begin answering questions now. Please state the news outlet you work for first. 

China Media Group:

In 2020, The CPC Central Committee and the State Council made more arrangements and deepened reforms to streamline administration, delegate authority, improve regulation, and optimize services. They also improved the business environment and brought out the vitality of market entities. So, can you specify what work the SAMR has done to improve the business environment? Thank you. 

Gan Lin：

Thank you for your question. Improving the business environment, especially by enhancing market regulation, is an important responsibility of the SAMR and an important task for the national system of market regulation. In 2020, we firmly implemented the decisions and arrangements of the CPC Central Committee and the State Council. The SAMR drew up opinions on the implementation of the regulations on improving the business environment. Being fully dedicated to the continued improvement of the business environment, the national system of market regulation pushed forward reforms through innovative measures with the aim to streamline administration and delegate authority, improve regulation, and optimize services. We mainly carried out tasks in the following five aspects:

First, we deepened business system reform and fully realized that procedures for setting up a business can be handled online. The average time needed for setting up a business has been shortened to within four working days. We pushed for the closing of a business to also be handled online and widened the pilot reform to simplify procedures for closing a business. We trialed reforms in separating permits from business licenses in 18 different pilot free trade zones with full coverage. We pushed for the experiences of pilot projects to be duplicated and implemented more widely. We carried out the simultaneous issuance of electronic business licenses and electronic seals, promoted the use of electronic signatures for business licenses and "electronic business licenses plus electronic license information." We have continued to expand the scenarios where electronic business licenses can be used. 

Second, we eased production access. We delegated the approval of manufacturing licenses to provincial-level market regulation authorities for five categories of products, namely, concrete iron for construction use, cement, equipment for radio and TV transmission, counterfeit RMB banknote discriminating devices, and simply supported beams used on prestressed concrete bridges. We advanced reforms relating to qualification certifications of institutions for inspection and testing. We also trimmed the directory for compulsory certification. 

Third, we advanced progress in resuming work and production. Together with relevant departments, we introduced ten measures to support the resumption of work and production, offered guidance for increased aid and assistance to self-employed individuals, put forth more than 700 policies to offer help, and released the national standards for a health QR code. We strengthened the comparison of domestic and foreign standards for anti-pandemic supplies, streamlined compulsory certification procedures for export-oriented commodities to be sold at home, conducted verification and calibration works for enterprises across 18.54 million measuring instruments, and tested 350,000 batches of anti-pandemic supplies. We made efforts to manage fees related to enterprises and pushed for a total of 5.2 billion yuan of overcharged fees to be returned to enterprises. 

Fourth, we conducted competition-related law enforcement with strict measures. We bolstered law enforcement against monopolistic practices and unfair competition. We filed cases in accordance with the law to investigate enterprises that ran internet platforms and had been allegedly involved in monopolistic practices. We investigated and dealt with several major and typical cases including the monopoly of active pharmaceutical ingredients and false transactions. We seriously handled cases where enterprises that ran various platforms had failed to offer prior notification of concentration of undertakings according to law and cases involving unfair pricing. We concluded 108 monopoly-related cases, 7,371 unfair competition cases, 473 cases involving the investigation of concentration of undertakings, and we also investigated and dealt with 20,000 price offenses. We fully implemented the review system for ensuring fair competition and organized a thorough clean-up of policies and measures issued before 2019. As a result, we cleaned up 1.07 million policy items, and abolished and revised nearly 6,000 among them. 

Fifth, we improved regulatory practices. Working with 15 departments, we researched and formulated the List of Items for Joint Spot Checks by Market Regulation Departments, covering 74 items in 35 fields. We built the national enterprise credit information publicity system and put it into operation, conducting joint punitive actions on 982,000 companies that committed serious illegal and dishonest acts. 

We work to pursue a better business environment and there is no end to our work. Market regulators will step up efforts to build a market environment that is easier to have access to, fair and orderly for competition, and safe and trusted for consumers. We will work to make contributions to accelerating the building of a high-level market system, improving the socialist economic system, and creating a business environment that is market-oriented, law-based and internationalized. Thanks.

Xing Huina:

Please raise your questions.

CNR:

Ms. Gan just introduced that in face of the COVID-19 outbreak and the downward pressure on the global economy, China's practices on intellectual property right (IPR) protection, improving the business environment and battling against IPR infringement and counterfeiting, have been widely recognized by the international community. What are the specific works that the Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting has done? What are their plans for the future? Thanks.

Gan Lin:

Thanks for your question. In 2020, the Office of the National Leading Group on the Fight Against IPR Infringement and Counterfeiting firmly implemented the important speeches and instructions given by General Secretary Xi Jinping and the decisions and plans made by the CPC Central Committee and the State Council. Departments at different levels coordinated with each other and took effective measures to fight against IPR infringement and counterfeiting, achieving great progress. We specifically strengthened our efforts in six areas, which are as follows:

First, we strengthened coordination. The National Leading Group on the Fight Against IPR Infringement and Counterfeiting held nationwide teleconferences, clarifying the major work on fighting against IPR infringement and counterfeiting in 2020, identifying the major tasks and verifying responsibilities. We carried out annual performance evaluation in 31 provincial-level regions and the Xinjiang Production and Construction Corps, to ensure the measures had been put into place. 

Second, we strengthened regulation in major areas. In the internet field, 14 departments carried out special internet market supervision work, or the so-called "Wangjian 2020" joint campaign, to combat illegal activities such as selling infringements and counterfeiting products online and unfair competition. Around 20,000 cases were investigated and dealt with. Meanwhile, four departments launched the "Sword Net 2020" campaign, focusing on combating infringement and piracy in audiovisual works, e-commerce platforms, social platforms, and other fields. We closed 2,884 illegal websites. We continued to carry out the "Iron Fist" campaign of intellectual property law enforcement, and investigated and handled 39,000 trademark infringements and patent counterfeiting cases. In rural and urban-rural fringe areas, six departments jointly carried out special enforcement campaigns to combat counterfeit and shoddy food in rural areas to help poverty alleviation and drive rural vitalization. We organized the "Spring Thunder" campaign to severely crack down on infringement and illegal acts in the field of agricultural materials. We organized market inspections on the spring and autumn crop seeds, and also investigated and dealt with a batch of infringement cases. Key efforts were also made in import and export links. We deployed the campaign for IPR protection named "Longteng," the campaign for IPR protection in shipping and delivery channels named "Blue Net," and the campaign for IPR protection for export transshipment goods named "Clean Net," and seized 62,000 shipments of import and export goods suspected of infringement. In major areas regarding people's livelihoods, we jointly launched special campaigns to implement the "four strictest standards" requirements, with 285,000 food safety violations investigated and handled. We also carried out a special campaign to crack down on the illegal manufacturing and sale of masks and other protective products, and 120 million problematic masks were seized.

Third, we strengthened judicial protection. We cracked down on more than 21,000 criminal cases of IPR infringement and the production and sale of counterfeit goods, arrested more than 32,000 suspects, with the value involved totaling more than 18 billion yuan. Courts across the country concluded 466,000 first-instance IPR cases, a year-on-year increase of 11.7%. The amount of compensation awarded in IPR cases increased by 79.3% year-on-year. We approved the arrest of 7,174 people committing IPR infringements, and prosecuted 12,152 people.

Fourth, we strengthened publicity and promotion. Focusing on major works of different departments across the country, we have given full play to the role of traditional media and new media to guide public opinion. We published a series of reports and typical cases on IPR protection and battling against infringement and counterfeiting for demonstration and guidance. Relying on international organizations, including the WIPO, the WTO and international conferences, we told the "Chinese story" of IPR protection and presented the "Chinese voice" of optimizing the business environment to the world.

Fifth, we strengthened joint governance. Related departments guided companies in the telecommunications and internet industries to sign a self-discipline convention on internet data security. Hangzhou, Nanning and other customs and cross-border e-commerce platforms were guided to explore the establishment of IPR protection cooperation workstations. In addition to that, the first ten local sub-centers of the National Overseas IPR Dispute Response and Guidance Center have been established under guidance. Over 500 IPR dispute mediation organizations have been set up and mediated 24,000 IPR disputes throughout the entire year.

Sixth, we strengthened international cooperation. We signed the China-EU Agreement Protecting Geographical Indications and the Regional Comprehensive Economic Partnership Agreement. The Beijing Treaty on Audiovisual Performances officially came into effect. We held the 3rd Forum on International Cooperation in Fighting against IPR Infringement and Counterfeiting and the 17th Shanghai International Intellectual Property Forum. We actively participated in international operations such as "Operation Opson" against food crimes, "Operation Pangea" against internet crimes of manufacturing and selling counterfeit drugs, and "Operation Cyber Eagle" against internet intellectual property crimes.

This year marks the start of the 14th Five-Year Plan (2021-25) period. The National Leading Group on the Fight Against IPR Infringement and Counterfeiting will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fulfill our duties, pursue innovation, and continue our fight against IPR infringement and counterfeiting. Going forward, we will step up our efforts in the following five aspects:

First, we will promote well-coordinated cooperation. We will ensure that administrative law enforcement, judicial protection, as well as arbitration and mediation, will proceed in an orderly manner. We will also further enhance the synergy between law enforcement and the crackdown [on IPR infringement and counterfeiting].

Second, we will focus on people's well-being and their concerns. We will ramp up our efforts to ensure that crackdowns, regulation and deterrence will work when it comes to the infringement and counterfeiting cases in which the public are concerned and have attracted wide attention, as well as those fields and areas where IPR infringement and counterfeiting cases have frequently emerged.

Third, we will improve regulatory practices. Greater efforts will be made to promote smart and credit rating-based regulation, so as to regulate online and offline infringement and counterfeiting throughout the whole industrial chain in a comprehensive manner. 

Fourth, we will promote public participation. We will strengthen industrial self-discipline, ensure that enterprises fulfill their responsibilities, and stimulate the enthusiasm of consumers, so as to establish a model of fighting infringement and counterfeiting based on collaboration and participation.

Fifth, we will deepen international cooperation. We will establish and improve multilateral and bilateral coordination mechanisms of law enforcement, which will help facilitate information exchange and case investigation, as well as communication and experience sharing, so as to jointly crack down on cross-border crimes. 

Thank you.

China Financial and Economic News:

Strengthening IPR protection is an important means for China to promote scientific and technological innovation, and realize self-reliance and self-improvement in science and technology. What do you think of the role that China's increased IPR protection efforts have played in recent years in promoting scientific and technological innovation and improving its business environment? Thank you.

Mao Jinsheng:

Thank you for your question. By implementing the important instructions made by General Secretary Xi Jinping, as well as decisions and deployments made by the CPC Central Committee and the State Council, and following the directive for intensified protection of IPR which was jointly issued by the General Office of the CPC Central Committee and the General Office of the State Council, the NIPA has improved IPR protection significantly over the past year.

First, we have stepped up efforts to coordinate relevant work regarding IPR protection. The NIPA has worked with relevant departments to study and draft a plan for implementing the Opinions on Strengthening the Protection of Intellectual Property Rights in 2020-21, listing 133 key tasks in detail. It has been issued by the General Office of the CPC Central Committee and the General Office of the State Council. We have established and improved a system in a bid to facilitate communication, information exchange and performance evaluation, and helped local Party committees and governments improve their IPR protection systems in terms of industrial self-discipline, examination and authorization, as well as mediation and arbitration. As many as 30 provinces, autonomous regions and municipalities nationwide have issued their own follow-up policies for implementing the Opinions as of April, thus further clarifying their own responsibilities. 

Second, the legal system for protecting IPR has been further tightened. We have cooperated with relevant departments to complete the fourth revision of the patent law, and established a punitive compensation system for infringements. We also set up the drug patent term compensation system and the early settlement mechanism for drug patent disputes. The protection term for design patents has been extended. In addition, we have stepped up efforts to revise the rules for implementing the patent law, and ensure the revision of relevant systems, including the Guidelines for Patent Examination, Measures for Administration of Trademark Agency, as well as the protection measures for official logos and relevant regulations regarding the protection of geographical indications.

Third, we have further clarified standards for law enforcement and IPR protection, and issued five standard guidelines, such as those for the administrative mediation of patent disputes and standards for judging trademark patent infringement. We are exploring the establishment of a working system to judge and test disputes over IPR infringement, to unify our standards for law enforcement. In 2020, the IPR authorities across the country handled more than 42,000 administrative adjudication cases related to patent infringement disputes, an increase of 9.9% year on year. 

Fourth, the coordinated protection mechanism has been further improved. We have continued intensifying efforts to establish an efficient and coordinated protection mechanism. A total of 40 IPR protection centers and 22 fast-track IPR protection centers which allow rights owners to safeguard their rights more efficiently had been established nationwide by the end of 2020. We have worked with the Supreme People's Court to launch an online mediation and litigation mechanism for IPR disputes. We have ensured that the National Overseas IP Dispute Response and Guidance Center will work efficiently, and helped them set up 10 local sub-centers across the country.  

Fifth, we have enhanced publicity over IPR protection. We have increased publicity on typical cases of IPR administrative law enforcement, as well as patent reexamination/invalidation cases. In the wake of public concerns and focusing on the special tasks of the fight against malicious trademark filings related to the ongoing pandemic, we have launched a series of campaigns to raise people's awareness. We have also organized activities to improve public awareness of laws, and explained relevant laws, regulations and policies regarding IPR protection in a timely manner. 

The achievements in IPR protection have been widely recognized among social sectors over the past year, with the score of social satisfaction on IPR protection reaching 80.05 points. China ranked 14th in the 2020 Global Innovation Index report released by the World Intellectual Property Organization (WIPO). Going forward, we will continue to implement the decisions and deployments made by the CPC Central Committee and the State Council calling for intensified IPR protection, and further improve the business environment to better meet the needs of high-quality social and economic development. Thank you.

Red Star News:

In recent years, online live broadcasting has brought new development opportunities for e-commerce and WeChat business. The management of counterfeit and shoddy goods on e-commerce platforms and WeChat stores has captured people's attention. My question is, what new measures have been taken over the past year in the management of e-commerce, livestream shopping and WeChat business? How can consumers protect their rights when they purchase fake and shoddy goods from livestreams and in online stores?

Gan Lin:

Thank you for your question. I'll answer this one. This issue has attracted much attention. With the rapid development of information technology, infringement and counterfeiting are characterized by such features as an integration of online and offline, organized criminal behavior, and refined division of production and marketing. This has made it increasingly difficult to deal with infringement and counterfeiting. On one hand, laws and regulations need to be improved. On the other, there needs to be innovation in the methods of supervision, such as using internet to manage online platforms to enhance the efficacy of enforcement.

In terms of managing infringements and counterfeiting online, the market regulation authorities have taken a series of effective measures. As I just introduced, the "2020 Sword Net" campaign is a multi-department effort aimed at cracking down on online sales of infringing, counterfeit and shoddy goods, unfair competition, and other illegal activities. It has also produced significant results, with nearly 20,000 cases having been investigated and dealt with. Of course, there are more complaints and informants in this respect. The "Iron Fist" action of IPR enforcement also coordinated both online and offline efforts, with 39,000 cases of trademark infringement and patent counterfeiting being investigated and handled. At the same time, we have also formulated the Measures for the Supervision and Administration of Online Transactions, which will come into force in a few days, on May 1. The Measures makes special provisions for operators of online live broadcast trading of goods. It also makes clear that if online service providers, such as social networks and live broadcasters, provide trading platform services such as online stores, commodity browsing, order generation and online payment for operators, they should fulfill the obligations of online trading platform operators in accordance with the law.

In a word, there is no place online that is outside the law, and the law must be obeyed both online and offline. Operators who carry out online trading activities using such online trading platform services should also fulfill the obligations of operators on the platform in accordance with the law. Platforms have their responsibilities and operators have their obligations, and both must abide by the law.

The management of infringement and counterfeiting online has always been an important part of our "Double Action" work, which has been included in the key tasks of the "Double Action" work for many years, and its implementation has been promoted as a key deployment. All regions and departments are also actively promoting the implementation. Both the "Sword Net" and the "Blue Net" campaigns have achieved positive results. Influenced by the epidemic, live broadcasting e-commerce providers have entered the era of nationwide live broadcasting, so many departments have now also issued the Administrative Measures for Network Livestream Marketing (Trial). Going forward, including livestream marketing, all subjects of online live broadcasts, such as "people, goods and market," "those in front of and behind the camera," as well as "various elements online and offline," should all be included in the scope of supervision. This requires us to step up efforts and take various measures. You will be able to see the results of further enforcement in the future. Thank you.

China News Service (CNS):

My question is for the Ministry of Commerce. What efforts has the ministry made to protect IPR and improve the business environment in recent years? Thank you.

Chen Yusong:

Thanks for your question. Good afternoon to you all. In recent years, the Ministry of Commerce has firmly implemented decisions and plans made by the CPC Central Committee and State Council on enhancing IPR protection and improving the business environment to boost high-quality economic growth.

First, we have been strengthening IPR cooperation and negotiations. Regarding IPR cooperation, we have regular contact with the United States, European Union, Russia, Japan, Switzerland, and other important economic and trade partners. Those contacts are both comprehensive, covering all IPR areas of mutual concern, and cross-sectoral, with full participation from government departments, industries, business associations, experts, and scholars. Through these candid exchanges, we have promoted the resolution of mutual concerns and further increased economic and trade cooperation. Moreover, we have taken an active role in IPR exchanges through multilateral channels, including the WTO, APEC, the Belt and Road Initiative, and BRICS to promote smooth international trade. Concerning IPR negotiations, we have signed the Regional Comprehensive Economic Partnership (RCEP) agreement, which includes a high-level and detailed section on IPR. Its uniform IPR rules have improved the level of regional IPR protection and strengthened international IPR cooperation between related countries. We have also signed the agreement on geographical indications, with high-level protection and wide coverage of more than 500 GI products from China and the EU, further boosting economic and trade cooperation between the two sides. Besides, the Ministry of Commerce has also actively promoted enterprises' early IPR warnings and protection overseas. In 2020, we released 12,186 IPR early warnings on the China Intellectual Property Rights Protection Website (IPR in China), sent 151 articles to WeChat subscribers, and compiled 48 IPR weekly journals and 12 special journals on overseas IPR early warnings to provide in-time information.

Second, we have continued to improve the business environment. Regarding the efforts to improve the business environment for foreign investment, the Ministry of Commerce has implemented the Foreign Investment Law and its enforcement regulations, marking an end to the approval and filing procedures for the establishment and change of foreign-funded enterprises. We have further enhanced the protection of IPRs and trade secrets of foreign-invested companies. We have released the newly revised negative lists on the market access of foreign-invested companies in general and that for pilot free trade zones, cutting numbers of prohibited industries to 33 and 30 respectively. We have published the catalogue of encouraged foreign investment industries (2020 version), increasing the number of industries by more than 10%. We have revised and issued the Rules on Handling Complaints of Foreign-Invested Enterprises to further improve the working mechanism for complaints. Concerning the enhancement of trade facilitation, the Ministry of Commerce has been promoting the implementation of the WTO's Trade Facilitation Agreement (TFA). By January 2020, we had put in place TFA regulations and measures, and worked with related authorities to roll out a number of additional trade facilitation measures, reasonably adjusted import and export management catalogs, continued to use digital and intelligent means to simplify customs clearance procedures and improve port operation modes, expanded single-window functions of international trade, improved customs clearance efficiency, reduced customs expenses and improved the business environment for cross-border trade. Regarding pilot innovation in free trade zones, the Ministry of Commerce has continued to deepen reforms to streamline administration and delegate power, improve regulation, and upgrade services in the area of intellectual property. We focused on innovative financial functions of intellectual property and dispute settlement mechanisms in pilot free trade zones, delegated more power to pilot free trade zones in reform, promoted investment liberalization and facilitation in free trade zones and pilot free trade zones to improve trade facilitation, enhance the capability of the financial sector in serving the real economy, and facilitate the flow of people.

This is a brief introduction of the efforts made by the Ministry of Commerce. We will act with a firm resolve to implement the policy decisions and plans of the CPC Central Committee and State Council and promote domestic coordination and international cooperation in IPR protection. We will promote opening up at a higher-level, improve the business environment and make better use of international and domestic markets and resources to help foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Thank you.

China Daily:

I would like to ask that while seven theatrical releases including "Hi, Mom" during the Spring Festival 2021 have set new box office records for Chinese New Year film season, the issue of piracy is still arousing concerns. What measures have been taken in this regard? Thank you.

Tang Zhaozhi:

Thank you for your question. From February to March this year, in order to regulate the copyright order of the film market, the copyright management division under the Publicity Department of the CPC Central Committee, the China Film Administration under the Publicity Department, and the Food-and Drug-Related Crime Investigation Bureau of the Ministry of Public Security jointly deployed and carried out centralized action to crack down on the distribution of movies pirated by recording in theaters. We adopted a variety of effective measures to severely crack down on the illegal and criminal activities of piracy and distribution of theatrical releases during the Spring Festival.

We have carried out the work in the following aspects. First, we deployed an early warning protection system. On Feb. 8, the National Copyright Administration (NCAC) released the second list detailing the key works for copyright protection in 2021, and included seven Chinese New Year theatrical releases including "Hi, Mom" into the early warning protection system. We asked providers of various internet services such as content, storage, search links, e-commerce websites, and app stores to take effective measures to prevent and promptly deal with infringement and piracy behaviors such as pirated recording and distribution of theatrical movies.

Second, we strengthened patrolling and monitoring. Local copyright and film authorities have strengthened the patrolling management of movie theaters, strictly guarded against covert filming and recording, and intensified online inspections and piracy monitoring. During their concentrated operations, the local copyright and film authorities focused their inspections and patrolling on the screening and distribution of seven Spring Festival theatrical releases, dispatched law enforcement personnel more than 36,500 times, inspected theaters, on-demand theaters and other venues more than 11,800 times, and inspected various websites over 2,682 times. According to monitoring results, there was no occurrence of piracy or infringement on legitimate video websites. Pirated content and links are mostly spread illegally through social platforms, online cloud storage, e-commerce platforms, and unregistered small websites without getting permits to provide internet content and online broadcast services. Most of such small websites are placed on servers outside of China.  

Third, we quickly dealt with infringements. Local copyright and film authorities arranged multi-shifts and multi-line responses, carefully screened and systematically sorted out the complaints of rights holders and the information reported by the public, and supervised and urged all internet service providers to take emergency measures to quickly delete more than 30,000 infringing links related to theatrical releases during the Spring Festival.

Fourth, we investigated and handled major cases. Local copyright and film authorities and public security organs have strengthened their efforts to identify clues and actively find the sources of cases, identifying a number of secret filming and recording suspects. Public security organs launched criminal investigations to hold the wrongdoers criminally responsible in accordance with the law, and promoted the investigation and handling of cases to trace their roots, break up gangs and destroy networks. At present, 39 key cases involving infringement and piracy of cinema films have been investigated and handled around the country, and 45 infringing websites have been shut down, effectively curbing the momentum of pirated movie recordings in cinemas.

Next, local law enforcement agencies will dig deeper into the sources of piracy, increase efforts to crack down on secret filming and pirated recordings in theaters, and severely investigate and punish websites, WeChat public accounts, and e-commerce operators that sell and distribute pirated films. They will supervise and urge all online platforms to strengthen the main responsibility of enterprises, and in accordance with the law, severely penalize acts of pirating and disseminating theatrical releases which would generate strong complaints from the right holders and cause great social harm. This will create a good social atmosphere that respects copyright and creation, and promotes the prosperity and healthy development of the film industry. Thank you.

National Business Daily:

The General Office of the State Council recently released a notice on this year's key tasks concerning government transparency, stating that government departments should make information related to law enforcement on anti-monopoly and anti-unfair competitive practices more transparent, and exercise impartial regulation equally across the board. What arrangements does the State Administration for Market Regulation have in this regard? Thank you.

Gan Lin:

Thank you for your question. It is fair to say that we have always been committed to disclosing information on law enforcement regarding anti-monopoly and anti-unfair competitive practices. We conscientiously conduct our work based on the key requirements set by the General Office of the State Council regarding government affairs transparency. 

Regarding the disclosure of information for law enforcement on anti-monopoly, we conducted the following tasks. 

First, we disclosed legislation information in a timely and active manner. For example, those rules and documents related to the latest regulations and guidelines on anti-monopoly practices. Second, we made information related to specific cases accessible to the public in accordance with the law. We published law enforcement information, law enforcement notices, and relevant legal documents on monopoly cases and explained the handling of cases to create a deterrent for further violations so that the public and the society can truly feel a sense of fairness and justice.

Third, we disclosed interpretations of major policies. We provided policy interpretations through illustrations, articles, and press briefings. For example, when disclosing information regarding cases of wide public concern, the person in charge of our anti-monopoly bureau was invited to answer questions from the media, experts were invited to write interpreting articles, and press conferences were held to release authoritative information. At the same time, since anti-monopoly practices attract international attention, we have expanded publicity and advocacy to effectively level the playing field and create a favorable social atmosphere for fair results. This is the anti-monopoly information disclosure.

Regarding the disclosure of information for law enforcement on anti-unfair competition, we know in 2017, China amended the Anti-Unfair Competition Law. One of the amendments defines specific regulations for disclosing information on administrative penalties. Specifically, businesses fined for violating the Anti-Unfair Competition Law should have their credit history recorded by the supervision and inspection department, which in turn should be made public in accordance with relevant laws and administrative regulations. The administrative punishments handed out by market supervision departments at all levels should then be disclosed via the national corporate credit information disclosure system. The State Administration for Market Regulation has disclosed recent administrative punishments for unfair competitive practices through a website launched last year specifically designed to disclose punishment letters in full as part of efforts to increase the transparency of law enforcement.

In the future, we will further beef up efforts to disclose information on law enforcement regarding anti-monopoly and anti-unfair competitive practices, increase the publicity of cases that violate the law, and explain the handling of cases as part of a legal education drive. Thank you.

Xing Huina:

This is the end of today's press conference. Thank you, to our four speakers and journalists from the media.

Translated and edited by Zhu Bochen, Wang Qian, Liu Sitong, Zhang Rui, Cui Can, Fan Junmei, Gong Yingchun, Li Huiru, Xiang Bin, Liu Qiang, Yang Xi, Duan Yaying, Zhang Liying, He Shan, Zhou Jing, 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:

Shen Changyu, head of the National Intellectual Property Administration (NIPA)

He Zhimin, deputy head of the NIPA

Yu Cike, head of the copyright management division under the Publicity Department of the Communist Party of China Central Committee

Chairperson:

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

Date:

April 25, 2021

Xing Huina:

Friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). The Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 proposes implementing the strategy of building China into a country that is strong on intellectual property rights (IPR). Today, we have invited Mr. Shen Changyu, head of the National Intellectual Property Administration (NIPA), to brief you on the progress of implementing the 14th Five-Year Plan and speeding up the building of a country that is strong on IPR, and to answer your questions. We also have with us Mr. He Zhimin, deputy head of the NIPA, and Mr. Yu Cike, head of the copyright management division under the Publicity Department of the Communist Party of China (CPC) Central Committee. 

Next, I will give the floor to Mr. Shen. 

Shen Changyu:

Thank you. Friends from the media, good morning. First of all, I would like to take this opportunity to thank you all for your interest, attention and support for intellectual property work over the years.

On Nov. 30, 2020, the Political Bureau of the 19th CPC Central Committee held a group study session on strengthening IPR protection in China. General Secretary Xi Jinping delivered an important speech, profoundly expounding on a series of major theoretical and practical issues concerning IPR protection, which provided fundamental guidelines for comprehensively strengthening IPR protection. Premier Li Keqiang presided over an executive meeting of the State Council to study and make plans on IPR-related work.

In 2020, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the intellectual property departments coordinated the epidemic controls with regular work, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, and successfully completed the main objectives and tasks of IPR protection and application outlined in the national intellectual property strategy and the 13th Five-Year Plan. Remarkable achievements have been made in various tasks.

First, IPR protection has been comprehensively strengthened. China's Patent Law and Copyright Law have been amended. A punitive compensation system for infringements of patents and copyrights has been established. The Opinions on Strengthening Intellectual Property Rights Protection and its action plan have been implemented. The national inspection and assessment of IPR protection have been carried out, in which 10 provinces (autonomous regions and municipalities) scored more than 90 points. We have investigated 31,300 trademark infringement cases nationwide and 7,100 cases of counterfeiting patents, with 841 cases being transferred to judicial organs. Over 42,000 administrative adjudication rulings on patent infringement disputes were made. A total of 1,826 infringement and piracy cases were filed for investigation and 213 cases were transferred to judicial organs. A total of 62,000 batches of import and export goods suspected of infringing certain IPR were detained, totaling 56.18 million items. More than 520,000 criminal, civil, and administrative IPR cases were received in the first instance, second instance and retrial, and over 519,000 cases were concluded. We cracked 21,000 criminal cases of IPR infringement and the production and sale of fake and shoddy products, and arrested 32,000 suspects, with the total value involved in the cases reaching 18 billion yuan. The satisfaction score of the IPR protection increased to 80.05 points.

Second, both the quantity and quality of IPR creation have increased. In the whole year, 530,000 invention patents were authorized, and the number of invention patents per 10,000 people reached 15.8, exceeding the targets outlined in the 13th Five-Year Plan. The number of PCT international patent applications submitted by Chinese applicants through the Patent Cooperation Treaty reached 69,000, ranking first in the world. In the whole year, 5.761 million trademark registrations were made, and 7,553 applications for international trademark registration under the Madrid Protocol were received from domestic applicants. The number of registered works reached 3.32 million. The number of registrations for computer software copyright was 1.72 million. In total, 765 geographical indication trademarks were approved for registration, six geographical indication protection products were recognized, and 1,052 companies were approved to use geographical indication special signs. In addition, 2,549 new varieties of agricultural plants and 441 new varieties of forestry plants were granted. In the Global Innovation Index 2020 released by the World Intellectual Property Organization (WIPO), China jumped 15 slots from 2015 to 14th place.

Third, the benefits of IPR application have increased. Statistics show that in 2019, the value added of national patent-intensive industries reached 11.5 trillion yuan, a year-on-year increase of 7%, accounting for 11.6% of GDP that year; the value added of the national copyright industry reached 7.3 trillion yuan, accounting for 7.39% of GDP that year. In 2020, 408 of the world's 5,000 leading brands were from China, with a total value of $1.6 trillion. The total amount of patent and trademark pledge financing in China reached 218 billion yuan, a year-on-year growth of 43.9%. The direct output value of enterprises using special geographical indication signs totaled 639.8 billion yuan, which provided strong support for the fight against poverty. A total of 186,000 technical contracts involving IPR were signed, with turnover exceeding 1.1 trillion yuan. The total import and export of intellectual property royalties amounted to $46.31 billion, of which exports were $8.68 billion, a year-on-year increase of 31.5%.

Fourth, reforms in the field of IPR have continued to deepen. We stepped up efforts to promote reforms to streamline administration, delegate power, improve regulation, and upgrade services in the field of IPR, and further improve the quality and efficiency of patent reviews. The average review period for invention patents has been cut to 20 months, two months quicker than at the beginning of the 13th Five-Year Plan period (2016–2020). Meanwhile, the review period for high-value patents has been reduced to 14 months and the average review period of trademark registration has been shortened to four months, down by more than half the time needed at the beginning of the 13th Five-Year Plan period. We screened out a batch of abnormal patent applications that were not made to protect innovation, and rejected a batch of malicious registration applications for trademarks not made for use. We also promoted the "one window" system for patent and trademark business acceptance and achieved the integration of systems across 27 provinces (autonomous regions and municipalities). Additionally, the Supreme People's Procuratorate established an IPR prosecution office and the Supreme People's Court set up the Hainan Free Trade Port Intellectual Property Court.

Fifth, new progress has been achieved in international cooperation on IPR protection. President Xi Jinping and European Union (EU) leaders announced the official signing of an agreement on geographical indications (GI). We contributed to the negotiation of a chapter on IPR in the Regional Comprehensive Economic Partnership (RCEP) agreement. We took orderly measures to implement provisions on IPR in phase one of the China-U.S. economic and trade agreement and renewed the "Belt and Road" intergovernmental agreement on IPR cooperation with the World Intellectual Property Organization (WIPO). The Beijing Treaty on Audiovisual Performances also officially came into effect, marking the first time an international intellectual property treaty has been adopted in China and named after a Chinese city. Important progress has been made in China's entry into the Hague Agreement Concerning the International Deposit of Industrial Designs. The WIPO Arbitration and Mediation Center established an office in the Shanghai Pilot Free Trade Zone.

2021 is the first year that the 14th Five-Year Plan will be implemented. The NIPA will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully grasp and put into practice the principles of the 19th CPC National Congress and the second, third, fourth, and fifth plenary sessions of the 19th CPC Central Committee. We will also act on the guiding principles of the important speech delivered by General Secretary Xi Jinping at the 25th group study session of the Political Bureau of the CPC Central Committee. We will accelerate the formulation of the Outline of National Intellectual Property Strategy (2021-2035) and a national IP protection and utilization plan for the 14th Five-Year Plan period. In doing so, we aim to strengthen top-level design, make progress while maintaining stability, and promote high-quality development of China's IPR work from a higher starting point to provide stronger support for fully building a modern socialist country and uphold our outstanding achievements as a celebration of the centenary of the CPC.

We would now like to answer your questions. Thanks.

Xing Huina:

Thank you, Mr. Shen, for your introduction. Now it is time for questions. Please indicate the media organization you work for before raising a question.

China Media Group:

As Mr. Shen mentioned, General Secretary Xi Jinping delivered an important speech on strengthening China's IPR protection while presiding over the 25th group study session of the Political Bureau of the CPC Central Committee on Nov. 30, 2020. What measures have been taken to implement the guiding principles of the speech? What progress has been made? Thank you.

Shen Changyu:

Thank you for the questions. As you said, the Political Bureau of the 19th CPC Central Committee held a group study session on strengthening China's IPR protection on Nov. 30 last year. General Secretary Xi Jinping presided over the session and delivered an important speech. He said that IPR protection relates to the modernization of China's governance system and capacity, high-quality development, people's happiness, the overall situation of the country's opening up to the outside world, and national security. He outlined how China is changing from a big country that introduces IPR to one that creates IPR, shifting from a country that pursues IPR quantity to one that seeks quality. He made strategic arrangements for comprehensively strengthening IPR protection in six aspects. His speech elicited a positive public response. Over the past half-year, the Leading Party Members Group of the NIPA and all the officials and staff in the field of IPR have been earnestly studying and putting into practice the guiding principles of the important speech. Remarkable progress has been achieved thanks to several measures that we took.

First, we set out to convey and study the gist of the speech. After General Secretary Xi Jinping delivered his speech, the Leading Party Members Group of the NIPA convened two themed sessions to convey and study the gist of the speech and issued a circular on studying and implementing the guiding principles of the speech to all institutions in the field of IPR. We held a meeting for leaders of IP offices nationwide and an expanded meeting for the leading Party members groups of IP offices nationwide before planning for implementation of its guidelines. We formulated and issued opinions on implementation and introduced 134 concrete measures. For each measure, we established an account to record the progress and ensure their correct implementation.

Second, we publicized and interpreted the speech. We coordinated mainstream media outlets to publish a series of articles and launch special coverage. We set up a dedicated column on the China Intellectual Property News and organized officials and staff of the NIPA to attend rotation training to foster a strong atmosphere of studying and practicing the guiding principles of the speech.

Third, implementation. So far, important progress has been made in many regards. For example, regarding the enhancement of top-level design of IPR protection, we have basically finished the drafting of the Outline of the National Intellectual Property Strategy and a national plan for IPR protection and application in the 14th Five-Year Plan period. Regarding the improvement in the law-based IPR protection, we have actively made preparations for the revised Patent Law to be put into practice on June 1. We have pushed forward a new round of research and revision on the Trademark Law as well as investigations into the legalization of the Geographical Indication Law. In promoting whole-chain IPR protection, we have implemented the Guidelines on Enhancing IPR protection and advanced high-standard plans. We have assessed the work of local governments and Party committees according to the arrangements of the central government to promote protection work. In deepening the reform of the systems and mechanisms in IPR protection, we have studied and proposed a series of new reform measures to streamline administration and delegate power, improve regulation, and upgrade services on IPR. In pushing forward international cooperation and competition in the field of IPR, we have also practiced items relating to IPR in the first phase of the China-U.S. trade deal, promoted enforcement of the China-EU Agreement on Geographical Indications, and completed protection notices for the first batch of productions. We have also participated in and completed negotiations relating to IPR in the RCEP agreements. In safeguarding national security in the field of IPR, we have examined the transfer of IPR in accordance with the law and boosted the creation and protection of IPR in key core technologies. 

For the next stage, the NIPA will further implement the guiding principles from General Secretary Xi Jinping's important speeches and promote and do our work well to celebrate the centenary of the founding of the CPC through extraordinary performance. Thank you. 

Guangming Daily:

My question is for Mr. Shen. The 14th Five-Year Plan has many arrangements regarding IPR. For example, high-value invention patents should reach 12 per 10,000 people by 2025. On April 15, data released by the National Center for Science and Technology Evaluation of the Ministry of Science and Technology shows that the trade volume of scientific and technological advances in 2019 decreased from that of 2018. The data also suggests that many high-value patents in colleges and scientific research institutions are inactive, and the scientific and technological achievements that they relate to have not been applied. Recently, academician Ouyang Zhongcan from the Chinese Academy of Sciences wrote a letter to Guangming Daily appealing for the application of scientific and technological advances to be emphasized in professional title appraisals. The application of scientific and technological advances is a systemic project. The NIPA has done a lot to promote work in this regard, like appraising the national model and pilot schools for IPR protection. My question is, during the 14th Five-Year Plan period, how will the NIPA cooperate with the Ministry of Science and Technology and the Ministry of Education to meet the targets relating to high-value patents laid out in the plan? Thank you. 

Shen Changyu:

Thank you for your very important question relating to the 14th Five-Year Plan. The application of scientific and technological advances involves many departments. Regarding the NIPA, we have made continuous efforts in the application of IPR. This year marks the beginning of the 14th Five-Year Plan. The 14th Five-Year Plan makes clear arrangements about IPR work over the next five years, and the content is the richest among all Five-Year Plans so far. It fully shows the more prominent role that IPR work plays in national economic and social development. 

Specifically, first, "the number of high-quality invention patents per 10,000 people" has been included in the latest Five-Year Plan, replacing "the number of invention patents per 10,000 people" in the 12th and 13th Five-Year Plans. This new indicator will effectively promote the realization of transforming China from a large country of intellectual property introduction to a large country of intellectual property creation, as well as transform intellectual property work from the pursuit of quantity to the improvement in quality. Second, the chapter on innovation-driven development lists "improving the protection and utilization mechanism of IPR" as an individual section, and outlines major tasks regarding the Outline of the National Intellectual Property Strategy. Third, other parts of the plan touch on IPR as well, including special arrangements for encouraging financial institutions to develop intellectual property pledge financing, strengthening the central government's responsibilities in intellectual property protection, and supporting Hong Kong to build a regional intellectual property trading center.

As for the work in the next stage, according to the arrangements and division of work in the 14 Five-Year Plan, we will strive to work with keen attention in the following aspects. First, we will do a good job in top-level design, including formulating and implementing the Outline of the National Intellectual Property Strategy and a national plan for IPR protection and application in the 14th Five-Year Plan period. Responsibilities of the central government in IPR protection should be enhanced in a proper way, and we should dovetail our work with the 14th Five-Year Plan and implement the plan in a solid way.

Second, improve systems and mechanisms. We will implement a strict IPR protection system, especially the punitive compensation system. We will improve related laws and regulations, and speed up IPR legislation for new fields and new business forms including artificial intelligence (AI) and big data. We will improve the administrative law enforcement mechanism as well as the system for arbitration, mediation, IPR safeguarding and assistance.

Third, continue to deepen reform. We will further optimize the financial assistance and reward policies as well as the evaluation mechanisms for patents, highlight high-quality development, better protect and encourage high-value patents, and cultivate patent-intensive industries. Meanwhile, we will reform the ownership and rights and interests distribution mechanism for state-owned IPR, expand the authority of universities and research institutions to handle IPR, improve intangible asset evaluation, and promote the industrial application of patents. 

Fourth, strengthen infrastructure development. We will strengthen the development of information and intelligent infrastructure for IPR. We will accelerate the construction of the national IPR big data center, build a public service platform for the protection and use of IPR, and support Hong Kong to build a regional IPR trading center, etc.

By implementing these measures, we aim to further highlight high-quality development and push for a new stage in IPR protection, new breakthroughs in IPR use, and a new level for IPR service to better serve national economic and social development.

I will respond briefly to your question on the application of patents.

The application of patents is indeed an important issue and has been an important area of attention for a long time. And it involves many government departments. At present, there are indeed many "sleeping patents." One of the reasons is that there are two difficulties for patent application. One the one hand, it's hard for the patents of universities and research institutes to be discovered and used; one the other hand, it's hard for small and medium-sized enterprises to get the patented technologies they need. To address these two difficulties, the NIPA and the Ministry of Finance jointly launched a special program for patent application at the beginning of this year.

Under the program, efforts are being made in the following three aspects: first, broadening channels. We will promote the IPR rights and interests distribution reform to raise the enthusiasm of universities and research institutes to apply patents. Second, connecting supply and demand. We will build a promotion and application platform for patented technologies and set up an effective supply and demand matching mechanism to link universities and research institutes with small and medium-sized enterprises through a variety of online and offline events. Third, strengthening incentives. Provinces with outstanding achievements in patent application will be awarded. Thank you.

China Daily:

2021 marks the start of China's 14th Five-Year Plan period. All localities and departments are drawing up blueprints for the period based on a review of their experiences gained from the 13th Five-Year Plan period. My question is, what has been done regarding copyrights? Could you please introduce?

Shen Changyu:

Mr. Yu will answer this question.

Yu Cike:

During the 13th Five-Year Plan period, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, our work on copyright has served the central task of economic development and the overall interests of the country. Focusing on copyright creation, protection and application, we have improved policies, strengthened supervision, optimized services and boosted the copyright industry. With these efforts, we have contributed to the implementation of the innovation-driven development strategy and the building of a moderately prosperous society in all respects. Following are the main achievements that were made regarding copyright during the 13th Five-Year Plan period.

First, our system of copyright laws has been continuously improved. We have actively advanced the third amendment to China's Copyright Law. On November 11, 2020, the 23rd session of the Standing Committee of the 13th National People's Congress approved the amended copyright law, which will come into force on June 1, 2021. We have continuously improved relevant laws and regulations and issued many regulatory documents, including the Notice on Strengthening Copyright Management of Online Literary Works and the Notice on Regulating the Copyright Order of Photography Works. Our system of copyright laws, which both suits China's national conditions and accords with international rules, has seen constant improvement and the copyright work is now much more law-based.

Second, copyright protection in China has been continuously improved. We have launched the "Sword Net" campaign for several consecutive years now to crack down on online copyright infringement. Fruitful results have been achieved. We have established an early warning mechanism for major film and television productions to protect their copyrights. We have improved the administrative law enforcement system for copyright and established an administrative copyright protection mechanism with Chinese characteristics. The achievements in promoting the use of copyrighted software have been recognized both at home and abroad and helped build up China's good image in IPR protection.

Third, the quality and efficiency of copyright work have been continuously improved. According to the deployment of the central authority, we promoted the demonstrations of copyright work, carried out the pilot construction of the national copyright innovation development base, established and improved the national copyright expo's authorized transaction system, and promoted healthy and rapid development of the copyright industry. We have straightened the copyright registration mechanisms and successfully publicized and popularized copyright issues. The copyright social service system is improving.

Fourth, international copyright cooperation and exchanges have been continuously deepened. We have carried out international copyright cooperation and promoted the establishment of a new type of multilateral and bilateral copyright relationship with win-win cooperation at its core. China has actively participated in the formulation of international copyright rules, and promoted the entry into force of the Beijing Treaty on Audiovisual Performances on April 28, 2020. This made it the first international intellectual property treaty to be adopted in China and the first to be named after a Chinese city since the founding of the People's Republic of China. We have broadened the channels for publicity abroad and enhance China's influence in international copyright work.

At present, we are implementing the requirements of the CPC Central Committee and the State Council and actively planning copyright work during the 14th Five-Year Plan period. To seek a new chapter and start a new journey during the 14th Five-Year Plan period, copyright work must be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, embody the spirit of a series of important speeches by General Secretary Xi Jinping on strengthening the protection of IPR, fully implement the decisions and deployments of the CPC Central Committee and the State Council, persist in seeking progress while maintaining stability, and keep to the right path and make innovations. Additionally, it must adhere to the concept that copyright protection is needed to protect innovation, vigorously implement the innovation-driven development strategy, insist on grasping the new development stage, implement the new development concept, foster a new development paradigm, persist in serving the overall situation of theoretical publicity work, maintain ideological security, promote cultural prosperity and development, and persist in advancing the modernization of the copyright governance system and governance capabilities. With the central goal of building China's strength in copyright, with a basic task of comprehensively strengthening copyright protection and accelerating the development of the copyright industry as well as further improving the copyright work system as the main measure, we'll continuously improve the level and effectiveness of copyright work and provide stronger copyright support for promoting high-quality development to build a socialist innovative country with advanced culture.

On behalf of the NCAC, I would like to take this opportunity to express my gratitude to the media outlets and journalists for their concern, help, and support regarding copyright work. Thank you.

China Financial and Economic News:

We learned that the amount of national intellectual property pledge financing during the 13th Five-Year Plan period doubled compared to that of the 12th Five-Year Plan period. What specific measures has the NIPA launched to promote financial services such as intellectual property pledge financing? What are the arrangements for the 14th Five-Year Plan period?

Shen Changyu:

Thank you for your question. Innovation is inseparable from the protection of IPR and financial support. Intellectual property finance is an organic combination of intellectual property and financial services, and it also provides a kind of "dual insurance" and "dual support." In recent years, the NIPA, in conjunction with relevant departments, has acted on the decisions and arrangements of the CPC Central Committee and the State Council, constantly made progress on intellectual property finance, and mainly carried out its work in the following aspects:

First, we have vigorously promoted intellectual property pledge financing work. In 2019, we joined with the CBIRC and the NCAC, to issue the Notice on Further Strengthening Intellectual Property Pledge Financing Work and specified three measures: tolerate a slightly higher bad loan ratio in IP pledge financing business, establish separate credit programs and specific in-house performance appraisal and incentive mechanisms. In 2020, the total amount of national patent and trademark pledge financing reached 218 billion yuan, a year-on-year increase of 43.9%, from which many small and medium-sized enterprises have benefited, especially those related to science and technology.

Second, we guided relevant institutions to develop and launch intellectual property insurance products, including our cooperation with PICC Property and Casualty Company Limited, to form four categories and 16 types of intellectual property insurance products. According to incomplete statistics, in 2020, the relevant insurance coverage exceeded 20 billion yuan, benefiting more than 4,000 companies.

Third, we have actively pushed forward the trial program for intellectual property securitization. Up to now, a total of 25 intellectual property securitization products have been issued nationwide, with an issue amount of more than 7 billion yuan. The relevant work has been included by the State Council in the pilot free trade zones' trial reform experience.

Next, the NIPA will continue to work with relevant departments to advance the improvement of intellectual property financial services, promote intellectual property pledge financing by entering industrial parks to benefit enterprises, and develop intellectual property insurance and securitization. At the same time, we will effectively prevent intellectual property financial risks as well as continuously improve the popularity, benefits coverage, convenience, and safety of intellectual property financial services. Thank you.

Phoenix TV:

Trademark squatting the names of celebrities and well-known companies has attracted wide public attention. What specific measures are in place to crack down on malicious trademark registration? What does the NIPA plan to do as the next step to curb these acts? Thank you.

Shen Changyu:

Thanks for your questions. Mr. He, deputy commissioner of the NIPA, will answer this question.

He Zhimin:

Thanks for your questions. The NIPA firmly stands against malicious trademark registration and actively promotes trademark registration in good faith among the public.

According to the Trademark Law, malicious trademark registration includes acts that violate the principle of good faith and which aim to exploit or misuse others' market reputation, damage others' lawful rights, or infringe on public resources. It mainly involves two situations. The first is malicious trademark registration of famous brands, trending news events, major national projects, or celebrity names. The other involves the hoarding of trademarks with no intention to use them.

The two situations have major negative social impacts. Malicious trademark squatting, like in the case of registering the name of Ding Zhen, a social media influencer in China, aims to make illegal gains and thereby disrupts the order of trademark registration management and causes a negative social impact. Trademark hoarding, such as the more than 300 trademark registration applications made by a single company and were rejected by our office some time ago, is a waste of market and administrative resources and seriously harms public interest.

To address these issues and create a better market environment, we have made efforts in the following four aspects. First, promote the improvement of laws and regulations. The fourth revision of the Trademark Law added a provision that states that "malicious trademark registration that is not intended for use should be rejected," and moved the threshold for combating malicious hoarding of trademark applications to the examination stage as well as throughout the entire trademark application registration process. Second, improve the identification of malicious registrations. By using a trademark review database, as well as human judgment, we can pinpoint malicious registration acts in our review process. Third, take differentiated approaches in our work methods. For acts that have a major negative social impact, like the ones for registering "Leishenshan," a makeshift hospital built in response to the COVID-19 outbreak in Wuhan, and "Clear Love," the patriotic expression made by Chinese martyr Chen Xiangrong in his diary, have been quickly rejected and made public, drawing wide criticism of the applicants of such trademarks. From 2018 to 2020, the NIPA had rejected over 150,000 filings of malicious trademark registration and trademark hoarding. Fourth, organize a special campaign to crack down on those illegal acts. During last year's Blue Sky campaign, we interviewed 2,950 trademark agencies about their practices. Last month, the NIPA launched a special campaign targeting malicious trademark squatting to increase law enforcement and enhance deterrence.

For the next step, we will continue to improve the legal system for trademark protection, increase punishment of violations, and make typical cases in trademark infringement public to promote China's brand building and high-quality IPR development. Thank you.

Red Star News:

With the rise of content production platforms like Douyin, Kuaishou, WeChat, and Weibo, internet users are increasingly enthusiastic about creating various types of online content, but copyright infringement issues often emerge. We have noticed that dozens of media production organizations and copyright holders have recently released a joint statement against copyright infringement in short videos, calling for short video platforms and content production and management parties of public accounts to increase awareness in copyright protection. What is the NIPA's comment on this matter? Thank you.

Shen Changyu:

Thanks for your question. Mr. Yu will answer this question because he is responsible for issues related to copyrights.

Yu Cike:

With the rapid development of digital technologies and mobile networks, China's online short video industry has seen robust growth in recent years. Meanwhile, intellectual property infringement in short video clips has become a very serious issue. This has elicited a strong reaction from rights holders and raised public concern. The NIPA has also paid high attention to such issues.

It is a basic principle stipulated in China's Copyright Law that one shall not distribute or use other people's works without permission. This principle surely applies to films and television works. Over the years, the NIPA has attached great importance to protecting the copyright of films and television works, proactively safeguarding the related orders. During the 13th Five-Year Plan period, the NIPA launched the "Sword Net" campaigns successively to combat online copyright infringement and piracy. During the campaigns, the NIPA introduced targeted regulation measures for relevant fields including film and television, proactively and effectively carried out early warning efforts for key films and television works, and published lists of such works . Over the past five years, a total of 38 such lists have been published, and the early warning efforts have covered 640 key films and television works. By doing so, we have managed to protect the IPR of these fine works when they are transmitted online.

Back in 2018, the NIPA included the rectification work of online short video copyright as a key task of the "Sword Net" campaign. The NIPA has been working to crackdown on copyright infringement and striving to strengthen copyright supervision of video clip platforms, user-based content and public account producers and operators. We have been continuously working on this front in recent years.

This year, in accordance with CPC Central Committee's deployment on strengthening all-round protection of IPR, the NIPA will work proactively to respond to the calls of right holders, and support and protect their legitimate rights. First, the NIPA will redouble its efforts to crackdown on IPR infringement in the short video industry. Copyright violation on short video platforms, user-based content and public account producers and operators, such as unauthorized copying, presenting, and distributing of other people's films, television or musical works, will be resolutely regulated. Second, the NIPA will work to hold video clip platform, user-based content and public account producers and operators accountable on IPR-related issues in a comprehensive manner. The NIPA will strengthen its efforts to establish copyright systems, improve the handling mechanism for copyright-related complaints, and effectively abide by its obligation to report on illegal and criminal activities and provide assistance to investigations. Third, the NIPA encourages film copyright collectives to build their capacity and carry out collective management efforts on the IPR of films in accordance with the law, and play the role of a link to protect the legitimate rights of rights holders and facilitate the legitimate use of users. Thank you.

ThePaper.cn

Currently, new sectors and business models, such as big data and AI, are thriving in China. What progresses have been made concerning the institutional arrangements on IPR protection in these fields? Thank you.

Shen Changyu:

Thank you for your question. This is indeed an important issue. Currently, big data and AI have become important factors and technologies for production, and there is a growing call for improving the IPR protection mechanisms in relevant fields. In view of China's future social and economic development and its competitive edge, strengthening IPR protection in the fields of big data and AI has become an imperative issue.

Among other things, IPR protection around big data focuses on handling the relationship between protection and use, security and privacy, and promoting the orderly entry of data resources into the factor market while still ensuring data security.

Regarding IPR protection of AI, the current focus is mainly on whether works and inventions completed by AI can generate new IPR, and the attribution of such rights. Currently, we are also actively listening to the views of the academic and industry sectors on these issues, studying the relevant institutional arrangements and the outcomes will be written in relevant plans and documents.

I think these are all very important issues. When it comes to big data and AI, the protection of IPR is an issue of great concern. For example, consider the issue of data property rights. Data is a new and important factor of production following the traditional ones such as land, technology and capital. The output of China's digital economy, which is supported by data, accounts for more than 36% of its GDP and contributes 67.7% to GDP growth, or around two-thirds. How to allow data to flow reasonably, make full use of it and effectively protect it are indeed very important issues, which require the design of a good system. Thank you for your question.

CRI:

Many people believe that China is already a major player in terms of IP, but that it is not strong yet. Could you explain what efforts have been made to promote the high-quality development of IP? And what have been the effects? Thank you.

Shen Changyu:

Thank you for your questions. In China's 14th Five-Year Plan, the "number of high-value invention patents per 10,000 population" is set as the expected index, which is a very important index. We need to strive for high quality and improve the quality. We need to solve the problems of "large but not strong" and "large but not excellent." As it was said just now, high-quality development is indeed a very important issue. It is a major decision and plan made by the CPC Central Committee with Comrade Xi Jinping at its core according to China's overall social and economic development. This idea has not only driven the vigorous development of the economy, but also become the fundamental principle for determining development ideas, formulating policies and measures, and implementing macro-controls in all fields. The NIPA has also taken a series of powerful measures to promote high-quality development of IP in order to implement the decision and plan of the CPC Central Committee. 

First, we will deepen implementation of the projects to improve the quality of patents and promote the strategy for trademarks and brands as well as the use of geographical indications. We will accelerate the establishment of an indicator system, policy system, statistical system and assessment system for the high-quality development of IP. Second, we will promote the "ownership of high-value invention patents per 10,000 population" for inclusion in the national 14th Five-Year Plan index, replacing the "ownership of invention patents per 10,000 population" index in the 12th and 13th five-year plans. Third, we will strictly enforce the examination and authorization of patents and trademarks, and promote high-quality creation and efficient use through high-quality assessments. Fourth, we will promote the improvement of funding policies, completely cancel funding for the application of IP, and focus on increasing support for subsequent transformation and application, administrative protection and public services. Fifth, we will severely crack down on abnormal patent applications not for the purpose of protecting innovation and malicious trademark registrations not for the purpose of being used.

Driven by these policies, the quality and efficiency of China's IP development has continuously improved. During the 13th Five-Year Plan period (2016-2020), the export volume of China's intellectual property royalties increased by double digits for five consecutive years. In 2020, the figure reached $8.68 billion, registering an average annual growth rate of 51.6%. The pledge financing of patents and trademarks more than doubled from 84.85 billion yuan ($13.07 billion) to 218 billion yuan. The added-value of China's patent-intensive industries reached 11.5 trillion yuan in 2019, accounting for 11.6% of GDP. In 2020, 408 Chinese brands, totaling $1.6 trillion, entered the list of the world's top 5,000 brands, ensuring a strong underpinning for our high-quality economic development. In general, China's IP development has seen continuous improvement in both quality and efficiency in recent years. Thank you.

Xinhua News Agency:

We have noticed that Chinese enterprises are encountering more and more intellectual property disputes in the process of going global. What are the initiatives of the NIPA to support Chinese enterprises to better deal with IP disputes overseas? Thank you.

Shen Changyu:

Thank you for your question. In recent years, the NIPA has consistently stepped up efforts to build mechanisms and platforms to better help Chinese enterprises handle overseas IP disputes.

First, we established the National Guidance Center for Handling Overseas Intellectual Property Disputes and ten local sub-centers, as well as a coordination mechanism for handling major IPR cases, instructing Chinese enterprises to take active steps to respond to overseas IP disputes. So far, the national center and local sub-centers have offered guidance and consultation in more than 300 cases.

Second, we have consistently improved worldip.cn, a national platform for overseas IPR information services. Currently, the website provides information regarding 1,339 IP laws, regulations and international treaties from 189 countries and regions, as well as more than 40 guidelines for overseas work involving IP.

Third, we have improved risk prevention and control mechanisms in overseas IPR protection, focusing on several key issues. For example, in response to pirate registration of Chinese trademarks in the overseas market, we have drafted and issued guidelines on safeguarding trademark rights in pivotal countries.

Fourth, we have intensified efforts to promote training. So far, we have trained more than 45,000 people, effectively raising the capacity of Chinese enterprises to protect overseas IP rights.

Next, we will continue to improve the overseas IP dispute response mechanism, fully leverage the role of the National Guidance Center for Handling Overseas Intellectual Property Disputes and local sub-centers, accelerate the establishment of overseas sub-centers, and provide high-standard guidance and services for Chinese enterprises that "go global." Thank you.

Xing Huina:

This concludes today's conference, thank you to the three speakers and thank you to all the journalists, goodbye everyone!

Translated and edited by Zhang Liying, Zhou Jing, Zhang Rui, Huang Shan, Guo Yiming, Liu Qiang, Zhu Bochen, Li Huiru, Li Xiao, Fan Junmei, He Shan, Liu Jianing, Wang Qian, Wang Yiming, Wang Wei, Xiang Bin, Yuan Fang, Dong Qingpei, 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:

Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

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

Date:

April 16, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today's press conference is a regular briefing on China's economic data. We are delighted to be joined by Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS. Ms. Liu will introduce details concerning China's economic performance in the first quarter of 2021 and answer your questions. Now, let's give the floor to Ms. Liu.

Liu Aihua:

Thank you. I'll start by briefing you all on China's economic performance in the first quarter of this year and then take your questions. The national economy has seen a good start in the first quarter. Faced with the impact of the COVID-19 pandemic during winter and spring as well as uncertainties in the external environment, local authorities and government departments have all worked under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, faithfully implemented the decisions and plans of the CPC Central Committee and the State Council, and consolidated and expanded the progress on epidemic prevention and control and socioeconomic development. Macro policies are being implemented in a scientific and targeted manner. As a result, China's national economy delivered a stable performance with a consolidated foundation and a good momentum of growth. The demand of production was expanded, market vitality improved, employment and consumer prices remained stable, and people's well-being was fully guaranteed. The national economy has seen a good start to the year.

According to preliminary estimates, gross domestic product (GDP) in the first quarter reached 24,931.0 billion yuan, up by 18.3% year on year at comparable prices, or up by 0.6% compared with the fourth quarter of 2020 and 10.3% compared with the first quarter of 2019, with an average two-year growth of 5.0%. By industry, the value added of the primary industry was 1,133.2 billion yuan, up by 8.1% year on year, or an average two-year growth of 2.3%; that of the secondary industry was 9,262.3 billion yuan, up by 24.4% year on year, or an average two-year growth of 6.0%; and that of the tertiary industry was 14,535.5 billion yuan, up by 15.6% year on year, or an average two-year growth of 4.7%. On one hand, the year-on-year GDP growth of 18.3% in the first quarter was affected by such unique factors as the low base figure of last year and the increased working days due to staff staying put during the Spring Festival. On the other hand, the quarter-on-quarter growth of 0.6% in the first quarter, with the average two-year growth reaching 5.0%, demonstrated the steady recovery of the national economy.

First, the overall agricultural production was steady, and pig production recovered significantly. 

In the first quarter, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3%, with an average two-year growth of 3.4%. With the current favorable climatic conditions in major farming areas, spring ploughing and sowing progressed well, and the winter wheat grew slightly better than average. In the first quarter, the output of pork, beef, mutton and poultry was 22 million metric tons, up by 21.4% year on year. Of this total, pork output was up by 31.9%, milk was up by 8.5% and eggs were down by 2.1%. Pig production recovered significantly. At the end of the first quarter, the number of pigs registered in stock was 415.95 million, up by 29.5% year on year, among which 43.18 million were breeding sows, up by 27.7%. 

Second, industrial production rebounded steadily, and the manufacturing industry demonstrated strong growth.

The total value added of industrial enterprises above the designated size grew by 24.5% year on year in the first quarter of 2021, or up by 2.01% quarter on quarter, with an average two-year growth of 6.8%. Of this total, the total value added of industrial enterprises above the designated size in March increased by 14.1% year on year, up by 0.60% month on month. An analysis by type of ownership showed that in the first quarter, the value added of state holding enterprises was up by 16.9% year on year; that of share-holding enterprises was up by 23.7% year on year; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 29.2% year on year; and that of private enterprises was up by 29.7% year on year. In terms of sectors, the value added of mining increased by 10.1% year on year, with an average two-year growth of 4.0%; that of manufacturing increased by 27.3% year on year, with an average two-year growth of 6.9%; and the production and supply of electricity, thermal power, gas and water increased by 15.9% year on year, with an average two-year growth of 4.8%. The value added of equipment manufacturing and high-tech manufacturing increased by 39.9% and 31.2% year on year, respectively, with average two-year growth of 9.7% and 12.3%, respectively. Specifically, the production of new-energy vehicles, industrial robots, excavating and shoveling machinery, microcomputers and integrated circuits all witnessed year-on-year growth of over 60%, with the average two-year growth exceeding 19%. In March, the Manufacturing Purchasing Managers' Index (PMI) stood at 51.9%, staying above the threshold for 13 months in a row; and the Production and Operation Expectation Index was 58.5%.

From January to February, profits from industrial enterprises above the designated size reached 1,114.0 billion yuan, 2.79 times that of the first two months of last year, or an average two-year growth of 31.2%; and the profit rate of the business revenue of industrial enterprises above the designated size was 6.60%, which was 3.15 percentage points higher than that of the first two months in 2020.

Third, the service sector experienced restorative growth, and market expectations were positive.

The first quarter witnessed a steady recovery of the service sector. Of this total, the value added of transportation, storage and postal services and that of real estate services grew by 32.1% and 21.4% year on year, respectively, with average two-year growth of 6.6% and 6.8%, respectively. In March, the Index of Services Production grew by 25.3% year on year, with an average two-year growth of 6.8%. In the first two months, business revenue of service enterprises above the designated size grew by 37.8% year on year, with an average two-year growth of 10.0%. Of this total, the business revenue of information transmission, software and information technology services and that of scientific research and technology services grew by 35.0% and 47.8% year on year, respectively, with average two-year growth of 17.4% and 11.5%, respectively. In March, the Business Activity Index for services stood at 55.2%, which was 4.4 percentage points higher than that in February. The Business Activity Index for railway transportation, air transportation, telecommunication, broadcast, television and satellite transmission services, software and information technology services, monetary and financial services stayed within the high expansion range of 60.0% and above; the Business Activity Index for accommodation, leasing and business services and resident services hit hard by the spread of COVID-19 in some areas at the beginning of the year rebounded to the expansion range. From the perspective of market expectations, the Business Activity Expectation Index for services stood at 62.9%, remaining within the high expansion range of 60.0% and above for two consecutive months.

Fourth, market sales improved gradually, and online retail sales grew rapidly.

In the first quarter, the total retail sales of consumer goods reached 10,522.1 billion yuan, up by 33.9% year on year, or up by 1.86% quarter on quarter, with an average two-year growth of 4.2%. Specifically, in March, the total retail sales of consumer goods reached 3,548.4 billion yuan, up by 34.2% year on year, 0.4 percentage point higher than that in the first two months, with an average two-year growth of 6.3%, or up by 1.75% month on month. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 9,134.5 billion yuan, up by 34.6% year on year, or an average two-year growth of 4.3%; and that in rural areas rose by 29.4% year on year to 1,387.5 billion yuan, with an average two-year growth of 3.2%. Grouped by consumption patterns, the income of catering was 1,059.6 billion yuan, up by 75.8% year on year, or an average two-year decline of 1.0%; and the retail sales of goods was 9,462.5 billion yuan, up by 30.4% year on year, or an average two-year growth of 4.8%. Grouped by categories, for the retail sales of goods by enterprises above the designated size in the first quarter, the year-on-year growth rates of 18 categories of goods exceeded 10%. Specifically, the retail sales of sports and recreational goods and communication equipment grew by 45.2% and 42.4% year on year, respectively, with average two-year growth of 17.4% and 17.1%, respectively. Online retail sales reached 2,809.3 billion yuan, up by 29.9% year on year, with an average two-year growth of 13.5%. Specifically, the online retail sales of physical goods totaled 2,306.7 billion yuan, up by 25.8% year on year, with an average two-year growth of 15.4%, accounting for 21.9% of the total retail sales of consumer goods, which was 1.2 percentage points higher than that in the first two months of this year.

Fifth, fixed asset investment recovered steadily and investment in high-tech industries and social sectors grew quickly.

In the first quarter, the investment in fixed assets (excluding rural households) reached 9.5994 trillion yuan, up by 25.6% over last year, or up by 2.06% quarter on quarter with an average two-year growth of 2.9%. In March, the investment in fixed assets (excluding rural households) grew by 1.51% month on month. Specifically, in the first quarter, the investment in infrastructure was up by 29.7% year on year, an average two-year growth of 2.3%; manufacturing was up by 29.8% year on year, an average two-year decrease of 2.0%; and real estate development was up by 25.6% year on year, an average two-year growth of 7.6%. The floor space of commercial buildings sold reached 360.07 million square meters, up by 63.8% year on year, an average two-year growth of 9.9%. The total sales of commercial buildings was 3.8378 trillion yuan, up by 88.5% year on year, an average two-year growth of 19.1%. By industry, investment in the primary industry increased 45.9% year on year, with an average two-year growth of 14.8%; in the secondary industry it was up by 27.8% year on year, with an average two-year decrease of 0.3%; and the tertiary industry grew by 24.1% year on year, an average two-year growth of 4.0%. Private investment went up by 26.0% year on year, an average two-year growth of 1.7%. Investment in high-tech industries grew by 37.3% year on year, an average two-year growth of 9.9%. Specifically, the investment in high-tech manufacturing and high-tech services grew by 41.6% and 28.6% year on year, respectively, with average two-year growth of 10.7% and 8.2%, respectively. In terms of high-tech manufacturing, investment in the manufacturing of medical equipment, measuring instruments and meters, and in the manufacturing of computers and office devices grew by 50.0% and 49.5% year on year, respectively, with average two-year growth of 9.1% and 24.2%, respectively. In terms of high-tech services, investment in testing services and in research, development and design services went up by 55.7% and 48.2% year on year, respectively, with average two-year growth of 14.8% and 21.5%, respectively. Investment in social sectors increased 31.7% year on year, with an average two-year growth of 9.6%. Specifically, investment in the health sector and education sector went up by 50.9% and 27.0% year on year, respectively, with average two-year growth of 22.3% and 10.4%, respectively.

Sixth, imports and exports of goods grew noticeably and the trade structure continued to improve.

In the first quarter, the total value of imports and exports of goods was 8.4687 trillion yuan, an increase of 29.2% over the previous year. The total value of exports was 4.6140 trillion yuan, up by 38.7% year on year; and that of imports was 3.8547 trillion yuan, up by 19.3% year on year. The trade balance was 759.3 billion yuan in surplus. In March, the total value of imports and exports of goods was 3.0228 trillion yuan, up by 24.0% year on year. The total value of exports was 1.5554 trillion yuan, up by 20.7% year on year; and that of imports was 1.4674 trillion yuan, up by 27.7% year on year. The trade structure continued to improve. In the first quarter, the imports and exports of general trade accounted for 61.2% of the total value of imports and exports, 1.3 percentage points higher than the same period of the previous year. The imports and exports by private enterprises accounted for 46.7% of the total value of imports and exports, 4.4 percentage points higher than the same period during the previous year. 

Seventh, consumer prices maintained the same level year on year and producer prices for industrial products went up year on year.

In the first quarter, consumer prices maintained the same level as the previous year. In March, consumer prices were up by 0.4% year on year, and down by 0.2% in February; or down by 0.5% month on month. In the first quarter, consumer prices fell by 0.1% in urban areas and maintained the same level in rural areas. Grouped by commodity categories, the prices of food, tobacco and alcohol went up by 0.6% year on year; clothing was down by 0.2%; housing was down by 0.2%; articles and services for daily use were down by 0.1%; transportation and communication fell by 1.4%; education, culture and recreation were up by 0.3%; medical services were up by 0.3%; and other articles and services were down by 1.1%. In terms of food, tobacco and alcohol prices, the price of grain went up by 1.5%, fresh vegetables were up by 4.8%, and pork was down by 12.5%, or down by 18.4% in March with a decline expanded by 3.5 percentage points compared with February. In the first quarter, the core CPI excluding the price of food and energy stayed the same as that of last year.

In the first quarter, the producer prices for industrial products went up by 2.1% year on year. Specifically, the prices in March went up by 4.4% year on year, 2.7 percentage points higher than the growth in February, or up by 1.6% month on month. In the first quarter, the purchasing prices for industrial products went up by 2.8%. Specifically, the prices in March went up by 5.2%, which was 2.8 percentage points higher than the growth in February, or up by 1.8% month on month.

Eighth, the surveyed urban unemployment rate fell and employment remained generally stable. 

In the first quarter, the newly employed people in urban areas numbered 2.97 million. In March, the surveyed urban unemployment rate was 5.3%, down by 0.2 percentage points compared with February and 0.6 percentage points lower than the same period last year. The surveyed unemployment rate of population with local household registration was 5.3% and that of population with non-local household registration was 5.4%. Specifically, the surveyed unemployment rates of the population aged from 16-24 and from 25-29 were 13.6% and 4.8%, respectively. The surveyed urban unemployment rate in 31 major cities was 5.3%, 0.2 percentage points lower than that in February. In March, employees of enterprises worked 46.9 hours per week on average, up by 0.6 hours compared with February. At the end of the first quarter, the number of rural migrant workers totaled 174.05 million. 

Ninth, residents' income continued to rise and the income growth of rural residents outpaced that of urban residents. 

In the first quarter, the per capita disposable income of residents nationwide was 9,730 yuan, a nominal increase of 13.7% year on year, with an average two-year growth of 7.0%, or a real increase of 13.7% year on year after deducting price factors, with an average two-year growth of 4.5%. In terms of permanent residents, the per capita disposable income of urban residents was 13,120 yuan, a nominal increase of 12.2% year on year and a real increase of 12.3%; and the per capita disposable income of rural residents was 5,398 yuan, a nominal increase of 16.3% year on year and a real increase of 16.3%. In terms of income source, nationwide per capita salary income, net operative income, net property income and net income from transfers saw year-on-year growth of 12.4%, 19.5%, 17.0% and 10.7% in nominal terms, respectively. The per capita disposable income of urban residents was 2.43 times that of rural households, 0.09 lower than the ratio of the same period last year. Median per capita disposable income nationwide was 8,014 yuan, an increase of 12.7%. 

Generally speaking, the national economy in the first quarter continued its stable recovery. However, we must be aware that the COVID-19 pandemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities. The foundation for the domestic economic recovery is also yet to be consolidated and the long-standing structural problems remain prominent with new situations and issues arising from development. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and continue to consolidate the foundation of economic stability, to build strength for development and to guarantee basic security requirements. We should maintain the consistency, stability and sustainability of macro policies, deepen reform and opening-up and innovation, keep the economy performing within a reasonable range and promote the quality development of the economy in a solid manner. 

That's all for my introduction. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu for your introduction. The floor is now open for questions. Please identify the media organization you represent before asking your questions.

CCTV:

Ms. Liu, from the data that was just released, we can see that the GDP in the first quarter achieved rapid growth of 18.3%. I would like to ask, what factors contributed to this growth rate? How should we understand the current operation of the overall economy? The first quarter of this year is also the first quarter of the 14th Five-Year Plan (2021-2025) period. What's your comment on China's economic performance for the start of the year? Thank you.

Liu Aihua:

Thank you for your questions. Judging from the main indicators for the first quarter just introduced, it can be said that in this period, despite the tests the pandemic gave rise to in winter and spring and the uncertainties of the external environment, the outcomes we achieved in coordinating the pandemic prevention and control with economic and social development have been consolidated and expanded. On the whole, China's economy has continued to recover steadily, with a positive start. Its characteristics are mainly reflected in five aspects:

First, production demand continues to improve. Because of the low base in the same period last year and the increase in working days as many people stayed put for the Spring Festival, this year's year-on-year growth rate has shown a different trend from previous years. We need to judge the economic situation from multiple angles. Judging from the year-on-year situation, due to the gradual recovery of market demand, the relatively low base of the previous year, and the stay-put celebrations, the main indicators showed double-digit growth. In the first quarter, the GDP increased by 18.3% year-on-year, as did the added value of industrial enterprises above designated size by 24.5%, the total retail sales of consumer goods by 33.9%, fixed asset investment (excluding rural households) by 25.6%, and total imports and exports of goods by 29.2%. The year-on-year growth rate of these indicators was all double-digit. From a quarter-on-quarter perspective, the main indicators continued to grow. In the first quarter, the value added by industrial enterprises above designated size increased by 2.01% from the fourth quarter of the previous year, the total retail sales of consumer goods by 1.86% from the previous quarter, and fixed asset investment by 2.06%. Looking at the average growth rate over the past two years, the GDP in the first quarter increased by an average of 5%, the added value of industrial enterprises above designated size by an average of 6.8%, the total retail sales of consumer goods by an average of 4.2%, the investment in fixed assets by an average of 2.9%, and the average growth rate of the total amount of goods imported and exported was also close to 10%. Therefore, by combining these indicators, it can be said that the overall economy is in stable recovery.

Second, employment and commodity prices are generally stable. In the first quarter, the surveyed unemployment rate in urban areas across the country averaged 5.4%, a year-on-year decrease of 0.4 percentage points. That includes an unemployment rate of 5.3% in March, down 0.6 percentage points year-on-year. In the first quarter, 2.97 million new jobs were created in urban areas across the country, fulfilling 27% of the annual target. In terms of commodity prices, consumer prices in the first quarter remained flat year-on-year. In March, a decline of 0.2% in the previous month turned to an increase of 0.4%, indicating a relatively moderate increase.

Third, we saw a rapid development of new growth drivers. In the first quarter, the high-tech manufacturing industry above designated size grew by 31.2% year-on-year, with an average increase of 12.3% over two years. The added value of the equipment manufacturing industry increased by 39.9% year-on-year, while the two-year average growth rate was 9.7%. These two growth rates are faster than the overall growth rate of all industries above designated size. Investment in the high-tech industry increased by 37.3% year-on-year, with an average growth rate of 9.9% over two years, which was 7 percentage points higher than the total investment. The output of smart low-carbon products has grown rapidly. In the first quarter, the output of new energy vehicles, industrial robots, and microcomputer equipment increased by 3.1 times, 1.1 times, and 73.6% respectively year-on-year, and the average growth rate over the two years exceeded double digits. New business forms and models continue to emerge. New models such as live-streaming e-commerce, online diagnosis and treatment, and telecommuting are developing well, and online and offline integration is speeding up. The online retail sales of physical goods in the first quarter increased by 25.8% year-on-year, with a two-year average increase of 15.4%, accounting for 21.9% of total consumer goods sales.

Fourth, quality and efficiency have been steadily improved. Let's first look at corporate profits. From January to February, the total profits for industrial enterprises above designated size increased by 1.79 times year-on-year, with an average increase of 31.2% over two years; service industry enterprises above designated size turned losses into profits, achieving a total profit of 169 billion yuan, compared to losing money in the same period last year. Residents' income continued to increase. In the first quarter, the national average per capita disposable income increased by 13.7% year-on-year in real terms, with a two-year average growth rate at 4.5%. Meanwhile, the income of rural residents grew faster than that of urban residents. Additionally, energy consumption per unit of GDP continued to decline, with preliminary calculations showing that energy consumption per unit of GDP in the first quarter fell by 3.1% year-on-year.

Fifth, market expectations are stable and improving. In March, China's Manufacturing PMI was 51.9%, an increase of 1.3 percentage points from the previous month, and was within the boom range for 13 consecutive months; the non-manufacturing business activity index was 56.3%, an increase of 4.9 percentage points; the composite PMI output index was 55.3%, an increase of 3.7 percentage points.

Judging from the above five aspects, we can see that the economic recovery in the first quarter of this year continued and that positive factors are accumulating. At the same time, we also understand that the international pandemic is still raging, the international environment is still complex and severe, the foundation for domestic economic recovery is not yet solid, and some service industries and small and micro-enterprises continue to face additional difficulties with their production and operations. In these aspects, we must continue to follow the deployments of the Central Economic Work Conference and the government work report to further increase the efforts to help enterprises out of difficulties; maintain continuity, stability, and sustainability of macroeconomic policies; and promote steady economic recovery. Thank you.

Red Star News:

My question is, judging from the statistics of the first quarter (Q1) of 2021, the consumption sector has rebounded significantly. What's your take on the recovery and in what areas has there been a relatively slow recovery? What measures will be taken to continue to expand consumption in the future? Thanks.

Liu Aihua:

Thanks for your questions. Judging from the data released just now, the total retail of consumer goods surged by 33.9% year on year in Q1, with an average two-year growth of 4.2%. Data show that this year, the consumer market is riding the quarterly recovery momentum from last year, showing a rapid rate of recovery. The three characteristics are as follows: 

First, the retail of goods maintained relatively rapid growth. Sales of goods grew by 30.4% year on year or average two-year growth of 4.8%. For sales of goods by enterprises above the designated size, the year-on-year growth rate in 18 categories of goods exceeded 10%. Specifically, sales of eight categories of goods, including sports, recreational, and communication equipment, increased by an average two-year growth rate of more than 10%.

Second, online sales saw a growing momentum. In Q1, online sales of physical goods reported an average two-year growth of 15.4%, accounting for 21.9% of the total sales of consumer goods.

Third, consumption sectors, such as the catering industry and offline consumption, which were buffered from recovery in the early stages, are now rebounding rapidly. In March, China's catering industry grew at an average two-year rate of 0.9%, which means that the monthly growth rate was higher than that of the same period in 2019 for the first time since 2020. Regarding offline consumption, sales of goods in physical retail shops above the designated size rose by 42.2% year on year in Q1, with an average two-year growth of 4.5%, 0.4 percentage points higher than that of the Jan-Feb period, showing a speedy recovery.

During the Tomb-Sweeping Day holiday, Chinese residents demonstrated a strong consumer demand for tourism and movies. Data from relevant departments shows that the total number of domestic trips topped 102 million during the holiday, recovering to 94.5% of the pre-COVID-19 level. From April 2 to 5, the number of railway passenger journeys rose by 225.8% compared with last year's Tomb-Sweeping Day holiday, recovering to 92.4% of 2019 levels. In the film market, China generated more than 800 million yuan in box office revenue during the three-day Tomb-Sweeping Day holiday, a record high in the same period compared to previous years.

From these numbers, we can see that there has been a rapid recovery in both online and offline sales of goods as well as in sectors such as catering and tourism, which had previously seen a relatively slow recovery and raised many concerns. Influenced by last year's base figures, the year-on-year growth was relatively rapid. With total sales of consumer goods dropping by 19% in Q1 of last year, on the basis of such a low base figure, sales of consumer goods registered a relatively fast growth rate of over 30%. There are also other contributing factors. The improved consumption environment boosted residents' confidence. Residents with an increased income demonstrated their strong consumption capacity. Favorable policies for expanding domestic demand and promoting consumption boosted the sale of major consumer goods. All of these are the reasons behind the rapid growth of the consumer market in Q1.

You just asked about what future trends we're likely to see for the recovery of the consumer market. Generally speaking, since last year, the consumer market has stood the severe test of the pandemic. The advantages of a mega-scale market are obvious and the momentum of upgraded consumption has remained unchanged. In the future, as the economy recovers steadily and residents' income continues to increase, there will be a greater impetus for promoting consumption capacity. China enhanced its responses to COVID-19 and took more targeted measures for pandemic prevention and control, which were also helpful in improving the consumption environment. Policies for expanding domestic demand and promoting consumption are paying off. The building of a new "dual circulation" development pattern that allows the domestic and overseas markets to reinforce each other with the domestic market as the mainstay, is speeding up. All these will support the steady recovery of the consumer market. At the same time, we should notice that China is still facing pressure from imported cases as well as the resurgence of outbreaks at home, which may affect consumer confidence. So we need to continue to coordinate the work of pandemic prevention and control and the economic and social development and improve the urban-rural logistics system to offer more favorable conditions for consumption. We will also work to maintain stability in employment, increase people's income and ensure that relevant policies are implemented in detail to sustain the steady consumption recovery. Thanks.

Shenzhen Special Zone Daily and Dute News: 

According to the statistics released, CPI growth was consistently negative during the first two months of this year, only becoming positive in March for the first time, and thus showed year-on-year flat growth in the first quarter. Analysts predicted that inflation would gradually grow in the next one or two quarters. What do you expect in terms of the CPI trend for the whole year? Thank you.  

Liu Aihua:

Thank you for your question. Just as you mentioned, the overall price levels in the first quarter were steady and the CPI showed flat year-on-year growth. The CPI shifted from a negative growth of 0.2% in February to positive growth of 0.4% in March. The trend of prices is of great concern among the public. Generally speaking, the CPI is currently flat year on year. The growth rate of 0.4% in March was also a mild one. Analyzed structurally, the main factor that led to the positive growth was the price increases of gasoline and diesel, which belong to non-food categories. In March, the prices of both gasoline and diesel increased by 12% year on year. Driven by the price rise of these two energy products, the growth rate of CPI in March turned positive and reached 0.4%. Looking at other commodity categories, price rises, including that of food, were all considered moderate and some prices even fell. Food prices in March declined by 0.7% year on year. As for the price of pork, which is of great concern, decreased by 18.4% in March.  

Looking to the future, what do we forecast in terms of CPI trends for the whole year? First, from the perspective of specific categories, the public is more concerned about the prices of industrial consumer goods, which grew by 1% in March year on year. As for future trends, since we have complete industrial systems, sufficient manufacturing capacity, and effective and forceful macro-control measures in the field, the factors leading to soaring prices do not exist in terms of supply and demand. Second, regarding food prices, the price of pork has played a big role in propelling food price growth over the past two years. However, it has dropped year on year for several months consecutively, falling by 18.4% year on year. Currently, with the implementation of measures to guarantee supply and stabilize prices, our hog production capacity has recovered remarkably. The live hog stocks had grown by 29.5% year on year by the end of the first quarter, an increase of six quarters in a row, indicating a rapid recovery. From this perspective, the price of pork is showing a continuous downward trend. In addition, grain prices were also relatively stable with grain production enjoying a good start this year and winter wheat growing a little better than previous years. From this perspective, food security can be guaranteed. Therefore, whether it's from pork or grain prices, there is little pressure for CPI to grow. Third, as for service prices, since the service industry has recovered steadily both in supply and demand, the price too will restore gradually with the recovery of supply and demand and may show a moderate growth trend. 

Based on the above-mentioned three aspects, including the prices of industrial consumer goods, food, and service, the CPI through the whole year is expected to remain in a moderate range of growth. Thank you.

CNBC:

I have two questions. First, investment in the manufacturing industry during the first quarter increased by 29.8% year-on-year, registering an average two-year decrease of 2%, and consumption in the first quarter exceeded expectations. Will the manufacturing investments impact future economic growth, employment, and consumption, and what are the factors involved? Second, China has promised to strive for peak carbon dioxide emissions by 2030. Will the economy be impacted to achieve this goal? Thank you.

Liu Aihua:

Thank you for your questions. Your first question is a very targeted one. In the process of rapid recovery of overall demand, there are indeed areas that have yet to return to pre-epidemic levels, including investments in the manufacturing sector. An average two-year drop of 2% means that current manufacturing investments are about 96% of before the COVID-19 epidemic and that manufacturing investments haven't returned to pre-epidemic levels. There are many factors involved. On the one hand, this shows that enterprises are facing some difficulties in production and management. They are still recovering and have some concerns regarding investment. On the other hand, enterprises are also observing the overall market, and the factors conducive to the recovery of manufacturing investments are slowly accumulating and increasing. For example, profits for industrial enterprises of designated size in January and February increased by 1.79 times, a significant growth year-on-year, and the average two-year growth reached 31.2%. It can be said that enterprise profits are improving.

This year marks the first year of the 14th Five-Year Plan period (2021-2025), and some major projects are being arranged, providing private enterprises with more and more opportunities to participate. There are many investment opportunities in terms of new infrastructure and new urbanization initiatives and major projects, the transformation of traditional industries, and the upgrading of emerging industries. Therefore, I think, with the overall recovery of the economy and improvement in enterprises' profits, the confidence of enterprises will slowly be enhanced and the room for upgrading of the manufacturing industry remains large. We are still very confident in the recovery of manufacturing investments in the future.

Your second question is about the impact of peak carbon dioxide emissions. In general, promising to strive for peak carbon dioxide emissions by 2030 indicates our confidence in green development. Peaking carbon dioxide emissions will certainly promote energy production and consumption toward clean and low-carbon development, and we are working towards it. Energy consumption per unit GDP decreased by 3.1% in the first quarter, suggesting that we have taken the correct actions in this regard, which is very beneficial to the green development of the economy. Thank you.

Hong Kong Bauhinia Magazine:

The International Monetary Fund (IMF) recently raised its economic growth projection for China in 2021, predicting that its economy will grow by 8.4%. What is the NBS' expectation for China's economic outlook of this year? Thank you.  

Liu Aihua:

Thank you for your question. The IMF upgraded its growth projection for China in 2021, lifting its economic growth to 8.4%, which shows the confidence and expectation of the international community for China's economic development throughout the year. As far as we are concerned, the economy is expected to maintain a consolidated and positive momentum for steady growth, which can be seen in the following three aspects:

First, internal driving forces have been strengthening. Consumption has been improving steadily due to increased personal incomes, improvement in the consumption environment, and implementation of policies. In March, the total sales of social consumer goods increased by 34.2% year on year, 0.4 percentage points higher than that of January and February. The hotel and catering industries, which were affected earlier, have been gradually recovering. March revenue in the catering industry was, for the first time, higher than the level of the same period in 2019, returning to pre-pandemic levels. Moreover, the composition of investment witnessed a continuous improvement in the first quarter, with the average investment in the high-tech industry and the social domain in the past two years up 9.9% and 9.6% respectively. Growth rates in both were close to 10%, higher than the overall investment growth. Such growth was actually not insignificant. Going forward with facilitating factors such as policies, programs, and funding are gradually put in place or implemented, investment is expected to maintain a steady recovery. Additionally, the growth of imports also accelerated in March, jumping 27.7% year on year, a figure that is higher than the growth of exports for the first time this year. This reflects a strong and consolidated recovery of domestic demand. 

Second, supply quality has been improving. Industrial restructuring has been on the rise. According to recently released data, both production and investment in the high-tech industry witnessed a faster growth than average. Additionally, the capacity utilization rate has been increasing, with the national industrial capacity utilization rate reaching 77.2% in the first quarter, up 9.9 percentage points year on year and the highest level in the same period since 2013. The service industry has also seen a steady recovery. The ratio of the added value in the service sector in GDP hit 58.3% in the first quarter, 21.1 percentage points higher than that of the secondary industry. The contribution rate in the service sector in terms of economic growth reached 50.9% and it continued to play its role as the major driving force for growth. Cutting edge services, including information transmission, software and information technology services, grew by 17.1% in the past two years.

Third, market vitality has been unleashed. Macro-policies have been put in place and continue to provide market entities with relief and necessary support. We have improved and implemented tax reduction policies in a bid to help market entities recover and energize them. The number of market entities has seen a rapid increase, with double-digit growth in market entities estblished daily. Enterprise projection has witnessed a good momentum of steady growth. In March, the manufacturing production and business activities expectation index and the non-manufacturing business activities expectation index were both around 60%, maintaining relatively high levels.

The above three aspects, whether in terms of the internal driving forces of the economy, the quality of supply, or market entities that we're concerned about, have all been improving and enhancing. The recovery in these aspects, together with a solid material foundation, complete industrial system, and abundant human resources, all of which are advantages that China has maintained for a long period, will synergize demand and supply, and provide micro-entities with relief. Overall, we are confident that our economic recovery will maintain the current momentum throughout the year, and I think we have the foundation and conditions to achieve a consolidated and positive momentum for steady growth.

Due to the pandemic, as we mentioned earlier, the economic environment is still facing uncertainties and instabilities. We have to be aware of such circumstances, as the foundation for domestic recovery is still yet to solidify and the growth of some enterprises in the service sector as well as among small and micro-businesses remains slow. In the wake of the new situation and problems in economic recovery, we will continue to follow the deployments in the government work report, as well as continue to consolidate the foundation for steady growth, ramp up efforts to achieve progress, and maintain the bottom line for ensuring economic growth to keep economic performance within the proper range throughout the year. 

Thank you.

National Business Daily:

Data for the seventh nationwide population census has not yet been released. When will it be available to the public? Thank you.

Liu Aihua:

Thank you for your attention to the population census. At present, all sectors of society are very concerned about the results of the seventh national census, and we also hope that everyone will receive new data about the country's population as soon as possible. This year, we will add more detailed information based on the sixth national census while significantly increasing the number of census bulletins to offer more details to the public. Therefore, we will make efforts to expedite the release of the final data.

Cover News:

I have two questions. The first is regarding the price of pork. What are your estimations for the future trends of pork prices following the recent dive in prices, which fell back to a dozen yuan for half a kilo? Will the price remain stable as many consumers wish? The second question is about the nationwide employment situation during the first quarter of 2021. More than 9 million students will graduate from colleges this year. What are the employment prospects for them? Thank you.

Liu Aihua:

Thank you for your questions. First, I talked about the price of pork just now. According to the current situation, pig production in China has recovered thanks to a series of supporting measures to stabilize supplies and price. In the first quarter, pig stocks grew 29.5% year on year and kept rising for six consecutive quarters. Large price drops were seen in some regions due to the recovery of pig production. CPI shows that the prices fell 18.4% year on year in March and also decreased month on month. The price will continue to fall as the pork production and supply situation continues to improve.

Your second question regards employment, which is so far generally stable this year. In the first quarter, the surveyed average urban unemployment rate was 5.4%, a decrease of 0.4 percentage point year on year, while the rate for March was 5.3%, falling by 0.6 percentage point year on year. Judging from current unemployment rate data, the current employment status is relatively stable. But just as you said, the overall employment pressure is relatively high this year, and structural imbalance is gradually becoming apparent in the process of economic recovery.

First, the total pressure still exists. The rural migrant labor population reached more than 170 million in the first quarter, 2.46 million fewer than in the same period in 2019. It can be understood that some enterprises in the service sector, particularly small and medium-sized enterprises, are facing more difficulties in production and operations, and are still in the process of recovery. Therefore, the demand for jobs is being directly affected and is indirectly causing the number of migrant workers in urban areas to be lower than before the pandemic. The surveyed unemployment rate for young people aged between 16 and 24 was 13.6% in March, up from a year earlier, indicating that young people still face challenges in employment. This may be because of the large number of young people pouring into the labor market after the Spring Festival and causing frictional unemployment. To some extent, it also signal that the job market is reviving. However, we need time to solve this problem and the job market pressure does indeed remain.

Furthermore, structural issues have also existed. We have learned through the investigation and research process that many enterprises in coastal industrial provinces and major foreign trade provinces report difficulties in recruiting workers. We recently conducted a survey of over 90,000 industrial enterprises above designated size, which showed that approximately 44% of these enterprises reported recruitment difficulties being the biggest problem they face and that this has reached the highest percentage in recent years. During several investigations, many enterprises reported that it is difficult to recruit ordinary workers, skilled workers, and highly-skilled workers on the frontline. These issues have started to appear during the economic recovery.

Therefore, the pressure on both the total amount and the structure of employment exists simultaneously. For the next step, as the economy continues to recover, we will continue to strengthen policies that prioritize employment and increase assistance to groups who have difficulties finding jobs. We will also gradually solve the problems faced by the employment sector by using employment guarantee services and by expanding market-oriented and socialized recruitment channels.

In general, the current employment situation is generally stable. With the overall recovery of the economy, there are still some conditions that need to be met to maintain both the increase of employment demand and the overall stability of the job market throughout the year. Thank you.

China National Radio (CNR):

We noticed that in the first quarter, the total sales of commercial buildings amounted to 3,837.8 billion yuan, up by 88.5% year on year. When coupled with the data released today regarding housing prices in March across 70 large and medium-sized Chinese cities, the overall year-on-year increase also continued. How do you evaluate the current property market situation? What impacts will this increase have on the national economy?

Liu Aihua:

Thank you for your question. Regardless of whether it is investment in or sales of real estate this year, these indicators have been affected by the base figures of the same period last year, and most of the indicators are currently showing double-digit growth. Since the beginning of this year, various regions and departments have been closely following the new situation and new problems, and further adhered to the principle of "houses are used for living, not for speculation." With the goal of stabilizing land prices, housing prices, and expectations, a series of powerful and effective measures have been introduced in a timely manner. 

For the next step, with the increase in the construction of affordable rental housing, the development of the long-term rental housing market will gradually be standardized. A new supply pattern for the real estate market with multi-subject supply, multi-channel guarantee, and simultaneous rental and sales will then gradually take shape, which is conducive to promoting a steady and healthy development of the real estate market throughout the year. Thank you.

21st Century Business Herald:

The market has become more concerned with increasing commodity prices. What is the future trend for commodity prices? China has proposed enhancing regulation of the raw material market. What methods might be adopted in the future? Thank you.

Liu Aihua:

Thank you for your question. Recently, under the impetus of various factors such as loose global liquidity, a recovery in market demand, and short-term supply shortages, and so on, there has been a surge in international commodity prices. According to the data from relevant international organizations, during the first quarter, average international energy prices rose by 35.3% from the previous quarter, while the average non-energy price rose by 11.8%, reaching a relatively high level in recent years.

If we look at the recent price changes, we can see that the prices of some raw materials are growing. PPI grew by 0.3%, 1.7%, and 4.4% year-on-year in January, February, and March, respectively, reversing the previous downward trend lasted for nearly one and a half years. A 4.4% year-on-year increase in March was mainly driven by sectors related to oil and metal, with average prices in the oil and metal-related sectors growing by 11.1% and 17.6% year on year respectively. Generally speaking, the structural increase in PPI is mainly driven by the growing prices of means of production, as their average price went up by 5.8% year on year in March. The price for the means of subsistence in March was stable, up 0.1% year-on-year.

As China integrates deeper into the global economy, the price increase of international commodities may have an impact on the prices of some domestic sectors via trade and investment channels. However, judging from the structural features of the current PPI increase, the impact will mainly affect some upstream industries. The influence on downstream industries is yet to be seen. The relationship between supply and demand is the most fundamental element for price changes. Under the current circumstances with the ongoing economic recovery, the quality and capacity of supply are gradually improving, while demand is still recovering. Seen from these aspects, the prices of China's upstream products have no foundation for long-term growth. Thank you.

China Financial and Economic News:

In recent years, China has made significant efforts to relieve the pressure of market entities. As Premier Li Keqiang said, market entities have provided much support in sustaining positive growth in the domestic economy as well as to meet employment goals in the last year. This year, China continues to adopt multiple measures to serve market entities. What are the major contributions made by vigorous market entities to the stellar economic performance in Q1? How do you see the relationship between the market entities and the country's economic performance? Thank you.

Liu Aihua:

Thank you for your questions. Market entities are the foundation of the market economy. Since last year, China has adopted many macro policies to cut taxes and fees to alleviate the difficulties of market entities and meet their demands. Those policies have been very effective in protecting market entities. From this year's statistics, we can see that the macro-economy is generally recovering and stabilizing, which is supported by the efforts of market entities at the micro-level. Moreover, as production and operations improve, businesses are gaining confidence. We can see this from the many statistics mentioned above, including the production and operations of some micro, small, and medium enterprises (MSMEs). In this year's government work report, China says it will continue to alleviate the difficulties of market entities; ensure continuity, consistency, and sustainability of macro policies; and avoid sharp turns in policy. This shows that China will maintain necessary policy support for market entities to recover. I believe that policy support will not only benefit the macro-economy but also promote higher quality and a higher level of employment.

MSMEs are now seeing better performance in their production and operations. They have also shown stronger confidence. In March, the PMI of small and medium enterprises had returned above the threshold, demonstrating stronger confidence among market entities. As macro policies continue to alleviate their difficulties, market entities, which are supported by their strong resilience, are bound to enjoy better production and operations this year. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu, and friends from the media. This is the end of today's press conference. Goodbye.

Translated and edited by Zhu Bochen, Huang Shan, Xu Xiaoxuan, Wang Qian, Zhang Rui, Zhang Junmian, Cui Can, Mi Xingang, Wang Yanfang, Gong Yingchun, Fan Junmei, Zhang Tingting, Chen Xia, Yan Xiaoqing, Guo Yiming, Li Huiru, 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:

Shen Xiaoming, secretary of the Hainan Provincial Committee of the Communist Party of China and chairman of the Standing Committee of Hainan Provincial People's Congress

Feng Fei, governor of Hainan province

Cong Liang, deputy head of the National Development and Reform Commission (NDRC)

Zou Jiayi, vice minister of finance

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

Zhang Jiwen, vice minister of the General Administration of Customs of China (GACC)

Wang Chunying, deputy administrator of the State Administration of Foreign Exchange (SAFE)

Chairperson:

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

Date:

April 12, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! Today's press conference is about the construction of the Hainan Free Trade Port (FTP). In accordance with the decision and deployment of General Secretary Xi Jinping and the Central Committee of the Communist Party of China (CPC), the construction of the Hainan FTP is being accelerated, policies are being formulated, and important progress has been achieved. Today, we have invited officials from central government departments and the Hainan provincial government to meet with you and introduce the situation. Speakers present at today's press conference include Shen Xiaoming, secretary of the CPC Hainan Provincial Committee and chairman of the Standing Committee of Hainan Provincial People's Congress; Feng Fei, governor of Hainan province; Cong Liang, deputy head of the National Development and Reform Commission (NDRC); Zou Jiayi, vice minister of finance; Wang Shouwen, vice minister of commerce and deputy China international trade representative; Zhang Jiwen, vice minister of the General Administration of Customs of China (GACC); and Wang Chunying, deputy administrator of the State Administration of Foreign Exchange (SAFE). Now, I will give the floor to Mr. Cong.

Cong Liang:

Ladies and gentlemen, friends from the media, good morning! On April 13, 2018, General Secretary Xi Jinping delivered an important speech at a conference celebrating the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone, announcing the CPC Central Committee's major measures to support Hainan in comprehensively deepening reform and opening up. The Master Plan for the Construction of the Hainan Free Trade Port was officially released on June 1, 2020.

We studied in depth the series of important speeches and instructions of General Secretary Xi Jinping on supporting Hainan in comprehensively deepening reform and opening up and building itself into a free trade port, and developed a good understanding of the significant decision of the CPC Central Committee that building the Hainan FTP will exert a far-reaching impact. The construction of the Hainan FTP is intended to gather high-quality global production factors including capital, knowledge, technology, management, and data, providing an example of high-quality development for the nation. It will promote deeper reform with a higher level of openness so that we can explore new paths and accumulate new experience to speed up the improvement of the socialist market economy system. It will explore the formation of an internationally competitive open system so as to provide an important platform for China to adapt to and actively participate in the formulation of international economic and trade rules at a deeper level.

Over the past three years, especially since the release and implementation of the master plan, the leading group on deepening all-round reform and opening up of Hainan province has been working with the Hainan provincial government and relevant departments to carefully implement the deployment and requirements of the leading group. The system integration and innovation has been put in a prominent place, with focus on trade and investment liberalization and facilitation and the efficient flow of various factors of production. The system integration and collaborative innovation have been highlighted. A series of supporting policies have been put in place to promote Hainan FTP construction. According to preliminary statistics, more than 110 policy documents have been issued and the policy framework of the FTP is taking shape. We have got off to a good start. In general, these policies and systems can be summarized in six aspects.

First, we introduced policies that enable trade and investment to be freer and more convenient. We have established a goods trade system featuring zero tariffs and introduced one negative and two positive lists. The Yangpu Bonded Port Area took the lead in the implementation of an entry and exit management system for goods to facilitate trade, which features opening up the "front line" (the area between the Hainan FTP and other countries and regions outside the customs territory of China) and regulating the "second line" (the area between the Hainan FTP and other areas within the customs territory of China). We have issued the negative list for the access of foreign investment, rolled out special measures to loosen market access, and reduced the number of sectors and industries that are off-limits to both Chinese and foreign investors in its negative list for market access to 27 articles, making investment freer. We have introduced the Catalogue of Encouraged Industries (2020 version) and 17 policy documents to support the development of tourism, the modern service industry, and the high-tech industry, giving more room for development.

Second, we introduced policies that enable financial support to be safer and more convenient. We issued policy documents such as the Opinions on Financial Support for Hainan to Comprehensively Deepen Reform and Opening Up, and promoted the establishment of financial policies and institutional frameworks that are suitable for the Hainan FTP. We have enhanced RMB convertibility and promoted the facilitation of cross-border trade in goods and services as well as new types of international trade settlements. A quota of US$5 billion has been allocated under the Qualified Domestic Limited Partner (QDLP) pilot scheme in Hainan. We also took the lead to launch a pilot reform of overseas listing registration for domestic companies.

Third, we introduced policies that enable the tax preferential policies to be more efficient and targeted. We have formulated and implemented preferential policies including corporate income tax of 15% on encouraged industrial enterprises and personal income tax of 15% for eligible talents. Enterprises established in the Hainan FTP are entitled to corporate tax exemption for income from newly increased overseas direct investment. We have improved the offshore duty-free shopping policy, approved the establishment of six more duty-free shops, and provided "mail delivery" and "deposit offshore, pick up backshore" services. We have introduced policies such as VAT refunds for ships, and a tax rebate at Yangpu Port of Departure, and allowed ships that transit at Yangpu Port of China to refuel with bonded oil. Now, we are formulating tax exemption policies for foreign exhibits during national level exhibitions.

Fourth, we introduced policies that enable the transportation service to be more convenient and open. We have promoted the integration of ports and shipping businesses in the Qiongzhou Strait and built a safer, more efficient, convenient, and cost-effective transportation channel in the Qiongzhou Strait. A convenient and efficient vessel registration procedure has been established, and we are promoting the construction of Yangpu Port of China into an international port of registry. We have innovated cruise and yacht management, supported the construction of Sanya into a home port for international cruise ships, and promoted travel among Hainan, Hong Kong, and Macao by yacht. We introduced the Seventh Freedom traffic rights for air passenger and cargo services and promoted the upgrading of Boao Airport to an international port.

Fifth, we introduced policies that enable the supporting factors to be more effective. We have expanded the scope and channels of visa-free entry for foreigners and carried out a pilot reform of international talent service management. We have issued the high-level talent classification standards (2020), high-level talent identification measures, and management measures for overseas talents. A total of 38 domestic professional qualification examinations are open for overseas personnel and 219 overseas professional qualifications are recognized. International pilot projects on internet data interaction have been carried out. Special channels for international internet data have been set up in nine key parks. Policies such as "standard land" and "rent first and transfer later" have been introduced to guarantee the demand for land in a more flexible and effective way.

Sixth, we introduced more efficient and sophisticated institutions to secure the implementation of the construction of the FTP. The 24th session of the Standing Committee of the 13th National People's Congress reviewed the draft Hainan Free Trade Port Law and solicited opinions from the public. The first batch of legal adjustment matters have all been settled including the introduction of three laws and seven administrative regulations. Special regulations for key parks such as Sanya Yazhou Bay Resort have been issued. We have also innovated institutional mechanisms for ecological civilization. We streamlined administration and introduced systems such as "one stamp of approval." Thirty-six risk prevention and control measures such as anti-smuggling were introduced. The construction and development environment of the Hainan FTP has been significantly improved.

"Spring brings a new beginning and the best is yet to come." With the implementation of Hainan FTP policies and systems, the improvement of the development environment, and the increase of market players, Hainan will surely become a popular destination for investment and business. Thank you all!

Chen Wenjun:

Thank you, Mr. Cong. Next, I will give the floor to Mr. Shen.

Shen Xiaoming:

Ladies and gentlemen, friends from the media:

Good morning, everyone! First of all, I would like to express my sincere gratitude to all sectors of society for their attention and support during the comprehensive deepening of reform and opening up and the construction of a free trade port in Hainan. On April 13, 2018, General Secretary Xi Jinping delivered an important speech at a conference celebrating the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone, giving Hainan a new historical mission to comprehensively deepen reform and opening up, and supporting Hainan to gradually explore and steadily promote the construction of a free trade port with Chinese characteristics. The Master Plan for the Construction of the Hainan Free Trade Port was officially released on June 1, 2020. In the past three years, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, and with the strong support of the central and state departments, other provinces, and all sectors of society, we have put into practice the guiding principles from General Secretary Xi Jinping's important speeches and instructions on Hainan. The vibrant Hainan province has deepened reform and opening up, showing significant changes in ten aspects.

First, our enthusiasm for entrepreneurship has never been higher. We vigorously carried forward the enterprising, pioneering, and hard-working spirit of special economic zones. Each year, we focus on one area and tackle problems centering around the area. We continue to carry out a series of activities such as "making contributions to speed up the construction of the Hainan FTP," encourage government officials to bear the responsibility, and promote the construction of the Hainan FTP to get off to a very good start and develop at a rapid pace.

Second, the quality of economic development has significantly improved. We have made the economic transformation in three aspects, the industrial structure has been optimized, and the quality of development has been considerably enhanced. First, we made the resolve to wean the economy away from the real estate industry. The proportion of industrial investment rose from less than 40% to more than 60%. Second, the economic growth drivers shifted from mainly investment, in particular, real estate and infrastructure investment, to the combination of consumption and investment. Third, we worked to attract various market entities that are in line with the direction of industrial development to participate in the construction of the free trade port. Though under the pressure of real estate regulation and the impact of the epidemic, by great efforts, Hainan's GDP and tax revenue have maintained steady growth, and the main economic indicators are better than the national average. In the first year of the construction of the Hainan FTP, the number of newly established enterprises, the actual use of foreign capital, the number of talents attracted, and offshore duty-free sales have all doubled.

Third, all types of market entities have responded actively. With the implementation of such key policies as the "one negative list and three positive lists for zero tariffs" and the "three lists for lowering market entry threshold," we have added 763,000 market entities in the past three years, exceeding the total number registered entities in the previous 30 years. The utilization of foreign investment has doubled three years in a row, with the three-year aggregate reaching $5.27 billion, a figure more than half the total reported during the previous 30 years combined. For the past three years, central enterprises and their subsidiaries in Hainan saw business revenues grow by more than twentyfold. Additionally, the number of new enterprises grew by 113.7% after the release of the master plan.

Fourth, talent attraction has gained good momentum. With the support of such central ministries and commissions as the Organization Department of the CPC Central Committee as well as other provinces, we have introduced three batches of 285 outstanding officials to work temporarily in Hainan as well as sent four batches of 400 Hainan officials to study in relevant central Party and government departments and developed provinces. Following the instructions of General Secretary Xi Jinping to mobilize the strength of the whole country and attract talents extensively to support the comprehensive deepening of reform in Hainan, we have brought in 233,000 talents for the province since 2018, up by 675% over the preceding period. Among the talents, over 50% were introduced in less than a year after the release of the master plan. Therefore, the first phase of the action plan's goal of attracting 1 million talents to Hainan has been fulfilled. We have also set up one-stop service windows for talents, released administrative measures for overseas personnel to practice and take professional qualification exams in the Hainan FTP, put in place preferential income tax policies for enterprises and individuals, and set salary as the main indicator for evaluating talents. Through these measures, Hainan has become a much better place for talent development.

Fifth, Hainan's environment has seen constant improvement. Hainan's environment is a treasure not only for Hainan people but also for all Chinese people. We have taken solid steps to advance the building of the national pilot zone for ecological progress in Hainan. The pilot program to establish a national tropical rainforest park system has been launched and passed national assessment. The proportion of new energy vehicles owned in Hainan has reached 4.2%, 1.3 times higher than the national level. We have also launched a ban on the production, sale, and use of disposable non-degradable plastic products. Additionally, the use of prefabricated buildings has doubled for three consecutive years; a "zero landfill" model for domestic waste was achieved on the island by the end of last year; the percentage of good air quality days reached 99.5% in 2020 with the average concentration of PM2.5 decreasing to 13 micrograms per cubic meter. The water ecosystems of rivers, lakes, reservoirs, and offshore areas were among the best in China.

Sixth, Hainan's business environment has become increasingly better. By regarding the business environment as the "golden bowl" for the Hainan FTP, we have promoted integrated policy innovation as a key focus and released 12 batches of 116 policy innovation cases. We have strengthened Hainan's one-stop service window for international trade, cutting approval time by 70-80%. Our extremely simple approval procedures are welcomed by all types of market entities.

Seventh, a modern industry landscape is taking shape. We have sped up efforts to form a "3+1" modern industry system (tourism, modern service, high-tech, and high-efficiency tropical agriculture). In terms of tourism and modern services, by making good and full use of the offshore duty-free shopping policy, we have encouraged Chinese consumers to purchase high-end, medical, and educational products and services in Hainan instead of overseas. From May 7 to 10 this year, the first China International Consumer Products Expo will be held in Hainan. In terms of high-tech industry, construction of the Nanfan Agricultural Silicon Valley has made substantial progress; a number of deep-sea projects have been launched at the Yazhou Bay Science City represented by the deep-sea manned submersible Fendouzhe; and China's Mars mission Tianwen-1 and lunar probe Chang'e-5 were launched at the Wenchang International Aerospace City. In the past three years, the number of high-tech enterprises in Hainan has increased by 273%, internet industry revenues have risen by 192% and the supporting role of the high-tech industry has become more and obvious. Regarding high-efficiency tropical agriculture, while we continue to grow rubber trees, betel nut trees, and coconut trees, we have also actively introduced seeds for new varieties of tropical fruit from around the world. Meanwhile, we have encouraged traditional maritime fisheries to move their business onshore or to deep-sea areas and to engage in leisure fishing. The structure of the agricultural industry has been further optimized.

Eighth, risk prevention and control have been forceful and effective. We always believe that "opening up" must be guaranteed through "effective management." The information platform for social management has been put into full use, offering 24-hour monitoring over the flow of people, materials, and capital in offshore areas, along the coastline, and on the island. We have also adopted provisional anti-trafficking regulations to crack down on fraudulent purchases taking advantage of the offshore duty-free shopping policy in accordance with the law.

Ninth, people's sense of gain has steadily been enhanced. We have secured a high-quality victory in the battle against poverty. All five impoverished counties, 600 impoverished villages, and 650,000 registered poor have shaken off poverty. We have accelerated the implementation of a commodity housing program to meet the housing demand of local residents and talents introduced from elsewhere. We have taken forceful steps to curb the rise of consumer prices. We now have 102 schools set up in cooperation with quality educational resources brought in from elsewhere in China. We have also introduced 49 quality medical institutes from other Chinese provinces. With these measures, we have basically achieved the goal of enabling locals to "attend a good school at their doorway" and "get their ailments treated without going to town and their serious illnesses treated without leaving the island."

Tenth, a law on the Hainan FTP is in the making. We are actively cooperating with the National People's Congress (NPC) to make the law so as to give Hainan greater legislative power and power to carry out reforms. Now the NPC Standing Committee has completed the first review and a collection of public opinion.

On April 13 three years ago, General Secretary Xi Jinping made an important speech to welcome worldwide investors to invest in Hainan, participate in the construction of the Hainan FTP, and share China's development opportunities and the fruits of its reforms. Three years on, Hainan has proven by practice that the free trade port is indeed an opportunity for the whole world and we welcome everyone to Hainan. Thank you.

Chen Wenjun:

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

CCTV:

General Secretary Xi Jinping has stressed on different occasions that lucid waters and lush mountains are invaluable assets. How will Hainan protect its unique environment as a matter of national importance and ensure that the environment will only improve and never get worse?

Shen Xiaoming:

General Secretary Xi Jinping said during his inspection tour in Hainan that the lucid waters, lush mountains, blue sea, and azure sky are Hainan's strongest advantages and best assets. They are precious objects that can neither be bought nor borrowed. We understand that the lucid waters, lush mountains, blue sea, and azure sky in Hainan are not only precious for Hainan people but also for all Chinese people. Therefore, to best protect Hainan's unique environment is a matter of national importance and one that we must be fully aware of.

To ensure that the environment will only get better and never get worse is something we are resolved to accomplish and these efforts are being led by the construction of the national pilot zone for ecological progress in Hainan. To protect the environment, we will uphold two important concepts. First, we must simultaneously improve the "three environments" (ecological environment, policy environment, and business environment) to support the building of the free trade port. Second, in the development of the free trade port, all other issues must give way to environmental protection. If any issue conflicts with environmental protection, the latter prevails. In other words, we will by no means seek development at the cost of the environment.

Guided by the two concepts, we will mainly focus on three tasks. First, by setting a goal: that Hainan's environment will rank among the best in the world by 2035. Second, we must prioritize governance. We have strengthened governance in the process of rectifying the problems found by the central environmental supervision task force and the national marine supervision task force. We won't rest until these problems are thoroughly resolved. Third, we will launch flagship projects to lead environmental protection efforts. After General Secretary Xi Jinping's April 13 speech, the CPC Hainan Provincial Committee and the Hainan provincial government have planned a number of flagship environmental projects. For example, we have designated 4,400 square kilometers in central Hainan island as a national tropical rainforest park to protect China's only tropical rainforest. We have made a new energy development plan which aims to raise the share of clean energy in Hainan's installed power capacity to about 85% by 2030, a very advanced level even around the world. We also announced that Hainan will no longer sell petrol-fueled vehicles after 2030 and instead promote clean energy vehicles. We have also adopted a ban on disposable non-degradable plastic products which is now gradually being expanded across the island. Additionally, we have vigorously promoted the use of prefabricated buildings and their number has doubled for three years in a row.

Hainan's environment is good. This is a feeling shared by everyone who has been to Hainan. However, we in Hainan are fully aware that a good environment does not mean good environmental protection. Therefore, we need to keep working hard and strive to leave the lucid waters, lush mountains, blue sea, azure sky, and a gradually mature free trade port to the generations to come. That's all I'd like to share on this question. Thank you.

China Reform Daily:

Mr. Cong, in your opening remarks, you introduced the development of policy framework in the Hainan FTP. As one of the main leading departments, what has the NDRC done in this regard? Can you elaborate a little? Thank you.

Cong Liang:

Thank you for your question. Just now, I gave a general overview of the development of the policy framework in the Hainan FTP, which is the result of the joint efforts by all departments and Hainan province. Since 2020, the NDRC has fully grasped and put into practice the principles from General Secretary Xi Jinping's major addresses and instructions, and implemented the decisions and arrangements of the CPC Central Committee and the State Council. We have innovated methods, fully performed our duties, and lost no time in making important policies and advancing major projects. Alongside Hainan province and other departments, we have jointly promoted the construction of the policy framework in the Hainan FTP.

The NDRC's work can be summarized as "three specials and one major." We have rolled out three special policies for the Hainan FTP, and boosted the construction of major projects in the Hainan FTP.

The first special policy is the Special Administrative Measures for the Access of Foreign Investment in Hainan Free Trade Port (Negative List). To further increase the liberalization and facilitation of investment in the Hainan FTP, accelerate the forming of globally competitive opening-up systems and policies, and turn the Hainan FTP into a flagbearer and window for opening-up in the new era, on Dec. 31, 2020, the NDRC and the Ministry of Commerce released the Special Administrative Measures for the Access of Foreign Investment in Hainan Free Trade Port (Negative List) (2020 Edition). Compared with the negative list with 30 restricted items for pilot free trade zones released in 2020, the negative list for the Hainan FTP was shortened to 27 items. The prohibitions and restrictions for some other items were also reduced, aiming at supporting the Hainan FTP to take a lead in further opening-up. Going forward, according to the requirements of the master plan, we will continue to shorten the negative list, and gradually allow more convenient and freer investment in Hainan.

The second special policy is the Catalogue of Encouraged Industries of Hainan FTP. In order to guide the industries in the Hainan FTP to develop in the right direction, and promote the clustering of domestic and international high-quality enterprises, on Jan. 27, 2021, the NDRC, the Ministry of Finance and the State Taxation Administration jointly introduced the Catalogue of Encouraged Industries of Hainan FTP (2020 Edition). Based on the current National Industrial Catalogue, it has added 14 more major categories and 143 sub-industries, basically covering all major industries and sectors in the Hainan FTP. The catalogue not only includes a wide range of items, but also highlights the development needs of the tourism industry, the modern service industry and the high technology industry. Next, we will make appropriate adjustments to the catalogue according to the needs in the construction of the Hainan FTP.

The third special policy concerns the special measures to ease market access in the Hainan FTP. In order to better leverage the distinct advantages of the Hainan FTP, which is positioned to experiment with the highest level of policies, and to explore a market access policy system, a supervision model and a governance institution with more flexibility and efficiency, several days ago, the NDRC and the Ministry of Finance jointly rolled out a series of special measures. Focusing on the functions of the Hainan FTP, we have proposed 22 measures for special market access that will deliver greater benefits in sectors including medical care, finance, culture and education. We will effectively promote the concentration of high-quality production factors, and speed up the fostering of new advantages with Hainan characteristics in cooperation and competition.

The "one major" refers to advancing the construction of major projects in the Hainan FTP. We have studied and made an action plan for the construction of major projects in the Hainan FTP, and established a reservation system for major projects. We have released the Regulations on the Management of Projects within Central Government Budget under Major Regional Development Strategies (Advancing Overall Reform and Opening-up in Hainan), and allocated 10 billion yuan to support the software and hardware infrastructure construction in the Hainan FTP. We have issued the Smart Hainan Plan and the Plan for Hainan to Build a Modern Comprehensive Transport System, so as to advance the construction of major projects in new-type infrastructure, transport and energy. We have included Hainan into the pilot project of the real estate investment trusts in infrastructure — the REITs pilot project — in a bid to support Hainan in vitalizing its existing assets, and expand financing channels in constructing major projects.

CRNTT:

Talent is the crucial foundation for constructing the Hainan FTP. Since June 1, 2020, when the CPC Central Committee and the State Council published the Master Plan for the Construction of the Hainan Free Trade Port, relevant departments have introduced a range of policies to attract talent to Hainan. How has the implementation progressed? And what measures will be taken to enrich the talent team in Hainan?

Shen Xiaoming:

As General Secretary Xi Jinping proposed at the celebration of the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone on April 13, 2018, deepening overall reform and opening-up in Hainan is a major national strategy, which requires rallying support from the entire country as well as global talented people. We must realize that in deepening Hainan's reform and opening-up, and constructing the FTP, talent remains the top priority resource. Since April 13, 2018, the central government and relevant departments have fully supported Hainan in pooling talent. Hainan has rolled out a series of policies concerning talent, and has preliminarily founded a talent-related policy system that is scientific and effective. I mentioned earlier that during the last three years since April 13, 2018, Hainan has introduced 233,000 professionals. The number increased 675% over 2018. What delighted us more is that over half of these 233,000 professionals were introduced in less than a year since the master plan was released. That is to say, the speed of introducing talent has increased.

Next, as you mentioned, we will further enlarge the talent team in Hainan. However, as I always tell my colleagues in Hainan, it is important to both introduce talent as well as foster talent. We need both talent introduced from outside and local talent. The master plan runs until 2050, and I often feel that we are lucky to be the first generation in its construction. Where is the last generation or those who will make the final sprint in the campaign? Perhaps they are still in kindergarten. As such, developing education in Hainan is of strategic significance in expanding the talent team there. Thank you.

CNR:

We have noticed that the Master Plan for the Construction of the Hainan Free Trade Port mentions gradually opening up and achieving initial results before 2025. The Ministry of Finance has released a series of supporting policies. What role have these supporting policies played? Thank you.

Zou Jiayi:

Thank you for your question. The master plan has proposed an arrangement for fiscal and tax policies. That is, to implement a simplified tax system with zero tariffs and low tax rates by phrases. Before launching island-wide special customs clearance operations, we will focus on zero tariffs and low tax rates. Specifically, we will exempt tariffs for some imported goods, and implement low income tax rates for enterprises and individuals that meet relevant requirements. Meanwhile, we will implement value-added tax policy for relevant shipping vessels. In total, 12 taxation policies are involved.

In the past year, nine of the 12 policies were introduced as they matured. The first was the offshore duty-free shopping policy. The second was the zero-tariff policy for raw and auxiliary materials. The third was the zero-tariff policy for vehicles and yachts. The fourth was the zero-tariff policy for production equipment imported by enterprises for self-use. The fifth was the preferential policy for corporate income tax. The sixth was the preferential policy of individual income tax for high-end and urgently-needed professionals. The seventh was the value-added tax policy for international shipping vessels. The eighth was the tax refund policy for ports of departure. The ninth was the policy for domestic ships with both domestic and foreign trade goods on board, allowing them to refuel with bonded fuel oil required for the voyage, or claim tax refund if they refuel with locally produced fuel oil for the voyage. These nine policies have contributed to the early results in constructing the Hainan FTP.

The policies will play roles in four aspects. First, they will support the construction of an international tourism consumption center. Offshore duty-free shopping policies have been improved. The duty-free shopping quota has been raised to 100,000 yuan per person per year. The categories of duty-free goods have been expanded to 45. The duty-free limit for a single product and the single-purchase quantity limit on most goods have been cancelled. That means, within the 100,000-yuan quota per year, people can buy a watch, or multiple lower-priced items.

Under most circumstances, there is no limit on the quantity of items that can be bought in a single purchase, except for a small number of goods such as cosmetics, cell phones and alcohol. Meanwhile, to make it more convenient for tourists to purchase goods, besides picking up purchases in the restricted areas of airports, train stations and ports, there are two more collection methods, namely, express delivery and pickup after returning to the island.

Pickup after returning to the island is designed for Hainan residents who depart for business or travel, allowing them to collect their duty-free purchases after returning to the island. Express delivery is for the convenience of tourists, so that they don't have to carry the goods themselves, but can instead leave an address and have the shop mail the goods to their home. In addition, six offshore duty-free stores have been added — three in Haikou and three in Sanya. With the four previous stores, there are now a total of 10 offshore duty-free stores in Hainan.

Second, optimization and upgrade of the industrial structure will be supported. We have issued a zero-tariff policy for raw materials, transportation and yachts, and self-used production equipment, as well as preferential income tax policy for enterprises. The zero-tariff policy for raw and auxiliary materials is applied to positive list management, which means raw and auxiliary materials in the positive list that are imported into and used for production within the island, or consumed in the processing trade and service trade of which final products would be exported to overseas are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for transportation and yachts is also applied to the positive list management, which means vessels, aircrafts, vehicles, yachts and other transportation in the import manifest used for transport and tourism in the island are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for self-used production equipment is applied to negative list management, which means equipment excluded from the negative list, or not belonging to commodities that laws, regulations and relevant provisions have clarified are not exempted from tax and not allowed to import, are exempted from custom duties, import value-added tax and consumption tax. The preferential income tax policy for enterprises refers to reducing the enterprise income tax of encouraged industries registered and substantively operated in Hainan FTP by 15%. Income from newly increased overseas direct investment of enterprises related to tourism, the modern service industry and high and new technology in Hainan FTP will be exempted from income tax. Qualified capital expenditure of enterprises may apply for a one-time pretax deduction or accelerated depreciation and amortization in the current period when the expenditure occurs.

Third, we will support the introduction of high-caliber, high-tech, and urgently-needed talents. Just now, a Hong Kong journalist asked a question about the talent introduction policy in Hainan, which also involves fiscal policy support. We have issued a preferential policy for individual income tax. For high-end and urgently-needed talents working in Hainan FTP, the portion exceeding 15% of the actual tax burden of their individual income tax will be exempted.

Forth, the construction of an international shipping hub for the new land-sea transit routes in the western region will be supported. We have issued three policies in this area. First, added-value tax will be rebated when domestic ship building enterprises sell qualified ships to transportation enterprises. Second, domestic ships using Yangpu Port as their transit port and engaging in domestic and foreign trade by the same ship are allowed to refuel with bonded oil required for the voyage at Yangpu Port. Export tax will be rebated when ships refuel locally-produced oil required for the voyage at Yangpu Port. Third, port of departure tax will be rebated for container goods that have been declared and exported by export enterprises at customs at the port of departure; taken direct routes to or stopped at designated ports during waterway custom transfer; and that are departing China from Yangpu Port in Hainan. Thank you.

ITAR-TASS:

I'd like to ask a question about cooperation between Hainan FTP and Russia. Recently, Hainan FTP issued policies on attracting foreign investment. What are the fields with the greatest potential for cooperation between Hainan FTP and Russia? What are the most important advantages of the bilateral cooperation? Thank you.

Feng Fei:

Thanks for your concern about the construction of Hainan FTP. In the past three years, the explosive growth in foreign investment has become a highlight in the construction of Hainan FTP. Hainan has become a "new favored place" for global investment. Specifically, I'd like to explain this through three areas in which we've witnessed exponential growth. First, Hainan's actual use of foreign capital has doubled annually for three years in a row, with the aggregate exceeding half of what the island province had accumulated over 30 years since it became a special economic zone in 1988. Second, the number of foreign investment entities has multiplied. The number of newly established foreign-invested companies in Hainan reached 1,005 last year, surpassing the 1,000 mark and nearing three times that of 2019. It was not easy to achieve such results since last year was severely impacted by the pandemic. Third, the number of sources of foreign investment grew exponentially. At present, more than 80 countries and regions including Russia have invested in Hainan.

Why has Hainan become a "new favored place" for global investment? I would use two points to sum up its favorable policies. First, Hainan has the lowest number of items on its foreign investment negative list. There are 33 items on the national list, 30 on the list of free trade zones, and 27 on the list of Hainan. Second, Hainan has the lowest tax and that might be what foreign-invested companies care most about. Take corporate income tax as an example. Companies in industries encouraged by Hainan enjoy a preferential corporate income tax rate of 15%. High-end talents pay income tax no higher than 15% of their gross income. Those two policies are exclusive to Hainan.

Regarding cooperation with Russia, we have considerations in two areas. First, we will deepen tourism cooperation. In 2019, 330,000 Russian travelers visited Hainan, which means among every four foreign visitors, one was from Russia. After the pandemic, we hope the flights between Russia and Hainan will soon be resumed, and more Russian friends will visit Hainan. Meanwhile, the fitness and elderly-care industry and shopping will bring new experiences for Russian travelers. Second, we will expand cooperation with Russia in the areas of culture, sport and technology, but especially culture. Russia is famous for its rich and colorful culture. Take art performances as an example. China's central government has approved foreign investment to establish commercial performance brokerage firms in Hainan. We hope to deepen bilateral cooperation in this field, and achieve mutual benefit and win-win results. Thank you.

China News Service:

To promote trade liberalization and facilitation is always the key point for the construction of Hainan FTP. What has the Ministry of Commerce (MOC) done in this area? What are the latest considerations and plans for the future? Thank you.

Wang Shouwen:

Thanks for your question. Trade liberalization and facilitation is a common feature of international advanced free trade ports, and also a key point for the construction of Hainan FTP. On June 1, 2020, the CPC Central Committee and the State Council released the Master Plan for the Construction of the Hainan Free Trade Port, which systematically designed the policies and regulations in the field of foreign trade, and clarified the goals expected to be achieved by 2025 and step-by-step arrangements. Since the construction of Hainan FTP began, the MOC has actively implemented the master plan and the relevant institutional arrangements of trade policies. We have already carried out the following measures.

First, we have studied and drafted the negative list of cross-border service trade for Hainan FTP. Currently, the drafting of the list has been completed and the corresponding procedures are under way.

Second, we drafted and reported to the State Council to release relevant replies on comprehensively deepening trials for the innovative development of service trade last August. A three-year trial will be launched in Hainan and other places to deeply explore new systems for the innovative development of service trade.

Third, the MOC and Hainan provincial government will co-hold the first China International Consumer Products Expo on May 7-10, which is now in intensive preparation.

Moreover, the MOC and other relevant departments are busy working to promote policy adjustment for duty-free shopping on offshore islands, the zero-tariff list for several imported goods, and the supervisory measures of duty-free shopping for goods with 30% added-value at Yangpu Bonded Port. Mr. Zou gave us a detailed introduction about this area just now. I'd like to emphasize that in order to implement the master plan, especially based on the new development stage and new development philosophy, and in line with the needs of the construction of Hainan FTP, the MOC and 19 other relevant departments have proposed a number of measures to advance trade liberalization and facilitation in Hainan FTP. The measures have been authorized by the State Council and formed into documents. Next, the MOC and 19 other relevant departments will release the documents, which contain 28 items of policies and measures relating to liberalization and facilitation of trade in goods and service. You can learn more specific content after its release, and here I'd like to briefly introduce these 28 items.

First, we will implement specific tasks of the Master Plan for the Construction of the Hainan Free Trade Port. For example, in the area of trade in goods, we will adhere to the principle of free flow through the "first line" and efficient control at the "second line." (The "first line" refers to the demarcation line between Hainan FTP and other countries and overseas regions while the "second line" refers to the dividing line between Hainan FTP and other regions on the Chinese mainland.) We will allow certain regions to relax their control of import and export qualifications for and quantities of commodities such as crude oil, refined oil and sugar, and cancel their licensing systems for imports such as mechanical and electrical products. In the area of trade in services, in accordance with the requirement of "allowing both access and operation," foreign institutions are explicitly allowed to independently hold foreign-related economic and technological exhibitions with names other than "China," "Chinese," or "national." Business activities related to technological import and export will no longer need to record registration for foreign trade operators. We are exploring ways to cancel examination and permission for auction enterprises and records of commercial franchise.

Second, we will serve the construction needs of the Hainan FTP. The supporting measures will include: delegating refueling permission of bonded bunker fuel for ships engaged on international voyages; greenlighting Hainan for the export of secondhand vehicles; piloting accreditation of trade in goods-related commodities, management and service certification bodies; encouraging Hainan to develop new trade patterns such as offshore global trade, digital, technological and cultural trade, as well as the exhibition economy; welcoming the establishment of trade bases of cultural goods; vigorously innovating models of international cooperation in the trade in service sector; and expanding trade by focusing on market entities, so as to build Hainan into a new global and regional offshore trade center as well as an exhibition center.

Third, we will optimize supporting policies in the trade sector. The following measures will be taken: improving risk warning and rapid response supervision capabilities for the quality and security of imports and exports; strengthening innovation of the customs supervision model; implementing multi-level approval models; facilitating prescribed examination procedures; supporting Hainan to participate in establishing recommended national, regional or group standards; establishing work stations to deal with trade frictions and mechanisms for trade adjustment and assistance; and improving the statistical monitoring system and other measures in a bid to realize integrated innovation in trade systems.

Next, the MOC will work with relevant departments to expedite trade liberalization and facilitation at the Hainan FTP. Thank you.

Guangming Daily:

With regards to China's efforts in fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, what is the positioning of the Hainan FTP, and how will it play its role? Thank you.

Shen Xiaoming:

I will summarize the two questions. The first is regarding the positioning of the Hainan FTP within the new development paradigm, and the second involves how it will play the role. I will start by answering the first question.

We have positioned the Hainan FTP at the intersection between domestic and international circulations. If dual circulation is shaped like the figure "8," Hainan province is situated right at the point the two loops intersect. Some may ask why. There are three reasons: First, at an institutional level, after the island-wide customs clearance operation in 2025, it will become a special region for importing and exporting commodities. Second, at a policy level, the main policy aims to facilitate free trade and investment, and almost all its policies are made for fostering international investment and making free trade more convenient. Therefore, the policy puts Hainan at an intersection linking domestic and international circulations. Third, with its special geographical location, Hainan connects the world's two most vibrant markets — the Chinese mainland and Southeast Asia — making it a natural intersection of the "dual circulations." Based on these three reasons, I think Hainan's positioning is highly important and significant in China's new development paradigm.

As for how the Hainan FTP will play its role, our consideration is as follows: it will follow the most advanced international trading standards, and will make full use of its investment and trade facilitation policies to attract talents, resources and capital in the process of "dual circulation." We hope the convergence will go beyond the material level to cause a knock-on effect, with macro and long-term significance. For instance, in the current context, COVID-19 is still raging around the world, hindering the easy flow of people, goods and capital globally. However, we can seize the opportunity against such a background to boost consumption at home, mainly in the following three aspects: first, the pandemic has stopped many consumers who wanted to buy luxury and high-end goods abroad. We adjusted our offshore duty free rules in a timely manner under the support of such departments as the Ministry of Finance, the GACC, the State Administration of Taxation, as well as the NDRC. The total amount of offshore duty-free sales last year was double that in 2019, reaching 30 billion yuan, and we expect the amount to exceed 60 billion yuan this year. This is the first aspect we will work on: bringing consumption back from abroad.

Our second effort aims to bring medical services back from abroad. This refers to patients who intended to travel overseas for medical treatment but couldn't, like those with cancer, after receiving the first period of targeted therapy abroad, they couldn't continue with the second phase treatment overseas as the pandemic halted international travel. The Boao Hope City in Hainan stepped in. Here patients can legally access new foreign drugs in Hainan that cannot be found in the domestic market. This explains what bringing back medical services is.

Our third effort aims to provide quality educational resources. Since the outbreak of COVID-19, some Chinese students have been unable to go abroad to study and their parents are worried about their children in case another pandemic hits in the future. Can students access high-quality international or even top-quality educational resources? Overseas universities which boast large numbers of Chinese students are also seeking ways of mitigating against similar emergencies and hope to open branches in China. Hainan is targeted to become an island for international education innovation. Through the introduction of top education resources from abroad, the domestic need for quality education can be well addressed. At present, Harrow International School is now open in Haikou and will followed by others this fall in Lingshui Li'An International Education Innovation Pilot Zone, while a large number of other projects are also underway.

We have taken the initial steps in promoting bringing back consumption. Compared with the 1 trillion yuan overseas consumption on commodities, the 800,000 patients receiving treatment abroad, and the 800,000 Chinese students studying overseas, the proportion is not high. However, its future has received much attention from market players. What I said is only one example of how the Hainan FTP can play its role, and there are many more examples. Thank you.

Hong Kong Economic Herald:

My question is for Mr. Shen. I remember a previous report saying that in terms of building an international business environment, Hainan was inefficient in providing professional services, as it lacked professional service institutions. And, it was not very competitive in attracting foreign investment. What has changed? What shortcomings does Hainan need to address? And how much does Hainan need to do in order to achieve a more ideal business environment?

Shen Xiaoming:

Mr. Feng will answer this question.

Feng Fei:

Thank you for paying attention to Hainan's business environment. Mr. Shen just mentioned a very important point, which is that business environment, ecological environment, and policy environment should become the core competitiveness of Hainan. We will strive to combine these three environments to optimize Hainan's development environment. In General Secretary Xi Jinping's important speech on April 13, he urged Hainan to expedite plans to foster a law-based, international, and convenient business environment as well as a fair, open, unified, and efficient market environment. These are also the ways in which Hainan can strive to improve its business environment.

In the Master Plan for the Construction of the Hainan Free Trade Port, we clarified our development goals in different stages. By 2025, we will have built an overall first-rate business environment in China. By 2035, the business environment will be further improved. Over the past years, Hainan has made great efforts to improve its business environment and fostered many renowned, national brands. Particularly, we have paid attention to the integrated and systematic innovation. For example, we led the country in implementing reforms of combining different types of plans into a single plan within the province. We have also regulated the use of all territorial space in a unified way, reflecting the need for a single blueprint to lay out all projects, a single form for application materials, and a single system for approval and inspection services. These efforts effectively solved problems that previously arose from excessive planning and met the needs for land, sea, and forest s of construction projects. For example, we promoted minimum approvals in key parks of Hainan Pilot Free Trade Zone, the replacement of project initiation approval with planning approval, and the replacement of single project assessment with regional assessment. We cut the number of approval items from 70 to four and the time needed for approval by over 80%. We also updated the single-window system for international trade, cutting the time needed for clearance to half the time needed three years ago. We continue to carry out innovative approaches for easier clearance such as "internet + appointments," post-release duty payments, and consolidated duty collections. Additionally, the "release after inspection" model allows imported products to pass through clearance if they meet inspection requirements. Another example is the "one seal approval" model, which allows the transfer of around 300 administrative items in a centralized, unified way. Finally, companies and individuals can now access government services via a single office, without turning to multiple offices.

Generally speaking, Hainan has achieved great progress in improving its business environment. We can see from Mr. Shen's examples of market entities, companies, and foreign investment, that Hainan's favorable business environment is widely recognized by companies. Objectively speaking, there is still room for improvement when compared to the master plan, specifically concerning the requirements of creating a market-oriented, law-based, and internationalized business environment, and other developed provinces and cities in the country.

Therefore, we will ramp up efforts to further optimize the business environment in three aspects, which are as follows. First, we will set goals for guiding the reform of the business environment. For example, we proposed improvements to government services by letting people access them in any region within the province and complete the process without the need for a second trip. Second, we will make quantitative goals in line with the standards of the World Bank, making our annual work quantified and specified across cities and provinces. Third, we will build a mechanism for assessing the business environment that enables the market to play its decisive role and allows participation from all companies and customers.

Again, a law-based environment is the best business environment as well as the most stable and predictable. Mr. Shen just discussed how the Hainan Free Trade Port Law will be implemented. This year, we will accelerate the formulation of laws and regulations on fair competition, social credit, and business registration and deregistration. In the meantime, we will push forward the building of a law-based government in all respects and regulate activities between the government and market in a law-based manner and through law-based procedures and approaches, protecting the legitimate rights and interests of investors.

I also want to take the initiative to respond to the recent incident which happened in Sanya involving tourists who recently complained that the sea urchin steamed eggs that they ordered at a restaurant did not contain any sea urchins. The Hainan Provincial Committee of the CPC and the Hainan provincial government attach great importance to the order of the tourism market and over the years have taken a series of strict measures in three aspects, including changes to the supervision system, complaint mechanisms, and special campaigns. We will carry out a thorough investigation, address the matter in line with the law and respond to public concerns in a timely manner. Thank you.

Red Star News:

Since July 1, 2020, new policies on duty-free shopping for travelers leaving Hainan Island have aroused a great deal of public interest, increasing the public's enthusiasm for tourism and shopping in Hainan. Since Feb 2, 2021, two new pick-up methods have been added: delivery by post and pick-up on the island. This has facilitated the shopping experience for travelers but has also further increased the regulatory pressure on customs. What are the considerations in preventing the purchase and resale of duty-free goods on the mainland (known as "tao daigou")? Thank you.

Zhang Jiwen:

Thank you for your question. The GACC resolutely implements the instructions given by General Secretary Xi Jinping on the construction of the Hainan FTP and the decisions and plans made by the CPC Central Committee and the State Council. We are actively exercising our functions, strengthening supervision, and improving our service to fully support the construction of the Hainan FTP.

Policies on duty-free shopping for travelers leaving Hainan Island is one of the major achievements in the initial stage of the construction of the Hainan FTP. Starting from July 1 of last year, Hainan increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan, expanding the range of duty-free goods from 38 to 45 categories. To ensure the smooth implementation of these new policies, customs are actively participating in timely policy creation and the adjustment of clearance procedures according to the new annual quota and categories. We also created targeted regulations based on their supervision and updated the customs' information management system. All of these efforts effectively guaranteed the implementation of new policies.

Implementation of new policies has greatly promoted Hainan to build itself into an international tourism consumption center and boosted growth in Hainan's foreign trade. Data from customs show that, between July 1, 2020, and April 6, 2021, Hainan reported duty-free sales of 34.7 billion yuan, up 244% from the same period last year. Duty-free shops in Hainan received 4.96 million customers and sold 43.26 million products during the same period, up 215% and 101% year on year, respectively. It is obvious that stimulus in consumption was brought about by preferential policies. On Feb 2, 2021, to make it more convenient for travelers to shop and maximize policy effects, methods were added for duty-free shoppers leaving Hainan Island, allowing them to pick up goods through delivery by post and after their return to Hainan Island. Customs attaches great importance to the new policies and on Feb 3, we published the Announcement on Issuing the Supervisory Requirements for the Methods of Picking up Goods through Delivery by Post and after Return to Hainan Island for the Duty-free Shopping of Travelers Leaving Hainan Island, clarifying the specific requirements for supervision. In the meantime, we will work actively to publicize and explain the supervision methods of customs. From Feb 3 to April 6, Hainan's offshore duty-free companies reported 400-million-yuan's worth in duty-free shopping sales via delivery by post, involving 100,000 customers and 530,000 products. They also accepted applications from the island's residents to pick up products after return to Hainan island, involving 2,216 duty-free products worth 2.62 million yuan purchased by 406 travelers.

We continue to improve and update the regulatory models and facilitate our services. In the meantime, we will crack down on illegal smuggling activities, such as "tao daigou," which exploit duty-free shopping policies. Customs has always taken strict measures to crack down on such practices by solving major crimes and dismantling smuggling gangs and networks. This has helped to ensure the stable and orderly implementation of policies for duty-free shopping and protected the legitimate rights and interests of most travelers.

In the past two years or so, Haikou Customs, under the guidance of the GACC, has carried out 11 rounds of special campaigns against smuggling through offshore duty-free channels. A total of 66 smuggling gangs were eliminated, involving cases worth about 200 million yuan. From July 2020 to now, more than 8,000 people who violated offshore duty-free shopping regulations were banned from enjoying the duty-free policies for three years. At the same time, in order to fully leverage the advantages of regional collaboration, Zhanjiang Customs and Haikou Customs have carried out joint operations against smuggling through offshore duty-free channels since January. So far, four rounds of joint campaigns against smuggling activities have been carried out and five criminal cases have been filed, involving illegal goods worth 26.84 million yuan.

In the next step, by adhering to the premise that opening-up can only serve its purpose when supported with enhanced oversight, customs will continue to make targeted crackdowns on various smuggling crimes during the construction of the Hainan FTP. Through these measures, we will ensure that the decisions and deployments of the CPC Central Committee and the State Council can be implemented to support the healthy development of the Hainan FTP. Thank you.

Cover News:

Since the release of the master plan, how are the relevant policies issued by the Ministry of Finance working out? What are your considerations in expanding the range of duty-free products in the future? Thank you.

Zou Jiayi:

Thank you for your questions. I just introduced that nine of the 12 fiscal and tax policies have so far been implemented. These nine policies, which have been in place for a significant amount of time, have achieved remarkable progress so far. The other policies, which were implemented more recently, are so far paying off and their effects will become clearer with time.

The policies yielding remarkable results include the offshore duty-free policy we repeatedly mentioned just now. The policy took effect on July 1 last year and duty-free sales had already exceeded 30 billion yuan by the end of March, registering a growth rate more than double that of the previous year. Sales under the supervision of the General Administration of Customs, as Mr. Zhang Jiwen just described, reached 34.7 billion yuan, with both the number of shopping trips and the quota for per capita shopping increasing significantly year-on-year. In June last year, I also introduced Hainan's offshore duty-free policy. At that time, journalists said that I was live-streaming e-commerce for Hainan. Now it seems that they no longer need me to do so. As Mr. Shen Xiaoming said, sales of offshore duty-free goods are expected to exceed 60 billion yuan this year. As the Chinese saying goes: peaches and plums, without speaking, form a path under them. The policy has indeed played a role in attracting visitors to Hainan, which stimulated the vitality of local tourism, the consumption market and promoted the development of related industries. In addition, the preferential policies for enterprise income tax and individual income tax that have been in place since Jan 1, 2020, reduced the tax burden of enterprises and attracted high-end talents to Hainan when they were in short supply. The number of new market players in Hainan has increased rapidly and all kinds of talents have continued to come to Hainan.

Additionally, policies that have been implemented for a relatively short time are slowly seeing benefits. For example, since the zero-tariff policies for raw and auxiliary materials, vehicles and yachts, and equipment for enterprises' use were adopted starting last November, the value of goods from these preferential policies has reached nearly 900 million yuan, while tax exemptions have exceeded 100 million yuan, effectively reducing the import cost of enterprises. I believe, with the steady implementation of these policies, more market players will benefit and the positive effects of these policies will further be unleashed.

On the whole, the adoption of the above fiscal and tax policies has delivered notable progress, boosted the confidence across all sectors involved in the construction of the Hainan FTP, and attracted more people, logistics, and funds to Hainan, laying a good foundation for the smooth start of the Hainan FTP construction.

The journalist also asked what are the future considerations in expanding the categories of duty-free goods? Nine of the 12 fiscal and tax policies just mentioned have been adopted and the other three policies are yet to be adopted. Next, we will step up efforts to speed up the adoption of the three policies: the zero-tariff policy for imported goods purchased by island residents, the duty-free policy for overseas exhibits at the China International Consumer Goods Expo to be held from May 7 to 10 in Hainan, and the policy to allow flights in and out of Hainan to refuel with bonded aviation fuel. We will work for the adoption of these three policies as soon as possible and closely follow the implementation of the nine policies that have already been adopted, assessing their effects promptly and make dynamic adjustments and improvements. Regarding the zero-tariff policies for list management, in particular, we will continue to expand the positive list categories and narrow the negative list categories to promote the steady progress of the Hainan FTP construction. Thank you.

Hainan Broadcasting Group:

What progress has the PBC and the SAFE made in promoting the construction of the Hainan FTP and facilitating the free cross-border capital flow since the release of the Master Plan for the Construction of the Hainan Free Trade Port last year? Thank you.

Wang Chunying:

Thanks for your question. It is stated in the master plan that "we should stick to the principle that finance serves the real economy; focus on trade and investment liberalization and facilitation to open capital accounts in phases; and promote the Hainan FTP and cross-border flow of funds in an orderly manner." According to the schedule laid out in the master plan, the PBC and the SAFE have adopted policies on the liberalization and facilitation of cross-border capital flow to support the development of the Hainan FTP. To sum up, the policies and their progress are mainly as follows:

First, the policy to promote the development of the accounting system. We support Hainan to launch free trade accounts, also known as FT accounts, to support enterprises' ability to handle local and foreign currency settlement of cross-border transactions and overseas financing business. The funds in FT accounts can be exchanged in the offshore market. In addition, we piloted the bank settlement account system in some regions, combining local currency with foreign currencies. Last September, Hainan was included as a pilot region and preparations for its launch sometime in the near future have been made.

Second, the policy to raise the facilitation of RMB settlement for cross-border investments. In September 2019, we began to support the offer of RMB settlement of cross-border goods and service trade at the banks in Hainan, upon the cross-border receipt and payment instructions submitted by the high-quality enterprises in the region. Additionally, we made the use of RMB capital account income more convenient within China. Last December, the PBC and the SAFE, together with the National Development and Reform Commission, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), and the China Banking and Insurance Regulatory Commission (CBIRC), jointly released a notice covering 15 articles in five aspects to further improve cross-border RMB policies. These policies mainly focus on the needs of the real economy, ways to promote higher levels of trade and investment of RMB settlement facilitation, means to further simplify the cross-border RMB settlement process, improving cross-border RMB investment and financing management, and facilitating the RMB receipt and payment under the current individual accounts and foreign institutions' use of RMB bank settlement accounts. Last year, cross-border RBM settlements in Hainan increased by nearly 50%.

Third, the policy for cross-border investment management in response to new forms of market demand, including implementation of the foreign investment management system of "pre-entry national treatment" plus the "negative list" in terms of foreign investment management. The exchange business related to foreign investment can be handled at the banks. The SAFE sets no limits on foreign investment not included in the negative list. Direct investments can basically be exchanged. Last December, the SAFE approved the launch of a pilot foreign investment by qualified domestic limited partners (QDLP) at the Hainan FTP and granted a pilot investment quota of $5 billion. At present, the Hainan branch of the SAFE has formulated the QDLP pilot management measures and is organizing and advancing specific pilot work.

Fourth, the policy of improving cross-border investment and financing exchange management. This policy was adopted mainly to meet the needs of investment and financing in Hainan's real economy, supporting the development of Hainan's specialty and relatively competitive industries and giving further priority support to overseas listings. Last September, we spearheaded a pilot reform of overseas listing registration for domestic companies in Hainan, which improves related registration procedures and allows companies registered in Hainan to go directly through overseas listing registration procedures at banks.

In general, the PBC and the SAFE actively implemented the master plan and specific planning work. We gave full play to the role of the Hainan FTP as an opening pilot zone at the forefront of reform. The implementation of pilot policies has been timely and effective and the policy support, including reducing processing hours and costs to enterprises, well meet the needs of Hainan's market players.

Recently, the State Council, the PBC, and the SAFE, together with the CBIRC and the China Securities Regulatory Commission (CSRC), jointly released the Guidelines for Financial Support for Hainan's Comprehensively Deepening Reform and Opening Up. The guidelines state the general principles and policy measures in six aspects on financial support for comprehensively deepening reform and opening up. These policy measures mainly include enhancing the convertibility of RMB to support the liberalization and facilitation of cross-border trade, investment, and financing; improving Hainan's financial market system; expanding the opening up of Hainan's financial industry; boosting the innovation of financial products and services; improving financial services; and strengthening financial regulation to prevent and defuse financial risks. The objective of these guidelines aims to promote the establishment of financial policies and an institutional framework suitable for the Hainan FTP and to consolidate the financial foundation of Hainan.

Next, the PBC and the SAFE will further follow the Master Plan for the Construction of the Hainan Free Trade Port to arrange key tasks step by step in phases by 2025; implement the guideline that finance serves real economy; continue to improve related policies while keeping them in line with actual economic needs and reducing risks; and further expand financial support for the reform and opening up of the Hainan FTP to promote the free and facilitated orderly flow of overseas funds. Recently, we are stepping up efforts to promote a pilot program for the higher-level opening up of cross-border trade and investment to boost innovation in cross-border investment and financial systems; improve the efficiency of market-based resource allocation; and strive to stimulate market vitality to better serve the new development paradigm. This is my response to your question. Thank you.

Chen Wenjun:

As time is limited today, our press conference ends here. Thanks to all speakers and friends from the media. Goodbye!

Translated and edited by Wang Yiming, Wang Wei, Yuan Fang, Wang Qian, Liu Jianing, Chen Xia, Lin Liyao, Fan Junmei, Zhang Tingting, Li Huiru, Cui Can, Liu Qiang, Duan Yaying, Zhang Rui, 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 head of the Publicity Department of the CPC Central Committee and minister of the State Council Information Office (SCIO)

Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs, and minister of agriculture and rural affairs

Wang Zhengpu, deputy director of the Office of the Central Leading Group for Rural Affairs, and head of the National Administration for Rural Vitalization

Hong Tianyun, deputy head of the National Administration for Rural Vitalization

Xia Gengsheng, deputy head of the National Administration for Rural Vitalization

Chairperson:

Chen Wenjun, head of the Press Bureau and spokesperson of the SCIO

Date: 

April 6, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office (SCIO). Since the 18th National Congress of the Communist Party of China (CPC), under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, and thanks to the concerted efforts of the Party and the Chinese people of all ethnic groups, China has attained a complete victory in the fight against poverty, creating a great miracle in the history of human poverty reduction. Today, the SCIO has issued a white paper titled "Poverty Alleviation: China's Experience and Contribution," which is the topic of today's press conference.

We have invited Mr. Xu Lin, deputy head of the Publicity Department of the CPC Central Committee and minister of the SCIO, to brief you on the white paper. Also present are: Mr. Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs, and minister of agriculture and rural affairs; Mr. Wang Zhengpu, deputy director of the Office of the Central Leading Group for Rural Affairs, and head of the National Administration for Rural Vitalization; and Mr. Hong Tianyun and Mr. Xia Gengsheng, deputy heads of the National Administration for Rural Vitalization. They will answer your questions. Next, we will give the floor to Mr. Xu for an introduction.

Xu Lin:

Ladies and gentlemen, friends from the media:

This year marks the centenary of the founding of the CPC. Since its inception, the CPC has taken the happiness of the Chinese people and rejuvenation of the nation as its original aspiration and mission, and united and led the people in the fight against poverty. The 100 years of the CPC's development have been a century when the Party has worked hard to eradicate poverty and backwardness and to ensure better lives for the people.

Since the 18th CPC National Congress, under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has adopted a series of bold policies and measures to fight a decisive battle against poverty that is unprecedented in scale and intensity, and has benefited the largest number of people in human history. At the grand gathering held this Feb. 25 to mark China's achievements in poverty alleviation and honor its model fighters against poverty, General Secretary Xi Jinping solemnly declared: Victory in the battle against poverty is complete, and China has completed the arduous task of eliminating extreme poverty.

Today, the SCIO has issued the white paper "Poverty Alleviation: China's Experience and Contribution." The document records the course of the CPC uniting and leading the Chinese people in the fight against poverty, and particularly efforts made to achieve a complete victory since the 18th CPC National Congress, introduces China's approach, and shares its experience and actions in poverty alleviation.

The white paper, which extends to more than 30,000 Chinese characters, consists of a preface, main body, conclusion and appendix. The main body includes five parts: "The Solemn Commitment of the CPC," "Final Victory in the Fight against Extreme Poverty," "The Strategy of Targeted Poverty Alleviation," "Exploring a New Path of Poverty Alleviation" and "A Global Community of Shared Future Free from Poverty." The paper is an important historical record that offers a comprehensive picture of China's poverty alleviation effort.

China's fight against poverty entered a critical stage after the 18th CPC National Congress in 2012. At the end of 2020, following eight years of hard work, China achieved the goal of eliminating extreme poverty — a key goal for the new era of building socialism with Chinese characteristics. The 98.99 million people in rural areas who were living below the current poverty threshold all shook off poverty; and all 128,000 impoverished villages and 832 designated poor counties escaped poverty. Our complete victory over extreme poverty is an outstanding achievement in the history of both China and humanity. As stated in the white paper, the battle against poverty has been another great revolution in rural China, leading to historic and comprehensive changes. The campaign boosted overall rural development and laid a solid foundation for building a modern socialist China and realizing the Second Centenary Goal.

China's poverty alleviation experience indicates that poverty is not predestined, nor is it unconquerable. With strong will and determination, as well as practical action, one can make steady progress toward overcoming poverty and realizing common prosperity.

According to the white paper, China's complete victory over extreme poverty shows that the CPC has held fast to its original aspiration and mission, and demonstrates its ability to lead politically, to guide through theory, to organize the people, and to inspire society. It shows the strength of socialism with Chinese characteristics in pooling resources to solve major problems. It highlights China's spirit, China's values, China's strength, and the willpower of the Chinese people to strive to realize dreams with bold resolve "which dares to make sun and moon shine in new skies." It exemplifies the fearless and indomitable character of the Chinese nation — determined to struggle and resolutely overcome all difficulties and challenges along the way.

The strategy of targeted poverty alleviation is a major innovation in the theory and practice of poverty alleviation, and China's strongest weapon in its final battle to secure victory against poverty. In its poverty elimination efforts, China has launched a series of guidelines and measures to increase efficiency, summarized as accomplishing "Targeted Efforts in Six Areas" (efforts to accurately identify the poor, arrange targeted programs, utilize capital efficiently, take household-based measures, dispatch first Party secretaries based on village conditions, and achieve the set goals), taking "Five Measures for Poverty Eradication" (boosting the economy to provide more job opportunities, relocating poor people from inhospitable areas, compensating for economic losses associated with reducing ecological damage, improving education in impoverished areas, and providing subsistence allowances for those unable to shake off poverty through their own efforts), and addressing "Five Questions in Poverty Alleviation" (who should help, who should be helped, how to help, how to evaluate whether someone has emerged from poverty, and how to ensure those people stay free from poverty).

The white paper emphasizes that in addition to securing a sweeping victory in the final battle against poverty, the strategy has also given a powerful boost to modernizing China's national governance system and capacity, and to enriching and developing the CPC's guiding philosophies and governance strategies in the new era.

In its practices, China has embarked on a path of poverty alleviation and designed an approach with Chinese characteristics, offering enlightenment to the international community in its battle to reduce poverty. The white paper provides China's proposals and approach for poverty alleviation from the perspectives of upholding a people-centered philosophy, highlighting poverty alleviation in national governance, eradicating poverty through development, letting the poor play the principal role, and pooling all resources to create synergy.

China cannot develop in isolation from the rest of the world, and the world needs China for further development. China has been actively engaging in international cooperation in poverty reduction and acts as an advocate, facilitator, and contributor to the international cause of poverty alleviation. According to the white paper, as China is home to nearly one-fifth of the world's population, its complete eradication of extreme poverty – the first target of the UN 2030 Agenda for Sustainable Development – 10 years ahead of schedule, makes an important contribution to the cause of global poverty alleviation. China is ready to strengthen exchanges and cooperation with other countries on poverty reduction and make a greater contribution to building a global community based on a shared future that is free from poverty and blessed with common prosperity.

Shaking off poverty is not the finish line but the starting point of a new life and new endeavor. As the world's largest developing country, China still has much to do to bridge the gap between unbalanced and inadequate development, narrow the gap between urban and rural areas and between regions, and realize people's all-around development and common prosperity for all. China will continue to consolidate the results of poverty elimination, dovetail new measures with rural vitalization, and comprehensively push forward rural vitalization by introducing more vigorous measures and pooling more resources. The white paper has depicted a bright future of China's rural vitalization and its development by the years 2035 and 2050, saying that the nation will continue to march towards higher goals of all-round development for the people and common prosperity for all.

This is the end of my introduction. Thank you!

Chen Wenjun:

Thank you, Mr. Xu. The floor is now open for questions. Please identify the media organization you represent before asking questions.

China Central Television (CCTV):

During his remarks at the grand gathering this February to mark the nation's poverty alleviation accomplishments and honor model poverty fighters, General Secretary Xi Jinping noted that China has accomplished its poverty alleviation target of the new era as scheduled and secured a complete victory in its fight against poverty through eight years of sustained work. My question is: how do we understand this "complete" victory? Thank you.

Tang Renjian:

Thank you for your question. At the ceremony to mark the nation's poverty alleviation accomplishments and honor model poverty fighters, General Secretary Xi Jinping declared that China has secured a complete victory in its fight against poverty and created another miracle that will go down in history. It is a historic and comprehensive victory.

First, China has completely eliminated extreme poverty for the first time in its history. Through eight years of arduous work, the 98.99 million people in rural areas who were living below the current poverty threshold all shook off poverty ; all 832 designated poor counties and 128,000 impoverished villages got rid of poverty; and China has eliminated poverty over entire regions, fulfilling its solemn commitment of "leaving no one behind" as it builds a moderately prosperous society in all respects. China has completely eliminated extreme poverty for the first time in its history of thousands of years, and realized a century-long aspiration of the Chinese people.

Second, those people who have been lifted out of poverty have seen significant improvement in their living standards. The per capita disposable income of the rural poor more than doubled, increasing from 6,079 yuan in 2013 to 12,588 yuan in 2020, up by 11.6% per annum on average. The Two Assurances and Three Guarantees [referring to the assurances of adequate food and clothing and guaranteeing access to compulsory education, basic medical services, and safe housing for impoverished rural residents] have been realized. People who have been lifted out of poverty now have adequate food and clothing. Nine-year compulsory education is now available to all children from rural poor households. All poverty-stricken populations now have access to basic medical insurance, critical illness insurance, and medical assistance, thus effectively resolving the problem of access to and affordability of medical services. Around 25.68 million impoverished people from 7.9 million households have moved into proper accommodation, bidding farewell to their dilapidated houses built of materials like beaten earth mixed with straw. Rural subsistence allowances, extreme poverty relief funds, and basic pension schemes now cover almost all people in need. The welfare of special disadvantaged groups is constantly improving. Over 24 million poor people with disabilities as well as the severely disabled have now been provided with living allowances and nursing subsidies.

Third, poverty-stricken areas have gotten rid of backwardness. Infrastructure has been improved. Lack of access to transport, electricity, drinking water, and means for communication have been resolved. By the end of 2020, impoverished areas had gained 1.1 million kilometers of reconstructed highways and 35,000km of new railways, making all villages, townships, and towns in poverty-stricken areas with the right conditions accessible by paved road and provided with bus and mail routes. Effective irrigated areas have increased by more than 5.35 million hectares. Almost all rural areas enjoy a steady power supply. Over 98% of poor villages have access to optical fiber communications (OFC) and 4G technology. Tap water coverage has increased to 83% in regions that have been lifted out of poverty. Arid areas like Xinjiang Uygur Autonomous Region and Gansu province now have access to clean and safe drinking water. Each impoverished county has created a batch of new industries with distinctive features and greater capacity to facilitate poverty alleviation efforts, and increased their industrial sustainability, laying a solid foundation for rural vitalization for the next step.

Fourth, those who have been lifted out of poverty have adopted a new mindset. The battle against poverty is a complete victory on both the material and mental level. It has rekindled people's desire to seek a better life. Impoverished people have been inspired to seek prosperity through hard work, self-reliance, and entrepreneurship. They have gained a stronger sense of self-reliance and a deeper desire to rid themselves of the shackles of poverty and achieve prosperity. Each household now tries to find ways to become prosperous and each village builds businesses that help them get rid of poverty. They are ready to compete in the race to prosperity. The impoverished have been constantly upgrading their mindsets and gained a deeper understanding of markets, technology, and innovation. They have greater confidence, more active minds, and higher aspirations. Good social practices, including filial piety, harmonious neighborhoods, and modest weddings and funerals, have been promoted. A healthy and civilized lifestyle has become the new pursuit of the people who have been lifted out of poverty.

Fifth, grassroots social governance in poverty-stricken areas has been greatly improved. More than 3 million first Party secretaries and resident working team members have been selected and dispatched to carry out anti-poverty campaigns on the frontlines. Grassroots Party organizations have improved their capabilities while carrying out CPC's rural work and poverty alleviation efforts. With closer relations between the villagers and village officials, and between the Party and the people, people in poverty-stricken areas have greater trust and confidence in the Party. Self-governance by villagers is becoming more effective. As villagers are involved in discussions and management of their own affairs, they become more active in participating in grassroots governance. Collective income in impoverished villages has greatly increased. Currently, the average collective income in impoverished villages across the country has exceeded 120,000 yuan. Village organizations have become more capable of serving the people. Grassroots management and service systems in those areas are constantly improving, inspiring vitality in local communities, and forming a new dynamic for social harmony, stability, and progress.

The complete victory in poverty alleviation has fully manifested the strengths of the CPC leadership and the advantages of the system of socialism with Chinese characteristics. A will to unite as one, do our best, set targets, adopt a pragmatic approach, be pioneers, innovate, tackle tough issues head-on, and live up to our people's trust, has formed in the great endeavors of poverty alleviation. It will continue to inspire us to fully vitalize the countryside.

Prensa Latina:

I'd like to know what is the plan for China to prevent rural people from returning to poverty? Thank you. 

Wang Zhengpu:

Thank you for your question. After China's overall victory in the battle against poverty, the first problem we have to deal with is to prevent people from sinking back into poverty. People who have been lifted out of poverty and those on the verge of poverty are at risk of returning to poverty again, so we have made considerations in this regard, and I'd like to answer this question in the following five aspects: 

First, we have established a long-term mechanism. It aims to provide monitoring and assistance to prevent a return to poverty. We will mainly monitor people's income, the implementation of the Three Guarantees (access to compulsory education, basic medical services, and safe housing for impoverished rural residents), as well as safe supply of drinking water. All of these have been our priorities in poverty alleviation. By conducting such monitoring, we intend to spot any trends that indicate a return to poverty early on and intervene through various supportive measures. The central authorities will on a regular basis analyze and inform the situation, thus improving the monitoring and assistance mechanism to help those rural people with a low income. Based on national conditions and that of rural areas, we will provide categorical assistance to different regions in order to safeguard people's basic living needs in rural areas.  

Second, we will ensure that our policies are consistent and stable. The central authorities have given a five-year grace period to those counties which have escaped poverty. During this period, we will continue to provide and improve our major support policies to give them a leg up to get them going. We will further adjust, optimize, and improve those existing assistance policies and the resources leveraged for intensive poverty elimination will be gradually redirected towards an extensive drive for rural vitalization. In this regard, over 30 complementary policies have been made and they will be gradually released.

Third, we will strengthen assistance. We will continue to provide follow-up assistance to those who have been relocated from inhospitable areas. We will adopt targeted measures to develop industries based on local conditions and provide more job opportunities, as well as enhance infrastructure construction and improve public services. In order to boost industrial development, we will shore up technology, equipment, funding, and marketing, and ensure all of these aspects will be improved to a higher standard. Regarding job opportunities, we will stabilize last year's employment levels and try our best to create more job opportunities for those who have escaped poverty. Moreover, we will prioritize assistance for key counties. The central authorities have decided to identify key counties in China's western region in order to help them achieve rural vitalization. Authorities at the provincial level should also offer help to their own key counties. Such assistance will be provided according to region and category and be implemented through concrete measures. 

Fourth, we will continue to pool possible resources and forces. We have learned that it is crucial for us to pool all possible resources and forces in the fight against extreme poverty. We will continue to adopt such policies and measures, including eastern-western collaboration, paired-up assistance, the "10,000 enterprises help 10,000 villages" project, military assistance, and we will continue to dispatch officials as first secretaries and working teams to those key villages. 

Fifth, we will continue to ensure responsibilities are fulfilled. During the grace period, we will continue to implement the policy of Party secretaries at the five administrative levels of province, city, county, township, and village, working together to consolidate and extend the outcomes of poverty alleviation and fully advance rural vitalization. More evaluations will be carried out over the status of formerly impoverished people and areas in order to evaluate the quality and efficiency of poverty alleviation, and Party committees and governments at all levels will continue to take responsibility to ensure that people do not sink back into poverty in large numbers.

Follow-up assistance for the relocated population is also very crucial. The number of people who have been relocated during our poverty alleviation efforts is relatively large. For those in the large resettlement sites, we will adopt some special policies and measures to help them. I'd like to invite Mr. Hong to introduce more about these measures. 

Hong Tianyun:

I'd like to add some more information about relocating people from areas. Mr. Wang has talked about our efforts to ensure that people do not sink back into poverty in large numbers, and this is something that we attach great importance to. We all know that during the 13th Five-Year Plan period, China relocated more than 9.6 million people from inhospitable areas and achieved complete victory in poverty alleviation. The number of relocated people, which is probably unprecedented worldwide, is almost equivalent to the population of a moderately developed country. Our priorities at present are to ensure that follow-up support will be given to the resettled population so that they will remain out of poverty after a smooth relocation and resettlement as well as remain employed and have a promising future. We will offer follow-up support in the following aspects: 

First, we will intensify our efforts to help the resettled population have adequate job opportunities and stable employment. We will help them build up self-belief, ensure their access to education and skills training, as well as help them boost the industrial development by offering them employment-specific assistance. Moreover, we will help those relocated change their ideas about employment and improve their skills. We will also organize them to work in other places and create more channels for them to find employment in places near where they live, to ensure that every relocated family with a labor force will be able to find jobs.  

Second, we will promote follow-up industries to be developed in a sustainable way. In the wake of the problem that emerged in some resettlement sites due to the imbalance between industrial development and structure of the labor force, we will ensure that local authorities will make the sustainable development of follow-up industries part of their counties' overall economic development, thus leveraging their comparative advantages and encouraging primary, secondary, and tertiary industries to develop in a coordinated way. 

Third, we will strengthen infrastructure construction and improve public services. As we all know, more than 9.6 million people have been relocated from inhospitable areas. There have been 35,000 centralized resettlement sites each with a population of over 800, and over 60 large communities each with over 10,000 people. These sites must be equipped with infrastructure providing such services as drinking water, electricity, transportation, and communication. We must accelerate the construction of those facilities which have yet to be fully completed, accelerate to improve an integrated and equalized public service system, and encourage both new and old residents to share the public services.

Fourth, we will build resettlement communities featuring openness and inclusiveness. We will improve community governance with an emphasis on humanity and enrich people's spiritual and cultural lives. We will encourage relocated people to communicate with local residents, and increase their sense of belonging, identity and happiness in their new communities and new places of residence, so as to create a harmonious and friendly environment in the resettlement communities and promote openness and inclusiveness.

After Mr. Wang started working in the National Administration for Rural Vitalization, he has prioritized follow-up support measures. As the former head of the Department of Organization of the CPC Sichuan Provincial Committee, he was once in charge of the resettlement communities in Liangshan Yi Autonomous Prefecture of Sichuan province. He explored many good methods and accumulated experience in the construction of community grassroots organizations and how to make grassroots Party organizations and Party members the backbones of communities. Currently, we are rolling out the work nationwide to reassure, unite and satisfy the people. Thank you. 

New York Times: 

When I went to southeastern Gansu, I found many families who had been helped by the poverty alleviation program. If they were registered as extremely poor in 2015 and 2016, but if they became poor in 2017, they could not get into the program. Are you going to make it easier for people to enter or are you going to re-register those who are extremely poor? And second, just as you announced today, is China's poverty alleviation program practical for other developing countries that may not have as much financial resources or organizational resources as China? Thank you. 

Wang Zhengpu:

Thank you for your questions. I will answer your first question and Mr. Xia will answer the second. China's poverty alleviation program contains a lot of effective methods and experience. After the critical battle of poverty alleviation began, we had plenty of lively and practical cases, which made the battle diversified in term of forms, and effective in results. The experience can be summarized into the following aspects, which can be learned from by the international community. 

First, adopting a people-centered philosophy. The CPC strives for the goal of ensuring a happy life for the Chinese people. That is the purpose and mission of the CPC. In alleviating poverty, the whole Party united together and, under this guiding philosophy, concentrated the strength from all sectors to promote good lives for the people. I think this experience is very important. 

Second, highlighting poverty alleviation in national governance. The CPC has always regarded China's common prosperity as its target, and poverty alleviation as an important task for ensuring national peace and stability. It has highlighted poverty alleviation when setting its policies and guidelines, and when formulating five-year plans and national plans for medium- and long-term development. The Party has pooled national resources to advance this cause. Especially since the 18th National Congress of the CPC, the CPC Central Committee with Comrade Xi Jinping at its core has prioritized poverty eradication in its governance, strengthened top-level design, increased fiscal investment and mobilized people from all walks of life. An institutional system for reducing poverty has been built, which has effectively supported the smooth advancement of poverty alleviation. 

Third, eradicating poverty through development. There is a saying in the poverty alleviation cause: "Poverty alleviation should be taken as the greatest opportunity for development." Development plays a decisive role in poverty alleviation. We must address the problem of unbalanced and inadequate development through economic development. Since the PRC's founding in 1949 and especially since the launch of reform and opening-up in 1978, the country has witnessed rapid economic and social development, with the economy and national strength growing steadily, which has won global recognition. This economic development has greatly promoted poverty alleviation, laid a firm foundation, and provided solid support for large-scale development-driven poverty alleviation efforts. 

Fourth, pressing ahead with poverty alleviation based on the actual conditions and a realistic appraisal of China's situation. China has set its poverty threshold and its poverty alleviation goals and strategies in a scientific way, and worked to create better ideas and methods. It has advanced this undertaking step by step and with steady efforts. After socialism with Chinese characteristics entered a new era, General Secretary Xi Jinping proposed the strategy of targeted poverty alleviation. The approach shifted from broad-brush policies to targeted measures based on specific conditions. The model of poverty alleviation changed from mainly relying on external support to a more sustained, self-motivated effort. The assessment system has shifted focus from regional GDP as the main indicator to the genuine results of poverty alleviation. The methods and experience are all based on China's situation. I consider this to be an important experience for other countries' poverty alleviation work as well. Every country and region has its own conditions, on which its poverty alleviation must be based. 

Fifth, letting poor people play the principal role. This encourages them to play their part, since they are the main players in eliminating poverty. China has inspired its people living in poverty to strive for prosperity and has provided them with the necessary education, so that they have the ambition to emerge from poverty and the tools to succeed. With education and training provided by the government, improvements to poverty alleviation methods, and the building of an incentive mechanism, poor people are encouraged to rely on their own efforts to escape poverty. 

Sixth, pooling all resources to create synergy. This is the political, systematic and organizational advantage of the CPC. I mentioned just now a slew of practices such as the eastern-western collaboration, fixed-point poverty alleviation carried out by government institutions and enterprises, and the campaign of "10,000 businesses helping 10,000 villages." Other political parties, federations of industry and commerce as well as prominent individuals without party affiliation have leveraged their strengths to contribute intellectual and material support. All sectors of society have united with common purpose and acted in unison to care about poor people and care for the cause of poverty alleviation.

We have summarized the six methods above as reference for the international community in alleviating poverty. As for the registering of people as poor, this is crucial in targeted poverty alleviation. I will let Mr. Xia answer this question.

Xia Gengsheng:

Thank you for your questions. It is fair to say that targeted poverty alleviation holds the golden key to securing victory against poverty and is also an innovative and most significant means during this latest battle against poverty. Identifying and registering people in need is the first step of targeted poverty alleviation. As we know, identifying people in need is a weak link that exists concerning our poverty alleviation work in poor areas. This is a dynamic process that involves preliminary identification, relatively accurate identification, and then accurate identification which cannot be achieved overnight. Since the launch of identification and registration projects in 2014, a total of 29.48 million poor households and 89.62 million poor people have been identified. For the first time, China has identified the distribution of its poor population, the cause of their poverty, and their individual needs. Between August 2015 to April 2016, we reviewed our work, disqualifying those ineligible for poverty alleviation, while also adding those who met the conditions but went overlooked. These procedures have been adjusted annually since 2017 in a bid to improve the accuracy of our work.

This shows that China's identification of poor households is dynamic, rather than a once-and-for-all thing. This is of crucial importance regarding how we identify targets, no matter whether it is during our battle against alleviating extreme poverty or the consolidation of the results of poverty elimination. Our identification methods involve three aspects. First, poor households are encouraged to apply for help themselves because they best know their difficulties and weaknesses. Second, grassroots officials are in the best position to report on the situation on local conditions as their daily work is closely related to the lives of poor people. Third, data-matching from different sectors can also help us identify the poor. Through big data analysis such as sudden and drastic medical expenses or the plummeting of income due to unemployment, we can identify, intervene, and support those in need promptly and help them apply for assistance. In addition, we also set up the "12317" hotline to allow for the supervision and reporting of misconduct in poverty alleviation work. Individuals who are eligible but weren't included in can call this number so that we can check and solve the problems. Thank you.

Market News International:

Experts predict that these over 100 million rural residents who have recently shaken off poverty could be the main middle-income spending force in the future. What kind of work should be done in order to help them move into middle-income groups? My second question is about infrastructure investment in rural vitalization. Will there be any financial support on the policy side? What will be the major methods in this regard? Will this increase the burden of debt for local governments? Thank you.

Wang Zhengpu:

You've raised two important questions. The first question is about how to help low-income populations become middle-income groups. This is Mr. Xia's field of work, so he will take this question. The second question is about investment, financing, and local government debt, which is Mr. Hong's field of work. Let's give the floor to them. Thank you.

Xia Gengsheng:

This is a good question. Although China has secured victory against poverty and a basic standard of living is now guaranteed among those who have shaken off poverty, a portion of them continues to live with a low income, and there remains a certain gap between them and middle-income groups as you mentioned. Helping the people who have just shaken off poverty gradually become a middle-income group will benefit our people, country, and the world. Once these 100 million people become middle-income earners, tremendous potential will be released by their spending activities and industrial development. To achieve a leapfrog development from poverty alleviation to middle-income level, we need to work on the following three aspects:

First, we need to promote income growth through industrial development. On the basis of effectively ensuring the supply of food and major agricultural products, we need to speed up efforts to develop specialized farming and livestock breeding methods that utilize local strengths, as well as develop the agricultural-product processing industry. We also need to foster new industrial and business models such as rural tourism, rural e-commerce, and real-life experience activities in rural areas. We need to extend the industrial chain, improve the value chain, and build the supply chain. Currently, we also need to redouble our supportive efforts via consumption. Over the past few years of poverty alleviation works, the farming and livestock breeding industries have produced many goods. Thus, we need to support them via consumption and translate their harvest into income, in a bid to build their capacity for self-development.

Second, we need to promote income growth by stabilizing employment. Employment is an important way of increasing income and ensuring its stability will help ensure a fundamental income for those lifted out of poverty. This year, we set the target of providing no less than 30 million job opportunities to people lifted out of poverty, and this has so far proved successful according to the current situation. These people now choose to either work as migrant workers or in areas closer to home, and the smooth flow of people between the two has been ensured. Migrant workers are organized by the labor cooperation program between eastern and western regions. This can provide targeted assistance for migrant workers in need and help them increase their income. In terms of job opportunities in places close to their homes, they are provided help via local poverty alleviation workshops, leading enterprises, and public-service sectors. In addition, carrying out vocational skills training programs is very important and can help those people lifted out of poverty to gain upgraded job opportunities and improve their potential for employment and income.

Third, we need to promote income growth via innovation, startups and entrepreneurship. Rural areas, especially those lifted out of poverty, have huge development potential and there are many ways and opportunities for them to promote income growth. This is opening new prospects for people to engage in innovation and start businesses. We will continuously improve the ecosystem for rural areas in innovation and business. For people who have been lifted out poverty and have the competence, are business-minded, and show willingness, we will encourage them to start businesses and increase their income. We will also focus on the training of family farm operators, farm cooperative leaders, innovation and business pioneers, rural e-commerce talents, and rural craftsman in a bid to promote entrepreneurship in rural regions and help those who have emerged from poverty increase their income and gain wealth. Thank you.

Hong Tianyun:

I'll answer the second question. The infrastructure investment for rural vitalization is mainly focused on rural development. Conducting the rural development initiative is a major arrangement made at the fifth plenary session of the 19th CPC Central Committee and an important focus for comprehensively promoting rural vitalization. This year marks the first year of comprehensively carrying out the rural vitalization development initiative and we will strive to succeed in the following five aspects: planning, construction, services, governance, and investment guarantees.

First, we will focus on planning. Rural plans are the blueprints for rural development. Planning should come before construction. As people often say, planning should be made scientifically and on a long-term basis, while construction should be pragmatic. We will clarify the layout and classification of villages, actively and orderly formulate a practical village scheme that integrates multiple plans, and realize the full planning coverage of those villages that have conditions and needs. Since the rural vitalization strategy was put forward at the 19th National Congress of the CPC, China's eastern region has taken the lead and gained good experience. We must start from the current basis and reality, retain the characteristics of the countryside, and avoid disordered and aggressive demolition and construction. In particular, we must strictly regulate the demolition and merger of villages, and must not force farmers to move into apartments. Rural development is to serve its residents.

Second, we will focus on rural infrastructure construction. We will continue to prioritize public infrastructure construction in the rural areas and strive to promote infrastructure coverage in villages, and by extension, to households. Access to "water, electricity, road, communication, and internet," energy supply, sanitation facilities, and garbage and sewage treatments are all basic elements necessary for modern civilized life in rural areas and the main focus of our rural development. We will guide local governments to determine the development priorities in light of local conditions and meet the most pressing needs of the rural residents. 

Third, we will focus on providing services. We will improve the level of basic public services in rural areas, establish a mechanism for balanced allocation of public resources between urban and rural areas, strengthen the allocation of basic public services to rural areas, and gradually unify urban and rural standards and systems. Next, we will concentrate on key issues such as rural education, healthcare, elderly care, and social security, and continue to realize equal access to basic public services in urban and rural areas.

Fourth, we will focus on governance. We have launched a five-year campaign for improving rural living environments to promote the marked upgrading of urban and rural appearances. We will give priority to supporting household sanitation in the rural areas of China's central and western regions, and advance toilet upgrading and sewage treatment in rural areas in an integrated manner. We will encourage the sorting and treatment of household waste at the source in rural areas where conditions permit and intensify efforts to make villages cleaner and greener, making rural areas more livable and rural residents more satisfied.

With the four "focuses" mentioned above, investment in rural development must be guaranteed. We should, through innovating the mechanism of investment and financing, form a diversified investment pattern featuring prioritized financial guarantees, focused financial support, and active social participation. Earlier, Mr. Tang introduced the No. 1 Central Document for 2021 and answered questions from the press. As we all know, this year's No. 1 Central Document issues a series of specific policies for input guarantees. According to the document, the general public budget should continue to prioritize spending on both agriculture and rural areas, and the central government spending on agriculture and rural areas should be further expanded. In addition, the share of the revenue from land transfers diverted to rural areas should be increased and local governments should be supported in issuing general bonds and special bonds for modern agriculture facilities and rural development to continue to enhance their financial support.

Rural vitalization is a long-term and historic task. While proceeding with the work, we must spare no efforts within our capacities and seek truth from facts. At the same time, the relevant departments have also been very strict in managing local government debts. We believe that the debt burden among local governments won't increase overall and is manageable. Thank you.

Shangyou News:

My question is about how poverty alleviation has been promoted in ethnic minority areas and how poverty reduction achievements will be consolidated in these areas next? Thank you.

Wang Zhengpu:

Thank you for your questions. As one of the main battlefields in the fight against poverty, ethnic minority areas have long been lagging behind, and many such areas, in particular, have a small population and a weak foundation. We have paid great attention to these areas in the fight against poverty. Mr. Xia will give you more details in this regard.

Xia Gengsheng:

As we all know, China is a big family composed of 56 ethnic groups, sharing the common name of the Chinese nation. Our country has made unity and common progress as well as common prosperity and development the theme of the Chinese nation's work in the new stage for a new era. Regarding poverty alleviation, General Secretary Xi Jinping has stressed on many occasions that no single ethnic minority group should be left behind in the country's building of a moderately prosperous society in all respects. This is a solemn commitment of the CPC. We can see it from three junctures. The first is the eight-year poverty alleviation campaign. During this period, China has always made ethnic minority areas and ethnic minorities the key areas and key groups of its poverty elimination endeavors and has adopted targeted strategies to consistently support them. For example, the central government has allocated nearly 300 billion yuan in poverty alleviation funds, or 45% of the country's total, to the eight provinces and autonomous regions with large ethnic minority populations (Guizhou, Yunnan, and Qinghai provinces and the Inner Mongolia Autonomous Region, Xinjiang Uygur Autonomous Region, Tibet Autonomous Region, Guangxi Zhuang Autonomous Region and Ningxia Hui Autonomous Region) over the past eight years. In addition, integrated government funds for rural development in the eight provinces and autonomous regions made up 39% of the country's total. Meanwhile, support in finance, land, human resources, and other aspects have also been weighted toward these regions, providing a strong guarantee for winning the battle against poverty in ethnic minority areas.

The second juncture was on June 23, 2017, when General Secretary Xi Jinping presided over a symposium in Taiyuan, Shanxi province, on poverty alleviation in severely impoverished areas. According to issues discussed during the symposium, most ethnic minority areas were considered severely impoverished areas. The "three areas" (Tibet Autonomous Region, the Hotan, Aksu, Kashgar prefectures and the Kizilsu Kirgiz Autonomous Prefecture in southern Xinjiang, and prefectures and counties with large Tibetan populations in the provinces of Sichuan, Yunnan, Gansu and Qinghai) and the "three prefectures" (Liangshan Yi Autonomous Prefecture in Sichuan, Nujiang Lisu Autonomous Prefecture in Yunnan, and Linxia Hui Autonomous Prefecture in Gansu) were made the key battlegrounds for the elimination of poverty. That meant that new poverty reduction funds, projects, and measures were weighted toward these regions. It is fair to say that through extraordinary support, severely impoverished areas have accelerated in casting off poverty and no longer drag national efforts down.

The last important time is 2020, final year for winning the battle against poverty. In the year, we speeded up our efforts to lift the remaining 52 impoverished counties, mostly located in ethnic minority areas, out of poverty. This was considered the last task for eliminating extreme poverty. After relentless efforts, extreme poverty was eliminated among all minority ethnic groups including 28 with small populations. Some ethnic groups, still at the later stage of primitive society when the PRC was founded in 1949, have now been enabled to make the great leap to socialism and, then again, great strides towards achieving moderate prosperity in all respects. General Secretary Xi Jinping's solemn promise that no ethnic group should be left behind on the way to eliminate poverty has been fulfilled. Per capita net income of the poor in the five autonomous regions (Inner Mongolia, Guangxi, Tibet, Ningxia and Xinjiang) and the three provinces with a large multi-ethnic population (Guizhou, Yunnan and Qinghai) have increased significantly, breaking through the 10,000-yuan mark at the end of last year. This was higher than the income level for the poor registered under the national system of identifying people in need to know whom to help. This is a hard-won achievement. Social and economic development in ethnic minority areas have accelerated notably, basic living and working conditions have improved and tremendous changes have taken place. People of minority ethnic groups now have a much greater sense of gain, happiness and security. We visited some of those freed from poverty in Liangshan last week. Their happiness could be seen on their faces. This is a very big change in recent years. According to third-party evaluation, by the end of 2020, the average satisfaction level of the general public for the poverty elimination work in the aforementioned eight provinces and autonomous regions was above 94%, showing the battle against poverty is a project beneficial to the wellbeing of the people winning their heartfelt approval. 

To consolidate the results of poverty elimination, we will continue to prioritize ethnic minority areas and their people as we move forward. We will make targeted efforts in the following respects: First, we will work to ensure that the support policies for formerly impoverished groups will be effectively implemented in all ethnic minority areas. Just as my colleagues said a moment ago, we will make sure that people do not sink back into poverty in large numbers. Second, we will continue to strengthen preferential treatment to ethnic minority areas. For key counties in the rural vitalization program, again mostly located in ethnic minority areas, we will adopt preferential policies and give concentrated fiscal, financial, land, talent, infrastructure and public service support to strengthen their points of weakness at a faster pace and improve their development capacity. In addition to these counties, the government will also support the whole of Tibet and Xinjiang to consolidate the results of poverty alleviation and promote rural vitalization. Paired assistance for Tibet, Xinjiang and the prefectures and counties with large Tibetan populations in the provinces of Sichuan, Yunnan, Gansu and Qinghai will remain unchanged. Third, we will further increase budgetary input. During the period of grace, fiscal investment will remain stable and composition of fiscal spending will be optimized. 

With these measures, we hope to ensure no ethnic minority area and people will be left behind in the efforts to consolidate the results of poverty alleviation and good performances will be delivered in pursing common prosperity. Thank you.

Xinhua News Agency:

My question is for Mr. Xu. In the past eight years, we have lifted nearly 100 million rural poor out of extreme poverty. Why was China able to achieve this? The white paper has offered much information, but what do you think is the most important reason? What experience have we gained for eliminating extreme poverty? Thank you. 

Xu Lin:

Thank you for your question. The main reason behind China's success in eliminating extreme poverty is the six experiences introduced by Mr. Wang just now. The most important of all, I think, is that the Communist Party of China cares for the people. From the Party leader to ordinary Party officials, we all put people first. 

For the past century, one generation of Party members after another have made continuous efforts toward the goal of seeing that the people can live a good life. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has prioritized poverty elimination in state governance and mobilized the whole Party and the whole country to engage in the battle against poverty.

Soon after the 18th CPC National Congress, General Secretary Xi Jinping visited Fuping in Hebei province to inspect development-driven poverty alleviation work there. During the visit, Xi clarified the relationship between eliminating extreme poverty and building a moderately prosperous society in all respects and mobilized the whole Party and the whole country to work hard to win the battle against poverty. 

General Secretary Xi Jinping was always concerned with impoverished regions and families in straitened circumstances, has always put poverty alleviation at the top of his work agenda and devoted much energy to it. He has assumed leadership, made plans, and directed the battle in person, and called meetings to hear reports and make plans at every critical stage of the battle. He has presided over seven central seminars on poverty elimination and made over 50 fact-finding trips, giving important instructions clarifying the direction of poverty alleviation.

He has visited every one of the 14 contiguous poor areas across the country and over 20 poor villages, and sat in impoverished households to hear of their difficulties, suggestions and needs.

You may still remember moving scenes in many news reports. For example, in Yuangudui village, Dingxi city of Gansu province, General Secretary Xi walked into a low and poorly-lit rural home and took a drink of water from a water vat by the wall with a gourd ladle to taste the quality of water the villagers were drinking. 

In Zhangzhuang village, Lankao county, Henan province, holding the hand of villager Zhang Jingzhi, General Secretary Xi looked at the 85-years-old's kitchen and bedroom. He also chatted with the family to learn about their grain output, whether they had received agricultural subsidies and if they were covered by subsistence allowances and medical insurances. 

General Secretary Xi's visits to the poor, his fact-finding trips and the plans he has made all embody the deep love of the people's leader for the poor, and have warmed their hearts, roused their enthusiasm to fight poverty and greatly boosted the confidence and morale of the whole Party and the whole country to win the battle against poverty. 

Poverty alleviation is a battle without smoke. On this battlefield, Party officials have dedicated themselves with great zeal, fulfilled their promises with actions and took great pains and even sacrificed their lives in exchange for the happiness of the poor. Here, I would give the examples of two ordinary Party officials. 

The first example is Jiang Haiquan, who was sent by the National Audit Office to serve as the first secretary of Jiashi village in Qiandongnan Miao and Dong autonomous prefecture, Guizhou province. When he arrived at the village, initially the villagers respectfully stayed out of his way because they thought that Jiang, having previously worked in a ministry in the big city of Beijing, would have no idea of the general situation in such a mountain village. However, Jiang visited the villagers to get to understand what problems they were facing, listened to their opinions, and helped them one by one. Gradually, the villagers accepted and respected him very much. When his two-year term was about to expire, all of the villagers jointly signed a petition marked with their thumbprints, hoping that he would continue to work in the village. He also couldn't bear to leave, so decided to work in the village for another two years. His daughter was only 3 years old when Jiang left for the village to help with the poverty alleviation; by the time he returned home, she was already in elementary school. His daughter missed her father but was sensitive for her age, saying that although her father hadn't come back home to accompany her to Children's Day for three years, she had her father's letters and promise that he would come back when the children in the mountain village lived a happy life like her.

Another example is Yang Ning, secretary of the Party branch and head of the village committee of Jiangmen village in Rongshui Miao autonomous county, Guangxi Zhuang autonomous region. She graduated from Guangxi University in 2010 and before applying to work as a village official in her hometown, becoming an assistant to the village director. She has devoted herself to helping lift the villagers out of poverty, working to change her hometown. As a member of the Miao ethnic group herself, she explored ways of poverty alleviation with her fellow Miao villagers and finally found a way to increase people's income by developing high mountain ecological agriculture. Worrying about her hometown fellows who had not yet completely escaped poverty, she decided to stay in the village even after her two consecutive terms had expired. In 2017, she was elected as the head of the village committee with a high approval rating. Now, with 326 poor farmers in 94 households in Jiangmen village having been lifted out of poverty, poverty has been eradicated. Yang Ning said that everyone has ideals and dreams and her dream is to use the knowledge she has learned to help the Miao people out of poverty and toward prosperity.

These grassroots cadres and poverty relief workers are ordinary people, and what they have done may seem trivial but is very pragmatic. It is these grassroots cadres, poverty relief workers, and CPC members who are the powerful forces of winning the battle against poverty. Thank you.

Farmer.com.cn: 

After winning the battle against poverty, the focus of the work related to agriculture, rural areas, and farmers has historically shifted to promote rural vitalization in an all-round way, which involves all aspects of the above-mentioned work. What's the next priority? Thank you.

Tang Renjian:

Thank you for your question. From poverty alleviation to promoting rural vitalization in an all-round way, a landmark change and strategic transition has been made in the work related to agriculture, rural areas, and farmers. The rural vitalization efforts have been mentioned several times in the previous questions and answers. Many examples are vivid and touching. We have worked in local departments and witnessed so many stories. Therefore, for the next step, we must continue to promote comprehensive rural vitalization in line with these guiding principles, ideas, and requirements.

Promoting rural vitalization in an all-round way involves a wide range of sectors. We do need to think carefully about where to start and what we should prioritize. We need to take all factors into consideration, while at the same time focus on some major work. The focus is as follows: First, we must first ensure food security. To the people, foodstuff is all-important. This is our top priority in governing the country. We will strongly implement the food crop production strategy based on farmland management and technological application, which lay a material foundation. The key is to solve issues related to seeds and arable land and to develop the seed industry. We will work to maintain the red line of 1.80 billion mu (120 million hectares) of arable land and one billion mu of high-standard farmland, which are the cornerstone of food security. At the same time, it is necessary to provide benefits to the farmers who grow grain and to make sure the local Party committees and governments shoulder their responsibilities. We must establish a mechanism guarantee of "two supplements," which is supplement by benefits and supplement by obligations. "Supplement by benefits" refers to allowing farmers to make profits from growing grain by improving corresponding agricultural prices and subsidy policies. "Supplement by obligations" refers to consolidating the obligations and responsibilities of local Party committees and governments regarding food security. In short, our goal is to ensure that the national grain output exceeds 1.3 trillion jin (650 million metric tons) and rises steadily, not only this year but also during the 14th Five-Year Plan period (2021-2025). At present, the summer grain is growing very well—a good sign of the harvest to come.

Second, we will consolidate poverty alleviation outcomes. It is not easy to win the battle against poverty, and by no means easy to consolidate this historic achievement. In general, we will maintain a stable assistance policy in areas that have escaped poverty and identify a number of key counties in the western region to help them develop and promote rural vitalization. For those who are prone to falling back into poverty, a dynamic monitoring mechanism will be established to identify and assist as early as possible. In brief, efforts must be made to prevent any large-scale relapse into poverty.

Third, we will develop rural industries that can benefit people. Increasing rural residents' income is a key approach to solving many problems in rural areas. As mentioned just now, we will make use of the multiple functions of rural areas—not just agriculture—because providing food is not the only advantage of these areas. We can give full play to other advantages, including ecological conservation, leisure tourism, and cultural inheritance. We will develop new industries and business formats such as rural tourism and recreation; promote the integration of primary, secondary, and tertiary industries in rural areas; maintain industries in the countryside as much as possible; and extend the industrial chain so that farmers can participate and benefit more.

Fourth, we will build the "hardware and software" in villages, and promote the coverage of public infrastructure in rural areas and extend it to households. I mentioned in previous press conferences that infrastructure problems have been basically solved at the level of administrative villages, and some have been solved at lower levels, but there are still gaps. Therefore, going forward, our focus is to promote solutions below the level of administrative villages, especially roads, which includes roads leading to different parts in villages, main roads in villages, as well as industrial roads, resource roads, and tourist roads for industrial development. We need to build these roads. Next, we will resolve the issue of cold chain logistics for storing agricultural products and keeping them fresh. It involves the upward movement of agricultural products from villages into the cities, and the downward movement of industrial products into villages and households. Solving these two major problems will not only improve the lives of the people, but also promote agricultural production. These facilities are our next priority. At the same time, we will improve the level of public services in rural areas, strengthen improvements to rural governance, improve social etiquette and civility in villages, and strive to further advance cultural and ethical progress. After a period of hard work, the look of the countryside will change both inside and out. Thank you.

Phoenix TV:

Some media outlets have stated that China's current poverty alleviation standards are lower than the standards set by the World Bank. What are your thoughts on this? Thank you.

Wang Zhengpu:

This is a frequently asked question, and I noticed that many reporters also asked this question during the sessions of China's top legislature and top political advisory body held this March. The spokespersons of the two sessions have already answered it many times. Since you're asking again today, let's allow Mr. Hong Tianyun, deputy head in charge of the matter, to answer your question.

Hong Tianyun:

Thank you very much. The determination of national standards based on the national economy, the level of social development and the basic living needs of the poor population have been consistent and ongoing practices in China since the implementation of the large-scale, planned and organized poverty alleviation program. China first formulated poverty alleviation standards in 1986. The standard at that time was 206 yuan, and the corresponding number of people living in poverty was 125 million. The priority was to solve the problem of food and clothing. The second time was when the country's first 10-year Outline of Development-driven Poverty Alleviation in Rural Areas was formulated in 2001, when the standard was raised to 865 yuan, corresponding to 94.23 million poor people. The third time was the formulation of the China's second 10-year Outline of Development-driven Poverty Alleviation in Rural Areas in 2011. The standard was raised again to 2,300 yuan, which was based on the 2010 constant price, corresponding to 122 million poor people.

Since the poverty alleviation work began, the identification and alleviation of the poor population in China have been based on the unit of households. The measurement standard is "one income, two no-worries and three guarantees," which is easy for grassroots and frontline officials and people to remember. What are the identification standard and poverty alleviation standard? They are these "one," "two," and "three." The "one income" refers to the annual per capita net income stably exceeding the current national poverty alleviation standard, which is 2,300 yuan as I just mentioned, with the current amount being about 4,000 yuan by 2020. The "two no-worries" and "three guarantees" refer to stable realizations of "no worries about food" and "no worries about clothing," as well as guarantees on "compulsory education," "basic medical care" and "housing safety." In the specific implementation process, the guarantee of the safety of drinking water is also included. The standard for the lifting of the poor population out of poverty in China is a comprehensive multi-dimensional standard, which not only considers income, but also the realization of poor people's rights to live and to develop. On the whole, it is higher than the extreme poverty standard of the World Bank, and also higher than the absolute poverty line determined by the 2030 Agenda for Sustainable Development set by the UN in 2015. It reflects the reality of China's socio-economic development and the basic requirements for building a moderately prosperous society in all aspects.

I would like to share a statistics report. By the end of 2020, the net income per capita of China's registered poor population reached 10,740 yuan, far exceeding the international extreme poverty standard. Next, in accordance with the relevant requirements and arrangements of the CPC central committee and the central government on effective connection between consolidating and expanding the results of poverty alleviation and rural vitalization, we will maintain the overall stability of the existing policies, support and further help areas and people lifted out of poverty; continue to support the development and growth of industries of rural characteristics in poverty-alleviation areas; promote stable employment for people who have escaped poverty; provide solid follow-up support for people relocated from inhospitable areas; ensure stable and continuous income growth for people lifted out of poverty; and move toward the goal of gradually realizing common prosperity for all. Thank you.

Yomiuri Shimbun:

China's goal is to achieve more obvious substantive progress for the common prosperity of everyone by 2035. In order to achieve this goal, it is essential to increase the income of farmers and develop rural areas. What kind of policies and measures will the National Administration for Rural Vitalization adopt? Thank you.

Hong Tianyun:

Thank you. The topic of rural vitalization is very popular today, and my colleagues have responded from different angles and aspects. By 2035, we will make more obvious substantive progress in achieving common prosperity for everyone as a mid- to long-term strategic goal set by the CPC and the central government. Rural vitalization involves a wide range of areas. It is a long-term and arduous task. It needs to bring together the powerful forces of the whole Party and all aspects of society to promote its implementation, and requires coordinated operations and joint advancement by all regions and departments. There is an old saying in China: "When everyone helps gather firewood, the flames rise high." I hope everyone will work together to promote, support and participate in this work.

We are duty-bound to promote rural vitalization in an all-round way. The administration for rural vitalization will work with relevant departments to further promote the implementation of various measures. At the same time, we must focus on the key points. Regarding the increase in farmers' income, this will mainly be achieved by developing industries, promoting employment, and continually increasing farmers' operating income and wages. This is the main source of income for rural people in China, and we must make great efforts to do it well. Regarding the development of rural areas, the next step is to start implementing rural construction activities, vigorously implement rural infrastructure construction, continuously improve the level of public services in rural areas, and promote the development of urban and rural integration. Meanwhile, we will continue to strengthen rural governance, promote the development of rural social undertakings and rural culture, further advance cultural and ethical progress, and continuously improve the level of good governance in rural areas. Our country is very large, and the differences among provinces, regions and municipalities are relatively big. East China is one step ahead, and there are many mature and successful experiences. The central and western regions are doing relevant work in a concrete, detailed and competent manner through studying and promoting these experiences.

China Daily:

We know that the National Administration for Rural Vitalization has already been established. We are very curious about how it operates. Could you please introduce it? My second question is: Now that the country's "No. 1 central document" for 2021 requires a rural construction action plan to be launched this year, what priorities do you have for implementation of the first year of the plan? Thank you.

Wang Zhengpu:

I know you all have a keen interest in knowing more about our rural vitalization work as well as the National Administration for Rural Vitalization. After the victory in the battle against poverty is complete, the focus of work related to agriculture, rural areas, and rural people will be shifted to comprehensively promoting rural vitalization. As a result, some adjustments will be made to the relevant institutions. The central government has decided that the Central Leading Group for Rural Affairs will undertake the functions of the former State Council Leading Group of Poverty Alleviation and Development and the State Council Leading Group Office of Poverty Alleviation and Development will be restructured to become the National Administration for Rural Vitalization. The Administration now falls under the Ministry of Agriculture and Rural Affairs and is mainly in charge of consolidating the achievements of poverty elimination and coordinating all concrete activities to implement the rural vitalization strategy.

As we shift our focus from poverty alleviation toward comprehensively promoting rural vitalization, our work will target a broader group, cover more areas, and meet higher standards. The task of comprehensively implementing the rural vitalization strategy is not second to the fight against poverty in depth, breadth, and difficulty. I may say that departments related to rural vitalization work shoulder major responsibilities and have a lofty mission to perform. We will further enhance the sense of responsibility, perform our duties strictly as the National Administration for Rural Vitalization, continue to promote the spirit of fighting poverty and achieve new victory on a new journey toward rural vitalization.

We are now carrying out overall planning for the rural vitalization work. I hope that journalists and media will provide support and assistance for our work. Also, we welcome your supervision. Let us join hands and create synergy in promoting the healthy development of China's rural affairs. 

The nature, main content, and main targets of the rural vitalization strategy are clearly defined. We take the strategy as a key driver in work related to agriculture, rural areas, and rural people in the new era. Its main content includes vitalization in five areas, namely industrial vitalization, talent vitalization, cultural vitalization, ecological vitalization, and organization vitalization. The strategy's overall goal is also clear, that is, to build rural areas with thriving businesses, pleasant living environments, social etiquette and civility, effective governance, and prosperity. We also set clear phased goals for rural vitalization in 2025, 2035, and 2050. Meanwhile, there will be some specific targets set by each Five-Year Plan that will promote step-by-step rural vitalization. China is a vast country with a huge population, and local conditions vary greatly from region to region. Local authorities have their specific goals, measures, and means in promoting rural vitalization. We believe that under the general goal set at the central government level, local authorities will surely meet their set targets at every stage through constant exploration and efforts. 

As for your second question, the rural construction work is now progressing steadily. The main target of the work is to upgrade existing infrastructure facilities. During its fight against poverty, the country has input a large amount of manpower, material, and funding to step up the development of infrastructure facilities in impoverished areas. So far, great improvements have been made and witnessed by all regarding roads, water supply, telecommunication facilities, and other village-level public infrastructure facilities in impoverished areas.

The next target for us to work toward is the further promotion of rural construction. The other speakers also talked about this topic just now. For example, roads should be extended to reach village communities and households. Some special roads for industry or tourism should also be further extended. A large number of existing infrastructure facilities need to be upgraded and constant efforts should be made in this regard. Furthermore, we will step up the improvement of rural living environments by upgrading toilets, sewage treatment systems, and the domestic garbage collection and transfer system. Statistics show that 68% of rural populations now have access to sanitary toilets and nearly 90% of domestic garbage undergoes centralized treatment. Now, our greatest weakness lies in domestic sewage treatment in the rural areas and we have invested heavily in this area. Currently, local authorities have been dealing with this problem in different ways, such as connecting with the sewage system in cities and building independently operating sewage treatment facilities, as well as other local approaches. All in all, I believe that the rural construction action plan will surely make new progress with the constant efforts made by local authorities. 

The rural vitalization strategy has attracted wide attention and concern from all sectors of society since the concept was first raised at the 19th National Congress of the Communist Party of China. We hope that journalists attending this press conference will help publicize the positive approaches adopted by local authorities so that they can learn from each other and jointly promote the healthy development of rural vitalization work. Thank you.

Tang Renjian:

I would like to add something. There are three institutions in charge of the rural vitalization work, namely the Office of the Central Leading Group for Rural Affairs, the Ministry of Agriculture and Rural Affairs, and the National Administration for Rural Vitalization. Among them, only the last institution's name reflects its role in promoting rural vitalization. In the future, the Office of the Central Leading Group for Rural Affairs and the Ministry of Agriculture and Rural Affairs will study and promote the establishment of laws, regulations, plans, strategies, and major policies on rural vitalization, so as to perform their functions from different perspectives and levels. Thank you. 

Chen Wenjun:

Thank you, speakers, and many thanks to journalists. Today's press conference is concluded. See you next time.

Translated and edited by Zhang Liying, Guo Yiming, Gong Yingchun, Liu Jianing, Zhu Bochen, Xu Xiaoxuan, Yuan Fang, Chen Xia, Wang Yanfang, Zhou Jing, Li Xiao, Li Huiru, Fan Junmei, Liu Qiang, Zhang Rui, Wang Qian, Wang Yiming, Yang Xi, David Ball, Jay Birbeck, Tom Arnstein and Geoffrey Murray. 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 Guiping, deputy governor of the People's Bank of China (PBC)

Wang Xin, head of the Research Bureau at the PBC

Sun Guofeng, head of the Monetary Policy Department at the PBC

Zou Lan, head of the Financial Market Department at the PBC

Chairperson:

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

Date: 

April 1, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office (SCIO). The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) established a comprehensive overall plan for coordinated regional development, and the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 also reflected the guiding principles of the session. The finance sector plays a crucial role in promoting coordinated regional development under the new development paradigm. Today, we have invited Mr. Liu Guiping, deputy governor of the People's Bank of China (PBC) to brief the media on relevant issues and field questions. With us, we also have department heads from the PBC, including Wang Xin, head of the PBC's Research Bureau; Sun Guofeng, head of the Monetary Policy Department; and Zou Lan, head of the Financial Market Department.

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

Liu Guiping:

Ladies and gentlemen, friends from the media, good afternoon. The fifth plenary session of the 19th CPC Central Committee clearly proposed accelerating the construction of a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. This is a major decision made by the CPC Central Committee with Comrade Xi Jinping at its core, after evaluating the situation based on the changes in China's development stage, environment and conditions, as well as changes in its comparative advantages in particular.

The conditions necessary for achieving smooth economic circulation are the matching of supply and demand, coordination between regions as well as between urban and rural areas, and domestic and international circulations reinforcing each other. Among these, promoting coordinated regional development is an important foundation for accelerating the fostering of a new development paradigm, which ensures social harmony, political stability and sustainable economic development. During the 13th Five-Year Plan period (2016-2020), the PBC adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implemented the decisions of the CPC Central Committee and the State Council, and followed the new development philosophy. Working with other relevant departments, we have improved the regional financial policy system, actively provided financial support for the country's major regional development strategies, and continuously enhanced regional development coordination.

First, we have developed a dialectical approach to thinking and promoted regional economic planning featuring complementary advantages and high-quality development. General Secretary Xi Jinping has emphasized on several occasions that imbalances are common, and we should pursue a relative balance between regions — this is a dialectical approach to coordinated regional development. On one hand, serving the implementation of China's major regional development strategies, the PBC has given full play to the functions of the central bank, and deployed financial vehicles to support coordinated development in the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta, ecological protection and high-quality development in the Yellow River basin, and the construction of the Chengdu-Chongqing Twin City Economic Circle. We have guided financial institutions to improve financial service innovation, and promoted leveraging the role of city clusters in driving growth. On the other hand, we have flexibly tapped into monetary and credit policy tools, made full use of financial technology, and actively carried out pilot programs for the reform and innovation of modern inclusive finance and green finance, built and improved a modern inclusive financial system and green financial system, and guided rural areas and underdeveloped areas to make up for their weaknesses, and promoted green, low-carbon and high-quality economic development.

Second, we have adhered to a problem-oriented approach, formulated differentiated policies tailored to local conditions, and provided category-specific guidance. According to the characteristics and comparative advantages of different regions, targeted pilot regional financial reforms have been carried out. Positive results have been achieved in fields such as inclusive finance, green finance and science and technology finance, giving rise to a set of practices that can be applied in other areas.

Third, we have taken into account both domestic and international dynamics and leveraged these two markets and resources. The pilot free trade zones are pacesetters of reform and opening up in the new era, and testing grounds for a high level of financial openness, which serve as a platform for tapping into both domestic and international resources. Among the 21 pilot free trade zones and Hainan Free Trade Port approved by the State Council, financial liberalization and innovation is one of the highlights, covering important elements such as the facilitation of cross-border investment and financing, the optimization of financial institutional arrangements and the innovation of cross-border financial services.

Next, the PBC will actively implement the guiding principles of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. As China enters a new development stage, we will follow a new development philosophy, foster a new development paradigm and pursue higher-quality growth. We will continue to bolster financial support for coordinated regional development, and advance regional financial reforms with distinctive features.

First, we will continue to increase financial support for the country's major regional development strategies. In accordance with local conditions, financial support will continue to be provided to promote the implementation of various strategies, including coordinated development in the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta, ecological protection and high-quality development in the Yellow River basin, and the construction of the Chengdu-Chongqing Twin City Economic Circle. We will enhance the quality and effectiveness of financial services for the real economy and coordinated regional development.

Second, we will continue to make overall planning and work on pilot zones for regional financial reform. Financial reform and innovation with regional characteristics will be strengthened. We will select eligible areas to promote pilot projects covering such areas as technology innovation finance, inclusive finance and green finance, and explore effective ways of providing financial support for high-quality development such as scientific and technological innovation, rural vitalization and green development.

Third, we will continue to promote financial liberalization and innovation in the pilot free trade zones and promote domestic and international circulations reinforcing each other. Starting from serving the real economy and promoting the liberalization and facilitation of trade and investment, we will focus on providing financial support for the construction of pilot free trade zones and free trade ports, promote the full implementation of the system combining pre-establishment national treatment and a negative list, and strive to achieve a high level of opening up. Thank you everyone.

Chen Wenjun:

Thank you, Mr. Liu. The floor is now open for questions. Please state the name of your news outlet before asking your questions.

CCTV:

In recent years, PBC has carried out a series of pilot programs on regional financial reforms, – covering key fields such as green finance and inclusive finance – in the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta and other hotspot areas. What progresses have been made in these pilot programs? What experience did you gather that can be rolled out across the country? Thank you.

Liu Guiping:

Thanks for your questions. I gave a brief introduction previously, and would like to introduce some details now.

As China's central bank, PBC always follows the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the major decisions and plans of the CPC Central Committee and the State Council. In accordance with the needs of macro-economic development and deployments of regional development strategy, we promote relevant works in accordance with our functions as the central bank.

I have just introduced several major strategies regarding regional development, and perhaps you may have noticed that the order in which I said them is the order of several major strategies deployed by the Party Central Committee and State Council, including the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, the integration of the Yangtze River Delta, the ecological protection and high-quality development of the Yellow River Basin, and the Chengdu-Chongqing Twin City Economic Circle. I'd like to introduce our works on pushing forward regional development from the perspective of the five development philosophies stressed by General Secretary Xi Jinping.

First, we implemented the philosophy of innovative development. We have promoted the reform and innovation of sci-tech innovation finance and actively explored an effective model for finance to support science and technology innovation. For example, we explored six special development models at East Lake High-tech Development Zone in Wuhan city, with the aim of building investment and financing channels to serve the whole life cycle of science and technology enterprises. The development models include institution establishment, operational mechanisms, financial products, information platforms, direct financing and financial supervision. All the experience we learned has been spread across the country.

Second, we implemented the philosophy of coordinated development. We actively promoted and supported major strategies for regional development. For example, we accelerated the building of Shanghai into an international financial center and high-quality and integrated development of the Yangtze River Delta, so as to give full play to the leading role of Shanghai as an international financial center. We made great progresses in streamlining administration, delegating power, improving regulation and upgrading services of the finance industry, coordinating supervision of credit agencies, and sharing economic and financial information. At the same time, when providing financial services for the construction of Guangdong-Hong Kong-Macao Greater Bay Area, we innovated cooperation models between the Chinese mainland and Hong Kong and Macao, and promoted cross-border mobile payment facilitation, trials of account opening witness service and cross-border purchase of wealth management products by residents in the Guangdong-Hong Kong-Macao Greater Bay Area – which is now in the process of moving forward. We also upgraded financial services in the area, and achieved positive results in finance related to people's livelihoods, facilitation of cross-border investment and financing, and financial market connectivity.

Third, we implemented the philosophy of green development. We propelled the construction of pilot zones of reform and innovation of green finance in six provinces and regions. The six provinces and regions are Zhejiang, Jiangxi, Guangdong, Guizhou and Gansu provinces and Xinjiang Uygur autonomous region. By the end of last year, the loan balance of green finance in these six provinces and regions reached 236.83 billion yuan, accounting for 15.1% of their total loan balance, and 4.3 percentage points higher than the national average. Bond balance of green finance in these places reached 135 billion yuan, up 66% year-on-year. Ganzhou New Area in Jiangxi province successfully issued the country's first authenticated green municipal special bond. Huadu district in Guangzhou developed several financial products such as carbon emissions rights mortgage and pledge financing.

Fourth, we implemented the philosophy of open development. We advanced financial opening and innovation in free trade zones, and forged a new paradigm of financial innovation. At present, there are 21 free trade zones throughout China. The experience we have spread across the country include more than 10 new businesses of local and foreign currency, such as macro-prudential management of full-diameter cross-border financing with the integration of local and foreign currencies; cross-border two-way RMB capital pool of transnational enterprises and groups; and simplified RMB settlement process for regular and direct investments.

Fifth, we implemented the philosophy of shared development. We promoted reform and innovative trials for inclusive finance and micro-finance, and significantly improved the coverage and accessibility of financial services. Taizhou city in Zhejiang province and Lankao county in Henan province solved issues relating to agriculture, rural areas, and rural people, information asymmetry and difficulties faced by small and micro-businesses in accessing affordable financing by making good use of financial technology. Taizhou has earned experience in financial services for small and micro-enterprises by focusing on real entities, services for small and micro-enterprises, and utilizing an accurate supply and stable operation. Lankao explored a new development model of inclusive finance with digital service platforms as the core. Thank you.

China Financial and Economic News:

Accelerated constructionof Shanghai as an international financial center and the integrated development of the Yangtze River Deltaregion are major development strategies established by the CPC Central Committee. What has the People's Bank of China (PBC) done in this regard? Thank you.

Liu Guiping:

Thank you for your question. Mr. Wang will answer this question.

Wang Xin:

Thank you for your question. Shanghai and the Yangtze River Delta area are the regions with the most dynamic economy, the highest level of development and the highest degree of opening-up in China. Accelerating Shanghai's development as an international financial center and providing sound financial support for the integrated development of the Yangtze River Delta region are important measures in creating a new highland of high-level opening-up. Last February, when Chinese society was hit hard by the epidemic, upon the approval of the State Council, the PBC, along with the China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commision (CSRC), State Foreign Exchange Administration (SAFE) and Shanghai Municipal People's Government, released the Opinions on Further Accelerating the Development of Shanghai as an International Financial Center and Providing Financial Support for the Integrated Development of the Yangtze River Delta Region. This is a major document, which lays out 30 specific measures covering all aspects of financial reform and opening-up. Some of the key points and highlights include increasing the green assets allocation of financial institutions, since it is very important at present for these institutions to increase green financial assets, fulfill their social responsibilities, and make sustainable investments. The Opinions also promotes the integrated establishment of green financial service platforms and the integrated development of credit investigation in the Yangtze River Delta region, which as a basic task, is essential for unified economicand financial development in the region. The Opinions also states that an inclusive financial index system and an alternative dispute resolution mechanism for financial consumption disputes should be set up in the region. In addition, Shanghai and the Yangtze River Delta region, with their relatively developed finance and science and technology, lead the country with regard to science and technology innovation. For example, in terms of getting listed on the Science and Technology Innovation Board, or STAR Market, be it the enterprises applying for listing or enterprises finally getting listed on the Market, enterprises from the Yangtze River Delta region account for nearly 50% of the country's total. Such a large proportion shows us the importance of the economy and finance of the region, including Shanghai.

Next, the PBC will continue to promote implementation of the Opinions, and many measures in it need our increased efforts to be carried out more quickly. We will step up efforts to further the development of green finance, integration of credit investigation, and establishment of an inclusive financial index system and an alternative dispute resolution mechanism for financial consumption disputes in the Yangtze River Delta region to promote the region's integrated development. Thank you.

Market News International:

How will the central bank solve the problem of unbalanced distribution of credit resources among different regions? In addition, medium- and long-term loans to enterprises in China continue to rise, while investments in the manufacturing sector remain sluggish. What is the main reason for this and how can the issue be dealt with?

Liu Guiping:

Thank you for your questions. Mr. Zou will answer this question.

Zou Lan:

Thank you for your questions. We have also noticed that investments in manufacturing have been sluggish. Investments in the manufacturing sector fell by 2.2% year-on-year in 2020, for which we think there are many reasons. First, affected by the external economic environment and the COVID-19 pandemic, the liquidity of manufacturing enterprises was strained and so loans were mainly used to meet the liquidity demand. The enterprises' investment ability and confidence need to be restored.

Second, it is related with adjustments to the industrial structure. With the strong support of national policies, investments in high-tech manufacturing industries have grown rapidly, but the proportion of these industries in the whole manufacturing sector remains relatively limited.

Third, as manufacturing enterprises turn to an assets-light strategy, their investment needs have shifted. These enterprises have begun to lease, instead of purchase, plants and equipment, and the new business model of shared manufacturing is making gradual progress, which has caused relatively big changes in the enterprises' investment demands. To support the high-quality development of the manufacturing industry, the PBC, following the arrangements of the CPC Central Committee and the State Council, has strengthened macro-prudential assessment, enhanced policy coordination and cooperation, and taken multiple measures together with other financial departments in recent years, which have promoted the substantial growth of medium- and long-term loans in the manufacturing industry. At the end of this February, the medium- and long-term loan balance of the manufacturing sector stood at 5.62 trillion yuan, up by 38.8% year-on-year and registering an increasing growth rate for 16 consecutive months, reversing the previous sluggish growth rate. Financial support for the manufacturing industry is paying off, and we believe this can drive investment in manufacturing to some extent.

We have also noticed the problem of unbalanced credit supply in different regions. We are analyzing the relevant issues and will take appropriate measures to solve the issue. Thank you.

Jiemian News:

The fifth plenary session of the 19th CPC Central Committee proposed establishing a modern central banking system. The modern monetary framework is an important part of modern central banking system. What aspects are the PBC considering for improving the modern monetary framework to support high-quality development during the 14th Five-Year Plan period? Thank you.

Liu Guiping:

Thank you for your question. I'd like to invite Mr. Sun Guofeng to answer this question.

Sun Guofeng:

Thank you for your question. The fifth plenary session of the 19th CPC Central Committee proposed that the 14th Five-Year Plan set the promotion of high-quality development as its theme. As such, the currency value must be kept stable and a sound monetary and financial environment can be provided for high-quality development. The monetary policy should be in accordance with the ultimate target stipulated by the Law of the People's Bank of China, which is "maintaining the stability of the currency value and thereby promoting economic growth." Keeping the currency value stable has both internal and external meanings. The internal meaning is to maintain price stability and to manage liquidity well. The annual Central Economic Work Conference in 2020 and the Outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-Range Objectives Through the Year 2035 clearly state that the intermediate goal of monetary policy is maintaining the growth rate of money supply, and social financing basically matching the nominal economic growth rate, thus specifying the "anchor" of the monetary policy framework. In recent years, the PBC has promoted the quoted interest rate in the loan market, which is the loan prime rate (LPR) reform, and the transmission efficiency of monetary policy has been significantly improved. As the benchmark rate in the credit market, LPR has played an important role in adjusting credit supply and demand, thereby affecting the money supply. Maintaining LPR at a reasonable level is conducive to stabilizing the "anchor" of the money supply. Therefore, LPR is not only an important part of the market-based interest rate formation and transmission mechanism, but also a key component of the money supply control mechanism. LPR is formed based on policy rate quotes. By improving the policy rate system which employs the open market operations (OMOs) rate as the short-term policy rate and employs the medium-term lending facility (MLF) rate as the medium-term policy rate, the PBC has guided the market rate represented by DR007 to hover around the policy rate. The PBC has also improved the market-based interest rate formation and transmission mechanism from policy rate to LPR to the effective interest rate on loans, and by joining with improvements on money supply control mechanism as an organic whole, it has established the modern central banking system.

The external meaning of maintaining currency value stability is to keep the RMB exchange rate basically stable at an appropriate and balanced level. As such, it is necessary to enhance the RMB exchange rate flexibility, strengthen the macro-prudential management of cross-border capital, guide social expectations, and strike a balance between internal and external equilibriums. Thank you.

Hong Kong Economic Herald:

What is the progress of the cross-border digital currency project being jointly promoted by the PBC and the Hong Kong Monetary Authority? During the 14th Five-Year Plan period, what measures will the central bank take to support Hong Kong in consolidating its position as an international financial center? Thank you.

Liu Guiping:

Mr. Wang Xin will answer this question.

Wang Xin:

Thank you for your question. China's digital renminbi (RMB) is mainly designed for domestic retail payments. However, when the conditions are suitable, if there is such a demand in the market, the use of digital RMB for cross-border transactions can also be accomplished. In the early stages, the PBC's digital currency research institute and the Hong Kong Monetary Authority (HKMA) conducted technical tests on the cross-border use of digital RMB in the mainland and Hong Kong, which was a routine R&D test for the RMB pilot. The digital RMB is being tested in several regions and scenarios across China, including at the Winter Olympic Games. There have been more and more diverse test scenarios for the digital RMB. At the same time, we have also been working with the HKMA to carry out certain technical tests on its cross-border use. Recently, with the support of the Bank for International Settlements' Innovation Hub Hong Kong Centre, the PBC's digital currency research institute and the HKMA, the Bank of Thailand and the United Arab Emirates have jointly initiated a research project on multilateral central banks' digital currency bridges, which aims to explore the use of distributed ledger technology to realize round-the-clock simultaneous settlement in cross-border transactions of central bank digital currency pairs, that is payment-versus-payment (PvP) link. Central bank digital currency has been a hot topic internationally. Many central banks have been conducting research and explorations, and similar cooperation projects have been carried out between different central banks. So, the PBC has also been exploring the feasibility of digital RMB. Thank you.

Yicai: 

From the latest meeting of the Federal Reserve, we can see that their monetary policy seems to be a little bit dovish, but U.S. bond yields continue to climb, and inflation expectations in the U.S. are also very strong. Now many analysts think that the Federal Reserve will raise interest rates or reduce its balance sheet in advance. Some worry that there may be spillover effects. What will be the effects? What's your opinion on that? Thank you.

Liu Guiping:

Thank you for your question. This question draws wide attention nowadays. I will invite Mr. Sun to answer this question.

Sun Guofeng:

Thank you. In 2020, China was the only major economy in the world to register positive growth and one of the few major economies to adopt normal monetary policies, which not only advanced the global economic recovery but also supported the normalization of monetary policies of other major economies. We have noticed that the U.S. treasury yield increased to over 1.75%, which drove the appreciation of the dollar. The U.S. dollar index has risen by 3.6% since the beginning of this year. Affected by that, some emerging economies face rising risks in repaying debts and refinancing. The pressure of currency devaluation amounts. Some economies raise their interest rates and fluctuations occur in the financial market. China has always stuck to normal monetary policies. From February to April last year, we took rather strong measures in response. After May of 2020, the monetary policies returned to normal, which greatly bolstered anti-epidemic prevention and control, and social and economic development, while not resorting to a deluge of excessive stimulus policies. We can see that China's national debt yield has remained stable since the recovery, and the free floating of renminbi exchange rate has become a normality, which serves as an automatic stabilizer for the macro economy and international balance of payment. Therefore both the massive monetary stimulus measures introduced by the Fed last year and future adjustments to monetary policy by the Fed will have relatively little impact on China's financial markets. In fact amidst the recent sharp volatility in global financial markets, especially in emerging economies, China's financial markets are running smoothly, the RMB exchange rate is floating freely and the 10-year Treasury yield is currently around 3.2%, which is still lower than the previous period. The positive effects of China's normal monetary policies have been delivering results. As the next step, the key is to get our own affairs in order. We will adopt stable monetary policies, retain our focus, and cherish the space for normal monetary policy. Meanwhile, we will keep a close eye on changes to the international economic and financial situation, increase the exchange rate's flexibility, coordinate international macro policies in line with China's conditions, and maintain a good macro policy leadership posture. We are pleased to see other economies seeking to return to normal monetary policy, which is beneficial to the long-run sound development of global economy. Thank you.

CNBC:

I have two questions. My first question is regarding real estate debt and the stock market. Which represents the bigger financial challenge and what measures will be taken? The second question is about the digital currency issued in Beijing and Chengdu this year. What achievements have been made and what adjustments are needed? Thank you.

Liu Guiping:

Thank you for your question. The first question concerning challenges and relevant markets goes to Mr. Zou. The second question regarding digital currency goes to Mr. Wang.

Zou Lan:

Thank you for your question. Over the past three years, according to the decisions and arrangements of the CPC Central Committee and the State Council, under the coordination of the Financial Stability and Development Committee under the State Council, the financial system has fully enforced all tasks and plans in the critical battle to forestall and defuse financial risks, and achieved results in the current stage. On the whole, the risks of the financial system have tended to shrink. China's financial risks are accumulated over many years and caused by systematic, mechanistic, cyclical and behavioral factors. Currently, the macro environment remains complex and severe, and the fluctuations of international capital flow are large due to the uncertainty brought by the epidemic. Shocks overseas cause fluctuations in the domestic financial market. The stock market, bond market, and bulk commodities market are exposed to the risks of oscillation. A small number of large-scale enterprise groups are still in a period of risks being exposed. Middle and low-quality enterprises still have difficulties in financing and the debt default risk is relatively high. The upward pressure on property prices is still large in some popular cities. Potential risks such as debt default among highly-leveraged medium- and small-sized real estate enterprises worth watching.

Facing the risks, in the next stage of normalizing the forestalling and defusing of financial risks, the financial management department will focus on key sectors and resolve existing risks. We will also improve mechanisms and systems, and perfect the financial risk prevention system and early warning system, to increase the activeness and foreseeability in financial risk prevention and control with a holistic view. We will resolutely guard against systemic risks to provide a good financial environment for sustained economic recovery and high-quality development.

Thank you.

Wang Xin:

The market has a great deal of interest in the digital RMB, and there is a great deal of concern. On the one hand, this has to do with the fact that more and more central banks around the world are getting involved in developing their own digital currencies. On the other hand, it may also be related to the jump in the prices of Bitcoin some time ago. The People's Bank of China has steadily promoted research, development and testing of the digital RMB, with more and broader test regions and test scenarios, and accumulated good experience. Generally speaking, the feedback from participating institutions and participating localities has been positive. For instance, the digital RMB red envelope during the Spring Festival was a good example. The digital RMB is getting closer to us, and we need to further enrich relevant scenarios and accumulate more experience. Next, we will further promote the digital RMB pilot programs and gather more experience. Thank you.

Bloomberg:

I have two questions and the first is regarding foreign outflows. As U.S. Treasury yields keep rising, is China worried about capital withdrawals of foreign and domestic investors from China's capital market? And do you have a response plan for this? Secondly, the Chinese government proposed reducing the government's leverage ratio. How does the monetary policy support this goal? Thank you.

Liu Guiping:

For these two questions, I will ask our two directors to answer separately. Regarding considerations about the impact of the reduction in the yields of treasury bonds on our entire market, Mr. Zou Lan, head of the Financial Market Department of the PBC, can you please answer it? Mr. Sun Guofeng from the Monetary Policy Department of the PBC can answer the latter question.

Zou Lan:

With regard to the bond market, we have been paying close attention to the operation of the bond market, including the situation of foreign investors investing in the Chinese bond market, as it continues to open up. Over the past few years, China's bond market has developed relatively quickly, with the balance reaching 118 trillion yuan at the end of February, ranking second in the world in terms of scale. China has a variety of bond varieties and also has complete trading tools, with expanding market depth and scale. Amid furthering opening up to the outside world, we have continuously improved the trading and settlement mechanisms of the bond market while drawing on rules of the international market. This has provided a more friendly and convenient investment environment for overseas investors.

Therefore, based on this situation, we feel that China's bond market still shows strong resilience and certain risk-aversive characteristics. From the data, we also observed that by the end of February, the scale of domestic bonds held by foreign institutions had reached 3.7 trillion yuan, a year-on-year increase of 62%. Overseas investors are mainly mid-to-long-term portfolio investors such as central banks and sovereign funds, so their holdings of Chinese bonds are relatively stable. In addition, the proportion of foreign investors' holdings in the bond market isn't high, and is now 3.1%, which is still relatively low compared with mature international markets.

We think that precisely because of these characteristics, FTSE Russell finally confirmed that China's bonds will be included in the FTSE World Government Bond Index (WGBI) a few days ago. Next, we will actively improve relevant policies and systems, and continue to promote the opening up of the bond market. That's my answer, thank you.

Sun Guofeng:

Let me answer the second question. When I introduced the framework of modern monetary policy, I talked about the 2020 Central Economic Work Conference, the Outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-Range Objectives Through the Year 2035. It is clear that the intermediate goal of monetary policy is to ensure that the growth rate of money supply and the scale of social financing basically tally with the growth rate of the nominal economy. This is an anchor of the monetary policy framework. We should see that trend of the growth rate of money supply and the scale of social financing and the growth rate of debt are basically the same. Therefore, this anchoring method of the monetary policy framework actually embeds the mechanism of stabilizing the macro leverage ratio into the monetary policy framework, which is a manifestation of the cross-cycle policy design concept proposed by the fifth plenary session of the 19th CPC Central Committee, and conducive to achieving the long-term balance of stable growth and risk prevention. That is to say, if monetary policy achieves the intermediate goal and keeps the growth rate of the money supply and the scale of social financing basically matching the nominal economic growth rate, the macro leverage ratio can be basically maintained. Thank you.

Red Star News:

Chengdu and Chongqing are currently accelerating the construction of a financial center in western China. In the next step of regional financial reform, will the People's Bank of China make new arrangements for the Chengdu-Chongqing Twin City Economic Circle? Will there be regional financial policy support? At the same time, I have also paid attention to the recent exposures of consumer loan variants such as the "betrothal gift loan" and the "cemetery loan" by small and medium-sized banks. Will the central bank regulate the behavior of small and medium-sized banks and how will they be regulated? Thank you.

Liu Guiping:

In fact, you have also raised two questions. The first question is about the certain considerations on the construction of the Chengdu-Chongqing Twin City Economic Circle. I will invite Mr. Wang Xin to answer it. The latter one is also a recent hot topic, involving some views on the innovation of related credit products. I will ask Mr. Zou Lan to answer it.

Wang Xin:

Thank you for your question. The construction of the Chengdu-Chongqing Twin City Economic Circle is a major strategic deployment made by the CPC Central Committee with Comrade Xi Jinping at its core. It is a major regional development strategy. Deputy Governor Liu also just introduced a number of major regional development strategies, including the Guangdong-Hong Kong-Macao Greater Bay, the Yangtze River Delta, the Beijing-Tianjin-Hebei region, and the Xiong'an New Area. The Chengdu-Chongqing Twin City Economic Circle is another major regional development strategy, that is of great significance for further promoting the development of western China, and accelerating the economic and financial development of the western region. The People's Bank of China has done a lot of work in the building of the Chengdu-Chongqing Twin City Economic Circle. According to the deployment of the CPC Central Committee and the State Council, the central bank actively participated in the drafting and compilation of the outline for the construction of the twin-city economic circle in Chengdu-Chongqing region, and the in-depth research on financial-related issues. At the same time, we are now working with relevant departments, as well as those of Sichuan province and Chongqing municipality, to further study the major strategic deployment of financial support for the Chengdu-Chongqing Twin City Economic Circle and support for Chengdu and Chongqing to jointly build a western financial center. Chongqing and Chengdu have different development characteristics, and each has its own characteristics in terms of finance. Therefore, when we research and formulate financial support policies, we will give better play to their respective characteristics on the basis of commonality and integrated development. We will further explore innovative measures for financial reform and opening up, and better promote the development of the Chengdu-Chongqing Twin City Economic Circle. Thank you.

Zou Lan:

I will answer your second question. Loans for "engagement gifts" and "graveyard purchase" have caused a stir. We believe that some banks, under the banner of so-called financial innovation, are challenging social pain points, leading people to over-indebtedness, touching the bottom line of public order and good morals, and detracting from the intended function of finance serving the real economy. These loans are in essence consumer loans, which are advertised to gain customers through the creation of gimmicks. It also reflects the lack of service capabilities of some small and medium-sized banks and some difficulties faced by financial development. Therefore, we should pay attention to the issue, even though it is caused by the behaviors of individual banks. We consider the issue from three aspects.

First, we will continue to supervise financial institutions to optimize their credit structure, focus on micro, small and medium-sized enterprises, and adhere to the duty of serving the real economy. 

Second, the PBC will continue to work with the CBIRC and some other government departments to supervise and guide the financial innovation of small and medium-sized banks and business services access. Under controllable risk and prudent regulation, the PBC will support financial innovations by banks and rectify illegal acts that are against the public order and good morals as well as major guidelines and policies.

Third, the PBC will take multiple measures to improve the abilities of small and medium-sized banks to serve the real economy and ensure that those banks have the capability, willingness and know-how to offer financial loans. This is my answer.

Liu Guiping:

I'd like to also add a few words. I am very grateful to our friends from the media for their supervision and reporting on financial services and innovation. It helps us keep abreast of relevant information to innovate products and provide high quality services for the real economy as well as for urban and rural residents. Thank you.

China Daily:

We are also concerned about financial support for the development of the real economy. Under the background of fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, what policies will financial supervision departments introduce to support high-end manufacturing? What new measures will be taken to promote the upgrading of the overall manufacturing level? Thank you.

Liu Guiping:

I will pass the question to Zou Lan, head of the financial market department at the PBC, to explain this for the journalist.

Zou Lan:

Thank you for your question. As we know, the manufacturing industry is the main body of national economy. Improving the strength of the manufacturing industry will lay an important foundation for fostering a "dual circulation" development paradigm. In line with the decisions of the CPC Central Committee and the State Council, the PBC and other financial supervision departments have taken multiple measures to fuel growth in medium and long-term loans in recent years, and I have just briefly introduced some new data.

The requirement to raise the proportion of loans to the manufacturing sector is clearly stated in this year's government work report. Next, we will carry out this requirement in three aspects:

First, we will urge and guide financial institutions to optimize the credit structure of the manufacturing industry, to clarify the objectives and tasks of "increasing the proportion of loans to manufacturing industries" and "maintaining a reasonable growth rate of medium and long-term loans to high-tech manufacturing industries." We will guide financial institutions to increase credit supply to high-tech manufacturing and strategic emerging industries, while also supporting the equipment renewal and technological upgrading in traditional manufacturing industries.

Second, we will improve financial services for high-tech manufacturing. We will guide financial institutions to develop skills of industry analysis and risk assessment in line with the features of the high-tech manufacturing industry such as light-assets, high intelligence, high-risk and high returns. We will boost their capacity to increase product and service innovation such as investment and loan linkage, intellectual property pledge loans and supply chain finance. We will optimize internal management mechanisms and channel more credit resources into the high-tech manufacturing industry.

Third, we will support financial services for enterprises and industries aiming for breakthroughs in key and core technologies. We will provide financial services for enterprises undertaking major national scientific and technological innovation tasks, while upholding market-oriented and law-based principles. Thank you.

Liu Guiping:

There is actually a big issue in the former part of your question just now. I did not miss it, so I had invited the head of the Financial Market Department to respond to it first. Regarding the PBC's policies on the regional development strategy and possible future ones, I will quickly brief you.

On one hand, we have introduced special financial policies to support regional development together with relevant government departments in accordance with the overall strategic arrangement of the CPC Central Committee and the State Council. The policies involve the coordinated development of the Beijing-Tianjin-Hebei region, the construction of the Xiongan New Area, the integrated development of the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the construction of Hainan Free Trade Port. On the other hand, we are working on policies to support the Chengdu-Chongqing Twin City Economic Circle in financial terms and their joint construction of a financial center in western China, together with relevant government departments. Related work is underway.

In short, the PBC will effectively perform its functions as the central bank in light of the country's established regional development strategy, and support and facilitate its implementation, both in accordance with the overall requirements of following a new development philosophy and fostering a new development paradigm to achieve high-quality development as China enters a new development stage. In particular, the PBC will effectively help foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, to benefit the Chinese people and the world more. Thank you.

CNR:

China has achieved positive results in building a green financial system since the 18th CPC National Congress, and is highly expected to fulfil the goal of peak carbon emissions and eventually achieve carbon neutrality. How will you help achieve that goal by better playing the role of green finance? Thank you.

Liu Guiping:

Thank you for your question. The PBC has always attached great importance to developing green finance and putting into action General Secretary Xi Jinping's thinking on promoting ecological progress and the concept of "lucid waters and lush mountains are invaluable assets." I mentioned some of our explorations in developing green finance when making the overall introduction, especially the pilot zones for green finance reform and innovation in nine localities of six provinces and autonomous regions. Since you asked about it, I would like to generally brief what we have done and what we will do.

Our work so far has mainly focused on the three major functions of finance in supporting green and low-carbon development: resource allocation, risk management, and market pricing. We have formed five pillars of green finance so far: a standard system of green finance, requirements for the supervision and information disclosure of financial institutions, a system of policy incentives and restraints, a system of green finance products and market, and international cooperation in green finance.

As the next step, in line with the peak carbon emissions and carbon neutrality targets set by General Secretary Xi Jinping during his participation in a relevant international event in September last year, we are taking the following measures.

First, we are putting in place the work to achieve peak carbon emissions and carbon neutrality, and carrying out carbon accounting step by step. One of the core, fundamental and difficult tasks is to explore the establishment of a national carbon accounting system. We have already started this work.

Second, we are strengthening the restraint mechanism based on information disclosure. We already issued a notice to the pilot zones for green finance reform and innovation, encouraging financial institutions to disclose environmental information. We also motivated listed companies, financial institutions, bond issuers, and key emission organizations to share environmental information with each other.

Third, we are playing the role of the market. A very important function of green finance out of the three as mentioned just now is price discovery. To realize this function, it is necessary to build a unified national carbon emission trading market. The market should embody more financial attributes, while finance supports and coordinates with the market.

Fourthly, with energy restructuring as the core, we will create carbon emission reduction policy support tools that directly reach the real economy. Our relevant departments and bureaus have already started to explore and study this area, and we will release relevant information to the public after yielding outcomes.

In addition, the PBC has launched a green financial performance evaluation of financial institutions in order to better promote the development of green finance. We are improving this evaluation system in the hope of establishing a better mechanism to promote financial institutions to support green and low-carbon development in an effective, strong and orderly manner, and to promote the achievement of peak carbon emissions and carbon neutrality.

Fifth, we will do a better job of risk prevention and control. We have decided to gradually incorporate climate change-related risks into the macro-prudential policy framework.

Sixth, we are further deepening international collaboration. China once again became the co-chair of the G20 Sustainable Finance Study Group this year. We will play this role and take the lead together with the U.S. Treasury Department to motivate the G20 to do more in sustainable finance. We will strive to work out a common green finance taxonomy together with the EU within the year. We will strictly control investment in new coal power projects overseas by further implementing the Belt and Road green investment principles. As you may have noted, China has the world's largest green loan balance and the world's second largest green bond market, and the quality is good, with not a single case of default so far.

Seventh, we are furthering pushing forward the construction of pilot zones for green finance reform and innovation. Besides those already constructed in nine localities of six provinces and autonomous regions, we will construct pilot zones in more localities to help realize the goal of peak carbon emissions and achieving carbon neutrality.

There are still many things that need to be done and many issues that need to be explored and studied in green finance. We will further strengthen international collaboration embodied with Chinese characteristics, and further put into action Xi Jinping's thinking on promoting ecological progress and fully implement the concept of "lucid waters and lush mountains are invaluable assets." Thank you.

Chen Wenjun:

Thanks to all our speakers and friends from the media. Today's press conference ends here.

Translated and edited by Xu Xiaoxuan, Zhou Jing, Yan Xiaoqing, Li Huiru, Liu Jianing, Fan Junmei, Wang Mengru, Liu Qiang, He Shan, Zhang Rui, Wang Qian, Zhang Jiaqi, Wang Wei, Wang Yiming, Yang Xi, Lin Liyao, 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:

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

Li Chuangjun, director of the New Energy and Renewable Energy Sources Department of the NEA

Li Fulong, director of the Development and Planning Department and spokesperson of the NEA

Huang Xuenong, director of the Electric Power Department of the NEA

Chairperson:

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

Date:

March 30, 2021

Xing Huina:

Friends from the media, good morning. Welcome to this briefing held by the State Council Information Office. Today, we have invited Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA) to brief you about China's renewable energy development and take your questions. We also have with us Mr. Li Chuangjun, director of the New Energy and Renewable Energy Sources Department of the NEA; Mr. Li Fulong, director of the Development and Planning Department and spokesperson of the NEA; and Mr. Huang Xuenong, director of the Electric Power Department of the NEA.

Next, I will give the floor to Mr. Zhang.

Zhang Jianhua:

Ladies and gentlemen, friends from the media, good morning.

It is my pleasure to meet you here and brief you on China's renewable energy development. First of all, on behalf of the NEA, I would like to express my sincere gratitude to our friends from the media who have shown understanding and support for China's energy industry.

Renewable energy is a green, low-carbon energy source and constitutes an essential part of our diversified energy supply system. It plays an important role in improving the energy structure, protecting the environment, addressing climate change, and promoting sustainable development.

China's renewable energy industry has gone through an extraordinary development process since the founding of the People's Republic of China (PRC) in 1949, by starting from scratch and becoming stronger and stronger. This is thanks to the attention shown by the Central Committee of the Communist Party of China (CPC) and the State Council, as well as the function of Renewable Energy Law. In recent years, especially since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee, the energy industry has thoroughly implemented Xi Jinping thought on eco-civilization and a new energy security strategy featuring "Four Reforms and One Cooperation" (one reform to improve the energy consumption structure by containing unnecessary consumption; one reform to build a more diversified energy supply structure; one reform to improve energy technologies to upgrade the industry; one reform to optimize the energy system for faster growth of the energy sector; comprehensive cooperation with other countries to realize energy security in an open environment). It has acted with unity, tackled difficulties, and taken vigorous measures to achieve the leapfrog development of renewable energy, thus scoring remarkable accomplishments.

First, China has topped the world in renewable energy production and utilization, providing robust support for the transition to green and low-carbon energy. The installed capacity of power generation has grown rapidly. By the end of 2020, the total national installed capacity of renewable energy generation reached 930 million kW, accounting for 42.4% of the total installed capacity, an increase of 14.6 percentage points compared with that of 2012. Of this, the installed capacity of hydropower reached 370 million kW, wind power reached 280 million kW, solar photovoltaic (PV) power reached 250 million kW, and biomass power reached 29.52 million kW, ranking first in the world for 16, 11, six and three consecutive years respectively.

The utilization level has continued to improve. In 2020, China's renewable energy generation hit 2.2 trillion kWh, accounting for 29.5% of the total electricity consumption of the whole society, up by 9.5 percentage points from 2012. On this basis, non-fossil energy accounted for 15.9% of the total primary energy consumption, and China honored its commitment for non-fossil energy to account for 15% of its total primary energy consumption by 2020. Currently, renewable energy accounts for around 40% of the total installed capacity, and 30% of power generation. China boasts the world's highest installed capacity of renewable energy.

Second, technology and equipment has been significantly upgraded, injecting powerful impetus into the development of renewable energy. We have established a relatively complete industry system of renewable energy technology. 

China is now able to independently design and manufacture the world's largest one-million-kW hydroelectric turbine, and the country leads the world in the design and construction of ultra-high dams and large underground caverns. Our low-speed wind power technology is among the world's most advanced; more than 90% of China's installed wind power generating capacity relies on domestically manufactured wind turbines; and the country has started trial operations of an offshore wind turbine with a capacity of 10 MW. 

Our PV power technology has developed rapidly, and China continues to establish new world bests in the conversion efficiency of solar PV cells. China dominates the global PV power industry. Seven of the world's top 10 PV module manufacturers are Chinese companies. Integrated manufacturing across the whole industrial chain has driven a continuous decline in the costs of electricity from wind and solar PV. In the past decade, the average cost of electricity per kWh generated in onshore wind power and solar PV power projects reduced by 30% and 75% respectively. 

The renewable energy technology sector has become more competitive, creating a strong momentum in the development of new models and new forms of business related to renewable energy.

Third, remarkable achievements have been made in reducing pollution and carbon emission, consolidating the foundation for the development of an eco-civilization. In 2020, the scale of renewable energy development and utilization in China reached 680 million tonnes of standard coal, equivalent to replacing nearly 1 billion tonnes of coal, reducing carbon dioxide, sulfur dioxide and nitrogen oxide emissions by about 1.79 billion tonnes, 864,000 tonnes and 798,000 tonnes respectively. This has provided a solid guarantee for winning the fight against air pollution. Meanwhile, China has actively promoted the clean use of biomass energy such as organic waste in urban and rural areas to improve the living environment. Also, China has actively explored efforts to integrate the control of desertification, the photovoltaic power generation and the agricultural development. By integrating photovoltaic power generation and ecological restoration, China has successfully coordinated the development and utilization of renewable energy with eco-civilization development. 

Fourth, renewable energy development has delivered great benefits to the people, contributing to poverty reduction. While extending power grids to areas without electricity, China has also actively launched independent renewable energy supply projects, bringing green electricity to over one million people previously without access to electricity. Since 2012, 31 large hydropower stations with a combined capacity of 64.78 million kilowatt have broken ground to support local economic development and facilitate poverty reduction for relocated residents. China has also launched an innovative scheme to develop photovoltage projects for poverty alleviation. Under the scheme, photovoltaic power stations with an installed capacity of 26.36 million kilowatt have been completed, benefiting nearly 60,000 poor villages and 4.15 million poor households. Economic benefits from these projects amounted to 18 billion yuan each year. This has resulted in the creation of 1.25 million welfare jobs. The scheme has now become a quality example of poverty alleviation through business development and one of China's ten finest projects for targeted poverty alleviation. 

Fifth, international cooperation continues to expand, making China's contribution to join hands to address climate change. As the world's largest renewable energy market and equipment manufacturer, China has continued to deepen international cooperation in the field of renewable energy. Our domestic hydropower business has spread to many countries and regions around the world, and the photovoltaic industry has supplied more than 70 percent of the components for the global market. The wide use of renewable energy in the Chinese market has brought down the cost of renewable energy at a faster speed and thus further driven renewable energy development and utilization in other countries. In this way, the world's transition to green energy has accelerated. Besides, in recent years, China has continuously increased renewable energy investment in countries and regions along the Belt and Road to help less developed countries and regions adopt advanced green energy technologies and contribute China's wisdom and strength to the high-quality joint building of a green "Belt and Road."

Ladies and gentlemen, journalists from the media, 

In his important speeches recently, General Secretary Xi Jinping has made it clear that China will strive to peak carbon dioxide emissions by 2030, achieve carbon neutrality by 2060, increase the share of non-fossil fuels in primary energy consumption to around 25 percent, and bring its total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030. This has further clarified the strategic direction for China's energy transformation and reform and set a new aim for China's renewable energy development. Next, the NEA will step up the implementation of carbon peaking actions in the energy field and set more proactive goals for new energy development. We will vigorously advance renewable energy development in the new era, expanding its scale, increasing its share, improving its quality and making it more market-based. We will accelerate efforts to replace fossil fuels with renewable energy and improve the capacity to absorb and store new energy. We will actively build a new type of electricity system dominated with new energy and make mechanisms and policies more favorable for the whole society to jointly develop and utilize renewable energy. We will vigorously develop renewable energy to turn it from a fresh force in the transition to green and low carbon energy to the main force in achieving peak carbon emissions and neutrality, providing a solid guarantee for building a clean, low-carbon, safe and efficient energy system.

Next, my colleagues and I will answer your questions.

Xing Huina:

Now you can raise your hands and ask questions. 

National Business Daily:

The goal of carbon neutrality will promote the large-scale development and utilization of renewable energy. The growing scale of renewable energy installations and electricity generating capacity has highlighted concern over how to avoid wastage of wind and solar power capacities. How will the NEA ensure the safeguard mechanism for electricity consumption? Thank you.

Zhang Jianhua:

Mr. Huang Xuenong will take the question.

Huang Xuenong:

This is a very good question. We are promoting renewable energy under the carbon peak and neutrality strategy. However, the huge waste from wind and solar power generation capacities cannot be ignored. For this reason, people from all sectors of society are very concerned about the consumption of renewable energy. In recent years, the mismatch between the development of new energy and the consumption capacity of the power system gave rise to prominent waste problems from wind and solar power. Starting in 2018, the NEA formulated a three-year action plan for clean energy consumption. From 2018 to 2020, the waste from wind and solar power has declined year by year, and the utilization rate of wind and photovoltaic power has increased significantly. By 2020, the wind power utilization rate had reached 97%, and solar power stood at 98%. When compared with other countries around the world, these are globally leading rates. 

Next, we will promote new energy as the main source of electricity supply to realize the objectives of the carbon peak and neutrality strategy. We will develop new electricity systems and take various measures to ensure high-levels of renewable energy consumption. The NEA will take the following three measures:

First, we will coordinate and improve the layout of new energy development. While meeting the demands for carbon peak and neutrality, taking into account local conditions of new energy resources in different regions, including land construction conditions, and especially making full use of the relatively large consumption capacity for new energy in central and eastern regions, we will step up efforts to boost local development and the utilization of new energy. In western and northern regions, where new energy resources are concentrated, we should scientifically plan and establish a group of power supply bases and power transmission channels that are dominated by new energy so as to realize the optimal overall configuration of new energy power.

Second, we should enhance the flexible adjustment capacity of the electric power system, which connects power generation and electricity users. In the past, our power generation facilities would adjust to meet customer demand, with power generation, electricity transmission and utilization all done simultaneously. The situation changed after large-scale new energy was connected to the grid. New energy generation is dependent on the weather, while users need reliable electricity supply. Integrating and connecting these two sides requires construction of a new type of power system to provide the ability for flexible adjustment to allow better consumption of new energy. In terms of power generation, we will increase efforts to enhance the flexibility of thermal power generation, including the construction of pumped storage power stations and peak-regulating natural gas power stations. Regarding power grids, we will step up infrastructure construction and enhance our ability to optimize resource allocation, and in particular give full play to the complementarity between large power grid s. In terms of users, we will promote terminal power replacement, especially green power replacement, to improve the response capacity on the demand side. In addition, we will accelerate the large-scale development of energy storage, promote overall digitalization of the power system and formulate an efficient and intelligent scheduling and operation system. For example, electric vehicles need to be charged via the electric power system, which seems to be a power supply task, but they can help improve system capacity through technological developments, including taking economic measures. When the demand for electricity is low, the power system will charge electric vehicles; when demand is high, the vehicles will discharge electricity into the power system. An electric car could become a power storage device in the power system. If there are thousands of electric vehicles, it will be beneficial for the power system. Therefore, we should accelerate the construction of charging infrastructure. On one hand, this will promote the development of new-energy vehicles, and on the other, it will also facilitate the construction of a new-type power system. This is a very good thing.

Third, we will formulate a long-term mechanism for new energy consumption. I'll outline the considerations from three aspects: First, while ensuring the consumption of the power grid, various market players including power supply, power grid, users and energy storage share the responsibility of clean energy consumption through the integration and multi-energy complementation of energy resources, power grid, electricity load and storage. Second, we should coordinate the resources of electricity load, power supply and power grid, and improve the new energy scheduling mechanism and adjusting ability of the power system from multiple dimensions so as to ensure matching of the adjusting ability with the developing and utilizing scale of new energy. Third, we should set a scientific target for the rational utilization rate of new energy. A dynamic adjustment mechanism must be formed to facilitate the development of new energy and overall improvement of the new-type power system. Wind and solar power resources, grid loads and grid structures all vary in different places. We should set regional targets in line with local conditions, make full use of the system's consumption capacity, and boost the development potentials of new energy. That's all from me. Thank you.

Phoenix TV:

The Outline of the 14th Five-Year Plan and the Long-Range Objectives through the Year 2035 have formulated that the development of renewable energy resources will be accelerated. Under the guidance of the outline, what new features do you think China's renewable energy landscape will present in the future? Thank you. 

Zhang Jianhua:

Mr. Li Chuangjun, head of the new energy department, will answer this question.

Li Chuangjun:

Thank you for your question. General Secretary Xi Jinping recently said that China's carbon dioxide emissions will peak before 2030 and achieve carbon neutrality by 2060. He also set forth the requirements for the development of renewable energy. Moreover, the Outline of the 14th Five-Year Plan and the Long-Range Objectives through the Year 2035, which was recently released at the "two sessions," have set clear tasks for renewable energy development. Overall, the development of renewable energy will face new situation and new tasks during the 14th Five-Year Plan period. There will be a series of significant changes in its development in terms of boundary conditions, logic and mechanisms. All in all, the development of renewable energy during the 14th Five-Year Plan period will enter a new stage with features as follows: 

First, renewable energy will be developed on a large scale. Given the achievements during the 13th Five-Year Plan period, the average annual installed capacity for renewables will witness a substantial increase during the 14th Five-Year Plan period, and the total installed capacity will be further increased. The installed capacity using new energy will make up over 50% of the country's total by the end of the 14th Five-Year Plan period.

Second, renewable energy will grow to a significant proportion. The ratio of renewable energy to energy consumption will continue to increase. By the end of the 14th Five-Year Plan period, renewable energy is expected to account for around two-thirds of the increase in electricity consumption throughout society, and will account for more than half of the country's primary energy consumption. Renewable energy will become a principal part of, rather than a supplement to, the increase in energy and electricity consumption.

Third, the development will be marketized. The market will further play a decisive role in allocating renewable energy resources. This year, wind power and solar PV power will start to deliver electricity at a price comparable to that of conventional electricity generation methods. There will be no subsidies, and their development will be market- and competition-oriented. 

Fourth, the development will be of high quality. During the 14th Five-Year Plan period, we will step up efforts to establish a new-type power system that makes clean energy a central focus, thus to improve our consumption and storage capacities for renewable energy. We will achieve large-scale development in renewable energy, and realize high-level consumption and utilization of these energy resources, so as to ensure reliable and stable power supply, and to achieve a high-quality leapfrog development.

Going forward, we will strive for the targets of peak carbon dioxide emissions and carbon neutrality, and fully utilize our advantages in renewable energy and relevant technologies, so as to leverage our strengths and shore up our weaknesses. We will consolidate and strengthen the overall core competitiveness and competitive advantages of renewable energy. We will give continued priority to the development of renewable energy. We will pursue high-quality leapfrog development, and improve quality and efficiency through reforms and innovation. We will promote renewable energy development by optimizing regional planning, building major bases, supporting pilot projects and carrying out action plans. We will accelerate the implementation of renewable energy substitution projects, and promote a high-proportion, high-quality, low-cost and market-oriented development of renewable energy. By doing so, we will make a greater contribution to the efforts of ensuring energy supply, promoting low-carbon green development, and achieving the targets of peak carbon dioxide emissions and carbon neutrality. Thank you.  

CCTV:

The 14th Five-Year Plan period (2021-2025) is a crucial and best time for China to peak its carbon dioxide emissions. What measures will the NEA take to realize the goal of peaking emissions? 

Zhang Jianhua:

On March 15, at the ninth meeting of the Central Committee for Financial and Economic Affairs, General Secretary Xi Jinping underscored that for carbon emissions to peak and to achieve carbon neutrality requires an extensive and profound systemic reform of the economy and society, and should be incorporated into the overall task of promoting ecological progress. He called for a spirit of perseverance in achieving the goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. There are 10 years between now and 2030. The first five years, which is also the 14th Five-Year Plan period (2021-2025), is a crucial stage for low-carbon energy transformation. We will take measures in three aspects to ensure solid progress in peaking carbon emissions. 

First, we will fully develop non-fossil fuel energy. The share of non-fossil fuels in primary energy consumption will reach around 25% and China's total installed capacity of wind and solar power will exceed 1.2 billion kilowatts by 2030. General Secretary Xi Jinping made commitments to these two goals, which outline what we must achieve. We will make more active new energy development goals and accelerate the development of wind and solar power. Meanwhile, we will exploit hydropower according to local conditions and develop nuclear power in an active and orderly way under the premise of ensuring safety. We will also quicken the construction of adjustable energy supplies such as pumped power storage and new-type power storage, to increase the flexibility of electricity systems and improve new energy consumption levels. Mr. Huang also just now mentioned the consumption of new energy, which is a pressing task. 

Second, we will greatly advance the green energy use model. In order to peak carbon emissions and achieve carbon neutrality, we should take the lead in the green transformation of social and economic development across the board and promote a green energy use model in key sectors and even across the whole society. We will adopt stricter energy consumption standards and support the replacement of fossil fuel energy and reform the ways energy is consumed in key sectors such as industry, architecture, and transportation. We will push forward the development of photovoltaic integration and the green energy use model via new energy vehicles and accelerate the replacement of electric energy in heating and cooking to improve the level of electrification across the whole of society. By 2025, the energy consumption per unit of GDP and its carbon dioxide emissions will decrease by 13.5% and 18%, respectively, compared to 2020. These two goals have already been included in the 14th Five-Year Plan. 

Third, we will make and implement more effective policies and measures. According to the general arrangements of the CPC central committee and the State Council, and sincerely carrying out the guiding principles of the ninth meeting of the Central Committee for Financial and Economic Affairs, the NEA is studying various paths, targets, and measures to realize the peak in carbon emissions and carbon neutrality. We will make supporting policies and measures for key targets to bolster low-carbon energy-smart transformation, the high-quality development of new energy, the building of new types of electrical systems, and the development of new types of energy storage. At the same time, we will well connect energy planning at national and provincial levels during the 14th Five-Year Plan period and integrate those targets into the plan such as responsibilities relating to power consumption, energy-saving, and emissions reduction to peak carbon emissions. We will give full play to the guiding role of planning, define clear responsibilities for all regions and localities to reduce carbon emissions, and support regions where the conditions permit to take the lead in realizing a peak in carbon emissions. We are about to buckle down to the job now. Thank you. 

The Paper:

With the arrival of the grid-parity era, sectors involved in renewable energy no longer need subsidies but many ongoing renewable energy projects face delayed subsidy payment, resulting in operation difficulties among some companies. How will you deal with the subsidy payment backlog? Meanwhile, how can Renewable Energy Certificates (RECs) play a greater role? Thank you.

Zhang Jianhua:

Thank you for your question. It is indeed a crucial and tricky issue. We will invite Mr. Li to answer the question.

Li Chuangjun:

Thank you for your question. China has made remarkable achievements in renewable energy development over the years but there are indeed problems in the development process. These include insufficient subsidy funds and the delayed payment of renewable energy subsidies like you mentioned. China has attached great importance to solving these problems. Working with relevant departments, the NEA has actively explored various means to solve the problem of overdue subsidies. Recently, the NDRC, MOF, PBOC, CBIRC, and NEA jointly issued a notice on guidance of increasing financial support to promote the healthy and orderly development of wind power and photovoltaic power industries. The notice provides solutions for liquidity risks experienced by relevant companies that are resulted either from overdue subsidies of renewable energy or delayed payment of the subsidies. The main measures are as follows:

First, financial institutions are encouraged to negotiate with renewable energy enterprises to extend or renew loans per commercial principles. At present, some renewable energy enterprises face a relatively tight cash flow due to delays in subsidy payments, yet these subsidies do exist and are guaranteed via government credit. Therefore, we require financial institutions to extend or renew loans or adjust repayment schedules or terms according to the project's progress and cash flow based on negotiation between the banks and companies. This is to ensure liquidity to in the companies.

Second, financial institutions are encouraged to issue loans for confirmed projects that are included on the subsidy list. Earlier, the MOF and several other departments vetted the qualifications of companies on the subsidy list. For those qualified but have yet to receive a subsidy from the government, the financial institutions can determine the loan size based on subsidy certification and other credit limit increase measures, as determined by the principles of marketization and rule of law.

Third, companies are encouraged to ease interest payment burdens via the trading of RECs. Together with other relevant departments, we are studying the possibility of issuing RECs to companies based on loan contracts and other documents filed by companies. This will allow them to trade RECs to reduce the pressure of paying interest, which is also an effective means for companies to reduce their burden.

Fourth, we will work to ensure the collection of all receivables related to renewable energy surcharges. The current levy rate on renewable energy surcharges has not reached 100%. We hope to levy all receivable surcharges in the front end to expand the source and scale of subsidy incomes.

Fifth, we will optimize the management of subsidy funds. Priority will be given to granting subsidies to projects and companies that voluntarily switch to achieve grid price parity, and will simultaneously increase credit support for said projects and companies.

The above are several methods to deal with the overdue subsidies. For the next step, we will work with relevant departments to further implement various policies to gradually alleviate and finally solve the problem of new energy subsidy arrears. Thank you. 

China Electric Power News:

The construction of a new type of power system with new energy as the mainstay was initially proposed at the ninth meeting of the Central Committee for Financial and Economic Affairs. What problems will the new system mainly target? The large-scale integration of new energy into the power grid has demonstrated randomness, discontinuity and fluctuation, making it not easy to keep the real-time balance of the system. So how will you ensure the stable supply of electricity and the safety of energy? Thank you. 

Zhang Jianhua:

Thank you for your questions. Huang Xuenong, director of the Department of Electricity, will answer your questions. 

Huang Xuenong:

To achieve the goals of peak carbon emissions and carbon neutrality, we regard energy as the main battle field and electricity as the main force. The construction of a new power system proposed at the ninth meeting of the Central Committee for Financial and Economic Affairs was an inevitable decision we made to achieve peak carbon emissions by 2030 and carbon neutrality by 2060. As is the core feature of the new system, new energy will become the main source of power supply. We have to face up to the fluctuation and discontinuity of new energy which you just mentioned. In a bid to make the power system clean and low-carbon, safe and reliable, smart and flexible, and cost-effective and efficient, we will innovate in equipment technology as well as systems and mechanisms, make sure various forms of energy are interconnected and complement each other, and promote the deep integration of power generation, the grid, load and storage. Next, I will introduce the measures in five aspects. 

First, we are striving to build a power generation, supply, storage and sales system in line with the large-scale development of new energy to ensure the safety and reliability of electricity. As for how to ensure the safe supply, that is a good question. The safe supply of electricity is the bottom line for building the new power system as well as a significant task for us. Here are some measures: First, we will give play to the power grid as a platform for allocating resources. Second, we will promote the construction of the power grid at a regional level. Third, we will rationally promote the construction of supporting and fundamental power sources. Fourth, we will build a multi-layered, properly scaled, safe and reliable power system, strengthen electricity security and its capacity for resisting disasters, and steadily enhance the intrinsic safety of the electricity industry.

Second, we are concentrating efforts to improve the flexible adjustment ability of the power system. Mr. Zhang made a detailed introduction just now. When addressing the issue of idle capacity in wind and solar power, I mentioned that we will improve the flexible adjustment ability of the power system from various aspects including power supply, the grid, demand and energy storage to meet the requirements for the large-scale integration of new energy into the power grid. After the integration, wind and solar power should not lie idle in large amounts, nor the shortage of power should be allowed. We will ensure the safety of power supply. In spite of the fluctuation and discontinuity of new energy, the new system, based on its flexible adjustments, can be turned into one that is user-friendly and ensures the supply. 

Third, we are putting forth efforts to promote the interconnection and integration of power generation, the grid, load and storage, and improve the system efficiency to meet the diversified needs of various types of users. We will guide new patterns and forms of business in the electricity sector toward sustainable and sound development. Regarding the supply side, we will make various energy sources complement each other and keep them optimized. Regarding the consumption side, we will promote the deep integration of electric heating and air conditioning. We will continue to improve the service of electricity, and realize the full utilization of a high proportion of new energy and the harmonious coexistence of multiple kinds of energy sources. We will promote the interconnection between the power system and advanced information and communications technologies, develop new business patterns and improve comprehensive energy services. 

Fourth, we are striving to make technological breakthroughs in key technologies of the new power system, carry out experiments and demonstrations, and promote their application. We will promote the deep integration of electrical technology with advanced information and communications technologies including artificial intelligence, big data, and the Internet of Things to form a key technology system with our own independent intellectual property rights. We will concentrate on tackling bottlenecks in key technologies, accelerate their research, development and application, and launch innovative demonstration projects featuring the new power system. 

Another key factor is to push ahead with the establishment of the electricity market, promote innovations in systems and mechanisms, and build a market system for the new power system. We will let the market play the decisive role in allocating resources and let the government play its role better. We will accelerate the establishment of the electricity market system featuring unification, openness and orderly competition through the constant improvements of the electricity market mechanism, operating mechanism and price mechanism. That's all. Thank you. 

Beijing Daily:

The replacement of fossil energy by non-fossil energy is an important measure in promoting the low-carbon energy transition. How will the NEA accelerate the development of non-fossil energy during the 14th Five-Year Plan period? Thank you.

Zhang Jianhua:

I'll let Mr. Li Fulong answer this question.

Li Fulong:

This question is very important. Vigorously developing non-fossil energy is an important measure in promoting the transition to low-carbon energy. Just now, Mr. Zhang Jianhua gave a very clear and detailed explanation of major measures, actions and policies related to achieving peak carbon dioxide emissions and carbon neutrality in the energy sector. During the 13th Five-Year Plan period, the proportion of non-fossil energy consumption in China increased from 12.1% to 15.9%, representing an average annual increase of 0.76 percentage points.

By 2030, the share of non-fossil fuels in primary energy consumption will reach around 25%. Over the next 10 years, this should increase by 0.9 percentage points per year on average, which is equal to an average annual increase of non-fossil energy of around 70 million metric tons of standard coal. The task is indeed very arduous. The NEA is currently conducting in-depth studies and formulating relevant policies and measures to strengthen its efforts in four aspects to promote the accelerated and high-quality development of non-fossil energy.

First, we will make plans, provide guidance, and carry out regulation. We are studying and drawing up modern energy system plans and sector-specific energy plans for the 14th Five-Year Plan period, which emphasize the development of non-fossil energy and the promotion of low-carbon energy transition. Our preliminary estimates show that clean energy will account for 80% of the increase in energy consumption during the 14th Five-Year Plan period, which is 20 percentage points higher than the 13th Five-Year Plan period. Non-fossil energy will make up the majority of the increase in energy consumption. This will lay a solid foundation for achieving the target of obtaining 25% of energy consumption from non-fossil energy. At the same time, we will ensure the national and provincial energy plans are linked together to accomplish the goals and tasks of promoting low-carbon transition.

Second, we will develop non-fossil energy in diversified ways. Under the condition of ensuring safety, we will take active and orderly measures to promote the construction of coastal nuclear power stations; continue to prioritize ecological conservation; develop and construct hydropower stations mainly on key river basins such as those in southwest China and the upper reaches of the Yellow River, with the firm goal of generating over 1.2 billion kW in 2030; and vigorously develop wind and solar power generation. At the same time, it is necessary to promote the development and utilization of other renewable energy sources such as biomass and geothermal energy according to local conditions.

Third, we will optimize the layout of new energy development. On one hand, we will continue to strengthen accommodation of power generated from new energy and cross-regional transmission capacity, promote the centralized development of wind and PV power generation in an orderly fashion, and actively promote the construction of clean energy bases featuring complementary use of diverse energy sources. On the other hand, it is necessary to increase the on-site development and utilization of new energy, and actively develop distributed energy resources, in particular promote the development of distributed PV power generation and decentralized wind power in China's central and eastern regions.

Fourth, we will strengthen the flexibility and adjustment capacity of the power system. We will continue to implement the flexible transformation of thermal power. Under the condition that gas sources are guaranteed, we will develop peak-shaving natural gas power stations according to local conditions, and accelerate the construction of pumped-storage power stations as well as R&D and application of new energy storage. We must adapt to the large-scale and high-proportion development of new energy, and accelerate the construction of a new, safe and efficient power system with new energy as the mainstay. As Mr. Huang Xuenong explained, this is key to ensuring the stable operation of the power system and promoting the high-quality development of new energy. Thank you.

Kyodo News Service:

Just now Mr. Zhang talked about international cooperation, so could you make an introduction to international cooperation on nuclear power, including Hualong One? Besides, with regards to Myanmar, the China-Myanmar oil and gas pipelines are a crucial channel for China's energy imports, and some analysts believe that Myanmar's domestic economy will affect energy cooperation between the two countries, so how do you view Myanmar's situation?

Zhang Jianhua:

The technology for China's Hualong One reactor is very mature. We are cooperating with many countries, and are also vigorously promoting the technology and design in China. We want to share China's good technology and equipment with our friends around the world, and contribute to the environmental protection of the planet. China's Hualong One technology has "gone global" in a very smooth manner.

Regarding cooperation between China and Myanmar, we have paid high attention to the situation in Myanmar -- China's friendly neighbor. As for the energy industry, China and Myanmar have carried out good cooperation in this regard -- China has two pipelines in Myanmar, one natural gas line and one crude oil line. Both lines are currently in safe and stable condition. Here I'd also thank our media friends for your attention.

Hong Kong Economic Herald:

We noted that the report on renewables published by International Energy Agency in 2020 showed China was one of the main forces driving the capacity growth of the global renewable energy last year. How do you view China's contribution to world renewable energy development? Thank you.

Zhang Jianhua:

Thank you for your question. I have just mentioned that China, as the world's largest renewable energy market and equipment manufacturer, has always been committed to strengthening cooperation with other countries in the field of renewable energy, providing Chinese products, contributing Chinese wisdom and strength to the global energy transformation and green development.

We have actively taken part in global cooperation, promoting our renewable energy products, equipment and services to "go global." China has provided hydropower services for a large number of countries and regions. For example, 70% of the world's construction of hydropower stations are conducted by Chinese enterprises. We would say that Chinese workers can be seen almost at every construction site of hydropower station around the world. China's photovoltaic industry has supplied 58% of polysilicon, 93% of silicon chips, 75% of battery chips and 73% of the components for the global market. Meanwhile, China is also the world's largest manufacturer of wind turbines, as its output accounts for half of the world's total. All the above data demonstrates that China is a key player in new energy market, and, without exaggeration, it ranks first in the world.

New forms and models of business are emerging in China as the renewable energy sector scales up. We blazed a new path of poverty alleviation efforts by developing photovoltage (PV) projects in poor areas, thus providing successful experience for global poverty reduction. We have explored new patterns for controlling desertification with photovoltaic technology, and succeeded in the coordinated development of renewable energy and ecological protection. We have also promoted new business models which combines PV power generation and agriculture, fishery as well as animal husbandry. Now, we are accelerating the integrated development of renewable energy with traditional industrial sectors such as construction, transportation and industry, striving to contribute China's wisdom to innovative global renewable energy development.

Especially in recent years, China has vigorously promoted the rapid and large-scale development of renewable energy by providing legal guarantees, planning and guidance, and financial support, etc., making outstanding contributions to the global transition toward renewable energy. By the end of 2020, China's cumulative installed capacity for renewable energy had reached 934 million kilowatts, accounting for one-third of the world's total. In particular, China's newly installed capacities for wind power and solar photovoltaic (PV) power stood at about 120 million kilowatts by the end of last year, accounting for more than half of the world's newly installed capacities for both. This positions the country as a strong force for the development of global renewable energy. The large-scale development of China's renewable energy sector has also strongly promoted the rapid progress of renewable energy technologies, especially those new energy sectors represented by wind power and PV power. With costs falling fast, economic efficiency rising rapidly, and competitiveness increasing swiftly, accelerating the growth of renewable energy—especially wind power and PV power—into the world's new main energy sources is becoming reality. It is fair to say that the rapid booming of global renewable energy would not have been possible without the large-scale development of the renewable energy sector in China, and that China has made contributions to the global transition to renewable energy and climate change response. Thank you.

South China Morning Post:

Data shows a 40% year-on-year drop in China's coal imports throughout January and February earlier this year, and it is said that China has imposed a ban on imports of Australian coal. Under such circumstances, will there be uncertainties about China's coal supply this year? Thank you.

Zhang Jianhua:

Mr. Li will answer this question.

Li Fulong:

This is a very important question. First, China has been part of the economic globalization system for many years, and its economy and energy sector have been increasingly integrated into the world trade system. China follows international practices and rules regarding the import and export of important products, including coal, oil, and natural gas. Second, in terms of market demand, energy supplies must meet the needs of China's economic development and people's livelihoods. We have always adhered to open, mutually beneficial, and win-win principles of international cooperation, including the field of international coal trade you just mentioned. These guidelines and benchmarks have always been upheld and unchanging for a long time. Third, market fluctuations and changes in demand are normal phenomena. As countries around the world gradually resume production, it is normal to see changes in energy supply and demand following the effects of the COVID-19 epidemic—not only in China but also around the world. That's my brief answer.

Zhang Jianhua:

Thank you, Mr. Li, and thank you for your attention, friend from the South China Morning Post. The NEA has a very important task, which is to ensure the security of the country's energy supply. Therefore, no matter the circumstances, with the support of local governments at all levels and close cooperation with enterprises, we can effectively guarantee the safety of energy supplies. This year, there are no obvious shortfalls and we have great confidence that national energy demands in all aspects will be satisfied.

Xing Huina:

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

Translated and edited by Yuan Fang, Zhou Jing, Duan Yaying, Liu Qiang, Gong Yingchun, Chen Xia, Wang Yiming, Li Huiru, Zhang Rui, Zhang Liying, Zhang Tingting, Huang Shan, He Shan, Liu Jianing, Wang Qian, Wang Wei, Qin Qi, Yang Xi, Xu Xiaoxuan, 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:

Yang Xiaowei, vice minister of the Cyberspace Administration of China (CAC)

Guo Ningning, vice governor of Fujian province

You Mengjun, mayor of Fuzhou Municipal People's Government

Sun Wei, a person in charge of the Department of High-Tech Industry of the National Development and Reform Commission (NDRC)

Yang Yuyan, a person in charge of the Department of Information Technology Development of the Ministry of Industry and Information Technology (MIIT)

Gou Ping, head of the Bureau of Sci-Tech Innovation and Social Responsibility of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC)

Chairperson:

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

Date:

March 19, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! The 4th Digital China Summit will take place in Fuzhou, Fujian province from April 25 to 26. As in previous years, the State Council Information Office (SCIO) is holding a press conference to brief you on preparations for this summit and other related issues and field your questions.

Today we have with us: Yang Xiaowei, vice minister of the Cyberspace Administration of China (CAC); Guo Ningning, vice governor of Fujian province, You Mengjun, mayor of Fuzhou Municipal People's Government; Sun Wei, a person in charge of the Department of High-Tech Industry of the National Development and Reform Commission (NCRC); Yang Yuyan, a person in charge of the Department of Information Technology Development of the Ministry of Industry and Information Technology (MIIT); and Gou Ping, head of the Bureau of Sci-Tech Innovation and Social Responsibility of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). Next, I will give the floor to Mr. Yang.

Yang Xiaowei:

Ladies and gentlemen, friends from the media, good morning! It is a great pleasure to meet with you all again at this press conference regarding the Digital China Summit. I would like to thank all the reporters paying attention to the 4th Digital China Summit. The summit has been held successfully three times and has played a significant leading role in promoting both the application of information technology in China and digital development in Fujian.

At present, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with the joint efforts of people across the nation, China has made strategic achievement in its nationwide epidemic control. Also, China has scored a complete victory in its fight against poverty and attained decisive achievements in securing a victory in building a moderately prosperous society in all respects. With the approval of the CPC Central Committee, the 4th Digital China Summit will be held in in Fuzhou, Fujian province from April 25 to 26 this year. The summit is co-organized by the CAC, NDRC, MIIT, SASAC and Fujian Provincial People's Government; and will be hosted by the Fuzhou Municipal People's Government and relevant institutions.

The CPC Central Committee and the State Council attach great importance to the construction of Digital China. The county has specified tasks to speed up digital development and build Digital China in the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, adopted at the fourth session of the 13th National People's Congress a few days ago. At a time when China has made important strategic progress in the battle to contain the virus, and achieved positive results in coordinating the fight against the virus with economic and social development, especially in the year which marks the beginning of the 14th Five-Year Plan and the 100th anniversary of the founding of the CPC, it is of crucial significance to hold the 4th Digital China Summit. It will further encourage all sectors to actively participate in the new journey of building Digital China with enthusiasm and creativity.

The summit, themed "New Potential for Data and New Journey of Digital China," aims to serve as a platform for releasing information development policies; showcasing the latest achievements of Digital China; boosting communication regarding theories, experiences and practices of e-governance and the digital economy; and promoting cooperation with global partners in the development of Digital China and the Digital Silk Road. The summit will consist of seven sessions: the opening ceremony, the main forum, sub-forums, an achievement expo, an innovation contest, policy release, and a signing ceremony for projects. In the meantime, discussions such as "Outlook for Fuzhou" and "Minjiang Dialogue" will be held. The summit will set up a "Cloud Summit" platform, and host both online and offline events. Important guests who can't attend the main forum and sub-forums in-person will be invited to address the summit, deliver keynote speeches, or participate in dialogue via video link or pre-recorded videos. The Digital China Innovation Contest will be run online with online entry and online judging, but the prize will be awarded offline at the summit. A virtual exhibition hall will also be set up along with the achievement expo. Media outlets will be invited to live-stream or record important events at the summit. 

The 4th Digital China Summit will commence in less than a month, with preparations for the event progressing in an orderly manner. The organizing committee will strictly observe the central Party leadership's eight-point decision on improving work conduct, implement regular prevention and control measures, and adhere to the principles of frugality, efficiency and safety in organizing the summit. People from all sectors are very much welcome to participate. We look forward to the successful convening of the 4th Digital China Summit. Thank you.

Chen Wenjun:

Next, the floor is given to Ms. Guo.

Guo Ningning:

Friends from the media, good morning! I would like to thank the SCIO for organizing the press conference on this summit, and also our friends from the media and all sectors for your attention and support for the Digital China Summit. It's my pleasure to brief you on the preparations for the event. 

With three consecutive sessions successfully held in Fujian province, the summit has become an important platform for the construction and development of Digital China, and has produced positive outcomes in displaying digital innovations, communicating and implementing digital projects, and developing digital industries. Its fourth session will kick off in Fuzhou on April 25, to which the Fujian Provincial Party Committee and government have attached great importance. We will always follow the major strategy and innovative practices of Digital Fujian proposed by General Secretary Xi Jinping in 2000, and keep in mind his generous care and earnest expectations for Fujian's development, especially for Digital Fujian, and his ardent remarks on benefiting society and people with information and digital technologies. We will fully implement the spirit of the congratulatory messages from the General Secretary to the two previous sessions, and prepare for the fourth session with devotion under the thorough guidance and strong support of the CAC, the NDRC, the MIIT, and the SASAC. Preparations have now entered the final stretch, and as the host, we will present a splendid digital event by further improving our services.

The theme of the fourth session is "New Potential for Data and New Journey of Digital China." We will highlight its features and host it both offline and online over an optimized Cloud Summit platform, to provide guests and friends unable to attend with an immersive experience of participation. The Digital China Innovation Contest will add up to eight competition categories, in which many leading digital companies and well-known universities and colleges will take part. We have invited three sister provinces — Sichuan, Anhui, and Guangxi — to be its guests of honor to showcase their digital construction achievements and industrial development. We will enrich and improve the session from the following four aspects based on the sound experience of the previous three sessions.

First, we will make it an event for displaying new digital applications. We will build a cloud exhibition hall with dedication, incorporate more interactive experiences with virtual products, and demonstrate 5G+8K ultra-high-definition videos and technologies like holographic projection, to endow the cloud platform with new features. We will adopt technologies such as contactless face recognition and one-code access, to offer smart services throughout the event. We will also open online and offline exhibition halls for daily displays of the event's highlights and outcomes, as well as the latest and most cutting-edge digital technologies, to present a summit that never ends.

Second, we will make it an event for experiencing new ideas with digital activities. This year's session will comprise a main forum and 20 sub-forums. The number of sub-forums will hit a new high. For the first time, China's ministries and state-owned enterprises (SOEs) will host multiple sub-forums on digital villages, the Digital Silk Road, new urban infrastructure, the digital transformation of SOEs, cybersecurity and information security, and more. Leading digital companies will hold over 20 activities such as "Outlook for Fuzhou" on the city's Sanfang Qixiang historical and cultural street to highlight the interactions between traditional culture and modern digital technology. There will also be a "Minjiang Dialogue," an academician and expert trip, and a digital village seminar, at which an innovative development path for a Digital China will be discussed.

Third, we will make it an event for seizing new opportunities empowered by digital development. The summit will contribute to building a Digital China with its spillover effect. The national-level pilot zone for innovation and development of the digital economy, the innovation center launched by BRICS countries in Xiamen, and the Maritime Silk Road Satellite Data Service Center have brought along new opportunities for high-quality development. This session will continue pooling experts in the digital field, showcasing digital application scenarios, releasing digital development policies, matchmaking digital industry projects, and actively serve the new development paradigm as a platform for cooperation in the digital economy industry across the country.

Fourth, we will make it an event for experiencing the new life amid digital transformation. More government organizations, companies, and public institutions will bring innovations in digital government, digital society, digital culture, smart cities, and digital villages, especially focusing on the scenarios of developing and using big data resources, and displaying brand new practices of smart life in the digital age. I believe you are bound to have a more dazzling and cooler new experience.

Fujian is now working on a plan specially for Digital Fujian during the 14th Five-Year Plan period at a high starting point with the benefits brought by digital transformation. We are accelerating the construction of a national-level pilot zone for the innovation and development of the digital economy and plan to be the No. 1 province for digital applications. We are deepening cooperation along the Digital Silk Road, and promoting all-round high-quality development on a new journey of building Digital Fujian.

We sincerely invite friends, both old and new, to visit Fujian and Fuzhou and attend the grand event to pursue a better future together.

Thank you.

Chen Wenjun:

The floor is now open for questions. Please name the news outlet you work for before asking questions. 

CCTV:

We noticed that the Outline of the 14th Five-Year Plan and the Long-Range Objectives Through the Year 2035 proposed to accelerate digital development and build a Digital China. Can you brief us on building a Digital China during the 13th Five-Year Plan period and the new measures to be taken during the 14th Five-Year Plan period? Thank you.

Yang Xiaowei:

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has laid great emphasis on building China into a cyber power and a digital country. After the release of the Outline for National IT Application Development and the National IT Application Plan during the 13th Five-Year Plan period, China's Cyberspace Administration and related departments have implemented the strategic plan and continuously conducted monitoring and assessment of the work on building a Digital China. During past years, we have released the Report on the Development Process of Building a Digital China in succession and achieved great progress in building a Digital China. The achievements are mainly as follows:

First, we are now global leaders in information infrastructure construction. Our country has built the world's largest fiber-optic network and 4G network. The netizen population increased from 688 million by the end of 2015 to 989 million by the end of 2020. During the same period, the internet service popularization rate increased from 50.3% to 70.4%. The commercialization of 5G has picked up speed, with nearly 720,000 5G base stations completed and more than 200 million 5G terminals connected. The large-scale deployment of IPV6 in China has also been very effective.

Second, the innovation capacity of information technology continues to improve. Significant progress has been made in the research and development of some of our basic and general technologies, and the development of integrated circuit manufacturing, equipment and materials has been accelerated. 5G artificial intelligence (AI), as well as domestic high-performance computing and quantum computing, have made significant scientific research achievements. China's Innovation Index jumped from 29th place in 2015 to 14th place at the end of last year.

Third, the vitality of the development of the digital economy continues to increase. The digital economy continues to grow rapidly, and the quality and effectiveness of our digital economy development has been significantly enhanced. New formats and models keep emerging, and by the end of last year, the value added of the core capacity of the digital economy accounted for 7.8% of the GDP.

Fourth, the efficiency of e-government services has significantly improved. E-government has strongly supported the modernization of China's governance system and governance capacity, and the level of public services has continued to improve. As you know, in the last year, China's e-government development index improved its global ranking by 20 places compared to 2018. China's online service index has climbed to the 9th place globally, reaching a very high level.

Fifth, we accelerated IT popularization to bring convenience and benefits to the people. By the end of last year, the internet access rate in primary and middle schools across China had reached 100% and the long-distance medical collaboration network had covered 24,000 medical institutions. All the targets of internet access in relation to poverty alleviation were completed by the end of last year. Steady progress was made in the building of "digital villages", injecting new digitalized and IT application impetus to rural vitalization.  

Sixth, international cooperation in regards to cyberspace was deepened. China proposed and launched the G20 Digital Economy Development and Cooperation Initiative, the Initiative on Belt and Road Digital Economy Cooperation, the Global Data Security Initiative and so on, thus contributing Chinese strength and plans to global digital economic development and cyberspace governance.

Yang Xiaowei:

The reporter just mentioned the 14th Five-Year Plan. In the next stage we will implement the decisions and deployments of the CPC Central Committee and carry out the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035. Right now, we are compiling the National IT Application Plan during the 14th Five-Year Plan period and we plan to make efforts in nine aspects as follows:

First, we will accelerate the optimization and upgrading of information infrastructure and the deployment of the 5G network on a large scale; make layouts for 6G network technology reserves in advance; and promote the deployment of IPV6 application on a large scale.

Second, we will invigorate the vitality of digital elements; and accelerate the formulation of fundamental systems, norms and rules of digital resource circulation, cross-border transmission and security protection.

Third, we will set up innovation systems to unleash digital productivity; accelerate the innovative application of digital technologies; and improve systems and mechanisms regarding scientific and technological innovation.

Fourth, we will accelerate digital industrialization and industrialized digitalization. We will promote the integration of digital technologies in the real economy, thus forging new competitiveness in the digital economy across China.

Fifth, we will accelerate the pace of building a digital society, promote the construction of new-type smart cities and "digital villages" and build a digital lifestyle that can be enjoyed by all.

Sixth, we will increase the digitalization level of the government, improve the national administrative system, give full play to the function of the government and significantly boost administrative efficiency and public trust.

Seventh, we will develop convenient digitalized services to benefit all people, and enhance multi-layer social security systems to strengthen people's sense of gain continuously.

Eighth, we will advance mutually beneficial and win-win international cooperation in the digital field and jointly build a community with a shared future in cyberspace. 

Ninth, we will establish inclusive and prudent digitalized development governance systems, and create a favorable digital development environment. During the 14th Five-Year Plan period, we will make efforts in the above-mentioned nine aspects. Thank you for your question.

Bauhinia Magazine:

The Digital China Summit has been held in Fuzhou for three years. How effective has Fuzhou been in developing the digital economy in recent years, and what are the plans and considerations for further promoting Fuzhou's digital economy in the future? Thank you.

You Mengjun:

Thank you for your question and your concern about Fuzhou. As early as 2000, General Secretary Xi Jinping, then-governor of Fujian province, put forward the strategic concept of building a Digital Fujian. During the past few years, following the instructions of General Secretary Xi and the deployments of the CPC Fujian Provincial Committee and the Fujian provincial government, Fuzhou has concentrated on developing its digital economy and has grasped the Digital China Summit as an opportunity. Thanks to all these efforts, the volume of the city's digital economy increased to 460 billion yuan in 2020 from 280 billion yuan in 2018 with the average annual growth rate surpassing 25%. The proportion of the digital economy in local GDP has been raised to over 45% from 36%. At present, there are 37 listed enterprises in the digital economy located in Fuzhou. We have focused on the following five areas:

First, we have carried out two special programs. One is a three-year initiative on building "Digital Fuzhou," which consists of 137 key projects in the areas of e-government service and data resources. The other one is a three-year action plan for new infrastructure, which includes 175 key projects of information infrastructure with the total investment valuing more than 230 billion yuan.

Second, we have established five industrial bases, focusing on big data, the Internet of Things, software, displays and photoelectricity. Many excellent enterprises in the digital economy such as BOE, Inspur, NetDragon, Bitmain and Guomai Tech have settled in the city, earning Fuzhou the title of "China's famous software city."

Third, we have accelerated the empowerment of digital technology. In traditional industry, more than 2000 companies have taken part in cloud-based platforms. We have fostered eight province-level industrial internet demonstration platforms including Morewis Cloud and Histron Cloud, 24 application benchmarking companies, and 188 provincial-level "Internet Plus" manufacturing projects. In the emerging industrial field, we have 360 AI-related companies and 523 blockchain-related companies. The Kunpeng Industrial Ecosystem is being applied first in Fuzhou.

Fourth, we have set up public service platforms for the digital economy. Basic supporting platforms including China-Fuzhou Internet of Things Open Lab, National Internet backbone access points and two major projects for the Digital Fujian Cloud Computing Center have been established. Sci-tech innovation platforms focusing on large-scale supercomputers, AI and optoelectronic information science and technology have been built. Industry-university-research cooperation platforms including the Tsinghua-Fuzhou Institute of Data Technology and the Southeast Research Institute of Express Big Data of the State Post Bureau have been introduced in Fuzhou.

The fifth thing is to build Fuzhou into a number one digital application city. In the aspect of e-government applications, we provide immediate and one-stop services based on the "Internet Plus Government Services" model to ensure that people can get things done through apps or through single visits to any related department within the city. At present, Fuzhou ranks 28th among Chinese cities for its business convenience, and stands at 4th place in the ranking of digital government development among provincial capital cities in China. In terms of urban management, we have built an intelligent drainage-water system and coordination center around the "city brain" and launched the country's first city-level public service platform for facial recognition. Fuzhou has been awarded the "China's Leading Smart City Award" for five consecutive years. In the aspect of services related to people's livelihoods, we have created "e-Fuzhou" public service model which provides transportation, educational, medical, community and other services. We are gradually enabling our citizens to experience new services and new lifestyles with the application of information technology.

After years of accumulation, Fuzhou's digital economy has already gained a solid foundation. Next, we will continue to implement General Secretary Xi Jinping's strategic thought on building a digital China in earnest with special gratitude and responsibility. In the future, "Digital Fuzhou" will remain our main direction of economic development. Becoming the number one city for digital applications will continue to be our working strategy, and building Fuzhou into a digital demonstration city in China will always be our goal. We will enhance our efforts in the following three areas. First, we will concentrate on cloud computing, big data, Internet of Things, AI and blockchain, and promote digital industrialization and industry digitalization in traditional industries such as textiles, chemical fibers, machinery manufacturing, metallurgical and building materials. Second, we will accelerate construction of information infrastructure, including supercomputing, storage and digital centers. Third, we will provide more and better applications for digital education, digital culture and tourism, and digital health care.

In short, we will continue to expand the platform effect of the Digital China Summit, make all-out efforts to develop the digital economy, and promote all-round and high-quality development in Fuzhou. Thank you.

Guangming Daily:

Many aspects of Fujian's digital economy such as 5G, blockchain, AI, and big data have been well developed. What are the specialties of Fujian's digital economy? What industries will you focus on supporting next? 

Guo Ningning:

Thank you for your question. In 2019, Fujian became one of the six national-level pilot zones for innovation and development of the digital economy. We have carefully studied and made action plans for the pilot zone to speed up the development of digital infrastructure, digital industries, digital trade, and digital consumption, striving to contribute Fujian's experience and plans to China's digital economic development. The advantages of Fujian to develop its digital economy can be summarized into the following six aspects.

First, through the construction of platforms. Fujian is located in a core maritime silk road area and boasts several national-level platforms such as the Fujian Pilot Free Trade Zone, the Xiamen BRICS innovation base, the digital service export base, and the comprehensive cross-border e-commerce pilot zone. The various advantages of multiple platforms have greatly supported the innovative development of the digital economy. 

Second, through the development of industries. The output values of Fujian's key industries such as the Internet of Things and AI have all exceeded 100 billion yuan. Key digital parks such as the Digital Fujian Industrial Park, the Fuzhou Software Park, and the Xiamen Software Park have become large industry clusters and hubs for the innovative development of digital industries. 

Third, we have created channels. Fujian has opened several international logistics routes, such as Silk Road Sea Transport and Silk Road Air Transport as well as the China-Europe Railway Express, becoming an important link connecting the land and maritime silk roads. Domestically, we have built a "two verticals and three horizontals" comprehensive transportation system and several "information highways" such as the Cross-Straits Optical Fiber Cable No. 1 and the national-level internet backbone direct connection point.

Fourth, we have built infrastructure. Fujian has planned new infrastructure early on and its new infrastructure index ranks within the top five nationally. The Digital Fujian Cloud Computing Center and Super Computing Center have been completed. 5G base stations cover all areas above county level, including major villages and towns. All cities have met standards for the high-level optical network cities.

Fifth, we have made supportive policies. To support digital economic development, Fujian has gradually rolled out a slew of policies concerning the industrial internet, satellite application, digital silk roads, intelligent manufacturing, and new infrastructure to improve the environment for advancing the digital economy. 

Sixth, we have fostered further potential. Fujian's digital economy has constantly accelerated the pace of development, transformation and upgrading. The provincial digital economy in 2020 reached 2 trillion yuan, an increase of 15%. It accounted for 45% of the provincial GDP. It is estimated that by the end of the 14th Five-Year Plan period (2025), the added value of the digital economy will exceed 4 trillion yuan, accounting for nearly 60% of the provincial GDP, a significant increase. It is therefore a crucial engine for the high-quality development of Fujian's economy. 

In the future, we will further advance the development of the digital economy and focus on implementing the following six measures. First, we will achieve breakthroughs in a batch of core technologies such as cutting-edge chips, core electronic components, and basic materials. We plan to build more than 100 high-level digital innovation platforms, with an emphasis on digital transformation of key industries. Second, a batch of digital innovation application scenarios will be generated. We will speed up the applications of AI, blockchain and 5G technologies, promote commercialized demonstrations and applications and build ourselves into the "No. 1 province in digital applications." Third, we will promote a batch of featured digital industries. Digital industry clusters regarding the building of "Smart Ocean," satellite applications, and ultra-high-definition videos will see accelerated development in a bid to advance digital industrialization and the high-quality development of digital industries. Fourth, we will foster a batch of pioneering digital companies. We have implemented a dedicated campaign for the cultivation of digital innovative companies and plan to foster more than 3,000 pioneering companies and digital innovative companies by 2022. Fifth, we will establish a batch of demonstration areas as pacesetters for digital development, launch actions to improve digital economic zones, and establish core areas for opening-up and cooperation in building "digital silk road." Sixth, we will explore a batch of digital innovative mechanisms to ease access to the digital economic market and advance legislative procedures regarding Fujian province's big data regulations. We plan to establish big data companies and effective allocation mechanism for the production factor of data to improve the digital economic environment and inject new momentum into the all-round and high-quality development of Fujian. Thank you. 

Beijing Daily:

The 14th Five-Year Plan has dedicated a whole chapter to digital development. What will the relevant departments do to advance digital economic development and the building of "Digital China" ? Thank you. 

Yang Yuyan: 

Thank you for your question. As you said, the 14th Five-Year Plan has dedicated a whole chapter to speeding up digitalization and building a digital China, and has set specific targets and requirements that show that the CPC Central Committee and the State Council have attached great importance to building a digital China. In recent years, under the strong leadership of the CPC Central Committee and the State Council, the MIIT has markedly boosted digital economic development. During the 13th Five-Year Plan period (2016-2020), China's digital economy registered a growth rate of 16.6%, laying a solid foundation to build a digital China. 

First, industrial foundation has been improved. As Mr. Yang mentioned, we have built the largest optical cable network and 4G network in the world. The number of terminal devices connected to the 5G network has exceeded 200 million. Fast development has been witnessed in areas such as the software and IT service sector, the electronic information manufacturing sector, and the communication service sector. Taking software as an example, the sector raked in an accumulated revenue of 8.16 trillion yuan in 2020, an increase of 13.3% year on year. 

Second, the pace of digital transformation continues to accelerate. In terms of manufacturing, we have vigorously promoted the construction of the industrial internet. Currently, there are more than 80 industrial internet platforms with various influences in the country, and the number of industrial apps exceeds 350,000, which strongly supports the industry's improvement in quality, cost reduction, and efficiency. In terms of information consumption, we are actively cultivating and promoting new data-driven models and business forms. Especially during the period of COVID-19 pandemic prevention and control, online education, telecommuting, and online shopping, among others, have all played a very important role.

Third, we continue to optimize China's environment for development. We have pushed to issue a series of documents, such as the "Several Policies to Promote High-quality Development of Integrated Circuit Industry and Software Industry in the New Era," as well as formulated a batch of national standards, such as the data management capability maturity assessment model. Additionally, we have guided local governments to promote national comprehensive experimental zones for big data, and promote the construction of landmark software industry cities, accelerating the agglomeration and development of the digital industry.

In the next step, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the MIIT will follow the trends of digitalization, networking, and intelligent development, and accelerate the construction of a digital China. Focus will be put on the following three aspects.

The first is to promote the digital industry to become bigger and stronger. We will focus on the seven key digital industries and ten digital application scenarios listed in the outline for the 14th Five-Year Plan. We will use applications as the driving force to promote the development of emerging strategic industries, such as big data, AI, and blockchain. We will also focus on cultivating an ecosystem for open-source software, and create an internationally competitive digital industry cluster.

The second is to promote the deepening and solid implementation of digital transformation. We will more deeply embed next-generation IT into the manufacturing sector, and use digitalization to drive changes in production methods. We will expand and upgrade information consumption, speed up the construction of information accessibility, and drive lifestyle changes with digitization to benefit people's life and work.

The third measure is to gradually improve the digital ecosystem. We will continue to improve the data management capabilities of enterprises and public institutions, and consolidate the foundations for data processing. We will cultivate big data trading platforms, explore various forms of data transaction models, and promote data circulation. We will effectively collect, manage, and use data, and activate the value of data elements.

At the upcoming Digital China Summit, the MIIT will host five sub-forums across topics such as big data, digital technology innovation, open-source software ecosystem, the industrial internet, and digital society. Here, I also sincerely invite everyone to actively participate in these sub-forums, have in-depth exchanges, and jointly contribute to the construction of digital China. Thank you.

New York Times:

Fuzhou was one of the first cities in China to develop close ties with the United States. Back in the 1800s, many American families, including my mother's family, moved to Fuzhou to do volunteer work in education and medicine as American missionaries. How has Fuzhou's history in education and in having international ties made a difference today in its economic development and in its digital development? Thank you. 

You Mengjun:

Thank you very much for your question. Fuzhou has a relatively long history of foreign exchanges. Since the middle of the 19th century, it has established contacts with many countries, including the United States. Especially after the reform and opening up, Fuzhou has continued to strengthen exchanges with cities from all over the world in the fields of economy, trade, and culture, realizing close cooperation, mutual benefit, and a win-win situation among all parties. With China opening its door wider and wider, Fuzhou very much hopes to continue to strengthen exchanges with countries and regions around the world, and to serve as a bridge to help form friendships between various peoples.

Regarding the impact of the Digital China Summit on the economy and society of Fuzhou, I think it will be extensive, profound, and everlasting. The Digital China Summit allows us to firmly position digitalization as a leading force in Fuzhou's industrial development, make us more determined and confident in the development of the digital economy, and make our industrial transformation and upgrading faster and faster so that our citizens can also enjoy increasingly convenient public services. We believe that with more summits to be held in the future, more new opportunities and changes will be brought to Fuzhou, and will help Fuzhou achieve faster and better development. Thank you again for your question.

The Poster News APP:

From the "Two Sessions" to the March 15 Consumer Day Gala, issues of data privacy and security have been consistently raised. With the advent of the digital economy era, data has become a new type of production factor and social wealth, and will be continuously shared, analyzed, and utilized. But it also means that personal privacy has become a primary concern in digital societies. In the future, what considerations will be taken to improve data security and privacy protection in the big data environment? Thank you.

Yang Xiaowei:

The CPC and the central government attach great importance to data security, personal information protection, and digital privacy. Over the past few years, we have continued to strengthen data security and personal privacy protections amid the rapid development of big data. We have implemented several important measures:

First, we continued to implement the Cybersecurity Law nationwide. We further strengthened coordination in policies, laws, and supervisions. We are stepping up efforts to formulate a data security law and a personal information protection law to ensure data security and individual privacy protection from a lawful perspective.

Second, we continued to enhance protection capabilities for the nation's critical information infrastructure, strengthened data security early warning and traceability systems, and comprehensively improved the data security protection of key information in key national sectors.

Third, we are stepping up efforts to formulate relevant regulations and criteria to establish systems for the confirmation, opening, circulation, and trading of data resources to further improve data property rights protection in terms of these operating mechanisms. This will provide institutional support for data security and the protection of individual privacy and personal information.

Fourth, we intensified efforts to enforce data security and personal information protection. In recent years, as you have seen and reported, we worked with relevant departments to step up efforts to protect technical patents, data copyright, individual data privacy, and continued rectification.

Fifth, we enhanced the publicity of data security. The Cyberspace Security Publicity Week, approved by the CPC Central Committee to take place every September, have given rise to an understanding throughout society about data security, protection of personal information, and individual privacy, and has safeguarded the vital interests of the people. Thank you.

Economic Daily:

SOEs are an important pillar of the national economy, and their digital transformation has attracted much attention. Could you brief us on what important measures will be taken next? Thank you.

Gou Ping:

Thank you for your question and concern about the digital transformation of SOEs. The CPC Central Committee and the State Council attach great importance to digital development. General Secretary Xi Jinping has repeatedly made important instructions on how to build China's strength in cyberspace, develop a digital China, and boost the integration of the digital economy and the real economy. At the Fifth Plenary Session of the 19th CPC Central Committee and the recently concluded Two Sessions, China made systematic arrangements for accelerating digital development. The SASAC will fully implement the policy decisions and plans of the CPC Central Committee and the State Council, and advance the digital transformation of SOEs.

First, we will strengthen top-level design. The Notice on Accelerating the Digital Transformation of State-owned Enterprises was issued to clarify the significance, main tasks, and safeguards of the digital transformation of SOEs.

Second, we will step up efforts to make this transformation. We have made digital transformation a key task in the reform and development of central SOEs, invited heads of SOEs to give lectures on digital transformation, and held promotional activities. Additionally, we have set up a collaborative innovation platform for central SOEs involved in BeiDou, blockchain, digital, and e-commerce development.

Third, we will set up demonstrative models to play a leading role. We have selected and published 100 typical cases in eight categories from SOEs, including product and service innovation and intelligent production and operation, to promote mutual learning.

SOEs have responded positively. Overall, the digital transformation of SOEs has made positive progress, which can be summed up in the following three aspects. First, we have accelerated the construction of a new digital infrastructure, in which SOEs can give full play to their role as the main force in new infrastructure construction. We sped up the construction of new digital infrastructure such as 5G, big data centers, and the industrial internet. The application of the BeiDou system in the industry has been enriched. More than 80 central SOEs have built group-level data centers and established more than 60 industrial internet platforms represented by the CASICloud and CEC Industrial Internet. Three central telecom SOEs have built more than 700,000 5G base stations, and COMAC has built China's first plant with full 5G coverage.

Second, we will accelerate the digital transformation of industries. SOEs have deepened the integration of digital technology and production, making major headway in digital product innovation, intelligent production, smart user services, and industrial ecology. Two thirds of the R&D institutes of the central SOEs have achieved work in 3D digital modeling and simulation, and more than half have built collaborative digital ecological platforms for the industrial chain. China State Shipbuilding Group has designed and built the world's first smart ship certified by classification societies (China Classification Society and Lloyd's Register). China Baowu has built an unmanned factory to achieve quasi-unmanned crane operations. Meanwhile, the State Grid has built a new energy cloud platform to promote the coordinated development of more than 3,000 upstream and downstream enterprises.

Third, we will boost the industrial application of digital technologies. SOEs have focused on core electronic components, high-end chips, industrial software, among other key areas to strengthen target research, and made breakthroughs in CPU, FPGA, operating systems, and EDA. SOEs have fostered a digital industry with a focus on cloud computing, big data, the Internet of Things, AI, and blockchain. Nearly 60 central SOEs have set up digital industry companies and more than 70 central SOEs have registered an annual transaction volume of more than six trillion yuan in e-commerce business. A group of influential enterprises have been developed, including State Grid Information & Telecommunication Group, Shanghai Baosight Software, and Richfit.

Next, we will enhance communication and cooperation with relevant state departments and local governments. We will make joint efforts to organize the implementation of special action plans for SOE digital transformation, coordinate the progress of digital transformation of industries and the industrial application of digital technologies, and break through core technologies to foster digital application scenarios, build models for industrial transformation, and make new progress in the digital transformation of SOEs. Thank you.

Cover News:

The SASAC recently issued a circular on speeding up efforts to promote the digital transformation of SOEs. The circular notes that China will intensify efforts to solve major R&D difficulties in the areas of core electronic components, high-end chips, and key software production. What are the specific plans? How will SOEs give full play to their advantages in this regard? Thank you.

Gou Ping:

Thank you for your questions. As you said and as I mentioned earlier, China is indeed weak in fields such as core electronic components, high-end chips, and key software production. The central SOEs have fully put into practice General Secretary Xi Jinping's important instructions on speeding up efforts to achieve breakthroughs in core technologies in key areas while acting in accordance with the decision and deployments made by the CPC Central Committee and the State Council. The central SOEs have focused on the key weaknesses, given full play to their advantages, and pooled great strength into further development. They have spared no efforts to expedite R&D activities and made positive progress. The SASAC has tried its best to help the central SOEs speed up efforts to make breakthroughs. In terms of strengthening guidance for assessment, increasing support for income distribution, establishing incentive mechanisms, and increasing capital support, we have strengthened policy support and provided guidance for enterprises to increase investment on R&D fronts. We have brought together factors for innovation and stimulated the drive for innovation to accelerate the pace of R&D breakthroughs. Meanwhile, we are also supporting professional mergers and acquisitions and corporate reorganization in the fields of core technologies with key links to be carried out in line with market principles. This will hopefully strengthen enterprises in the industrial and supply chain and improve the support capacity of our supply chain and the resilience of our industrial system. We also give full play to our institutional strength, which is to mobilize resources to accomplish major initiatives as well as the overall advantages of the central SOEs. We support central SOEs to take the lead and establish systemic, task-oriented innovation consortiums as well as industrial and technological innovation alliances in a bid to undertake major national sci-tech projects; promote further integration between enterprises, universities, research institutions, and consumers; and foster innovation along the industrial chain and among all sizes of enterprises. In particular, we encourage the central SOEs to harness their platform and application strengths to help all innovators in their R&D efforts and market applications and to promote the application of new technologies and products. The central SOEs already have some experience in this area and have made progress in collaborative innovation.

Next, the SASAC will focus on high-quality development and work to establish a new development paradigm. We will make sci-tech innovation a top priority and pool the resource and strength advantages of central SOEs to establish key areas for sci-tech breakthroughs, areas of development for original technologies, major hubs for sci-tech talents, and "special zones" for sci-tech innovation. We will make central SOEs a strategic strong point for national sci-tech industry and let them better play their part in speeding up efforts to make China a country of innovators in an effort to achieve self-reliance in science and technology. 

Beijing Youth Daily:

As China accelerates its efforts to build a digital society, the issue of the digital divide has become increasingly severe for the elderly. The MIIT said that a special campaign will be launched to help the elderly better adapt to online applications. What is the current status? Thank you.

Yang Yuyan:

Thank you for your question. This January, the MIIT launched a campaign to make online applications more elderly-friendly and barrier-free. The deployment work was recently finished and the campaign has been put into practice.

Next, we will follow the schedule and arrangement and focus on the actual needs of the elderly people; organize relevant parties to speed up the elderly-friendly and barrier-free adaptation work for websites and mobile applications; and establish an evaluation system to test the efficiency. It is estimated that by the end of this year, the first batch of qualified, barrier-free websites and mobile applications will be selected and released to the public. Thank you.

Guangming Online:

The outline of the 14th Five-Year Plan mentions that China will speed up efforts to build its digital economy. What are the policy considerations behind developing the digital economy? Thank you.

Sun Wei:

Thank you for your question. I also want to thank our friends from the media for your long-term interest in and support for the development of the digital economy. General Secretary Xi Jinping has attached great importance to the development of the digital economy, proposing to build a digital economy with data as a key element, and promoting and integrating the digital and real economies.

In recent years, the CPC Central Committee and the State Council have carried out a series of strategic measures such as building China's cyberspace strength, developing mechanisms for big data, and advancing Internet Plus initiatives, which have laid a solid foundation for the development of the digital economy. The just-concluded fourth session of the 13th National People's Congress has reviewed and adopted the outline of the 14th Five-Year Plan. It proposes accelerating digital development to build a digital China, making deployments for the development of the digital economy in the new era. The NDRC will fully implement the arrangements made by the CPC Central Committee and the State Council and work with relevant parties to put into practice the outline of the 14th Five-Year Plan and speed up the development of the digital economy. Our efforts in this regard will be made in the following six aspects.

First, the top-level design of the digital economy will be further strengthened. We will formulate special 14th five-year plans for the digital economy, strengthen the innovation and application of key digital technologies, accelerate digital industrialization and industrial digitalization, improve the digital governance system, and upgrade digital services. We will drive overall reforms in the ways of work, life, and governance through digital transformation and promote high-quality development.

Second, the construction of new types of infrastructure will be actively promoted to consolidate the development foundation of the digital economy. We will devise and introduce the 14th five-year plans for new infrastructure construction, enhance overall planning and coordination, refine the policy environment, and increase support. We will speed up the establishment of a collaborative innovation system for national integrated big data centers and promote high-quality and green development of data centers and 5G.

Third, the cultivation of the data factor market will be accelerated. We will give play to the key role of factors of data production, activate the potential for data production, and further improve the data ecology. We will work out and release guiding documents to develop the data factor market and build and improve the systems, standards, and norms in this field, including in areas of property rights, transaction and circulation, cross-border transmission, and security protection of data resources.

Fourth, the deep integration of digital technology and the real economy will be further advanced. We will foster new strengths in the digital economy, build new drivers for its development, and generate new industries as well as new forms and models of business. We will continue to implement the "Digital Transformation Partnership Initiative" to facilitate the digital and intelligent upgrading of conventional enterprises.

Fifth, guidance for regional pilot and demonstration programs will be intensified. We will implement major regional strategies and steadily advance the development of pilot zones for the national digital economy's innovation and development. We will speed up efforts to guide pilot zones to conduct preliminary trials in light of local conditions and reduce systemic and institutional barriers for development to give full play to their driving and demonstrating roles.

Sixth, a standardized and orderly policy environment will be fostered. We will build a policy and regulatory system that is compatible with the development of the digital economy, attach equal importance to both development and regulation, support the innovative development of platform companies, and enhance their international competitiveness. We will tighten supervision over online platform economy in accordance with laws and regulations, and strengthen the building of dynamic and innovative institutions in order to vigorously support the development of the digital economy.

Thank you again for your question. The NDRC will hold a sub-forum on the digital economy at this Summit (the 4th Digital China Summit). We welcome your input and participation.

Red Star News:

This year's summit includes eight competitions, adding, for example, events related to big data and robots. What were the considerations for doing so? How do we encourage teenagers to participate in these competitions?

You Mengjun:

This a very good question. General Secretary Xi Jinping has repeatedly stressed that to seek innovation is to seek the future. As an important part of the summit, the Innovation Contest has now been a success across two sessions, attracting the participation of a large number of outstanding teams and teenagers from home and abroad. The last session of the contest witnessed the involvement of nearly 10,000 teams and more than 20,000 contestants. The contest is becoming more and more professional and its reputation is growing across the industry.

This year's event will see eight competitions held simultaneously, including digital Party building, digital government, big data, smart healthcare, Kunpeng computing, cybersecurity, integrated circuits, and youth AI robots. Organizing competitions in these fields is mainly to dovetail areas of interest in the development of digital technology and various points of industry focus. For example, this year marks the 100th anniversary of the founding of the Communist Party of China, so we added a new competition event titled digital Party building.

You mentioned another two new competition events just now — big data and robots — for which we had the following considerations:

General Secretary Xi Jinping pointed out that data is also a factor of production and big data is an important productive force. By holding the big data competition, we aim to focus on the theme of this year's summit, pooling intellectual resources of enterprises, colleges, and universities, and scientific research institutions to accelerate the technological innovation and industrial application of various data. We also seek to explore new models and scenarios for data sharing, opening-up, development, and utilization and develop a group of big data application projects to facilitate industrial transformation, social governance, and public services in a targeted manner.

General Secretary Xi Jinping pointed out that the cultivation of scientific and technological personnel should begin with children. The Digital China Summit also attaches great importance to the fostering of innovation among teenagers. During the third session of the summit last year, we held a contest for primary and middle school students. After an extensive selection process, nearly 1,000 students took part in the competition, which highlighted the innovative potential of many young people. This year, we changed the contest for primary and middle school students into a youth-built AI robot competition, whose aim is to "popularize AI education and cultivate scientific and technological personnel for the future." By doing so, we want to highlight the important position of AI in the application of digital technology and guide teenagers to study AI knowledge systematically through interesting and challenging competitions with the goal of cultivating scientific professionals for the future.

In order to encourage youngsters to participate in the AI robot competition, we worked with the Fujian Association of Science and Technology and other institutions to carry out promotional activities at primary and middle schools across the province. It is hoped that the competition will attract a new generation of students to study and take interest in information technology. As far as we know, students are so far very interested in the competition and schools are organizing registration. The competition is expected to stimulate primary and middle school students' interest in digital technology innovation and help cultivate young innovative talents who will make contributions to the development of Digital China. Thank you for the questions.

Chen Wenjun:

The last question.

Yicai:

Digital rural development is an important strategic direction for rural vitalization and an essential part of building a Digital China. What progress has been made in promoting digital rural development? What new measures will be taken? Thank you.

Yang Xiaowei:

In accordance with the decisions and plans of the CPC Central Committee and the State Council, the CAC has deeply implemented the Outline of the Digital Rural Development Strategy. We have enhanced policy coordination and interaction at different levels with relevant departments, including the Ministry of Agriculture and Rural Affairs, the NDRC, and the MIIT. Together, we have identified and focused on the key tasks of digital rural development in 2020 with coordinated actions. In the past year, with COVID-19 control as a "new normal," digital rural development played a big role in various aspects: in the support of COVID-19 control and work resumption in rural areas; advancing poverty alleviation; promoting agricultural and rural modernization; improving information services for agriculture, rural areas, and rural people; and bridging the digital divide between urban and rural areas.

First, all targets for digital rural development in 2020 were achieved on schedule. Thanks to the efforts by the MIIT, the SASAC, China's three major telecom operators (China Mobile, China Unicom, and China Telecom), and China Tower, information infrastructure in rural areas was further improved. More than 98% of administrative villages had access to fiber-optic cables and 4G services. Some 309 million rural people accessed the internet, and the internet penetration rate in rural areas was 55.9% by the end of last year. Total online retail sales across China's 832 national-level poverty-stricken counties jumped 26% year on year to more than 301.4 billion yuan ($46.3 billion).

Second, internet infrastructure in rural areas was further improved. The MIIT and the Ministry of Finance (MOF) organized the provision of universal telecommunications services in six batches. We established 13,700 4G base stations in rural areas. The National Radio and Television Administration (NRTA) stepped up efforts to increase the coverage of radio and TV broadcasts in rural areas. Approximately 146 million rural households had access to satellite TV.

Third, the digital economy expanded the space for rural development. The Ministry of Commerce, the MOF, and the new national administration for rural vitalization continued to introduce e-commerce to poverty-stricken villages and has supported e-commerce development in a total of 1,338 counties. Live streaming has become a new way to facilitate the outflow of agricultural products from the countryside.

Fourth, we utilized information technology to drive the digital transformation of agricultural production. The Ministry of Science and Technology organized the implementation of major projects, while the Ministry of Agriculture and Rural Affairs promoted the integrated application of information technology and agricultural machinery services in various fields such as plantation and animal husbandry.

Fifth, with the establishment of a nationwide online platform, government services are being extended from national, provincial, municipal, and county levels to townships. 

Sixth, continuous measures were made to develop cyber culture in rural areas. The Publicity Department of the CPC Central Committee, the CAC, the NRTA, and other departments worked together to promote the building of integrated media centers at the county level. So far, more than 2,400 county-level integrated media centers have been launched and are developing into major platforms for public communication.

Seventh, active steps were taken to explore new models for digital rural development. Last year, the CAC and seven other ministerial-level departments launched a trial project for digital rural development, which now covers 117 counties and cities. We are tracking its development in order to accumulate experience which can be applied to other places across the country.

We are cooperating with other relevant departments to identify key tasks for digital rural development in 2021 according to the Outline of the Digital Rural Development Strategy. We aim to boost the development of rural industries, further optimize the layout of the industries, and enhance rural people's digital skills and literacy so as to consolidate gains in poverty alleviation, especially poverty alleviation through internet-based services, and upgrade services by promoting digital rural development.

Chen Wenjun:

Thank you to all the speakers and journalists. Today's press conference is hereby concluded. 

Translated and edited by Mi Xingang, Liu Qiang, Liu Jianing, Huang Shan, Zhang Jiaqi, Zhou Jing, Lin Liyao, Zhang Junmian, Zhang Rui, Chen Xia, Duan Yaying, Zhu Bochen, Li Huiru, Xu Xiaoxuan, Fan Junmei, Wang Qian, Zhang Liying, Wang Wei, 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:

Li Bin, deputy director of the National Health Commission (NHC)

Tian Yulong, member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer

Chang Jile, director of the Bureau of Disease Prevention and Control of the NHC

Yuan Lin, director general of the Department of Drug Regulation of the National Medical Products Administration (NMPA)

Wang Junzhi, deputy head of an expert task force on vaccine development and academician of the Chinese Academy of Engineering

Wang Huaqing, chief expert of the National Immunization Program of the Chinese Center for Disease Control and Prevention

Chairperson:

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

Date:

March 15, 2021

Shou Xiaoli:

Good afternoon, ladies and gentlemen. Welcome to the State Council's interagency task force press conference. Currently, China has been promoting COVID-19 vaccination in an orderly manner, and people are very concerned about the progress. To help people better understand the situation, today we have invited Li Bin, deputy director of the National Health Commission (NHC) to brief you on promoting COVID-19 vaccination and answer questions of interest. We also have with us Tian Yulong, member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer; Chang Jile, director of the Bureau of Disease Prevention and Control of the NHC; Yuan Lin, director general of the Department of Drug Regulation of the National Medical Products Administration (NMPA); Wang Junzhi, deputy head of an expert task force on vaccine development and academician of the Chinese Academy of Engineering; and Wang Huaqing, chief expert of the National Immunization Program of the Chinese Center for Disease Control and Prevention (CDC).

Next, I will give the floor to Mr. Li.

Li Bin:

Good afternoon, friends from the media! It is a great pleasure to meet with you here to introduce the progress of COVID-19 vaccination work in China. At present, in accordance with the decision and deployment of the Communist Party of China (CPC) Central Committee and the State Council, all localities are promoting vaccinations in a safer, more orderly and vigorous manner by distinguishing priorities, insisting on informed consent for voluntary and free vaccinations, integrating regular prevention and control with vaccination work, and undertaking due responsibility and industry supervision responsibilities in a prudent and orderly manner in accordance with the law. China has administered 64.98 million doses of COVID-19 vaccines as of March 14. At present, we are organizing the implementation of vaccination following a sequence of administering vaccines to key groups, high-risk groups and then the general public, and steadily increasing the vaccine coverage rate.

The first step is to vaccinate key groups. These groups include people facing a higher risk of occupational exposure, people at risk from overseas infections and people in key positions that maintain the basic operation of society, as well as people over 18 years old who live in border counties. We also include people who work in industries with higher risks of virus transmission such as the service industry and labor-intensive industry, some senior citizens who basically maintain good health but need to be vaccinated for special reasons, and other key groups decided by industrial authorities. At present, the vaccination of key groups is progressing in an orderly manner.

The second step is to vaccinate high-risk groups, which mainly include elderly people and people with underlying diseases. As data on the protective efficacy of the vaccine in these groups from clinical trials is not yet sufficient, vaccination of these groups will be arranged according to the progress of vaccine development. The mass vaccination of these groups will be carried out in a timely manner once sufficient data on vaccine safety and efficacy are available from clinical trials.

The third step is to widen the inoculation to the general public. In this stage, we will administer COVID-19 shots to the rest of the public who are willing to get vaccinated except for the above-mentioned two groups. Our ultimate goal is to effectively protect the health of all people.

In order to ensure the smooth progress of the inoculation, we have mainly done the following work.

First, we have urged the relevant departments and local governments to perform their due responsibilities. A working mechanism of "daily reporting, weekly scheduling and semi-monthly announcement" has been in operation, and a monthly dynamic adjustment mechanism for vaccination supply and demand has been established. All relevant departments have shouldered their responsibilities to see that all vaccination tasks are fulfilled properly. Vaccination is the main task of epidemic prevention and control and has been carried out in all provinces. All localities have strengthened the coordinated management of vaccine supply within their jurisdictions, and accurately calculated the demand for vaccine use according to the vaccination plan and the capacity to guarantee services. Vaccine delivery and quality supervision of stored vaccines, as well as specific inoculation responsibilities, are implemented at the municipal and county levels. At present, localities have formulated step-by-step vaccination plans based on the statistical situation of various groups of people and set detailed timetables, so that the vaccination of various groups of people are advanced steadily and seamlessly. For people who have not yet completed vaccination, timely arrangements should be made. We can also move ahead of the vaccination schedule when it is possible. In these ways, the inoculation plans are arranged with national-level coordination. At present, the State Council's interagency task force has sent 15 instructor groups to various provinces to ensure that all measures are put in place.

Second, we are making every effort to roll out vaccination. The State Council's interagency task force has established relevant work systems to coordinate the supply of vaccines nationwide and strive to ensure that vaccines are produced at full capacity and expand capacity. The relevant departments have stepped up efforts to coordinate the supply and demand of vaccines, regulate the storage and transportation of vaccines, improve the efficiency of distribution, and guarantee the supply of vaccines. All localities set up sufficient vaccination stations with enough personnel and equipment, according to the amount of people that need vaccination and the amount of people that have been vaccinated. Vaccination workers must receive training before they are qualified for the job. They must strictly adhere to the principle of "three checks, seven verifications and one match" to ensure safe and standardized vaccination, including checking the recipient's health condition, contraindications and their vaccination cards and also recording the appearance, batch number, and expiration date of the vaccine and syringe. They must also verify the recipient's name, age, and the vaccine's product name, specification, dosage, injection site, and route of administration, and ensure that the information of the recipient, vaccination card and vaccines are all matched.

Third, we strictly implemented vaccine control measures. In terms of traceability, the country established a platform for nation-wide, coordinated, and electronic vaccine tracing, with stipulated information from various regions being reported to the platform in a timely and accurate manner. This enables the full traceability of vaccines covering the source and whereabouts. In terms of distribution and usage safety management, disease prevention and control departments and vaccination units made great efforts in strictly controlling vaccines on their way in and way out, and regularly monitor and record temperatures of COVID-19 vaccines during storage and transportation, so as to ensure safety. 

Fourth, we strengthened efforts to guarantee treatment for adverse events following immunization (AEFI). Class-two general hospitals and above were organized to provide medical treatment at vaccination spots they have been paired with. Experienced personnel for emergency treatment were sent to offer on-site support with necessary medical equipment and medicines. Ambulances were stationed on site. Personnel participating in medical treatment were given strict training to make sure suspected AEFIs can be identified in a timely manner and treated immediately. We made all-out efforts in organizing medical treatment, with barriers cleared for referrals and green paths for treatment established. 

Fifth, we carried out science popularization activities. We made timely releases of information relating to the safety and efficacy of COVID-19 vaccines, as well as knowledge regarding which kind of people the vaccines are suitable for and what to keep in mind during vaccination. This was done via official websites and official accounts on WeChat. We offered timely answers for the questions in people's mind, cleared their doubts, and earned the public's cooperation for the vaccination task. 

I just offered a brief introduction. Next, my colleagues and I will answer your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Li. Now we will start to answer questions. Please state the news outlet that you work for before asking questions. 

CCTV: 

Many residents have received the notice for vaccination. Some others haven't. Are there means for them to get inoculated if they want to? Can they make appointments on their own and then go to vaccination spots for inoculations? Thank you.

Li Bin: 

We made comprehensive arrangements for this type of work to be carried out in an orderly manner when conducting the vaccination task. Mr. Chang will introduce the relevant information. 

Chang Jile:

Thank you for the questions. Mr. Li just mentioned that, high-risk groups will first get inoculated with COVID-19 vaccines, then high-priority groups, and finally other groups, according to the country's unified arrangement. Currently, all regions are devising practical plans to inoculate different groups of people at different stages according to the nation's overall arrangement. As far as we know, the current vaccination efforts around the country are mainly focused on target groups, most of which are involved in key industries and key places, and are mainly organized centrally by the units where they work, while some temporary vaccination points have been set up in places where target groups work and live. If a few targeted people couldn't take part in concentrated inoculations for personal reasons, they may get inoculated at vaccination units nearby afterwards, though, they need to contact vaccination units in advance, or they can make appointments according to the requirements of local health administrations, disease control departments and vaccination units. The vaccination task this time targets large groups of people and involves numerous vaccination spots. Many vaccination spots have been increased or set up for temporary use. Existing vaccination spots have expanded service capabilities. We are constantly optimizing vaccination services. We will also make timely public releases of information related to vaccination spots. People with questions about the inoculation of COVID-19 vaccines may consult local health departments, disease control institutions or vaccination units, online or via telephone. In short, we are currently advancing the inoculation of COVID-19 vaccines in an orderly and effective way, in accordance with the unified arrangement of the joint prevention and control mechanism of the State Council. We hope that all people will cooperate for this task to be done and get inoculated as early as possible to gain protection. Thank you.

ThePaper.cn:

Surveys show that many Chinese are willing to get inoculated with the COVID-19 vaccines, but some have hesitations about the safety of the vaccines and have showed less willingness. How will you clear people's safety-related concerns? Thank you.

Li Bin:

This is a very good question. As I just mentioned, the basic principle of inoculation of COVID-19 vaccines in our country is for people to voluntarily get inoculated with informed consent. The number of inoculations is directly related to people's willingness to get inoculated. So, we have always paid attention to this issue when conducting the vaccination task, seeing it as the priority. We have been following up and doing research regarding this issue. According to what we have learnt, inoculation willingness is influenced by many factors and shows quite large changes. At present, there are two main factors impacting inoculation willingness. One is the epidemic prevention and control situation. Our country has taken powerful and appropriate measures in this field, and as a result, the situation has been stable, generally speaking. Therefore, this makes some people think that the risk of infection is rather low and there is no need to get inoculated for additional protection for the time being. The other one is that because the COVID-19 vaccines are new to the market, some people want to see more information about the efficacy. Many people are eager to know about safety data and efficacy issues, planning to get inoculated once more knowledge of the vaccines is known. These are the two factors that have the largest impact on the issue at the moment. 

Here, I would like to share something with you. First, regarding infection risks, although China's overall situations for epidemic prevention and control currently remain stable, there remain risks of infected cases importing the virus as well as localized outbreaks among individuals and across society. For the vast majority of people, if we have no immunity against the novel coronavirus, the possibility of infection will continue to exist, and some of us will likely show severe symptoms after getting infected. Therefore, vaccination is the best way to prevent COVID-19. Vaccination can effectively protect both individuals and society, and reduce infection, severe illness, and death rates. This is therefore the main strategy to prevent and control COVID-19 in the country at present.

Second, the more people who have been vaccinated, and therefore have immunity, means that we can effectively control the spread of the novel coronavirus. Vaccination can protect not only ourselves and our families but also the rest of society.

Third, regarding the vaccination effect, all the vaccines can be used in China only after they have undergone clinical studies in line with relevant domestic regulations. They must then be approved by the national medical products authorities and pass strict verifications. In the process of storage and transportation, all vaccines must be monitored and have their temperatures recorded at regular intervals to ensure that they meet the requirements regarding temperature environment and transportation. For vaccinations, we have expanded our personnel training and asked all medical staff to strictly implement operating instructions to guarantee the effectiveness and safety of vaccines.

With the development of vaccination work, the number of vaccinated people has increased, so I believe immunity will further rise. We hope more people will actively take part in vaccinations at an early date so that we can witness the protective effect of vaccines together. Thank you.

CRNTT:

What is the suggested time between getting the COVID-19 vaccine and other vaccines? Is it possible to encounter an adverse reaction if you receive other vaccines after getting this one? Since China has carried out a massive domestic vaccination program, when are we expected to reach herd immunity? Thank you.

Li Bin:

This is a very specialized question, so I would like to invite Prof. Wang Huaqing to answer it.

Wang Huaqing:

Thanks for your question. Because the COVID-19 vaccine is new, the question you asked is not only a question that concerns the public but also one that professionals must conduct research on. Some time ago, we organized some experts to study and verify this issue. In order to monitor adverse reactions, suspected adverse reactions, and other considerations, we have studied whether tour novel coronavirus vaccine can be used simultaneously with other vaccines, and if not, how much time should there be between receiving vaccinations. Our findings show that at least two weeks' gap should be guaranteed between the COVID-19 vaccine and other vaccines. But in some special instances, the two weeks' recommendation can be waivered. For example, if someone has to be vaccinated against rabies or tetanus after being bitten by animals or are suffering trauma.

We all know that vaccines are external antigens that enter the human body. There will likely be some adverse reactions after vaccination, most of which will be normal reactions that will get better without treatment. However, sometimes there may be suspected adverse reactions with more severe symptoms. If that is the case, we recommend that the person goes to the hospital to receive timely diagnosis and treatment. During this process, if the doctor suspects that the adverse reactions were caused by the vaccine, the case will be reported and further investigation and diagnosis will be followed. In the future, we will continue to monitor and evaluate adverse reactions and suspected adverse reactions related to both the COVID-19 vaccine and other vaccines.

Just now you mentioned the issue of the immunological barrier, which is something that is of particular concern to the public, and also the direction in which we have been working hard. Everyone knows that COVID-19 is a disease that most or all the public is susceptible to. It has a very high severe co-morbidity rate for people with chronic diseases and the elderly, while some people may eventually lose their lives due to severe illness. According to the results of global monitoring, the global case fatality rate exceeds 2%, which is also relatively high. Under the circumstances, the key for us in controlling this disease is to rely on vaccines. As for other non-vaccine measures, China has made great efforts in various aspects in the early stages. The cost of taking non-vaccine prevention and control measures together has also been very high. We hope that in the future we will build an immunological barrier through vaccination. This is also the conclusion of our experience in controlling past infectious diseases.

Regarding the establishment of herd immunity, this has a lot to do with the protective efficacy of the vaccines and the population's vaccination rate. In the past, we eliminated smallpox and formed a population immunity of around 85% — that is the population immunity, not the vaccination rate. This means that the rate of people with immunity accounted for 85% of the whole population. Measles, which is more contagious, requires 95% of the population to be immune to block the disease. We have eliminated smallpox, and put forward the goal of eliminating measles. The goal of elimination is to prevent it from spreading, so the population must have high immunity.

COVID-19 vaccinations should be carried out step by step. The first step is to consider key populations, those with key jobs and who are at high risk of infection. The second step involves people who may be at risk of severe illness, and the third step involves other groups. In the end, all eligible members of the public will be vaccinated. This is the basis for the establishment of an immunological barrier or herd immunity. Of course, the establishment of such an immunological barrier requires efforts from all sides, including the public. Therefore, we hope that members of the public who received COVID-19 vaccination appointments will actively cooperate, and get vaccinated. Let's work together to build an immunological barrier, so that our studies, work and lives can return to normal. Thank you.

Reuters:

We have heard many times about production capacity, and are particularly concerned about the issue of output. What is the actual production volume of the four COVID-19 vaccines currently on the market in China? For example, what are the actual daily, weekly and monthly outputs? Or, how many have been produced so far? Also, in terms of these four vaccines, what is the difference between actual production output and designed production capacity? Why is there such a difference? Just now you mentioned some goals. What are the actual production plans for these four vaccines? How many doses of vaccine are actually planned to be produced, by certain specific times? Thank you.

Li Bin:

You've asked a combination of several questions. I'd like to invite Mr. Tian Yulong to introduce the relevant situations.

Tian Yulong:

Thank you for your questions. You are very professional and concerned about the issue of vaccine production. According to the overall deployment of the State Council's interagency task force, the MIIT has taken the lead in working with the NHC, the NMPA and other relevant departments to ensure the supply of COVID-19 vaccines. Your concerns are regarding production. At present, four vaccines have been granted conditional approval, including three inactivated vaccines from Sinopharm CNBG Beijing, Sinopharm CNBG Wuhan and the Beijing-based Sinovac Biotech, as well as a Chinese adenovirus vector vaccine from the Tianjin-based CanSino Biologics. These four companies have begun organizing mass production. Just now, Mr. Li Bin explained that we have completed more than 60 million vaccinations, so we have met the current supply and demand pretty well. You will have also seen our donations to other countries, with our exports receiving positive feedback — so, we have also supported international demand.

It appears that domestic vaccine production is still expanding. With the continuous release of production capacity, the output will gradually increase. This reflects China's institutional advantages, industrial mobilization capabilities, and enterprises' advantages in efficient organization. During the Spring Festival, vaccine enterprises worked overtime and raced against time to organize production at full capacity, which also reflects our people-centered philosophy. According to the current production plans, we have established a dynamic guarantee balance mechanism for production supply and demand. We must accurately measure demand and implement vaccinations step by step, so that the accurate connection between production and supply can be guaranteed. Our continuous release of vaccine output and production capacity at all stages throughout the year has met the needs at all stages. Therefore, we are still very confident, because China's industrial mobilization, emergency response capabilities and corporate capabilities of organizing production are highly efficient.

One thing particularly important is that vaccines are different from other anti-epidemic supplies and medicines, and it is crucial to ensure absolute quality and safety throughout the entire vaccine production chain and process. The production process is very complex, with many production steps and high technical content, and market access and supervision are also very strict. We and the drug regulation authorities have cooperated in ensuring quality and safety and every batch of vaccines must undergo a necessary period of production testing. During the period, safety must be ensured in every procedure, and measures like testing must be intensified. We must make safety and quality the bottom line in capacity release, production and supply. On this premise, our production capacity is constantly expanding. We and the health authorities have established a dynamic, precise and balanced mechanism for vaccine production and supply to meet vaccination demands, and I believe we will be able to complete our task successfully. Thank you. 

South China Morning Post:

We know that there is demand for Chinese vaccines in many countries and that China itself has to build up an immunization barrier for its own entire population, so is there a priority? How do you balance the demand for vaccines at home and abroad?

Tian Yulong: 

Vaccine is an important field of current anti-epidemic cooperation in international community. We can see from the news that while prioritizing meeting domestic demand, China has taken practical actions to implement President Xi Jinping's announcement about making COVID-19 vaccines a global public good. We have actively promoted international cooperation on vaccine and won recognition from the international community. 

At the end of February, the Ministry of Foreign Affairs released information that China had been providing vaccine aid to more than 50 countries and exporting jabs to 27 countries. As China's vaccines become more and more popular, we believe that more countries will accept them. China's production capacity will continue to be released and output will continue to expand, and so will our supply both at home and abroad. While ensuring that domestic needs are met, we will keep increasing our assistance and exports to other countries and jointly fight against the epidemic. We are confident that China's high-quality, safe vaccines will be welcomed by more countries and we are willing to make more efforts in this regard. Thank you. 

China Media Group:

Currently, China has approved four types of COVID-19 vaccines for market launch. What are their differences, and the advantages and weaknesses of each? 

Li Bin: 

This question goes to Mr. Wang. 

Wang Junzhi: 

The four categories of COVID-19 vaccines are developed through two approaches. The difference is that three of them are inactivated vaccines and one is an adenovirus vaccine. The inactivated vaccine uses physicochemical methods to inactivate the live virus after its activation and expansion and then purify it. The vaccine's character is that its component is the most similar to the structure of the natural virus. Therefore, it gives a strong immune response and safety is ensured. The vaccine is stable to be stored at 2-8 degrees Celsius for two to three years, and is easy to be transported, which is convenient for people in remote areas. This vaccine requires two shots. As for the adenovirus vaccine, we take Ad5 as the vector, introduce COVID-19 antigens, and then make viral vector vaccines with bioreactors. This production technology is relatively easy and the cost is low, because it was based on our original Ad5 Ebola vaccine. This type of vaccine can not only generate neutralizing antibodies but also improve cellular immunity, using a one-dose immunization procedure. The one-dose immunization is really convenient for specific populations with emergency needs.

No matter what approaches we take, the most important thing is to adjust to the features of the antigens and pathogens, and use the most suitable technology to develop safe, effective and quality-controlled vaccines. That is the most crucial criterion for vaccines to work. Thank you. 

Bloomberg:

China announced a vaccine passport last week, aimed to allowing citizens to travel internationally. That will only work if you can get other countries to recognize it. What outreach is China making on this front, and have any countries said they'll recognize China's passport? 

Li Bin:

We are actively working in this field. First, we have paid close attention to the policies and measures adopted by each country after administering COVID-19 vaccines. This includes the international issue of recognizing people who have been vaccinated, which you mentioned. Second, we have been actively studying relevant policies, which are currently undergoing adjustments and improvements. Relevant departments of the interagency task force have been leading the work, and we will publish detailed rules once the policies have been approved. By adopting these policies, we aim to further promote COVID-19 vaccination, and boost international communication and exchanges. Thank you.

Cover News:

Besides the four approved vaccines which are already available on the market, how is the development of other vaccines progressing? It has been reported that teams headed by Chen Wei and Zhong Nanshan, both academicians with the Chinese Academy of Engineering, have deployed new vaccine research and development. What is the special significance of the new vaccines currently being developed? Thank you.

Wang Junzhi:

As we know, 17 Chinese COVID-19 vaccines are currently going through clinical trials, four of which have been approved under certain conditions, and another three technological approaches are either in phase 3 clinical trials or will enter phase 3 clinical trials shortly. The public are all very interested in their progress for the future. For these vaccines, two tasks must be accomplished before they can enter the market. First, we must ensure that the data on safety and effectiveness for phase 3 clinical trials meet relevant requirements. Second, we must complete the commercial-scale production process verification, and establish reliable quality standards. We need to collect sufficient data from clinical trials. This is not an easy task, because we have faced great difficulties in doing phase 3 clinical trials, which are done abroad. Once there is enough data to show that a vaccine is as effective as it is designed and that it has an acceptable safety profile, the applicant can submit the marketing application to the NMPA. The NMPA will immediately complete the reviewal process, and ensure that safe and effective vaccines can be available on the market as soon as possible.

China News Service:

If the number of new COVID-19 vaccines approved for the market increases, the whole of society will be concerned about their quality and safety. What measures will the NMPA take to enhance the supervision of vaccine quality? Thank you.

Li Bin:

This question is very clear, so I'd like to invite Mr. Yuan Lin, head of the Department of Drug Regulation of the NMPA, to introduce the situation.

Yuan Lin:

Thank you for your question. This is a very important issue that has generated much interest, and is also related to concerns over safety for people who have been vaccinated. Through years of efforts, and along with the rapid development of the economy and society, China has established a fairly complete vaccine regulatory system, a relatively comprehensive legal system and a comparatively sound vaccine quality standards system. We have implemented good manufacturing practices (GMP) in line with advanced international standards, and China's vaccine regulatory system has twice passed the evaluation of the WHO's national regulatory system. As such, it can be said that our vaccine regulation has been internationally recognized.

Especially since the outbreak of COVID-19, the NMPA has resolutely implemented a series of important instructions given by General Secretary Xi Jinping on COVID-19 vaccines, and implemented decisions and arrangements of the CPC Central Committee and the State Council. In particular, in the aspect of implementing the "four strictest" regulatory requirements for vaccines, a series of strong and effective measures have been taken to ensure the quality and safety of the COVID-19 vaccines.

It is well known that with regards to laws and regulations, China is the only country in the world that has introduced a specific law on vaccine management, which is the Vaccine Administration Law. On that basis, we have formulated a series of supporting rules and regulations and put in place requirements on technical specifications, ensuring that all vaccine-related companies, including distribution companies, as well as vaccination centers and regulation authorities can act in line with relevant laws and rules, and all of our work can be carried out in an orderly manner within the legal framework. To ensure the quality of vaccines, by adhering to the laws, regulations and supervision, and being responsible for the people, we have made it clear that vaccine manufacturers are primarily responsible for ensuring the quality and safety of vaccines. We require that vaccine manufacturers assume the main responsibilities in accordance with the law. They are required to act as follows: First, they must strictly abide by the Good Manufacturing Practice (GMP) for Drugs. Second, they must ensure that products are produced according to approved manufacturing techniques and standards. The process of vaccine manufacturing is relatively complex and missteps can be caused by oversights. Meanwhile, to further ensure the quality and safety of vaccines, we require manufacturers to conduct strict testing before releasing vaccines and take responsibility for pharmaceutical marketing, including strictly following requirements on transport, delivery and cold-chain logistics. At the same time, we require manufacturers to actively collect and analyze information on adverse reactions that occur during vaccination work. The aim of all these measures is to ensure the safety and quality of vaccines throughout the entire management chain. 

For regulation authorities, we used a combination of measures to tighten supervision and law enforcement. We just mentioned that four manufacturers have been granted conditional market approval for vaccines. We organized comprehensive and systematic inspection tours of these companies in a timely manner. Meanwhile, we organized inspections of relevant workshops to ensure that they were licensed. We also arranged for expert inspectors from national and local drug regulatory authorities to carry out inspections and spot checks regularly or periodically. One of the important measures we have organized is for a team of at least two inspectors stationed in the manufacturers to supervise different aspects using various measures, to supervise and guide companies to improve their management system and ensure their manufacturing processes are in line with laws and regulations, in a bid to ensure vaccine quality. With the joint efforts and coordinated cooperation with relevant departments, we are working together to use information technology to track vaccine information, monitor suspected adverse reactions during vaccination and offer proper handling, and crack down on vaccine-related crimes and violations in accordance with the law. 

By taking various, effective measures, we will ensure the safety of COVID-19 vaccines in a comprehensive manner and lay a solid foundation for the vaccination work. Thank you.

Red Star News:

Recently, blood banks in some parts of the country have been facing blood shortages. Those in charge of local departments have said that this is related to the COVID-19 vaccinations. What impact will COVID-19 vaccinations have on blood donation? When can vaccine recipients donate blood? Are blood stocks still able to meet people's needs? Thank you. 

Li Bin:

This is a very important question. Health care authorities have always attached great importance to the safety and supply of blood. Ensuring blood supply is one of our major tasks. During the vaccination work, we have been paying attention to the question of how to ensure the effective blood supply. Mr. Chang will introduce the details. 

Chang Jile:

Thank you for your question. The safety of blood supply has a direct bearing on clinical and medical treatment services. The NHC has always attached great importance to the implementation of the Blood Donation Law, and made great efforts to encourage the public to participate in voluntary blood donation. The amount of blood collected from voluntary donors in China has increased for 20 consecutive years, with all blood donated for clinical use undergoing nucleic acid testing. China ranks among the top countries in the world in terms of ensuring the safety of blood supply. We have also used information technology to establish a monitoring and early warning system on blood inventories across the nation and a coordinating mechanism to guarantee supply. Through the national management system of blood inventories, 452 blood banks across the country share their information with one another and can timely monitor the collection and storage of blood in different places. In the case of a transient blood shortage or low supplies of certain blood types in certain areas, we immediately kick-start the coordinating mechanism and timely allocate blood from blood banks where storage is sufficient to ensure supply.

Regarding the impact of vaccination on blood donation, in the light of the current blood donor eligibility criteria and different types of vaccines inoculated, the suspension of blood donation ranges from 24 hours to four weeks. In addition, according to the Blood Donation Law, there should be an interval of no less than six months between donations. Since the COVID-19 vaccination campaign launched, we have strengthened the monitoring and allocation work of blood storage and rolled out a system which includes daily monitoring and reporting. As of now, the national level of stored blood is above the security line. The blood supply is stable and can basically meet the demands for clinical use. Initially, to ensure the safety of blood donors and vaccine recipients, following the principle of being proactive and prudent, we organized experts to study this question. We have also taken common international practice into consideration with regards to the suspension of blood donations after inoculation by the COVID-19 vaccine. 

As the inoculation of COVID-19 vaccines is proceeding worldwide, the delay periods for blood donation after vaccination have been successively updated and released internationally. Therefore, in line with the principle of scientific prudence, we have also organized experts to conduct a study to determine the time to suspend blood donation after vaccination against the new coronavirus. Next, we will continue to strengthen the education and mobilization of voluntary non-remunerated blood donation, and encourage healthy citizens of the right age to actively donate blood without compensation. On the other hand, we will guide clinics to strengthen the rational use of blood, and at the same time closely monitor the situation of blood stocks nationwide, make timely deployments and do a good job in guaranteeing clinical blood use. Thank you.

The Straits Times: 

In the beginning, China's vaccination program appeared to be ahead of all other countries, but the rate of inoculation seems to have slowed in recent months. Is this because of the hesitation that you mentioned earlier? And other plans to release more clinical trial data so people are less worried? 

Li Bin:

Just now I briefed you on the current situation of vaccination. So far, 64.98 million doses of COVID-19 vaccine have been administered in China, and the inoculation program is now being promoted in a steady and orderly manner. We have been paying close attention to public's willingness to get vaccinated during our inoculation work. Next, we will vigorously advance the vaccination program and constantly improve vaccine rollout.

Guangming Daily:

We know that vaccines are products that need tight supervision. They have to go through the lot release process before they are authorized for the market. Can China's current lot release capacity meet the demand for the large-scale production of COVID-19 vaccines? Thank you.

Li Bin:

Mr. Yuan will answer this question.

Yuan Lin:

Thank you for your question. Vaccines are products that need key and strict regulation. Lot release must be taken as the bottom line or even the red line to ensure the quality and safety of the vaccines. At the same time, lot release is also an internationally accepted, effective and powerful regulatory measure for vaccines and other biological products. I mentioned China's Vaccine Management Law just now—the first of its kind in the world which took effect on Dec. 1, 2019. The law clearly stipulates that vaccines entering China's market, both those produced domestically and imported ones, should undergo the lot release process in accordance with the law. More specifically, each lot of vaccines, before their release onto the market, need to be tested and approved by nationally recognized lot release institutions. The NMPA attaches great importance to enhancing China's lot release capacity, and has made timely and comprehensive analyses of the country's current strength of vaccine production and lot release. With the strong support and coordination of relevant departments, we have planned ahead and adopted phased and step-by-step measures in advance to further intensify and accelerate the capacity building of biological products lot release and of the relevant testing institutions. What gratifies us is that at present, the national medical products testing institutions and those at the provincial (municipality) level including Beijing, Hubei and Guangdong, have all gained the capacity to carry out lot release for COVID-19 vaccines. Meanwhile, we are actively promoting the capacity building of other provincial-level drug testing institutions. It is expected that a dozen new institutions will be able to conduct lot release for vaccines in the near future, which will continuously meet the needs for coronavirus vaccine lot release in China.

Simultaneously, we are stepping up efforts to constantly improve our testing quality and efficiency to keep pace with the production capacity of COVID-19 vaccines. We require all the lot release institutions to strengthen their management, to conduct tests on the safety and effectiveness of vaccines in accordance with legal requirements and national standards, and to ensure the quality of the lot release work. To actively keep pace with the country's rising production capacity of the coronavirus vaccines, we demand that on the premise of ensuring quality, testing institutions should tap internal potential and improve efficiency. We also require that the institutions' testing work and vaccine manufacturers' statutory self-checks are started, conducted and completed simultaneously, which has greatly shortened the time it takes for COVID-19 vaccines to enter the market. Through the continuous efforts of the national medical products administration system to enhance the lot release capacity, we can fully ensure the effective coordination and consistency of the coronavirus vaccine lot release capability and manufacturers' continuously increasing production capacity and output. This will ultimately guarantee the smooth administering of COVID-19 vaccines. Thank you. 

Economic Daily:

How is the raw material supply for vaccine production? Can the production and supply of key materials be guaranteed? What measures have been taken to ensure the production of materials and the stability of production and supply chains? Thank you.

Li Bin:

I'd like to invite Mr. Tian Yulong to answer these questions. 

Tian Yulong:

Thank you for your questions, which I think are very important. A stable and adequate supply of materials is essential to vaccine production. The MIIT accumulated significant experience in this regard while ensuring the supply of medical products last year. Thanks to the integrity of our industrial system and our ability to mobilize, organize and respond to emergencies, we established an industrial chain connecting upstream and downstream companies. The experience was helpful for us to adopt good measures in accurately connecting and ensuring the smooth operation of supply and industrial chains, and upstream and downstream vaccine production systems.

Our measures focus on two aspects. The first is to ensure the stability of the vaccine production chain. Vaccine production involves multiple links, including the supply of equipment on production lines, raw materials, auxiliary materials, packaging materials, cold-chain equipment for the transportation of vaccines, and the equipment required for vaccination. All these links require stable production and supply chains. We have focused on coordinating the production, procurement, and supply of these materials. At present, China has a complete vaccine production system; the supply of raw and auxiliary materials is orderly, stable, and sufficient enough to support large-scale production now and for some time to come. We are quite confident of this. This is the most important foundation for ensuring large-scale production and the supply of vaccines needed for the inoculation program.

The second aspect is the supply chain. To ensure the safe, efficient and quick transportation of vaccines to inoculation and distribution venues, we need to establish a logistics chain, a testing chain, and other relevant chains for upstream and downstream companies. These chains are critical for orderly, efficient, smooth, and safe production, as well as testing and the use of vaccines. The MIIT and relevant departments have established sound mechanisms for efficient cooperation to ensure not only steady production but also efficient transportation and supply of vaccines. So, please rest assured.

Hong Kong Economic Herald:

The impact of mutations on the efficacy of COVID-19 vaccines has drawn both domestic and international attention. Regarding the vaccines approved for conditional marketing in China, how effective are they against coronavirus mutations? Thank you.

Li Bin: 

I'd like to invite Mr. Wang Junzhi to answer the question.

Wang Junzhi:

This is an issue of great concern both at home and abroad. Currently, we haven't found that mutated COVID-19 strains have had an obvious impact on the efficacy of domestic vaccines approved for conditional marketing. Companies developing the vaccines have conducted cross-neutralization tests and evaluations on mutant virus strains using immune serums. The latest study report still shows no obvious decrease in the neutralizing activity of both the inactivated vaccine and recombinant protein vaccine against new COVID-19 strains, including the strain discovered in South Africa. However, more follow-up studies are needed.

We need to attach great importance to this issue. The long-term spread of the virus may result in the accumulation of multiple mutations. When the accumulation reaches a certain level, it may undermine the protection given by vaccines. This risk does exist. In order to effectively counter the influence of virus mutations, we must take precautionary measures and actively prepare for this. I think the following two aspects are very important. First, we need to carry out close and real-time monitoring, collect variants quickly once they are detected, and then perform tests on them to identify their impact on vaccines. Second, we need to step up the development of vaccine platforms. By arranging five technical routes, China has already established a powerful platform for vaccine R&D. In addition, we are taking proactive measures to develop a new generation of vaccines so that we can roll out effective vaccines as quick as we can against new variants once mutations are proven to eliminate or greatly reduce the efficacy of existing vaccines. This is critical.

Generally, we need to improve our comprehensive capabilities to better deal with virus mutations in the future. This is the most important thing to do. Thank you.

Shou Xiaoli:

The State Council's interagency task force briefing today is hereby concluded. Thank you all. Goodbye.

Translated and edited by Liu Sitong, Zhou Jing, Lin Liyao, Wang Zhiyong, Zhang Rui, Liu Qiang, Liu Jianing, Fan Junmei, Cui Can, Zhang Junmian, Xu Xiaoxuan, Li Huiru, Zhang Liying, Wang Qian, 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:

Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council

Deng Zhonghua, deputy director of the Hong Kong and Macao Affairs Office of the State Council

Zhang Yong, deputy director of the Legislative Affairs Commission of the Standing Committee of the National People's Congress (NPC)

Chairperson:

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

Date:

March 12, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office. As you all know, the fourth session of the 13th National People's Congress (NPC), which concluded yesterday, adopted the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region (HKSAR) by an overwhelming majority vote. To help the public more accurately understand the decision from both legal and logical perspectives, we have invited Mr. Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council, Mr. Deng Zhonghua, deputy director of the Hong Kong and Macao Affairs Office of the State Council, and Mr. Zhang Yong, deputy director of the Legislative Affairs Commission of the Standing Committee of the NPC. They will elaborate on the decision and take your questions. First, we will give the floor to Mr. Zhang Xiaoming.

Zhang Xiaoming:

Friends from the media, good morning. Yesterday afternoon, the fourth session of the 13th NPC adopted the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region. The decision is another major step in the governance of Hong Kong taken by the central authorities following the adoption of the Law on Safeguarding National Security in the Hong Kong Special Administrative Region. It is also a milestone in implementing the principle of "one country, two systems." The NPC has made major decisions on Hong Kong-related issues both this year and last year. This fully demonstrates the great importance attached to Hong Kong affairs by the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, and General Secretary Xi Jinping's general plan of the governance of Hong Kong. When the vote on the draft decision was held, Mr. Zhang Yong and I were at the Great Hall of the People. A total of 2,896 NPC deputies cast their votes. Except for one abstention, all the other 2,895 deputies voted in favor. A big round of applause broke out when Li Zhanshu, chairman of the NPC Standing Committee, announced the result. The sustained applause represents the shared aspiration of the Chinese people, including all our compatriots in Hong Kong, and the unshakable will of the state.

At a workshop held by the Chinese Association of Hong Kong and Macao Studies on Feb. 22, Xia Baolong, vice chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and director of the Hong Kong and Macao Affairs Office of the State Council, elaborated on the theme of implementing the principle of "patriots administering Hong Kong" put forward by General Secretary Xi Jinping, and advancing the steady and sustained implementation of "one country, two systems." Xia's statement has drawn a positive public response in Hong Kong. On March 5, Wang Chen, vice chairman of the NPC Standing Committee, made a detailed explanation of the necessity and importance of improving the electoral system of the HKSAR as well as the main points of the draft decision. On March 6 and 7, Vice Premier Han Zheng made important remarks on matters related to improving the HKSAR's electoral system while attending group discussions of Hong Kong and Macao CPPCC members and NPC deputies. These state leaders clarified the position of the central authorities. Here, I would like to share some views on the great significance and far-reaching impact of improving the HKSAR's electoral system.

First, improving the electoral system is highly necessary to address the loopholes and deficiencies in the HKSAR's legal system, and is conducive to improving the system and institutions of "one country, two systems." The framework of the existing methods for the selection of the HKSAR chief executive and for the formation of the Legislative Council (LegCo) was established in the process of formulating the Basic Law of the HKSAR over 30 years ago. The instability in Hong Kong society during recent years has exposed clear loopholes and deficiencies in the HKSAR's existing electoral system, including the methods for selecting the chief executive and for the formation of LegCo. In particular, the electoral system was not secure enough. As a result, anti-China disruptors in Hong Kong found their way into the HKSAR's bodies of power and other governance structure through elections; and external forces have meddled in Hong Kong's affairs through various means, allowing them to engage in activities aimed at undermining China's national security. Therefore, we must fix the deficiencies, and forestall and defuse relevant risks at the institutional level. Moreover, improving the electoral system is an important step toward implementing the overarching plan of upholding and improving the system and institutions of "one country, two systems" made by the 19th CPC Central Committee at its fourth plenary session. It also shows that the principle of "one country, two systems" has been refined in light of new developments.

Second, improving the electoral system is of fundamental importance to safeguarding political stability and security in the HKSAR, and ensuring a stable Hong Kong in the long run. The turbulence over the amendment bill descended into social chaos, which fully reveals that the main problems facing Hong Kong are political issues, not problems of whether the electoral system should be democratic, or whether the pace of democracy should be faster or slower, as some people have said. These issues involve battles against attempted power grabs, subversion and infiltration. In this regard, we will not back down. The aim of improving the electoral system is to close the pathway within the political structure for anti-China and destabilizing forces in Hong Kong to seize power by exercising the central authorities' statutory power to make decisions on the political structure of the HKSAR in accordance with the Constitution and the Hong Kong Basic Law. It goes hand in hand with the formulation of the Law on Safeguarding National Security in the HKSAR. Together, they will provide fundamental solutions to various forms of chaos, and safeguard the national security and the political stability and security of the HKSAR.

Third, improving the electoral system is the right choice based on Hong Kong's actual conditions, and a step which will steadily advance Hong Kong's democratic system. For the over-150 years that Hong Kong was under British colonial rule, there was no democracy to speak of. It was only since its return to the motherland that its people have truly held their future in their own hands. The development of democracy in the city does not have a long history and steady improvements should be made to it through exploration. In improving the electoral system, priority will be given to adjusting and improving the Election Committee, which is broadly representative, and empowering it with new functions. In addition to continuing to elect the chief executive, it will also elect some members of LegCo and participate in the nomination of all LegCo candidate members. The aim of such an approach is to build a democratic system that is suited to Hong Kong's actual conditions and has distinctive Hong Kong features. It will ensure the pace of development of democracy in the city is steadier.

Fourth, improving the electoral system is crucial for Hong Kong to improve the performance of its government, promote development of its economy, and improve people's livelihood. The deficiencies in the current electoral system and its uncertain status have triggered a tendency to politicize Hong Kong society. Moreover, after finding their way into the HKSAR's governance system, anti-China and destabilizing forces in Hong Kong have blatantly manipulated the political agenda. Some opposition LegCo members have abused procedures and disrupted, and even paralyzed, the functioning of LegCo through such improper moves as filibustering. These acts have gravely impeded the exercise of governance by the HKSAR government and created significant internal friction. The improvements to the electoral system will enable the HKSAR government and people from various sectors of Hong Kong society to focus on economy and development, and will address housing difficulties and other pressing problems affecting people's livelihood. It will also enable Hong Kong to better involve itself in the building of the Guangdong-Hong Kong-Macao Greater Bay Area, integrate into China's overall development more smoothly, and maintain and improve its international competitiveness. In short, it will enable Hong Kong to break the political impasse, achieve good governance and improve the well-being of its residents.

Fifth, improving the electoral system will provide a systemic safeguard for implementing the principle of "patriots administering Hong Kong" and ensure the continued success of "one country, two systems". "Patriots administering Hong Kong" is not a new concept. In fact, Comrade Deng Xiaoping pointed out that Hong Kong must be administered by the people of Hong Kong with patriots as the main body in 1984 when he met a delegation from the Hong Kong industrial and business community visiting Beijing and a group of Hong Kong community leaders. Across the world, no country allows people who are unpatriotic to participate in the governance of the country or any place under the country's jurisdiction. It goes without saying that those who administer Hong Kong must be patriots. When meeting with Chief Executive Carrie Lam Cheng Yuet-ngor this January, General Secretary Xi Jinping clearly stated that the principle of "patriots administering Hong Kong" must be always upheld to ensure the steady and sustained implementation of "one country, two systems." Improving the electoral system will put in place the requisite security valve to ensure that the political power and the governing power of the HKSAR are firmly in the hands of patriots. This will provide a strong and reliable safeguard for ensuring the steady practice of "one country, two systems" in Hong Kong in the long run.

I want to emphasize that it was the CPC that initiated the policy of "one country, two systems," and that leads, advances and upholds its implementation. No one better appreciates the value of "one country, two systems" or is more committed to the original aspiration of this notion than the CPC or the Chinese government. The Law on Safeguarding National Security in the HKSAR which has been formulated, the ongoing improvement of the electoral system of the HKSAR , and everything we will do in the future, are all aimed at improving the system and institutions of "one country, two systems" and ensuring its sound implementation, rather than changing the principle.

During the "two sessions" over the last few days, many NPC deputies and CPPCC members from Hong Kong were excited when delivering speeches. Some NPC deputies said that the NPC's decision on improving the electoral system of the HKSAR will send a "belated spring" to Hong Kong. Some CPPCC members exclaimed that "Hong Kong can be saved." Other CPPCC members commented that this major decision of the NPC fully demonstrates the central authorities' deep care for Hong Kong and its future. As people in Hong Kong like to visit Che Kung Temple during the first lunar month and draw fortune sticks, some CPPCC members mentioned that no matter what kind of fortune the people receive, the Law on Safeguarding National Security in the HKSAR is the greatest blessing, and the NPC's decision on improving the electoral system of the HKSAR is the most effective solution. I think these words speak volumes about the views of people in Hong Kong. When we spoke with some Hong Kong personages, they mentioned a simile that, "just as a serious illness requires strong medicine, Hong Kong's existing electoral system requires a major surgery." I think "surgery" is a vivid illustration. To be more accurate, the improvement of Hong Kong's electoral system is like a minimally invasive surgical procedure with an incision that is small but deep enough to remove the infection and allow for a speedy recovery. We are firmly convinced that after the surgery on Hong Kong's electoral system, its democratic system will regain health. Hong Kong's social vitality will be fully unleashed, and its people will enjoy better and more peaceful lives. 

In recent days, the HKSAR government and people from various sectors in Hong Kong issued statements, took part in interviews, signed petitions, and set up street counters to express their firm support for the NPC's decision on improving the HKSAR's electoral system. Opinion poll results released by the Hong Kong Research Association also show that around 70% of those polled support the NPC's decision. This is the best and most forceful rebuttal of the smears and false claims against the NPC's decision made by some people overseas. Last year, when the Law on Safeguarding National Security in the HKSAR was promulgated, I said at a press conference here that the law is an anchor of stability for the city. Today, I would like to add another sentence and together make them a couplet of good wishes, that is, the improved electoral system will be a vital long-term safeguard for Hong Kong. As the city's electoral system and rules are amended, the ship of "Hong Kong under 'one country, two systems'" will be able to cleave waves, sail smoothly onward and deliver an even brighter future for the city.

That concludes my opening remarks. Thank you.

Chen Wenjun:

Thank you, Mr. Zhang Xiaoming. Next, let's give the floor to Mr. Zhang Yong.

Zhang Yong:

Thank you, Mr. Chairperson. Friends from the media, good morning. Just now Mr. Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council, expounded on the major and far-reaching significance of the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region. Next, let me give you a brief overview of the decision as well as its constitutional and legal basis.

The NPC's decision consists generally of the following nine articles:

First, it sets out the basic principles for improving the electoral system of the HKSAR, namely implementing the principle of "one country, two systems," upholding the constitutional order, ensuring "patriots administering Hong Kong," improving the governance efficacy of the HKSAR, and safeguarding the right to vote and the right to stand for election of permanent residents of the HKSAR.

Second, it establishes the core elements for conducting elections of the Election Committee, the Chief Executive, and the LegCo. The thrust of these elements is to restructure the Election Committee and add new functions to it. This will expand and ensure the balanced and orderly political participation of various sectors of Hong Kong society, make the Election Committee more suited to Hong Kong's realities, more broadly representative, and better meet the overall interests of Hong Kong society. The composition of the Election Committee will be expanded from four to five sectors, and its membership will be increased from 1,200 to 1,500. The Election Committee shall continue to elect the Chief Executive designate, and the Chief Executive shall be appointed by the Central People's Government. In addition, the Election Committee shall elect a fairly large proportion of the members of the LegCo, and nominate candidates for LegCo members.

Third, it establishes a committee for reviewing the qualification of election candidates in the HKSAR, which will be responsible for reviewing and confirming the qualification of candidates in the elections of the Election Committee, the Chief Executive and the Legislative Council. This is an important institutional arrangement to ensure "patriots administering Hong Kong."

Fourth, it authorizes the NPC Standing Committee to amend Annex I and Annex II to the Basic Law of Hong Kong. The two annexes, namely, Method for the Selection of the Chief Executive and Method for the Formation of the Legislative Council and Its Voting Procedures, list specific matters to be handled regarding the election of the Chief Executive and the Legislative Council. 

In addition, the NPC decision requires the HKSAR to amend relevant local laws, and organize election activities accordingly. It also requires the chief executive of the HKSAR to submit in a timely manner reports to the Central People's Government on important situations related to elections. These is the main content of the decision.

The NPC decision is solidly based on the Constitution. The constitutional basis of the NPC decision lies in the following three aspects:

First, the Constitution of the People's Republic of China covers the HKSAR. The Constitution is the fundamental law of the State. It has supreme and universal legal authority within the territory of the People's Republic of China. With its return to the motherland, Hong Kong is now again an integral part of China's governance system. In terms of legal status, the HKSAR is a local administrative region directly under the Central People's Government. The central authorities exercise overall jurisdiction over Hong Kong in accordance with the Constitution and other relevant laws.

Second, the principle of "one country, two systems," by definition, has well-laid out purposes. The fundamental purpose of this principle was set on the very day of its formulation, which is to safeguard China's unification and territorial integrity and sustain Hong Kong's prosperity and stability. "One country" is the prerequisite and basis of "two systems."

Third, the system of special administrative region established by the Basic Law is based on underlying principles and prerequisites. The Basic Law of the HKSAR adopted by the NPC in 1990 was formulated in accordance with the Constitution, which gives legal status to the policy of "one country, two systems." The Basic Law has comprehensive provisions on the operation of various institutions to be set up in the HKSAR. In establishing these institutions, the Basic Law observed two underlying principles: First, Hong Kong would be administered by Hong Kong people with patriots as the main body. Second, Hong Kong would enjoy a high degree of autonomy authorized by the central authorities. These two principles are embodied in the specific provisions of the 160 articles in the Basic Law.

To summarize, under the principle of "one country, two systems," the Constitution and the Basic Law jointly form the constitutional basis of the HKSAR. All the mechanisms and institutions of the HKSAR are built on this constitutional basis, and must meet the requirements of this constitutional basis in all their operations. Should there be failure to meet such requirements or violation and even sabotage of the constitutional basis, the relevant mechanisms and institutions must be revised and improved.

The NPC decision is solidly based on law. As we know, China exercises the system of people's congresses, and the National People's Congress is the highest state organ of power, which has and exercises the power of sovereignty. It is stipulated in China's Constitution that the NPC has the power of deciding on the establishment of special administrative regions and the systems to be instituted there. The electoral system of the HKSAR, which is at the core of its political system, is decided by the central authorities. Over the past few years, those who oppose China and destabilize Hong Kong have used the loopholes and deficiencies in the existing electoral system, and their acts have undermined not only China's sovereignty, security and development interests, but also the constitutional order and effective governance of Hong Kong. Therefore, necessary measures must be taken to revise and improve relevant systems and institutions. This is within the powers of the NPC. What is more, it is a responsibility the NPC must fulfill. 

Last but not least, I want to stress that the NPC decision has indisputable legal binding force. Next, the NPC Standing Committee will amend Annex I and Annex II to the Basic Law, and the HKSAR shall make amendments to relevant local laws. In doing so, they must act in strict compliance with the NPC decision and implement it in both letter and spirit. Thank you.

Chen Wenjun: 

Thank you, Mr. Zhang Yong. The floor is now open for questions. Please identify your news outlet before asking your question.

CCTV:

The central authorities started rolling out a series of measures last year, including the formulation and implementation of the Law on Safeguarding National Security in the Hong Kong Special Administrative Region. During the "two sessions" over the last few days, the NPC adopted the decision on improving the electoral system of the HKSAR. What is the impact of such a decision on the implementation of "one country, two systems"? Going forward, what other systems does the central authorities plan to improve? Thank you. 

Zhang Xiaoming:

I'll take this question. The NPC and its Standing Committee have adopted decisions or formulated the law regarding Hong Kong five times since last May, including the decision of the NPC on establishing and improving the legal system and enforcement mechanisms for the HKSAR to safeguard national security, adopted on May 28, 2020; the law on safeguarding national security in the HKSAR, adopted by the NPC Standing Committee on June 30, 2020; the decision of the NPC Standing Committee for the sixth Legislative Council of the HKSAR to continue to discharge duties, made on Aug. 11, 2020; the decision of the NPC Standing Committee issues relating to the qualifications for members of the Legislative Council of the HKSAR, on Nov. 11, 2020; and the decision on improving the electoral system of the HKSAR which was adopted yesterday (March 11, 2021). All these decisions and legislation — which have been adopted in a short period of time — are precise, effective and highly timely. On behalf of Mr. Xia Baolong and the relevant departments responsible for Hong Kong and Macao affairs, I would like to express our high respect and sincere gratitude to all the members of the NPC Standing Committee and every NPC deputy.

Hong Kong has been troubled by two major institutional problems since its return. The first lies in the legislation of Article 23 of the Basic Law, and the other concerns the development of Hong Kong's political structure. The former problem led to the absence of a law in Hong Kong safeguarding national security, and the latter problem intensified political turmoil in Hong Kong. Thanks to the formulation and implementation of the law on safeguarding national security in Hong Kong, the first problem has been resolved. The NPC and its Standing Committee's amendments to the relevant laws this time and in the future are for the sake of the second problem. In fact, they concern political stability and the security of political power. Both of the two measures will work together to jointly lay a solid institutional foundation for the implementation of "one country, two systems" in a comprehensive and accurate manner, which will ensure the steady implementation of the principle in the long run, and usher in new progress of Hong Kong.

Regarding possible new institutional reforms that the central authorities may adopt, as I mentioned previously, the fourth plenary session of the 19th CPC Central Committee has explained explicitly in relevant resolutions in this regard. It has made the overall plan on upholding and improving the system and institutions of "one country, two systems," especially those systems and institutions to be improved in relation to the implementation of the Basic Law of the HKSAR. Moreover, we will also improve political, economic, cultural, educational and social systems and institutions. All these institutional reforms will definitely be advanced in light of the "one country, two systems" principle and within the framework of the Basic Law. Joint efforts from the HKSAR government and people from all walks of life in Hong Kong are needed to address the problems and make rectifications to restore order in certain areas, such as education. Thank you. 

ITAR-TASS: 

My question is also about reform. This reform implements the principle of "patriots governing Hong Kong." Can you give any details [about] who will serve as the judge? Who will make decisions concerning politicians and officials [with regards] to patriotism feelings? Will the moderate opposition be able to be elected to the Legislation Council after the reform? Don't you think that this principle of patriotism will leave some part of Hong Kong society unrepresented in the Legislation Council, and possibly lead to further political crisis? Thank you. 

Zhang Xiaoming:

I'm glad to answer your question. This is indeed a question of great concern in Hong Kong society. Comrade Deng Xiaoping once elaborated on the criteria that patriots must meet. He said: "What is a patriot? A patriot is one who respects the Chinese nation, sincerely supports the motherland's resumption of sovereignty over Hong Kong and wishes not to impair Hong Kong's prosperity and stability." These three sets of criteria still stand in judging whether a person is patriotic or not. Of course, at the time when Deng made his remarks, Hong Kong had not returned to the motherland, had not been included in the national governance system, and had not seen chaos like the illegal "Occupy Central" movement and the turbulence over the amendment bill. At that time, there could not be a "negative list." At a recent symposium, Mr. Xia Baolong said that patriots must uphold the nation's sovereignty, security and development interests, respect and uphold the fundamental system of the country and the constitutional order of the HKSAR, and do their best to safeguard Hong Kong's prosperity and stability. Xia also clearly pointed out that those who advocate "Hong Kong independence," those who apply the "burn with us" tactic, and those who defy the nation's fundamental system, are not patriots. Xia's views align with Deng's definition of patriots. What's more, Xia's elaboration was a practical response to the new situations, new problems and new challenges arising from the implementation of the "one country, two systems" principle after Hong Kong's return to the motherland. The aim of improving the electoral system of the HKSAR is to provide a legal and institutional safeguard for fully implementing the principle of "patriots administering Hong Kong." We will by no means allow unpatriotic people, especially those anti-China disruptors in Hong Kong, to participate in the governance of the HKSAR. We will never allow those anti-China disruptors in Hong Kong to continue to have a seat in the hall of LegCo. Not even one. This is self-evident.

I must make it clear that the central authorities' emphasis on "patriots administering Hong Kong" is not meant to erase all differences in Hong Kong. Here, two lines of demarcation have to be drawn. First, the fact that unpatriotic people are not allowed to find their way into the HKSAR's power structure or governance system does not mean that they are not allowed to work and live in Hong Kong. They are just not allowed to participate in its governance. Second, the fact that unpatriotic people, especially those anti-China disruptors in Hong Kong, are excluded from the HKSAR's governance system does not mean that opposition members or the pan-democracy camp will all be excluded. We cannot simply equate the opposition members, especially the pan-democracy camp, with the anti-China disruptors in Hong Kong. There are patriots among the opposition members, especially among the pan-democracy camp, and those patriots still have the right to stand for election and be elected in accordance with the law. I would like to assure the reporter from TASS that LegCo in the future will be more broadly representative, and you will hear different voices in LegCo, including criticism of the government. What is different is, you may never see those legislators who make an ugly show of themselves, or willfully filibuster, or even get into fist fights. That is the difference. Thank you.

Lianhe Zaobao: 

We have seen that the NPC has decided to improve the electoral system of Hong Kong in the form of "decision plus amendments." Is there a specific timetable for this work? What is the deadline for amending the laws? Considering this, is the 2021 Hong Kong LegCo election still going to be held in September? Will the improved electoral system be applied by then? Thank you.

Zhang Yong: 

Thank you for your questions. Article 9 of the decision clearly stipulates that it shall enter into effect as of the date of promulgation. Authorized by the decision, the NPC Standing Committee will amend Annex I and Annex II to the Basic Law as soon as possible. Then, in accordance with the decision and the Basic Law's Annex I and Annex II amended by the NPC Standing Committee, the HKSAR will amend relevant local laws on elections as soon as possible. Only in this way can election activities in Hong Kong be conducted smoothly in accordance with the law.

As for when the next LegCo election will be held, the NPC Standing Committee decided on Aug. 11 last year that the sixth (incumbent) LegCo will continue to perform its duties for no less than one year, until the term of the seventh LegCo begins. According to the decision, the HKSAR can decide on its own when the next LegCo election will be held based on the HKSAR's actual situation, the amended Annex I and Annex II, and relevant local laws. Thank you.

Sing Tao Daily:

The NPC deliberated and adopted the decision on improving the electoral system of the HKSAR, giving more power to the HKSAR's Election Committee, including electing the chief executive designate and a relatively large proportion of LegCo members. Some people have considered this to be a "leap backwards for democracy." Is this inconsistent with "the principle of gradual and orderly progress" as stipulated in the Basic Law? Thank you.

Deng Zhonghua:

Thank you for your question. The Election Committee set out in the NPC's decision is a new institutional framework. As Mr. Zhang Xiaoming and Mr. Zhang Yong introduced just now, it will be responsible for nominating candidates for the chief executive and electing the chief executive designate, and electing a relatively large proportion of LegCo members, as well as nominating candidates for all LegCo members. That is the fundamental system of the Election Committee. Our two major considerations are as follows:

First, the Election Committee shall be composed of representatives from different sectors and strata of Hong Kong society, and is broadly representative. Electing part of the members of the LegCo and nominating candidates for LegCo members through such an Election Committee helps go beyond the interests of one certain sector, region or group, and makes up for the underrepresentation of functional and geographical constituencies under the current system. This way, LegCo can better represent the overall interests of Hong Kong society.

Second, the Election Committee shall be responsible for electing the chief executive designate and part of the LegCo members. This way, the chief executive and LegCo will share certain common voters, which will facilitate communication between them, and help consolidate the executive-led system stipulated in the Basic Law. In fact, the practice of the Election Committee electing some members of LegCo existed in the past. The HKSAR people are quite familiar with it. It cannot be said that restoring conventional practice is a "leap backwards," or that it is not "gradual and orderly progress" of the HKSAR's democratic system. "Gradual and orderly progress" does not mean a higher amount of direct elections in every single election. The method and system are good so long as they move toward expanded democracy in general, and better safeguarding the overall and fundamental interests of the HKSAR society as well as the democratic rights and fundamental wellbeing of the HKSAR residents. Thank you.

China Review News Agency:

The NPC decided to establish a candidate qualification review committee of the HKSAR. What significance does this have in ensuring the nomination of "patriots"? Does it conflict with the rights of HKSAR residents guaranteed by the Basic Law to exclude certain residents from standing for elections based on their political stance? Thank you.

Deng Zhonghua:

The candidate qualification review committee of the HKSAR will be established to vet and confirm the qualifications of candidates for members of the Election Committee, chief executive and LegCo members. It is an important system for implementing "patriots administering Hong Kong." It aims to rule out anti-China, destabilizing forces from the HKSAR's governance structure. It aims very clearly to exclude them and ensure that the chief executive, LegCo members, and the Election Committee members are all true patriots, and that the power to administer the HKSAR is firmly in the hands of patriots.

The establishment of the qualification review mechanism ensures that candidates' qualifications conform with the Basic Law, relevant laws, interpretations, decisions and local laws of the HKSAR. This is an entirely different matter from safeguarding the rights of the HKSAR residents as stipulated by the Basic Law, including the right for HKSAR permanent residents to vote and stand for election. The two do not contradict one another at all. Essentially, the qualification review mechanism provides an institutional guarantee for the principle of "patriots administering Hong Kong," ensuring the sound and sustained implementation of the "one country, two systems" principle in the HKSAR. It is a basic premise for HKSAR residents exercising the right to vote and the right to stand for election.

Just think what Hong Kong would be like if those who oppose China and destabilize Hong Kong occupied core positions of the HKSAR's body of political power? The turbulence over the amendment bill in 2019 cannot ever be allowed to happen again. Thank you. 

Hong Kong Ta Kung Wen Wei Media Group:

The Clause 7 of Annex I and Clause 3 of Annex II to the Basic Law, as well as NPC Standing Committee's relevant interpretations in 2004, stipulated a "five-step" procedure for amending the methods for the selection the Chief Executive and the formation of the LegCo. Why did the central authorities still adopt "decision plus amendments" approach, instead of authorizing the HKSAR to amend them in accordance with the "five-step" procedure? Thank you.

Zhang Yong: 

Thank you for your question. Amending and improving the electoral system of the HKSAR through the form of "decision plus amendments" is an important decision we made after repeatedly studying and carefully weighing various factors. Mr. Zhang just clarified its imperative and significance during his opening remarks. Here I would like to add one more point. 

The chaos in Hong Kong society in recent years has clearly exposed the institutional loopholes and deficiencies in Annex I and Annex II of the Basic Law. These can be demonstrated in two aspects. First, those who oppose China and destabilize Hong Kong have made use of the institutional loopholes in the electoral system to enter the political structure, brazenly engaging in activities that undermine not only the nation's sovereignty, security and development interests, but also the prosperity and stability of Hong Kong. Second, those who oppose China and destabilize Hong Kong have taken advantage of the institutional deficiencies in procedures, deliberately destroying the constitutional order and effective governance of Hong Kong and obstructing its democratic development.

We all know that as early as in 2007, the NPC Standing Committee made a decision which clearly stipulated that the fifth chief executive could be selected through general election in 2017. In August 2014, the NPC Standing Committee further stipulated the roadmap and timetable for selecting the HKSAR's chief executive and forming LegCo through general elections. Unfortunately, those who oppose China and destabilize Hong Kong made use of the "five-step" procedure to veto the proposal for electing the chief executive. As a result, the aim of selecting the chief executive and forming LegCo through general elections was hence far beyond reach. If the institutional loopholes enabling anti-China disruptors in Hong Kong to enter the body of political power were not fundamentally plugged, the "five-step" procedure you mentioned would exist only in name and lead nowhere. Through the "decision plus amendments," the NPC and its Standing Committee, at the state level, exercised its constitutional power to establish a democratic electoral system with Hong Kong characteristics that suits the actual conditions of Hong Kong. This is an effort to reform from the bottom to ensure "patriots administering Hong Kong," to restore constitutional order, and to improve governance efficiency, laying a solid institutional foundation for the sound and sustained implementation of "one country, two systems." Thank you.

Hong Kong Economic Times:

The question of whether the general election goals stipulated in Article 45 and Article 68 of the Basic Law would be changed along with the reform of the electoral system has drawn much attention. What is the central authorities' interpretation of general elections? Thank you.

Zhang Xiaoming:

As I just said, the NPC's revision of the electoral system of the HKSAR is a "small incision," and not a single character or punctuation mark in Article 45 or Article 68 of the Basic Law has been changed. Therefore, the goals of selecting the HKSAR's chief executive and LegCo members through general elections will not be changed.

The central government has always firmly supported the HKSAR in gradually developing a democratic system suited to the HKSAR's realities. Just now, as Mr. Zhang Yong also mentioned, the NPC Standing Committee adopted a decision on Aug. 31, 2014, which clarified that election of the Chief Executive of the HKSAR in the year 2017 could be implemented by the method of universal suffrage. After realizing universal suffrage of the chief executive, the selection of all members of the Legislative Council by universal suffrage could also be realized in 2020. However, it was the opposition in Hong Kong that stymied the decision in every possible way. The opposition proposed "civil nomination" that completely violated the nomination mechanism clearly stated in Article 45 of the Basic Law, and advocated that anyone in Hong Kong can nominate a candidate for the position of the Chief Executive. I remember I had a public debate with the then-chairman of the Civic Party when I was in Hong Kong. Hong Kong could have achieved universal suffrage for the selection of the Chief Executive in 2017, but it was not achieved in the end. Who should bear this responsibility? Who is blocking the pace of democracy in Hong Kong and preventing the implementation of universal suffrage? I think justice is in the hearts of the people, and everyone knows it in their hearts.

You mentioned the implications of the universal suffrage system or the implications of universal suffrage. I think this should be understood strictly in accordance with the relevant provisions of the Basic Law. Universal suffrage naturally includes the implications of universal and equal elections. As for the specific arrangements for the universal suffrage system, they should be based on the "one country, two systems" principle, proceeding from the realities in Hong Kong, and stipulated in accordance with the Hong Kong Basic Law and the relevant decisions of the NPC Standing Committee. Thank you.

CGTN:

After the NPC passed its decision on improving the HKSAR's electoral system, a U.S. State Department spokesperson condemned the move as an attack on the democratic process in Hong Kong. What are your comments on this? In addition, if the United States and other Western countries impose so-called sanctions on China and the HKSAR, how will China respond? Thank you.

Zhang Xiaoming:

First of all, I want to say that the design and improvement of the electoral system of the HKSAR are purely China's internal affairs that allow no carping comments from any foreign country. As far as I know, the United States itself has very strict laws and regulations to prevent foreign interference in its elections, including the recent passage of an election reform bill by the House of Representatives of the U.S. Congress. Naturally, we have to ask, why can the United States amend its election laws whenever it deems necessary, yet be so interested in and neurotic about law amendments in a special administrative region of China and strike such a meddlesome posture. Speaking of the matter, it reminds us of some scenes. During Hong Kong's turbulence over the proposed amendment bill in 2019, when rioters carried out such violent acts as beatings, smashing property and setting fires on the streets, and even attacked the Legislative Council, American politicians felt a sense of gloating and praised it as "a beautiful sight to behold." By the time American protesters stormed the Capitol Hill on Jan. 6, they quickly defined it as domestic terrorism. Isn't this typical and blatant double standards? So, I do not understand, and I don't know, when there was so much chaos surrounding the U.S. presidential election last year, and after the violent attacks on the Capitol Hill on Jan. 6, what moral basis do American politicians still have in criticizing the electoral system of the HKSAR of China?

We also noticed that at the 46th session of the U.N. Human Rights Council, 70 countries signed a joint statement urging relevant sides to stop interfering in China's internal affairs, including those concerning Hong Kong. This fully shows that hegemony is repugnant. As for the "big stick" of sanctions frequently wielded by the United States, I think it has long been despised. Our colleagues in the Hong Kong and Macao Affairs Office, including Mr. Xia Baolong, Mr. Deng Zhonghua and myself here today, were all included on the so-called sanction list by the U.S. government last year. We are deeply honored by this. Of course, we have always adhered to the principle of "it is impolite not to reciprocate" for such sanctions, and they will definitely remember our countermeasures. That's all I have to say. Thank you.

China News Service:

Just now, Mr. Zhang Yong said that the NPC decision has a legal basis. My question is, what is the legal basis of the NPC in authorizing the NPC Standing Committee to amend Annex I and Annex II to the Basic Law of Hong Kong? Thank you.

Zhang Yong:

Thank you for your question. As I said in my opening remarks, it is stipulated in China's Constitution that the NPC has the power to make decisions regarding the establishment of special administrative regions and the systems instituted there. The NPC is China's highest state organ of power. It has been stated clearly that the NPC decision establishes the requisite core elements for the electoral system of Hong Kong and has solid constitutional and sufficient legal basis. In fact, both before and after Hong Kong's return to the motherland, the NPC made multiple major decisions on the question of Hong Kong. I would like to give some additional information regarding your question. The Method for the Selection of the Chief Executive of the HKSAR and the Method for the Formation of the Legislative Council of the HKSAR are two annexes to the Basic Law. The fact that they are not included in the main clauses of the Basic Law was the result of special considerations during the drafting process of the Basic Law decades ago. As these specific items may need adjustments as the situation changes, it is more flexible for them to appear in the form of annexes to make it more convenient to make amendments if necessary. In fact, the two annexes were amended in 2010 and approved by the NPC Standing Committee. According to Clause 22 of Article 67 in China's Constitution, the NPC Standing Committee shall exercise the functions and powers accorded to it by the NPC. Therefore, the NPC authorizing its Standing Committee to amend Annex I and Annex II is in line with the original intent in drafting the Basic Law, and has sufficient legal basis. I hope my answer is helpful. Thank you.

China Daily:

Could you explain how the NPC made the decision? Does the legislation process take into account the opinions of Hong Kong residents? What are the next procedures for the NPC Standing Committee in amending the Annexes? And, will the opinions of the Hong Kong people be included in this process? Thank you.

Zhang Yong:

Thank you for your questions. The drafting of the NPC decision drew on suggestions and advice from people of various circles. Relevant departments of the central authorities and legal experts established a special work force who made extensive studies and investigations in the drafting of the decision. During the process, they solicited views multiple times from the chief executive of the HKSAR, major government officials, leading members of the Hong Kong legislature, and representatives of various circles in Hong Kong. When the epidemic situation was still very serious, related departments organized webinars with representatives from Beijing, Hong Kong, Macao and Shenzhen, while officials from relevant departments went to Shenzhen to hold multiple seminars, in order to listen to opinions and suggestions from representatives of various circles. We would like to thank friends from the media in Hong Kong, Macao and the Chinese mainland who extensively covered and initiated lively discussions on this topic. We have been following your reports. Your reports also fully reflected the voices of people from different walks of life. During the fourth session of the 13th NPC several days ago, nearly 3,000 deputies conducted thorough deliberations on the draft version of the decision and proposed many suggestions for its further improvement. The NPC and related departments attached great importance to those suggestions and fully absorbed them after careful research and studies. Next, under the authorization of the NPC, the NPC Standing Committee will strictly follow legal procedures in amending Annex I and Annex II. It will also continue to solicit views from various circles, and increase communication and coordination with relevant parties. I believe this work will begin very soon. Thank you.

Phoenix TV:

My question is about the composition of the Election Committee. Why should Hong Kong deputies to the NPC, Hong Kong members of the CPPCC National Committee and representatives of Hong Kong members of related national organizations be added as the fifth sector in the Election Committee? What are the considerations of the central government? Thank you.

Deng Zhonghua:

As we all know, under Hong Kong's current electoral system, Hong Kong deputies to the NPC are ex-officio members of the Election Committee, and some Hong Kong members of the CPPCC National Committee are also members of the Election Committee. Under the new electoral system, Hong Kong deputies to the NPC will continue to be ex-officio members, and all HKSAR permanent residents among the members of the CPPCC National Committee will become members of the Election Committee. That is to say, the Hong Kong members of the CPPCC National Committee will also be ex-officio members of the Election Committee. In addition, we have included the "representatives of Hong Kong members of related national organizations," because we think that as these Hong Kongers participate in activities of national organizations, they have a better understanding of state affairs. Generally speaking, the members in the fifth sector have a strong sense of the nation. Their appointment as members of the Election Committee can help strengthen national elements in the Committee and integrate the defending of national interests with the interests of Hong Kong. Thank you.

Kyodo News:

My question is about economy. Some people from the economic community are concerned that the reform of the electoral system will cause Hong Kong to lose its status as an international financial center, and that foreign companies in Hong Kong will flee overseas. What is China's take on this? Thank you.

Zhang Xiaoming:

I'll take your question. But before I answer, I'd like to just remind you and other friends from the press of events from the past. In September 1983 when the Sino-British talks over the future of Hong Kong reached a deadlock, the British side, in order to achieve the goal of "trading sovereignty for administration," played the "economy card" to impose pressure on China, and started spreading messages such as "talks collapsing with the future of Hong Kong unclear" to the outside. As a result, on September 24, Hong Kong witnessed sharp devaluation of its currency and runs on banks, its residents started panic buying daily necessities, and it seemed like that was the end of Hong Kong, in an event which became known as "Black Saturday." In 1995, before Hong Kong's return to the motherland, the American Fortune magazine ran a cover story called "The Death of Hong Kong," predicting that it would be impossible for Hong Kong to remain an international trade and financial center after it returned to the motherland. After the enactment of the Law on Safeguarding National Security in the HKSAR last year, another American magazine, The Atlantic, published an article titled "The End of Hong Kong." There seems to be a rule that whenever the occasions are important and sensitive or whenever there are major events, some Westerners will be more enthusiastic in expressing pessimistic views about Hong Kong and spreading all kinds of alarmist "predictions." However, the facts always astound them.

You mentioned the confidence of foreign investors in Hong Kong. Since the enactment of the Law on Safeguarding National Security in the HKSAR, I've observed that both foreign and local Hong Kong investors have more, instead of less, confidence in Hong Kong. Let me provide you with some figures as an example. The capital flowing into Hong Kong last year reached US$50 billion, the balance of Hong Kong's banking system repeatedly set new all-time highs, and the funds raised through initial public offerings (IPOs) in its stock exchange ranked second in the world last year. The stock market is a barometer of Hong Kong's economy and an important indicator in assessing the confidence of investors. The market capitalization of Hong Kong's stock market hit a record of HK$50 trillion this January. Even a survey published by the American Chamber of Commerce in Hong Kong showed the percentage of enterprises optimistic about the business environment in Hong Kong increased sharply in January compared with August last year.

I also want to point out that the reason Hong Kong obtained its special economic status, including as an international financial center, international trade center and international shipping center — especially the international financial center — is attributed to many reasons, including a complete legal system, an abundance of professionals, a highly free and open market, and linguistic advantages. Another important factor is the driving force brought by the Chinese mainland's sustained and rapid development to Hong Kong. Such advantages are not available elsewhere and are difficult to replicate. Therefore, we have every reason to believe that following the implementation of the Law on Safeguarding National Security in the HKSAR and the improvement of the electoral system, Hong Kong's political, economic, social and business environments will be further improved, and Hong Kong's status as an international financial center will be further consolidated. That's all for my answer. Thank you.

Chen Wenjun:

Today's press conference is hereby concluded. Thank you all.

Translated and edited by Zhang Liying, Chen Xia, Wang Yiming, Zhou Jing, Zhu Bochen, Duan Yaying, Huang Shan, Gong Yingchun, Zhang Rui, Liu Qiang, Wang Qian, Zhang Jiaqi, Yang Xi, Fan Junmei, Li Huiru, He Shan, Guo Yiming, Xu Xiaoxuan, and David Ball. 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:

Ning Jizhe, deputy head of the National Development and Reform Commission (NDRC)

Hu Zucai, deputy head of the NDRC

Zhao Chenxin, secretary general of the NDRC

Chairperson:

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

Date:

March 8, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today we are celebrating International Women's Day. We would like to extend our greetings to all women and wish you a happy holiday. Today, we are joined by three members of the Leading Party Members Group of the National Development and Reform Commission (NDRC). They are Mr. Ning Jizhe, deputy head of the NDRC; Mr. Hu Zucai, deputy head of the NDRC; and Mr. Zhao Chenxin, secretary general of the NDRC. As we know, works on reform and development are of crucial importance in implementing the new development philosophy, carrying out the guiding principles of the fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC), and ensuring a good start of the 14th Five-Year Plan (2021-2025). Today, three NDRC officials will elaborate on the issue and take your questions. Now, let's give the floor to Mr. Ning Jizhe.

Ning Jizhe:

Ladies and gentlemen, friends from the media, good morning. On March 5, He Lifeng, head of the NDRC, did an interview and answered several questions that the media are most concerned about. Today, Mr. Hu, Mr. Zhao and I are happy to meet our friends from the media and take your questions. As today celebrates the International Women's Day, I would like to first extend our greetings to all women. I also want to thank our friends from the media for your attention, understanding, support, and help for our reform and development work.

Since last year, in face of a complicated and challenging international situation and formidable tasks in promoting reform, development and stability at home, especially with the severe impact of the COVID-19 pandemic, all regions and departments have been working under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, coordinating epidemic prevention and control with social and economic development, and making efforts to ensure stability on six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and maintain security in six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations). China's economy saw improvements quarter by quarter and has been recovered in a stable manner. The major annual tasks of economic and social development have been completed in a satisfactory way. Meanwhile we attained a complete victory in the fight against poverty and scored decisive achievements in securing a full victory in building a moderately prosperous society in all respects.

Over the past few days, the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development and the draft report on national economic and social development plan for 2021 have been delivered to the "two sessions" for deliberation. The draft report summarizes the implementation of last year's plan on national economic and social development, and further puts forward main targets, policy directions, and specific tasks for economic and social development in 2021. The draft report will be delivered to the National People's Congress (NPC) for deliberation and to the National Committee of the Chinese People's Consultative Conference (CPPCC) for discussion. Once approved by the NPC, the report will serve as an important foundation for us to carry out our work concerning economic and social development.

The year 2021 has been a rather significant year in China's modernization. It marks the start of the 14th Five-Year Plan and the embarkment of a new journey to build China into a modern socialist country in all respects. Thus, works on reforming and development are very important. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and in accordance with the requirements of the Report on the Work of the Government delivered by Premier Li Keqiang, we will act on the general principle of pursuing progress while ensuring stability, ground our efforts in the new development stage, apply the new development philosophy, and create a new pattern of development. We will work to pursue high-quality development, resolutely promote reform and advance opening-up. We will consolidate and expand the achievements of the COVID-19 response and economic and social development, ensuring better coordination in pursing development and upholding security. We will work to ensure stability on six key fronts and maintain security in six key areas, implement macro policies in a systemic and targeted way, and keep major economic indicators within an appropriate range, in a bid to ensure a good start of the 14th Five-Year Plan and commemorate the centenary of the CPC with outstanding achievements in development.

That's all for my introduction. Next, Mr. Hu will brief you on the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development.

Hu Zucai:

Friends from the media, good morning. Next, I will brief you on the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development.

The 14th Five-Year Plan period is the first five years after China has achieved the first centenary goal of establishing a moderately prosperous society in all respects and embarked on a new journey towards the second centenary goal of building China into a modern socialist country in all respects. The CPC Central Committee and the State Council have attached great importance on the formulation work of the 14th Five-Year Plan. The fifth plenary session of the 19th CPC Central Committee deliberated and adopted the Recommendations of the CPC Central Committee for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035 , and this has set the direction and provided the basic principles for the formulation work of the draft outline. General Secretary Xi Jinping has delivered important speeches and made important instructions many times on the formulation and publishing of the 14th Five-Year Plan outline. Premier Li Keqiang has also presided over many meetings to deploy the research efforts.

In accordance with the deployments made by the CPC Central Committee and the State Council, the NDRC has been working with relevant parties and effectively advanced the formulation work since 2019. After the conclusion of the fifth plenary session of the 19th CPC Central Committee, the NDRC has fully implemented the guiding principles of the recommendations of the CPC Central Committee, and finished the draft outline based on summarizing and evaluating the 13th Five-Year Plan. During the formulation process, the NDRC combined both target-oriented and problem-oriented approaches and integrated top-level designs by drawing on public opinion. The NDRC organized research on more than 200 major issues, listened to both experts' opinions and those from all regions and government departments, and collected measures and suggestions from all sectors of the society. This means the draft outline fully represents the aspirations of the society, the wisdom of the public, the opinions of experts, and the experiences of those at the grassroots level.

The draft outline follows the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, specifies and quantifies major targets and key tasks of economic and social development during the 14th Five-Year Plan period, and draws a blueprint of China's embarkment on a new journey to build itself into a modern socialist country in all respects. It is a common action plan for Chinese people of all ethnic groups. The draft outline has 19 parts, 65 chapters, and 192 sections, with approximately 74,000 Chinese characters. It consists of three parts. The first part elaborates on the development environment, guiding principles, and main targets. The second part contains strategic tasks and measures from 17 aspects. The third part is about guaranteeing the implementation of the outline. In general, the draft outline has four highlights.

First, the draft outline represents the core value of the three new fronts. The draft outline was formulated by analyzing China's new development stage of building itself into a modern socialist country in all respects. It applies the new development philosophy in a complete, precise, and comprehensive manner. It also reflects China's accelerated pace in creating a new pattern of development with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. It demonstrates China's efforts in promoting high-quality development. The draft outline shows the full understanding and the systemic implementation of the requirements of the three new fronts.

Second, the draft outline has made special efforts to ensure the dovetail of the two centenary goals. The draft outline compiles long-range objectives through the year 2035, focuses on the current tasks of the 14th Five-Year Plan period, and centers on the requirements of making new breakthroughs on six fronts. It has set 20 major targets in five categories including the economy, innovation-driven development, public welfare, green ecology, and security. It not only pays attention to the implementation of the new development philosophy and fully correlates with a set of indicators of high-quality development, but also fully reflects the people-centered development philosophy and works to bring a greater sense of gain to the public. The targets are set in a scientific and reasonable manner, so that they can be both encouraging and practical; meanwhile there is room left to deal with uncertainties.

Third, the draft outline highlights the requirements of ensuring coordination in pursing development and upholding security. It remains mindful of worst-case scenarios and coordinates between development and security. For the first time, the draft outline has set a section for safe development, which sets specific arrangements for improving the national security system and capacity-building, and guaranteeing the security of food, energy, resources, finance, and more. 

Fourth, the draft outline highlights support towards the implementation of major strategic tasks. In accordance with the needs of the nation and the expectations of the people, the draft outline has set 20 special sections and put forward 102 major projects. This has provided strong support for the implementation of the targets listed in the draft outline. 

The draft outline is currently under deliberation at the fourth session of the 13th National People's Congress (NPC). The NDRC will proactively collect opinions from NPC deputies and CPPCC members, and quickly revise and improve the draft outline. As the blueprint has been drawn and the horn of inspiration blown, we are convinced that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with the hard work of Chinese people of all ethnic groups, there is no doubt that the blueprint will become reality, and new and big steps will be made in terms of China's economic and technological strength, national strength, and people's livelihood. Thank you.

Chen Wenjun:

Thank you, Mr. Ning and Mr. Hu, for your introduction. Now the floor is open for questions. Please identify your news outlets before asking questions.

CCTV:

This year, the macro economy still faces the risks of inbound Covid-19 cases and uncertainties of the external economy. How do you view these issues? What kind of policies and reform measures will be taken to support the economic recovery and ensure the realization of economic and social development targets this year? Thanks. 

Ning Jizhe:

This is a good question. First of all, it should be noted that China's economic performance during the first two months of 2021 has continued the trend of steady recovery seen since the second quarter of last year. Production indicators show that, during the first two months of this year, overall electricity generation and rail freight volume increased by 24.2% and 16.5% respectively. Demand indicators show that the combined sales of retail and catering enterprises increased 28.7% year-on-year during this year's Spring Festival holiday, and 4.9% from the 2019 Spring Festival holiday, which was before the Covid-19 outbreak. A total of 12.265-billion-yuan cinema tickets were sold this February, setting a global single-market box office record for a single month. After the Spring Festival, the rate of investment projects starting and resuming and construction companies starting work were higher than in previous years. Import and export figures were released yesterday. Total renminbi-denominated imports and exports from January to February up 32.2% year-on-year, with exports up 50.1%. In terms of economic outlook indicators, the manufacturing purchasing managers' index (PMI) and the non-manufacturing business activity index stood at 50.6% and 51.4% respectively in February, marking the 12th consecutive month the indexes were above the 50-point mark indicating economic expansion. This shows that the economy has maintained its expansionary trend.

In the meanwhile, like you said, to ensure continuous and stable economic recovery, China still faces risks and challenges. The Covid-19 epidemic is still spreading around the globe. The world economic situation is severe and complex, and the number of unstable and uncertain factors has increased. Also the foundation for domestic economic recovery is not yet solid. Consumption is still constrained, the growth of investment is not sustainable, and micro, small and medium-sized enterprises and self-employed individuals still face many difficulties. But we should view many of these domestic economic problems as problems existing only during the recovery period and can be resolved through development. As for the inbound risks you mentioned, we need to respond to them in an active and proper manner. We will counteract the uncertainties of the complex external environment by increasing internal certainty through active efforts. 

We all see that the draft report on development plan has made clear the major targets of social and economic development for 2021, such as a GDP growth of over 6%, over 11 million new urban jobs, a surveyed urban unemployment rate of around 5.5% and a CPI increase of around 3%. These targets are based on consideration of economic recovery, impacts of Covid-19 on the economic trajectory, and the balance and connection between different years. They are in line with the principles of range-based regulation and a prudent approach to development. We have the confidence that with the support of macro policies and the joint efforts of market entities, we will achieve the social and economic development targets this year. I will highlight policies and measures in the following six aspects:

First, we will work to ensure that macro policies provide necessary support to the economy. To promote steady, healthy and sustainable economic development, we must ensure continuity, stability and sustainability of macro policies. We should avoid a sudden turn in policies and adjust and improve policies as situations change in a timely fashion. We will continue to pursue a proactive fiscal policy. In 2021, we will arrange more than 25 trillion yuan in expenditure in the general public budget, up by 1.8% over the previous year. We will raise the general transfer payments from central to local governments by 7.8%, and increase transfer payments for equalizing access to basic public services by over 10%. We will continue to pursue a prudent monetary policy and enable the increases in money supply and aggregate financing to be generally in step with the nominal GDP growth. This year, we may see a relatively higher nominal GDP growth, which requires us to maintain reasonable and ample liquidity. We will continue to implement the employment-first policy. This year, the target for new urban jobs is two million more than that of last year. For companies that do not cut jobs or only cut a small number of jobs, we will continue to provide adequate fiscal and financial policy support and lower premiums for unemployment insurance and work injury compensation insurance.  

Second, we will continue to implement preferential policies for enterprises to address their problems. Enterprises are the source of economic growth. Ensuring the stability of the 140 million market entities means that we can keep the fundamentals of the economy stable. Regarding tax-cuts, we will continue to implement systematic tax-cut policies, extend the duration of several temporary policies, and adopt new structural tax reduction measures. Regarding financial policies, we will continue the policy of allowing micro and small businesses to defer principal and interest repayments on inclusive loans and channel more bank funds to micro and small businesses and self-employed individuals. Inclusive loans to micro and small businesses by large commercial banks will increase by over 30%. We will provide targeted support to enterprises and industries enduring a protracted hit from Covid-19. We will continue to guide the financial sector to give more to the real economy. To reduce costs, electricity rates for general industrial and commercial businesses will be further reduced. Average rates for broadband and dedicated internet access services for small and medium-sized enterprises will be lowered by another 10%. The port development fee will be abolished. Airlines' contributions to the civil aviation development fund will be cut by 20%. Governments in localities that were hit hard by Covid-19 will be encouraged to lower or waive rentals on state-owned property for micro and small businesses and self-employed individuals in the service sector.

Third, we will make good use of reform policies. Reform is both a driving force and an integral part of the macro policy. Achieving steady growth must rely more on reform and innovation as the fundamental driving force. Reform policies should aim to energize market entities. We will uphold the "two no irresolutions" principle (no irresolution about consolidating and developing the public sector and no irresolution about encouraging, supporting, and guiding non-public sector development). We will implement the action plan for building a high-standard market system, and deepen reforms to streamline administration and delegate power, improve regulation, and upgrade services. We will also deepen the reforms of enterprises, fiscal, taxation, financial and price systems. Opening-up policies should be more supportive to keep the fundamentals of foreign trade and investment stable and ensure the stability of trade volume and market entities. We will stabilize the volume and improve the quality of imports and exports and maintain a basic equilibrium in the balance of payments. We will further the development of pilot free trade zones, the Hainan Free Trade Port and other highlands for opening up. We will leverage the massive domestic market to promote international cooperation and promote a positive interplay between the domestic circulation and international circulation. 

Fourth, we will make clear the directions for sci-tech development and industrial policies. Science and technology are the driving force of development, and industry is the vital foundation for development. We will strengthen scientific and technological self-reliance, vigorously enhance scientific and technological innovation capabilities, significantly increase spending in basic research, and effectively achieve breakthroughs in core technologies in key areas. Meanwhile, we will further strengthen international cooperation in the field of science and technology. We will advance the supply-side structural reform and make full efforts to revitalize and promote the real economy, upgrade the industrial foundation and modernize industrial chains. A major campaign to develop advanced manufacturing industry clusters will be launched. The proportion of R&D expenses covered by the additional tax reduction policy will be raised to 100 percent for manufacturing enterprises. We will make a full refund of incremental VAT credits to advanced manufacturing enterprises on a monthly basis, and raise the proportion of loans to the manufacturing sector. We will implement a series of policies to promote high-quality development of the integrated circuit industry and the software industry in the new era. Pilot projects that integrate the advanced manufacturing industry and the modern service industry will be carried forward. 

Fifth, we will focus on demand-side regulation. To foster a new development paradigm, we must firmly expand domestic demand as a strategic priority, accelerate the cultivation of a complete domestic demand system, promote the coordinated development of domestic and external demand, and give full play to the fundamental, critical and supportive role of consumption, investment and exports on economic growth. I'd like to talk a little bit more about consumption. To expand consumption, we must stabilize and create more jobs and ensure steady increases in people's income. In the meanwhile, we must notice that per capita consumer spending dropped by 4% last year, lower than the real growth rate of 2.1% of per capita disposable income of Chinese residents. This was mainly due to reduced contacts and gatherings because of the epidemic. Therefore, to further tap consumption potential, we must maintain epidemic prevention and control measures on a continuing basis and promote consumption at the same time. We also need to expand the consumption of goods, including commodity consumption, service consumption, health consumption, information consumption, online consumption and green consumption. To promote auto consumption, we will carry out policies to encourage auto consumption in rural areas and auto trade-ins. We will guide local governments to ease purchase restrictions for new-energy vehicles and issue more license plates. These measures will spur auto consumption and lead to healthy and orderly development of new-energy vehicles. In 2020, the output of new-energy vehicles hit 1.456 million, up by 17.3% over the previous year. In regards to housing, we will increase the supply of government-subsidized rental housing and shared ownership housing to address the housing difficulties of the people, especially new urban residents and young people.

Sixth, we will push forward green, low-carbon and circular development. Strengthening protection of the environment is favorable for fostering new areas of high-quality development. To achieve peak carbon emissions and carbon neutrality is an opportunity to step up the upgrading of industry and energy structures. In 2020, the installed power generating capacity of renewable energy stood at 934 million kw and we will further increase it. While increasing the capacity, we will also address the problem of idle capacity and improve storage capacity to achieve coordinated and orderly development. We will promote the cultivation of energy-saving and environmental protection industries worth of trillions of yuan. The green transformation of major industries and areas will be carried forward. Thus, we will realize the targets of a drop of around 3% in energy consumption per unit of GDP and a continued reduction in the discharge of major pollutants.

The Cover:

The Central Economic Work Conference made it clear that China will accelerate the construction of major projects and strengthen the sustainability of investment growth in 2021. What specific measures will be taken to expand rational investment this year? What are the considerations and plans for supporting new infrastructure development? Thank you.

Ning Jizhe:

Last year, China became the only major economy to see positive growth, in which investment played a big role. In order to keep the economy operating within the proper range this year, we still need to give further play to the key role of investment, strengthen areas of weakness, create more investment opportunities, boost investment growth, and appropriately expand effective investment. Measures will be taken in the following five aspects: 

First, we will give play to the leading role of government investment. In 2021, 610 billion yuan will be earmarked for investment in the central government budget, an increase of 10 billion yuan from the previous year. It will be used to mobilize resources to deal with major, difficult, and urgent issues at the state level. We will actively support the renovation of old urban communities and construction in key sectors involving agriculture, rural areas, farmers, water conservancy, major infrastructure and national strategy, social undertakings, and ecological progress. Meanwhile, 3.65 trillion yuan of special local government bonds will be issued for transport, energy, agriculture, forestry, water conservancy, eco-environmental protection, social undertakings, logistics, municipal public utilities, industrial parks, and other infrastructure and public service projects that will yield a certain degree of revenue.

Second, we will give more play to the role of investment in strengthening areas of weakness and adjusting structures. Investment today will be the supply of tomorrow. We will accelerate efforts to strengthen weaknesses in such areas as infrastructure, municipal public utilities, agriculture and rural areas, public security, eco-environmental protection, public health, material reserves, disaster prevention and mitigation, as well as in ensuring people's wellbeing. We will expand investment in equipment upgrading and technological upgrading in the manufacturing sector. Last year, investment in high-tech industries grew 10.6% year on year, 7.7 percentage points higher than overall investment. This year, we will further strengthen macro guidance and coordinate industry layouts to focus on energy-efficient and environmentally-friendly sectors as well as new-generation information technology, biotechnology, and new energy. We will also increase investment in high-tech and strategic emerging industries.

Third, we will focus on new infrastructure, new urbanization initiatives, and major projects. In terms of new infrastructure, we will roll out the 14th Five-Year Plan for new infrastructure construction to boost the development of the digital economy, expand the application of 5G, as well as speed up the construction of industrial internet and data centers. As for new urbanization initiatives, we will launch an urban renewal campaign to advance the renovation of old urban communities in all aspects and promote urbanization mainly in county towns. Regarding major projects, we will expedite the progress of major projects on time, including the Sichuan-Tibet railway, the Xining-Chengdu railway, and the Dateng Gorge water conservancy project.

Fourth, we will boost the development of private investment. Last year, private investment maintained a good momentum in recovery. It registered a positive growth, accounting for 54.9% of the total investment and showing great potential. This year, we will take measures in the following three aspects: First, we will further mobilize the enthusiasm of private investment, continue to open up market access for private enterprises, support their innovative development, and encourage private capital to participate in the construction of new infrastructure, new urbanization initiatives, and major projects as well as projects to strengthen areas of weakness. Second, we will further strengthen the capacity of private investment, guide banks to increase credit support for private enterprises, and implement cost-cutting policies for micro, small, and medium-sized enterprises. Third, we will further explore new ways for private investment, extend the public-private partnership (PPP) model to more areas in a well-regulated way, and steadily carry out trials for real estate investment trust funds (REITs) in infrastructure projects to put existing infrastructure assets to good use.

Fifth, we will build up the number of projects in reserve and strengthen the guarantee of vital factors including funds. The work will focus on the following aspects: First, we will stay committed to the principle that projects are well-planned before investment. This year, we will make efforts to identify major construction tasks, plan and reserve a group of major projects which will strengthen the economic foundation, increase functions and promise long-term benefits, and accelerate the progress of preliminary work on those projects. Secondly, we will stay committed to the principle that funds follow projects. We will expedite the issuance of central budgetary investment plan and organize local governments to make high-quality preparations for projects funded by special bonds. Third, we will stay committed to the principle that production factors go with projects. We will enhance communication and coordination between departments and guarantee the land used for major national projects. Thank you.

China Daily:

We know that topics involving education, medical care, elderly care, and childcare are closely related to people's lives and thus are among their concerns. What new measures can be expected in this year's draft outline of the 14th Five-Year Plan to address public worries and concerns? Thank you. 

Hu Zucai:

The five-year plan is as much a matter of state as of every household. The draft outline follows the people-centered development philosophy; sets out the overarching goal of meeting the people's ever-growing needs for a better life; focuses on well-rounded human development and the improvement of people's lives; stresses to ensure that public services are inclusive, meet essential needs and ensure basic living standards for people in difficulty; steps up efforts to promote equal access to basic public services, and puts forward a series of development goals, indicators, policies, and measures to ensure that the fruits of development will benefit all the people more equitably and provide a higher-quality and higher-level of access to childcare, education, employment, medical services, elderly care, housing, and social assistance.

In terms of major indicators, those indicators related to people's livelihoods are the largest. Seven of the 20 major indicators in the draft outline concern people's livelihoods, accounting for more than a third of the total -- the highest of all past five-year plans. These indicators cover employment, income, education, medical care, elderly care, and childcare, and other areas of people's livelihoods. This fully demonstrates that we have placed greater importance on improving people's wellbeing.

Regarding employment and income, we will mainly step up efforts to offer more and better job opportunities and make steady progress to raise personal incomes. Employment is the cornerstone of wellbeing, while income is its wellspring. We will implement an employment-first strategy and give top priority to promoting employment in economic and social development. We will offer more job opportunities; improve the employment support system for key groups such as college graduates, rural migrant workers, and demobilized military personnel; assist people with disabilities, zero-employment families, and other groups facing difficulty in securing work; and keep the surveyed urban unemployment rate within 5.5%. We will improve the lifelong skills training system and continue to launch vocational skills training programs on a large scale to tackle structural unemployment. We will give special attention to raising the income of low-income groups and expanding the middle-income population. We will ensure growth in personal income that is basically in step with economic growth, and improve the mechanism for reasonable wage increases. We will raise the proportion of labor remuneration in primary distribution, improve the distribution mechanism to allow innovation to have its due share of income, and increase property income through multiple channels.

In terms of education, we will develop a quality education system. We will stay committed to giving priority to developing education to make it fairer and better. We will continue to improve the conditions of schools in counties with weak education foundations, places with high population inflow, and rural areas. We will build and renovate more than 4,000 primary and middle schools to promote quality, balanced and integrated development of urban and rural compulsory education. We will speed up efforts to strengthen weaknesses in pre-school education, build and renovate 20,000 kindergartens, offer more than 4 million places in government-funded and privately-run non-profit kindergartens. We will endeavor to deal with difficulties brought on by expensive fees and the shortage of preschools, and raise the gross enrollment ratio for preschool education to 90%. We will consolidate and improve the level of universal senior high school education to increase its gross enrollment ratio to over 92%. We will launch an initiative to improve the quality of modern vocational and technical education, develop a group of high-level vocational and technical colleges and training bases as well as relevant disciplines to cultivate various types of skilled craftsmen across the country. We will develop world-class universities and disciplines for different categories, encourage some regular undergraduate institutions to shift their focus toward providing applied education, support the development of 100 undergraduate institutions in the central and western regions of China, and raise the gross enrollment ratio for higher education to 60%.

With regard to healthcare, we will work to build a Healthy China in all respects. We will develop a strong public health system to improve our ability to respond to public health emergencies. We will improve the medical service system in which public medical institutions play a major role; support provinces with weak medical resources to build regional medical centers; and improve the capacity of community-level medical services with a focus on county-level hospitals. We will improve the quality and scale of medical personnel training and increase the number of certificated (assistant) doctors to 3.2 per 1,000 people and registered nurses to 3.8 per 1,000 people. We will improve the medical insurance system for the entire population, advance overall planning of basic medical insurance schemes at the provincial level, improve medical insurance and assistance systems for major diseases, ensure that medical expenses can be settled where they are incurred via basic medical insurance accounts, and actively advance the reform of centralized procurement and uses of medicine and consumables to reduce the burden of medical care for the public.

In terms of social security, the main aims are to help those most in need, to build a tightly woven safety net, and to build the necessary institutions. China has built the largest social security system in the world. During the 14th Five-Year Plan period, we will further improve the multi-tiered social security system, increase the basic old-age insurance coverage to 95%, realize the unified national management of old-age insurance funds, promote the provincial-level unified management of insurances for unemployment and work-related injuries, relax insurance eligibility for people with flexible employment, and ensure the full coverage of social insurance for all eligible population. We will gradually improve the basic pension standards for urban and rural residents, and promote the transfer and continuation of social insurance. At the same time, we will strengthen social assistance, ensure the basic needs of people in difficulties, and promote the development of charity.

In terms of senior and child care, we will mainly improve the service system for the elderly and the young. It is expected that China will enter the stage of a moderately aging society during the 14th Five-Year Plan period. The draft outline responds to social concerns by actively responding to population aging as a national strategy. We will vigorously develop public-interest services for elderly care, and build an elderly care service system with the coordination of services based on community and home, while promoting the integration of medical care and health care. We will improve elderly care service network based on community and home, promote the transformation of public facilities suitable for elderly people, take various measures to expand the supply of beds in elderly care institutions, and improve the service capacity and level. The proportion of nursing beds will be increased to 55%. We will develop an inclusive child care service system and boost the number of nurseries for children under 3 years old from 1.8 to 4.5 per 1,000 people. We will support businesses, public institutions, social organizations and other social forces to provide public-interest child care services, encourage kindergartens to develop integrated services, and improve the quality and level of child care and education. Thank you.

Phoenix TV:

We have seen some positive achievements in the construction of new urbanization in recent years, including granting urban residency to 100 million people from rural areas and other permanent residents without local household registration, and the increase of urbanization rate to more than 60%. My question is, what targeted measures are proposed in the draft outline to implement the new urbanization strategy and improve the quality of new urbanization? Also, how will the implementation of these measures be ensured? Thank you.

Hu Zucai:

Urbanization is the only path to modernization, the largest source of China's domestic demand potential and strong domestic market, and an important support for building a new development pattern. China has made major historic achievements in constructing new urbanization since the 18th CPC National Congress. The integration of people from rural areas into the city has accelerated. We have raised the percentage of permanent urban residents to 60% of the population, and the percentage of urban permanent residents with local household registration to 45%. The goal of granting urban residency to 100 million people from rural areas and other permanent residents without local household registration was met. The "19+2" pattern of city clusters has been basically established and cities have taken on a new look.

During the 14th Five-Year Plan period, China's urbanization rate will be between 60% and 70%, which is still a middle and late stage of rapid development, and also a key period of China's comprehensive transformation. We should adhere to the path of new urbanization with Chinese characteristics, deeply promote the new urbanization strategy with a people-centered approach, and comprehensively improve the quality of urbanization development.

First, we will deepen reforms of the household registration system, and move faster to grant permanent urban residency to people who move to cities from rural areas in an orderly manner. At present, there are still more than 200 million people from rural areas and live in cities without permanent urban residency. Among those who have registered as permanent residents, some have not fully integrated into the city. Giving permanent urban residency to people who move to cities from rural areas is still the primary task of new urbanization. We will continue to prioritize household registration of existing residents and at the same time grant urban residency to more new residents. Moreover, we will advance the reform of the household registration system and the full coverage of basic public services, and move faster to integrate urban residents from rural areas into cities. 

On one hand, we will continue to relax restrictions on household registration and grant urban residency to those who would like to settle down in cities. We will relax restrictions on permanent urban residency except in some megacities. We will try out a household registration system based on permanent residence, and move faster to grant permanent urban residency to people from rural areas with stable employment and residence in the city. Cities with a permanent resident population of under 3 million people should completely abolish restrictions on household registration, ensuring that people from rural areas, either local or non-local, share the same standards in applications of household registration. The eligibility for household registration in cities with a permanent resident population of 3-5 million will be relaxed in an all-round manner. Megacities with a permanent resident population of more than 5 million should improve their point-based household registration system, simplify the point-based measure, and focus on two parameters – social insurance records and number of years living in the city. Cities where conditions are mature are encouraged to cancel the annual quota on permanent urban residency. At the same time, we should safeguard the ownership rights, contract rights and land management rights of those from the countryside who settle down in cities.

On the other hand, we will promote the equal access of permanent residents to basic urban public services, achieving "equal treatment and sufficient supply." We will improve the basic public service provision mechanism based on residence permit, residency years and other conditions, encourage local governments to provide more basic public services and convenience, improve the level of compulsory education in urban areas, housing support and other services for residence permit holders, and allow non-registered residents to enjoy basic public services equal to registered residents on a gradual basis.

At the same time, we will speed up work on granting permanent urban residency to people who move from rural to urban areas, and introduce policies for making both the transfer payments and the land designated for urban development granted to the government of a local jurisdiction conditional upon the number of people with rural household registration who are granted permanent urban residency in that jurisdiction.

Second, we will optimize the structure of urbanization and promote the coordinated development of large, medium and small cities.

We should promote development of megacities toward a leaner and healthier mode. The COVID-19 epidemic has exposed various problems in megacities such as high population density and poor risk resistance capacity. We should focus on three aspects to solve these problems. First, we should delimit and stick to the boundary of urban development and be cautious in removing counties and establishing districts. Second, we should relieve non-core functions of cities in an orderly manner, guide the over-concentrated resource elements to transfer to other regions in a gradual and orderly manner, and properly reduce development intensity and population density of central urban areas. Third, we should promote synergized development of big cities with nearby small- and medium-sized cities and suburban new towns. We will cultivate and develop a number of modern metropolitan areas by better integrating transportation.

Large- and medium-sized cities should improve their functions. We should give full play to the advantages of relatively low comprehensive cost in large- and medium-sized cities that can help transfer industries and relieve functions of super-large cities, and improve the service function and quality of life in cities.

Counties should speed up to make up for their weaknesses, promoting urbanization with counties as important carriers. Counties occupy an important position, serving hundreds of millions of rural dwellers and are an important support for expanding domestic demand. In most areas, counties are still the first choice for rural residents seeking medical treatment, obtaining employment and enrolling their children in school. At present, there are still many weaknesses in the construction of counties. We must promote urbanization construction with counties as important carriers. Since last year, we have been adjusting measures according to local conditions and giving targeted guidance, speeding up the improvement of their weaknesses of counties and large townships, improving top-level design, and strengthening financial support. During the 14th Five-Year Plan period, we will support the construction of counties with better foundation in the east of the country, focus on supporting the county construction in central, western and northeast regions, give support to the construction of counties in major agricultural producing areas and key ecological function areas, and strengthen the construction of border towns. We will actively promote the upgrading and capacity expansion of 17 facilities in the four major areas of public services, environmental sanitation, municipal public utilities and industrial development, and enhance the comprehensive carrying capacity and governance capacity of counties.

Third, we will comprehensively improve the quality of cities and promote livability and employability. We will also promote measures to fix shortfalls in infrastructures such as public transport, parking lots and charging stations, of which there is strong demand from the public; strengthen the construction of flood control and drainage systems; promote urban waterlogging controls; and complete the renovation of 219,000 old urban residential communities built before the end of 2000. We will also use digital technology to improve urban governance, so that urban residents can enjoy a higher quality of life.

Reuters:

How would you like to implement the reforms regarding the new "dual circulation" development paradigm during the 14th Five-Year Plan period? Why is the economic growth target for 2021 set at above 6%? What is the consideration for it? Why didn't you set an economic growth target for the 14th Five-Year Plan period? In 2021, what should we do to prevent asset bubbles, financial risks and debt risks brought about by the easy monetary policies rolled out last year? Thank you. 

Zhao Chenxin:

Thank you for your question. I think, according to what you've asked, your major concern is about reform. The first reporter also asked about reform. People are really concerned about it. Indeed, we should strive to reform with relentless efforts. As we enter the 14th Five-Year Plan period, we should give further play to the key role of deepening overall reform. At the recent 18th meeting of the central committee for deepening overall reform , General Secretary Xi Jinping emphasized five priorities for deepening reforms, including implementing a high-level of self-reliance and self-improvement, facilitating economic circulation, expanding domestic demand, as well as carrying out high-level opening-up and promoting comprehensive green transformation. These five priorities are very important. They are the fundamental principles that we will follow in future reforms.

You also asked about the macro control policies to balance economic growth while preventing risks. My understanding is as follows. Actually, Mr. Ning has talked about it. We should, on the one hand, have bottom-line thinking and prepare for potential risks, on the other, we should also strengthen follow-up analysis, make adjustment according to circumstances, and respond in a rapid, targeted and scientific manner. Additionally, we should unswervingly advance reform, so as to defuse risks and challenges. I would like to introduce the major reforms that the National Development and Reform Commission will advance this year in five aspects:

First, we will step up efforts to stimulate the vitality of various market entities. In term of the state-owned economy, the focus will be on optimizing its layout and making structural adjustment. The state-owned capital and enterprises will play more important roles in sectors concerning strategic security, industrial progress, the national economy and people's livelihood, as well as public services, so as to adjust and optimize the industrial structure. We will advance mixed-ownership reform scheme of the state-owned enterprises in a proactive and steady manner, especially in the four batches of over 200 state-owned enterprises pilots. We will foster a batch of new model enterprises and collect typical cases, and sum up practical experience as soon as possible so as to formulate measures for deepening structural reform in state-owned enterprises. In terms of the private economy, which many are also concerned about, our priority is to improve the environment for the development of the private economy, and step up efforts to eradicate barriers and obstacles which hinder the development of private enterprises. Moreover, we will strengthen monitoring the operation of the private economy, and establish some model cities to guide the development of the private economy nationwide.

Second, we will strive to establish a high-standard market system. The work can be summarized in following three aspects. We will implement the action plan to guide the building of a high-standard market system, so as to make it perform better. We will accelerate the development of a unified market. To promote efficient allocation of factors, we will continue to deepen reforms to encourage market-based allocation of land, the labor force, capital, technology and data. In order to improve market access, we will adopt a unified management model, and optimize dynamic adjustment mechanisms for the negative list. We will revise and roll out the market access negative list for 2021 in order to continue to remove various invisible market access barriers. We will also formulate and roll out special measures to ease market access in Hainan province and the city of Shenzhen.

Third, we will deepen reform in major sectors. For example, the power sector should strive to establish a unified electricity market system nationwide, and increase spot trading pilots for electricity. The oil and natural gas sectors shall deepen reform of the oil and gas pipeline operation mechanism, and ensure the implementation of reform measures in terms of equipment manufacturing, design and construction in power grid enterprises. The oil and natural gas industries should strive to reform the pipeline network operation mechanism, and accelerate the building of a unified network. Efforts will be made to ensure the equal access to the national pipeline network among market entities. We will also improve the government's storage system and mechanism for crude and refined oil. We will deepen market-oriented reform in the railway industry, and promote moderate competition among the railway transportation companies.

Fourth, we will ramp up efforts to drive green transformation. We will accelerate our steps to build up the nationwide markets for trading energy consumption rights and carbon emission rights, so as to peak carbon dioxide emissions and achieve carbon neutrality. We will improve the system for controlling the total amount and intensity of energy consumption, and optimize  systems and mechanisms for the coordination between the increase, consumption and storage of clean energy. We will establish and improve the mechanism to realize the value of ecological goods, and formulate ecological damage compensation regulations.

Fifth, we will enhance our capacity to safeguard the people's wellbeing. Mr. Hu has introduced some measures in this regard, and I'd like to add some more information. We will improve the policies and systems for distribution based on factors of production. We will improve the mechanism to ensure the returns for factors of production are determined by the market, and work to increase factor income of the low- and middle-income groups, so as to strive for common prosperity. Moreover, we will improve the price control mechanism of important livelihood commodities, and establish and improve a system of standards for basic public services. We will also boost the healthy development of elderly care and childcare services, and reform and improve the public service system of national fitness. Through these reforms, we aim to meet the people's increasing needs for a better life. Regarding the reforms, that's all I would like to introduce.

Hu Zucai:

I would like to answer the question about the gross domestic product (GDP) target set for the 14th Five-Year Plan period. GDP, as a comprehensive indicator, has always been a focus of attention. It has been contained as a major economic indicator in the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development. The document sets the goal of keeping the average annual growth in an appropriate range, and stipulates that annual target [for economic growth] be set in light of actual conditions. This is the first time in our history of formulating five-year plans. Such a growth target is qualitative overall, with quantitative objectives being implied. It is a prudent adjustment made advisedly in light of the overarching target of promoting modernization. It is also a decision made after considering the development trend, domestic and external environment in the 14th Five-Year Plan period. I think we should understand this in a comprehensive and accurate manner.

First, GDP is a core indicator of a country's economic development. It also reflects the comprehensive economic strength and international competitiveness of a country. Therefore, GDP has been contained in the draft outline as one of the major indicators, but the target has been expressed in a different way.

Second, as China has entered a new stage of high-quality economic development, it is not reasonable to assess its development by simply looking at the GDP growth rate. We should not just pursue economic growth without considering the quality and effectiveness of development, as well as the ecological and environmental impact. On the other hand, economic growth does matter when it comes to the target of realizing modernization. China is still the world's largest developing country, and development remains the basis for and the key to tackling every problem we face. The draft outline has taken both above aspects into consideration. However, it does not mean that we will not need a GDP growth rate any longer. It was pointed out at the fifth plenary session of the 19th CPC Central Committee that China's per-capita GDP will reach the level of a moderately developed country by 2035, which means that its GDP growth rate in the coming 15 years has to be kept in an appropriate range. Moreover, the draft outline has set specific targets for other major indicators, including that of the unemployment rate, energy intensity and carbon intensity. All of them are interconnected with GDP, which means that we should strive to keep the economic growth in line with the potential growth rate. 

Third, we are confident that GDP growth rate will maintain at a certain level, which is proven by a comprehensive study and calculation with the participation of many think tanks. However, given the great uncertainties in the domestic and external environment in the next five years, the decision to not set a specific and quantitative growth target will make us more proactive, active and at ease in coping with all sorts of risks and challenges. It will help boost the flexibility of development and leave room for tackling uncertainties. It will also help us focus on improving the quality and effectiveness of development. Compared to five years, the annual situation is easier to study and judge, so in the annual work, the annual growth target can be determined in a targeted manner, depending on the situation, such as changes in the internal and external environment and the economic performance. Thank you.

Bloomberg:

I would like to ask about strengthening China's science and technology. What will be the priorities during the 14th Five-Year Plan period to this end? What will China do to boost the investment into science and technology? Do you have an expectation for its amount? Thank you.

Ning Jizhe:

Strengthening China's science and technology is a very important topic, and the speakers have all talked about it more or less just now. The country will accelerate it during the 14th Five-Year Plan period, including this year. Specifically, we will improve our strategic scientific and technological strength, boost basic research, applied research, and the transfer and transformation of scientific and technological outcomes, and further improve China's core industrial competitiveness. As for the specific projects and investments that you just asked about, there is a target set out in the 14th Five-Year Plan that China's R&D spending will increase by more than 7% per year, which is expected to account for a higher percentage of GDP than that during the 13th Five-Year Plan period. The figure already increased fast during the 13th Five-Year Plan period, taking up 2.4% of GDP last year. We will strive to surpass it during the 14th Five-Year Plan period.

In terms of key projects, first, the construction of national laboratories should be accelerated, and the system of national key laboratories should be reorganized.

Second, we will facilitate basic research, including formulating and implementing a ten-year action plan, and establishing a number of research centers for basic disciplines.

Third, we will further plan and implement the Sci-Tech Innovation 2030 Agenda to seek breakthroughs in core technologies in key fields.

Fourth, in terms of new infrastructure construction, some of the previous major scientific and technological infrastructure projects are now operational, such as the Tianyan Telescope built up through a long period of effort. We will build more, and advance scientific and technological innovation in artificial intelligence, quantum science, brain science and other sectors.

Fifth, in terms of international centers for science and technology innovation and national science centers, we will develop international centers for science and technology innovation in Beijing, Shanghai, the Guangdong-Hong Kong-Macao Greater Bay Area, as well as comprehensive national science centers in Huairou, Zhangjiang, Hefei, and the Guangdong-Hong Kong-Macao Greater Bay Area with greater efforts. We will also develop a nationally influential scientific and technological innovation center in Chengdu and Chongqing based on a quality plan.

Sixth, we will improve a number of multi-level innovation platforms, including national industrial innovation centers, technological innovation centers, manufacturing innovation centers, engineering research centers, and technological centers of enterprises.

Seventh, we will organize and implement demonstration projects for integrated innovation. As enterprises are the mainstay of technological innovation, we will motivate large enterprises to share their resources, scenarios, applications, and innovation needs with small and medium-sized enterprises to create an ecosystem of innovation and entrepreneurship based on industrial chains and supply chains. We will motivate enterprises to increase R&D spending with tax incentives. Now, over 70% of all R&D funding comes from enterprises, and we will make that proportion even higher. At last, we will continue to support mass entrepreneurship and innovation, and construct demonstration bases for innovation and entrepreneurship. Thank you.

Hu Zucai:

China spent a total of 2.44 trillion yuan in R&D in 2020, accounting for 2.4% of its GDP, a record high in history and maintaining its position as the second in the world. The draft outline aims for China's R&D spending to increase by more than 7% per year. Total R&D spending will reach 3.76 trillion yuan by 2025 if it grows at 7% every year. Of course, we have calculated it at the current prices in 2025, not at a constant price. It is a quite big increase, 1.32 trillion yuan more than in 2020 and higher than that during the 13th Five-Year Plan period. As you may have noticed, this time in the draft outline, we have put basic research in a more important position, and elaborated it in a special section. We have also, for the first time, set an indicator -- the proportion of basic research expenditure to R&D expenditure -- in the draft outline. This figure was 6.16% in 2020, much less than that of developed countries. The draft outline proposes that it will reach over 8% by 2025 during the 14th Five-Year Plan period, a very positive direction to work towards. Spending in this area reached 150.4 billion yuan in 2020, and is expected to reach about 280 billion yuan in 2025 (calculated at the constant price in 2020), and we will strive to make it even higher. It sends a clear message that we will value basic research more. Thank you.

CNR:

How will China coordinate regional development during the 14th Five-Year Plan period? The State Council recently approved the establishment of a joint working mechanism between the local governments and central government departments to revitalize northeast China. What measures will there be to promote the revitalization? Thank you.

Zhao Chenxin:

Thanks for your questions, which are both about regional development. The CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to regional development, and further implemented the strategies for coordinated regional development since the 18th CPC National Congress. Under major strategies for the coordinated development of the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Yangtze River Delta, and the ecological protection and high-quality development of the Yellow River basin, those regions have all taken on their respective functions, and moved on to better paths of development. As they now become increasingly coordinated in development, we will seek even better coordination during the 14th Five-Year Plan period, mainly from the following three aspects:

First, we will further implement major regional strategies. In the Beijing-Tianjin-Hebei region, we will relocate non-essential functions from Beijing in a steady and orderly manner, and build the Xiongan New Area according to high quality standards. In the Yangtze River Economic Belt, we will put ecology first and pursue green development, and promote high-quality development while protecting it rather than developing it in a large scale. In the Guangdong-Hong Kong-Macao Greater Bay Area, we will develop a dynamic and internationally competitive first-class bay area and a world-class city cluster. In the Yangtze River Delta, we will enhance its integrated development by forming a new development paradigm first, and make it a foundation and role model for high-quality development across the country. In the Yellow River basin, it is important to make a good start in ecological protection and high-quality development, to ensure significant progress during the period.

Second, we will continue to push forward the strategies for coordinated regional development. We will release more nuanced policies in the western region, promote coordination within it, and form a new paradigm featuring better protection, further opening up, and high-quality development. We will facilitate breakthroughs in the comprehensive revitalization of the northeast, and coordinate policies to ensure national defense, food, ecological, energy, and industrial security. We will speed up the rise of the central region by equipping it with a modern industrial system with advanced manufacturing as the mainstay. We will accelerate the modernization of the eastern region, which will include upgrading its industries by enhancing their capabilities in scientific and technological innovation, and engaging more in international economic cooperation at a higher level. We will also coordinate land and marine development, develop the maritime economy, and build the country into a strong maritime country. We will motivate functional platforms such as national-level new areas to lead in-depth reforms and further opening-up, and consequently, lend fresh impetus to the real economy.

Third, we will focus on building a regional economic layout with complementary advantages for high-quality development. The focus is on improving the institutional mechanism for coordinated regional development, supporting regions in giving full play to their comparative advantages, promoting the rational flow and efficient concentration of various factors, enhancing the momentum of innovative development, and building a power system for high-quality development. We will enhance the carrying capacity of central cities, urban agglomerations and regions with advantageous economic development in terms of economy and population, and support other regions in enhancing their functions in safeguarding national food security, ecological security and border security. Through these efforts, China's regional development will be more coordinated, more efficient and of higher quality.

I would also like to mention the joint working mechanism to revitalize northeast China. General Secretary Xi Jinping has visited the northeast region many times and made many important instructions on this issue since the 18th CPC National Congress. It fully reflects the great attention and earnest expectations of the CPC Central Committee with Comrade Xi Jinping at its core for revitalizing northeast China. The NDRC and other government departments have continuously improved the "1+N+X" policy system for revitalizing the region. Under our policies and work plans, the region made new progress in its revitalization. We then set up the joint working mechanism under the State Council's Leading Group for Revitalizing Northeast China and Other Old Industrial Bases. It was established with the approval of the State Council for better coordination and supervision of related work. NDRC deputy head Cong Liang has taken charge of it, and related work has already started. Through this implementation plan, we will plan the main ideas, key tasks, major projects and major policies for the next step of the revitalization of northeast China, and through a series of efforts, we will promote a new and greater breakthrough in the revitalization of northeast China. Thank you.

Southern Metropolis Daily:

Due to extremely cold weather, China's electricity consumption load last winter hit a new record, even higher than last summer. Will this situation become normal in the future? And we know the U.S. state of Texas recently suffered a large-scale and long-lasting power outage due to extremely cold temperatures. Facing new changes in the energy industry, what measures will the government take to guarantee energy security? Thank you.  

Zhao Chenxin:

Thank you for your questions. As you said, there have been some new changes, new situations and new challenges to China's energy operation and supply. I'll address the subject from these three aspects.

First, let's review the basic situation at that time. As winter began, China's energy demand — especially its electricity demand — grew rapidly, due to the rapid recovery of economic activities and a large-scale cold front. The nation's peak power load hit new record highs on four days: last Dec. 14, 16 and 30, and this year on Jan. 7. In particular, the evening peak load nationwide hit 1.189 billion kilowatts on Jan. 7, which was more than 10% higher than last summer's peak. On the same day, the nation's power generation reached 25.967 billion kilowatt-hours. In a situation like this, it's difficult to fully satisfy the electricity demand. Currently, China's installed power generation capacity is more than 2 billion kilowatts. Therefore, it seems that we should have no problem with such huge installed capacity. However, since the peak load occurred at night, solar power generation, that is to say, photovoltaic power generation, could not be used. In addition, there was no large-scale wind across the country on Jan. 7, so we could only generate about 10% of wind power. The total installed capacity of wind and photovoltaic power generation is 530 million kilowatts, but there were 500 million kilowatts that could not be used. The total installed capacity of hydropower is 370 million kilowatts. However, as winter is the dry season, more than 200 million kilowatts could not be used during the peak load period. In addition, the peak of natural gas consumption occurs in winter. China's installed natural gas-fired power generation capacity is nearly 100 million kilowatts, but around 50 million kilowatts could not be used. As a result, it is really difficult for the remaining installed capacity to meet the demand of high load. We also need to consider the problems of regional capacity and shutdowns of generators for maintenance. No matter the difficulty, in accordance with General Secretary Xi Jinping's instructions on sticking to the people-centered philosophy of development, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) organized localities and central State-owned enterprise (SOEs) to make all-out efforts to meet the challenge, and we finally succeeded in ensuring smooth and orderly operation of the energy sector and stable and efficient power supply, especially supply for people's livelihood. No major problems occurred. The sharp contrast between us and the case you mentioned just now is a good manifestation of China's institutional strengths and our putting people first.

Second, let's talk about our evaluation of the new situation. Previously, peak energy consumption normally occurred in summer because of the rapid increase of the air conditioning load. According to our analysis, the unusual winter peak was mainly caused by the increasing demands for clean heating in northern China and for electric heating in southern China in recent years. Increases in air conditioning and electric heating loads both show the desire of the Chinese people for a better life. We must ensure stable energy supply to meet their aspiration. Therefore, the NDRC and the NEA have organized different sectors to carry out in-depth research, because we should take into consideration the safety, affordability and sustainability of energy supply, establish an energy system that is clean, low-carbon, safe and efficient, and  achieve peak carbon emissions and carbon neutral goals. As such, we are preparing the next work plan.

Finally, let's talk about what should be done. This can be summed up in one sentence: We will fully implement General Secretary Xi Jinping's instructions on improving energy production, supply, reserve and sales systems. We have already made relevant plans, and the next step is implementation. In terms of production, we will strengthen the supply of energy resources by establishing a diversified power generation system featuring stable operation. In terms of supply, we will improve energy resource allocation by promoting the coordinated development of power grids at different levels nationwide. In terms of reserve, we will shore up our weak links in energy reserve by strengthening our reserve capacity in an all-round way. In terms of sales, we will build a modern energy market system and use market-based measures to deepen energy demand side management.

In conclusion, in recent years, in accordance with General Secretary Xi Jinping's requirement for a new energy security strategy featuring "Four Reforms" and "One Cooperation," we have secured profound progress in energy sector. We have prominent institutional strengths, a strong material foundation and rich supply experiences to confidently ensure energy security during the 14th Five-Year Plan period, and enhance people's sense of satisfaction. Thank you.

Kyodo News:

My question is about foreign investment. Some foreign-funded companies are worried that certain policies, such as the export control law, may impose restrictions or obstacles on their investment in China. How can you make foreign-funded companies reassured about their investment in China during the 14th Five-Year Plan period?

Ning Jizhe:

China's paid-in foreign direct investment (FDI) bucked the trend last year despite a sharp contraction in global cross-border direct investment. In 2020, nonfinancial FDI into China rose to $144.4 billion, up 4.5% year on year. In January this year, the country made a good start in the use of foreign capital, which reached $13.5 billion, up 6.2% year on year. Foreign-funded enterprises have maintained stable operation and production in China, and a number of major foreign-funded projects are being implemented steadily  despite the impact from the COVID-19 pandemic. A total of 94% of U.S. companies are optimistic about the business outlook in China this year, and more than half said that China remains their top investment destination, according to the 2021 White Paper on the Business Environment in China released by the American Chamber of Commerce in South China. However, it is not only companies from the U.S. Those from Japan, Europe and elsewhere are also optimistic about the business outlook in China. 

The next step of promoting stable foreign investment still faces many challenges. In 2021, the NDRC, in line with the deployments of the CPC Central Committee and the State Council, will carry out opening-up in a larger scope, wider areas and at a deeper level, and step up building of a new system for a higher-level open economy. The country will fully implement the foreign investment law to better promote and protect foreign investment and continue to improve its business environment. 

First, we will continue to reduce the negative lists for foreign investment. China revised its negative lists of foreign investment for four consecutive years from 2017-2020. The number of sectors that are off-limits for foreign investors has been cut by nearly two-thirds. A series of major opening-up measures have been launched in finance,  automobile, and other sectors, and the manufacturing industry has been basically opened up. In 2021, we will further shorten the negative lists for foreign investment, with more efforts made to ensure opening-up of the manufacturing industry and promote the orderly opening-up of the service industry. We will extensively introduce advanced technology, management experience and business models, and promote high-quality economic development with a high-level of opening-up. At the same time, we will also give full play to the FTZs' role as the "test field" for further opening-up, and encourage them to continue pilot projects.

Second, we will continue to expand the fields where foreign investment is encouraged. The new 2020 Catalog of Industries Encouraging Foreign Investment  took effect this January, adding 127 items to the list and further expanding the scope for foreign investment. Next, we will focus on its implementation, apply combined measures of boosting the increment, stabilizing the stock and enhancing the quality, and improve the relevant supporting policies. We will actively channel more foreign investment into fields like advanced manufacturing, high technologies, and energy conservation and environmental protection, as well as into producer services such as research, development, and design; modern logistics; and information services. Finally, investment will be encouraged in China's central, western, and northeastern regions to give better play to foreign capital's role in ensuring the stability of industrial and supply chains.

Third, we will ramp up efforts to promote the implementation of major foreign investment projects. In 2018, the NDRC led the establishment of a special task force for major foreign investment projects to coordinate project implementation and solve any problems involved. So far, four batches of major foreign investment projects have been launched, with a total investment of more than US$110 billion. This year, we will launch the fifth batch of such projects and provide policy support in industrial planning, land use, environmental assessment, and energy use, etc. We will continue to focus on fields like advanced manufacturing and high technologies when supporting major foreign-invested projects. We will encourage foreign investors to participate in the high-quality development of China's manufacturing sector, in the construction of new infrastructure and in China's innovation-driven development, and better leverage the exemplary role of these projects. We will encourage localities to improve their mechanisms, promote coordination at all levels, and provide services at every stage of the project.

Fourth, we will fully implement a post-establishment national treatment for foreign investment. Since last year, China, in accordance with the arrangements to ensure stability on six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations) and maintain security in six areas (employment, people's livelihood, market entities, food and energy, industrial and supply chains, and operations at grassroots levels), has introduced a series of measures in fields including tax, finance, and social security to alleviate difficulties encountered by enterprises. These measures are equally applicable for foreign companies. We will continue to promote the equal treatment of foreign and domestic enterprises in terms of government procurement, land supply, the reduction and exemption of tax and fees, license applications, standards-setting, project application, and human resources policies, among others. 

Regarding the Export Control Law  that has drawn some foreign enterprises' attention as you mentioned, the purpose of the law is to restrict the export of dual-use items, military items, and other controlled items. It also means that domestic and foreign enterprises are treated equally in terms of the control scope and measures. In general, the normal export of foreign enterprises won't be affected.

Fifth, we will effectively strengthen oversight for business services. We will more actively introduce relevant policies and measures to foreign enterprises, enhance information services through multiple channels, and readily resolve difficulties faced by foreign-funded projects in investment, production, and operation in a coordinated manner to create a more convenient environment for foreign enterprises to invest in China. At the same time, we will continue to refine the regime of pre-establishment national treatment plus negative list for foreign investment, and security reviews of foreign investment. We will work to establish a fair, transparent, efficient, and safe regulatory system that is in line with high-level opening-up and international norms, in order to foster a favorable investment environment. Thank you.

China News Service:

The draft outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-range Objectives Through the Year 2035  (referred to as the "draft outline" hereafter) explicitly points out that China will make more active and effective efforts to promote common prosperity. What are the specific measures in this regard? Thank you. 

Hu Zucai:

Common prosperity is an essential requirement of socialism, a shared aspiration of the Chinese people, and also a goal that our Party has been unwaveringly committed to. Since the 18th National Congress of the Communist Party of China (CPC), common prosperity has taken on new implications and secured more solid progress. A significant step is the complete victory in eradicating absolute poverty. Our success in building a moderately prosperous society in all respects has also laid a solid foundation for promoting common prosperity. The fifth plenary session of the 19th CPC Central Committee made major arrangements for the promotion of common prosperity, and for the first time in the history of the plenary sessions of our Party, set the long-range goal of " achieving more notable and substantial progress in promoting common prosperity for everyone" by 2035. Common prosperity itself is an important goal of socialist modernization. As China has embarked on a new journey toward fully building a modern socialist country, we must attach greater importance to common prosperity and make a more proactive and meaningful effort to fulfill this goal.

Common prosperity has distinct features of the times as well as Chinese characteristics. As far as I'm concerned, we should have an overall understanding of common prosperity from the following four aspects:

First, common prosperity means "prosperity for all." It is not the prosperity for some people or some regions, but the shared prosperity for all Chinese people. It means that all Chinese people share the benefits of development and live a happy and fulfilling life.

Second, common prosperity refers to "comprehensive prosperity," which includes both material and spiritual prosperity. It means not only affluence in life but also confidence and self-improvement in spirit. It also entails a comfortable environment for living and working, social harmony, and universal access to public services. In short, common prosperity is to realize people's all-around development and social progress. 

Third, common prosperity points to "shared prosperity through joint contribution." Common prosperity requires the hard work and mutual assistance of all people. Everyone participates and contributes, and benefits are enjoyed by all. With concerted efforts, we build a better home and live a better life.

Fourth, common prosperity means "realizing common prosperity gradually." Achieving prosperity for all is a long-term and arduous task. It is a gradual process. We must abide by the law of development and act proactively, all the while keeping our feet on the ground and committed to persistent efforts instead of being divorced from reality. We should achieve the goal of common prosperity step by step on the road toward modernization.

The four aspects are my overall understanding of common prosperity. 

The draft outline sets the goal of making solid progress toward prosperity for all Chinese people and puts forward the requirement of making more active and effective efforts to promote common prosperity. These are actually further plans for advancing common prosperity. We should focus on the prominent contradiction of unbalanced and inadequate development; give priority to narrowing the disparities in development between urban and rural areas, and between regions, and in income distribution; and secure solid progress toward common prosperity while furthering high-quality development. In other words, we should both make the cake bigger and share it fairly. We will proactively solve problems such as wealth disparity between regions, between urban and rural areas, and in incomes. We will safeguard and improve people's livelihoods in the course of development, and enhance people's well-being by coordinating advances in employment, income distribution, education, social security, health, housing, elderly and child care, among other areas. We will pay more attention to weighting more toward rural, grassroots and less-developed areas, and disadvantaged groups, to promote social equity and justice. In this way, we hope all the people can enjoy the fruits of development in a fairer way and feel a greater sense of gain through joint contribution and shared benefits. We will pool the tremendous strengths of all the people to build China into a modern socialist country.

According to the arrangements of the CPC Central Committee, the draft outline proposes that an action plan for promoting common prosperity be formulated. This is a top-level design, which will clarify the direction, goals, key tasks, pathways and methods, policies, and measures for achieving common prosperity. The NDRC is taking the lead and cooperating with relevant departments for the formulation work. In addition, the draft outline calls for supporting Zhejiang province to build a common prosperity demonstration zone through high-quality development. There, top-level design and demonstration zone construction are both being promoted. Zhejiang boasts relatively good conditions in all aspects, with its urban-rural gap, regional development, and affluence indicators all leading the country. Therefore, the draft outline makes it clear that Zhejiang will be supported to build a common prosperity demonstration zone through high-quality development. The main task is to explore institutions, mechanisms, and systems for boosting common prosperity, gain experiences that can be replicated and applied in other areas, and make solid progress in this regard. Thank you.

Chen Wenjun:

Today's press conference is concluded. Thank you all.

Translated and edited by Duan Yaying, Huang Shan, Xiang Bin, Guo Yiming, Gong Yingchun, Li Huiru, Zhang Liying, Zhang Jiaqi, Chen Xia, Wang Mengru, Zhang Junmian, Xu Xiaoxuan, Liu Qiang, Wang Qian, Zhu Bochen, Yuan Fang, Cui Can, 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:

Guo Wei, deputy director of the State Council Research Office

Sun Guojun, member of the Leading Party Members Group of the State Council Research Office

Chairperson:

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

Date:

March 5, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office. The fourth 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. Guo Wei, deputy director of the State Council Research Office, and Sun Guojun, a member of the Leading Party Members Group of the State Council Research Office. They will elaborate on the report and take your questions. First, we will give the floor to Mr. Guo.

Guo Wei:

Friends from the media, good morning. Earlier today, Premier Li Keqiang delivered the Report on the Work of the Government at the fourth session of the 13th National People's Congress. The report upholds Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide. It fully implements the guiding principles of the 19th National Congress of the Communist Party of China (CPC); the second, third, fourth, and fifth plenary sessions of the 19th CPC Central Committee; and the annual Central Economic Work Conference in 2020. The report reviews the main work on social and economic development last year, and summarizes the achievements made during the 13th Five-Year Plan (FYP) period and the main targets and tasks for the 14th FYP period. It also puts forward the main projected targets and macro policy directions concerning this year's social and economic development and makes arrangements for the main agenda of this year.

I've read some of the responses posted on the internet on my way here. Many say that the report responds to people's concerns and reflects the expectations of all parties. Some says that after listening to the report, they feel proud of the nation's achievements, inspired by the policies of the central government, and are more confident when facing difficulties. Others say that new policies make them feel assured, and that the recent progress brings them so much hope. We participated in the drafting process of the report, and also felt very inspired when listening to Premier Li delivering the report at the Great Hall of the People today. We feel that the report is indeed practical and informed by the realities on the ground. It rallies people together and boosts our confidence.

This year is rather special as it marks the beginning of the 14th FYP, the embarkment of a new journey toward fully building a modern socialist country, and the 100th anniversary of the founding of the CPC. The drafting work of the report was very crucial, and great importance was attached to it by the CPC Central Committee and the State Council. General Secretary Xi Jinping made important instructions on the drafting of the report and chaired meetings of the Political Bureau of the CPC Central Committee and of its Standing Committee, studying and discussing the draft and putting forward specific requirements for revising. Premier Li presided over the drafting and revising of the report, and chaired executive and plenary meetings of the State Council to discuss the draft. Premier Li also presided over themed symposiums many times to directly listen to opinions and suggestions from all parties. Other leaders of the State Council also gave concrete instructions on the drafting and revisions of the report. The drafting work collected opinions and suggestions from all provinces, autonomous regions and municipalities; central departments in the Party, the government, the military, and people's organizations, as well as some central State-owned enterprises.

The report consists of three major parts. The first part briefly reviewed last year's work and achievements. The report notes that last year was an extraordinary year in the history of the People's Republic of China. We've achieved major strategic success in our response to COVID-19, and China was the world's only major economy to achieve growth. We attained a complete victory in the fight against poverty and scored decisive achievements in our efforts to build a moderately prosperous society in all respects. We owe our achievements 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, the armed forces, and the Chinese people of all ethnic groups. 

The 13th FYP concluded last year, and the 14th FYP starts this year. Acting in accordance with the Recommendations of the Central Committee of the Communist Party of China for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035, the State Council has drawn up the draft Outline for the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035. The second part of the report briefly introduced the content of the draft outline and summarized the achievements made during the 13th FYP period and the main targets and tasks for the 14th FYP period.

Based on the analysis of the development in and outside China, the third part of the report made comprehensive plans and arrangements for the main tasks and policies of the government this year.

Next, Mr. Sun and I will take questions from you regarding drafting of the report. Thank you.

Shou Xiaoli:

Thank you, Mr. Guo. The floor is open for questions. Please identify your news outlet before asking question. Thank you.

CCTV:

This year's government work report points out from the very beginning that last year was an extraordinary year in the history of the People's Republic of China. It also states that the work last year was truly challenging. Given the achievements of last year, how do we best understand and define "extraordinary" and "challenging?" Thank you.

Guo Wei:

I think it is quite accurate to describe last year as extraordinary.

Last year, our tasks were extraordinary. We needed to achieve decisive success in eliminating absolute poverty and secure a full victory in building a moderately prosperous society in all respects.

Last year, the difficulties and challenges we faced were exceptional. We encountered combined adverse and severe impacts rarely seen in a century. First, the sudden outbreak of the once-in-a-century COVID-19 epidemic posed a serious threat to people's health and brought unprecedented difficulties to economic and social development as well as all aspects of work. In the first quarter of last year, China's economy registered a negative growth rate of 6.8%, which hasn't been seen since the reform and opening up. Second, the world economy found itself deep in recession and for the first time in history, the economies of all regions were hit hard simultaneously. The global economy suffered the worst recession since the Great Depression in the 1930s, which has directly affected the stability of foreign trade and the security of the industrial and supply chains in China. Third, the international landscape was complex and grave with many uncertainties. Economic globalization encountered headwinds and the impacts of unilateralism and protectionism were on the rise. In addition, some areas of our country suffered severe floods and typhoons.

Last year, the achievements in development that we secured were remarkable. Facing the severe and complex situation, the Chinese people of all ethnic groups, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, responded with tremendous tenacity and forged ahead with great resolve. We achieved major strategic success in the fight against COVID-19 and fully protected the health and safety of the people, creating fundamental guarantees and prerequisites for economic and social development. We took the lead in resuming work and production and were the first to achieve positive economic growth. At the same time, reforms in key areas and at key points were deepened, breakthroughs in opening up were made, people's livelihoods were effectively ensured, and 11.86 million new urban jobs were created. Society was harmonious and stable on the whole.

Last year, the goals we fulfilled were extraordinary in the historical development of the People's Republic of China. We attained a complete victory in the fight against poverty. All remaining poor rural residents were lifted from poverty, as were all of China's remaining poor counties, accomplishing the daunting task of eliminating absolute poverty that has existed in China for thousands of years. Our gross domestic product (GDP) exceeded the 100-trillion-yuan threshold, with the economic strength, composite national strength, and people's living standards reaching new levels. We made great progress in scientific and technological innovation. Our Chang'e-5 spacecraft successfully landed on the near side of the moon and brought back lunar samples. The new deep-sea manned submersible Fendouzhe (Striver) completed its 10,000-meter sea trials. Last year was a landmark year in many respects in the history of the People's Republic of China.

Last year, the efforts made by the Chinese people were also extraordinary. The COVID-19 pandemic broke out at the beginning of last year. You may recall that on the very day of the Lunar New Year, General Secretary Xi Jinping chaired a meeting to direct outbreak response. At that critical moment, more than 40,000 medical workers rushed to aid Wuhan in Hubei province, and manufacturers of masks, protective suits, and other medical supplies worked overtime to increase production. From medical staff to the People's Liberation Army, from scientific researchers to community workers, from volunteers to those who oversaw projects, people of all ages from all walks of life across China united to fight against the pandemic. Facing difficulties brought about by the economic downturn, the central government considerably reduced non-essential and non-obligatory expenditures and the provincial governments also cut spending to support those working on the ground as well as market entities. Many enterprises saw reduced profits but did their best not to cut jobs. Some employees who saw their salaries reduced stood together with the enterprises to tide over the difficulties. As the government work report reads, "Local authorities and government departments across the country kept in mind the big picture and shouldered their responsibilities. Market entities, over one hundred million in number, responded to shocks with fortitude and resilience. Our people worked hard and fought adversity in close solidarity and with the unyielding spirit of the Chinese nation."

It is fair to say that last year, the difficulties and challenges we faced were extraordinary, the achievements we secured were remarkable, the efforts we made were exceptional, and the success we gained was earned through resilience. The year 2020 is a year to remember in history. Thank you.

CNR:

My question is about the GDP. Last year's government work report did not set specific GDP targets, but we noticed that this year's report has set an expected GDP target of over 6%. For what reasons is this? Given the complex and challenging economic environment both at home and abroad, could you please give some comments on our economic development targets? Thank you.

Sun Guojun:

Thank you. I will answer your questions. Last year's report did not put forward a quantitative target for GDP growth rate. The biggest reason was the great uncertainty. China's economic growth rate was 2.3% in 2020, which was a better-than-expected result and not easy to achieve. 

Implementing the guiding principles of the recent Central Economic Work Conference, this year's government work report sets an expected target for economic growth at over 6%. I will list three factors that have been taken into full consideration.

First, we have taken into account the recovery of economic activity. China's economy has gradually recovered since the second quarter of last year. The momentum of improvement has continued during the third and fourth quarters, so that we can expect a generally stable economic performance this year.

Second, we have taken into account the base figures. For example, due to the base figures for 2020, we can expect an obvious year-on-year rise in GDP growth in the first quarter of 2021. Statistically, GDP growth rates may show a falling trend from high to low throughout the year of 2021. However, this will only be the appearance of statistics. For each quarter, we expect GDP growth to be relatively stable compared to the previous quarter.

Third, we have taken into account the need to sustain healthy economic growth. When we set the expected GDP growth target for 2021, we need to take into account both the economic situation of this year and that of the next two years. The expected target should be well-aligned with the annual goals of subsequent years, so as to maintain long-term and steady economic development. Thank you.

ThePaper.cn:

It is mentioned in the work report that the consumer price index (CPI) will rise by around 3% this year, followed by a steady increase in people's income. Can you explain how the steady increase in income will be achieved and to what extent our income will have to increase in order to catch up with the 3% increase in consumer prices? Thank you.

Sun Guojun:

Thank you for your questions. The CPI is directly related to everyone's daily life, and affects the basic wellbeing of the people. Keeping the CPI generally stable is an important objective of macroeconomic regulation and control, and an important sign that economic operation remains within a reasonable range. Last year, China's CPI rose by 2.5%, which was significantly lower than the expected target of around 3.5%.

This year, taking into account the carry-over effects and new price increases, the expected target for the rise in the CPI was set at around 3%, a downward adjustment from last year's expected target, indicating that the Chinese government is confident that the CPI will be controlled at a relatively low level. Food prices account for a high percentage of the CPI. In recent years, China has scored consecutive bumper harvests, so the supply of agricultural products has been guaranteed. This, coupled with the basic recovery of hog production capacity, is conducive to keeping prices stable.

This year's government report sets a target of steady growth in personal income. To increase people's income, the prerequisite is to achieve relatively full employment and strive to keep the growth of people's income basically in line with economic growth. At the same time, efforts should be made to raise the incomes of low-income groups, expand middle-income groups and promote common prosperity. Thank you.

China News Service:

The government work report said that China has achieved a major strategic success in the fight against COVID-19. Could you elaborate on our achievements? What should be done next? Thank you.

Guo Wei:

COVID-19 is the most serious global pandemic seen for nearly a century. After the outbreak, the CPC Central Committee with Comrade Xi Jinping at its core made epidemic prevention and control the top priority. General Secretary Xi Jinping gave immediate instructions, took charge of the COVID-19 response, made people's lives and health the first priority, and adopted resolute measures in the battle against the novel coronavirus. Premier Li Keqiang chaired multiple meetings of the Central Leading Group for Novel Coronavirus Prevention and Control and made specific arrangements. Thanks to the resolute decisions made by the CPC Central Committee, the coordination of different localities and departments, and through the concerted efforts of the Chinese people, we achieved a major success in our response to COVID-19. In around a month, the fast spread of the virus was contained; in around two months, the daily increase of domestic coronavirus cases had fallen to single digits; and in approximately three months, a decisive victory was secured in the battle to defend Hubei province and its capital city Wuhan. In response to evolving epidemic dynamics, we made timely adjustments to our response approaches. We improved routine control mechanisms, reopened the economy and resumed normal life in low-risk areas, suppressed several regional outbreaks of the epidemic, and consolidated our achievements in controlling COVID-19.

We have withstood the test of COVID-19 and protected the health and safety of the Chinese people. More importantly, after the epidemic, Chinese people of all ethnic groups are more united as one, more patriotic, and more confident in the vitality and advantage of our national system and our state governance system, which will bring long-lasting effects to our future development.

As the pandemic continues around the world, the government work report has made arrangements for the next step under the requirements of the CPC Central Committee on epidemic prevention and control as well as socioeconomic development. It stresses a more coordinated way to carry out COVID-19 prevention and control and pursue socioeconomic development. I think, first, we're going to improve our routine prevention and control measures and boost our capacity with science-based precise measures. We will minimize the impact of our COVID-19 response on our work and life, increase testing for high-risk personnel and areas, and identify risks in a timely fashion. Second, we will increase our emergency response ability. We should ensure readiness and supply so that, in case of sudden outbreaks, we can identify control zones, and conduct COVID-19 testing, contact tracing and carry out medical treatment. Of course, we need to avoid a one-size-fits-all approach and imposing extra requirements in the name of epidemic control. Third, we will continue to promote vaccine research and its free roll-out. Currently, we have conditionally approved four COVID-19 vaccines for public use. In the next step, we will continue to intensify our efforts in R&D, improve vaccine production and supply, step up supervision of the supply chain, standardize vaccination procedures, and ensure the quality of the vaccine as well as safe vaccination. At the same time, we will continuously monitor and study mutant COVID-19 strains, and speed up our R&D of drugs and treatment, in order to increase our capacity for treating COVID-19.

Phoenix TV:

We noticed the report mentioned that the government formulated and implemented macro policies to meet the urgent needs of market entities. What's the rationale behind that? Thank you.

Sun Guojun:

Thank you for your question, which is a question that particularly captures the key point. Facing the shocks of a severity rarely seen before, the CPC Central Committee pledged to coordinate the COVID-19 response with socioeconomic development, and adopt macro policies to minimize the impact of the pandemic. We carried out the task of maintaining security and stability in six key areas -- particularly job security, basic living needs, and the operations of market entities. We also maintained security in industrial and supply chains, food and energy, and the smooth functioning of grassroots government at the macro level. Our goals were maintaining security by keeping stability while pursuing progress, holding the bottom line and keeping the fundamentals of the employment and economy. Our goals last year were specific and clear. As is clearly stated in the government work report, we gave top priority to stabilizing employment and ensuring living standards, made decisive progress in the battle against poverty, and achieved our goals in building a moderately prosperous society in all respects.

How can we keep the bottom line and fulfil the task of "maintaining security in six key areas"? This requires a targeted approach based on the characteristics of the epidemic shock and the actual situation of the country. Unlike previous economic and financial crises, the epidemic directly hit the consumer side of the economy and a large number of micro-, small and medium-sized enterprises (MSMEs) and self-employed individuals. China has more than 30 million MSMEs and 90 million self-employed individuals, which support many of the 440 million urban employees and 290 million migrant workers. MSMEs and self-employed individuals are less risk-resilient market entities. We have to give priority to stabilizing employment and protecting people's livelihood. The policies we have implemented revolve around market entities, with the focus placed on helping less risk-resilient entities overcome difficulties. If there are problems with market entities and employment, there will be problems with people's livelihood. This includes tax cuts and fee reductions of more than 2.6 trillion yuan, including 1.7 trillion yuan in social insurance premium cuts and exemptions, mainly benefiting MSMEs. It also includes more than 7 trillion yuan in deferred principal and interest repayments on loans to MSMEs, as well as concessions from the financial system and a significant increase in loans from large commercial banks for the benefit of MSMEs. As last year's government work report mentioned, market entities must be able to sustain themselves and assure success for the future. We have helped to sustain market entities, which has laid a solid foundation not only for maintaining stable employment and meeting basic living needs, but also for economic recovery. 

In terms of actual results, our employment and economic growth indicators were better than expected last year, and we achieved greater results at a reasonable cost. Thank you.

21st Century Business Herald:

My question is, the three-year campaign to prevent and resolve financial risks in 2020 has concluded, so how can we evaluate the results of this three-year campaign? Is the financial risk mitigation going to be a protracted battle? Thank you.

Sun Guojun:

Preventing systemic financial risks remains the permanent task of financial work, which is the same worldwide. The CPC Central Committee and the State Council have attached great importance to that. The Party's 19th National Congress has made forestalling and defusing major risks as one of the three critical battles, and preventing and resolving financial risks is an important aspect of it. Through concentrated efforts, a number of major risks have been effectively dealt with, important milestones have been achieved in the disposal of financial risks, financial risks have tended to shrink and are generally controllable, the financial order has improved significantly, and financial operations are more robust.

Meanwhile, we must also see that the current domestic and international economic and financial situation is complex and volatile, and the financial sector is still facing many risks and challenges. We should remain mindful of worst-case scenarios and make unremitting efforts to prevent and control all kinds of financial risks. 

First, we will improve the mechanism for managing financial risks, and see that responsibilities are fulfilled by all the stakeholders, including financial institutions and their shareholders, local governments and financial regulators. 

Second, we will focus on preventing and resolving the risks of small and medium-sized financial institutions, replenishing the capital of small and medium-sized banks through multiple channels and strengthening corporate governance.

Third, we need to improve laws and regulations governing the bond market and properly handle the debt default risks of enterprises. 

Fourth, we will continue to resolve existing risks, improve our ability to anticipate and foresee, prevent incremental risks, closely prevent and control external imported risks, improve the long-term mechanism for risk disposal, and resolutely guard against systemic risks. Thank you.

Shenzhen TV:

We have noticed that the new FYP has dedicated a whole chapter to science and technology for the first time, emphasizing that technological self-reliance is the main pillar for China to develop its economy. What are the measures to be taken to realize technological self-reliance? Thank you.

Guo Wei:

The fifth plenary session of the 19th CPC Central Committee pointed out that we should make innovation the core of our modernization campaign, make scientific and technological self-reliance and self-improvement a strategic support for national development, and accelerate the development of science and technology.

Improving our technological and innovative ability is a systematic program and requires long-term work. This year's government work report underlines three aspects. 

First, we need to strengthen national strategic science and technology forces, including the construction of national laboratories, make good use of existing national science and technology resources, optimize the allocation of science and technology forces, and strengthen core technology research and development.

Second, we should strengthen basic research, which is emphasized in this year's government work report. Basic research requires much time and down-to-earth work. Therefore, we should have the spirit of "the blacksmiths of the past who would spend years forging the perfect sword," and create conditions for scientists to continue their hard work. To enhance basic research, we have a series of policies, including expanding investment in basic research, and improving the assessment and incentive mechanisms of technological results. 

Third, we will leverage market forces to encourage the enterprises to increase R&D investment. The government work report proposes an important policy, which is raising the extra tax deduction on manufacturing enterprises' R&D costs from 75% to 100%. That means enterprises can enjoy double deduction on R&D expenditure and are eligible for more income tax deductions. That is a great boost for enterprises to increase R&D spending.

Certainly, China's technological development must rely on international technological cooperation, which is what we have constantly upheld in the past. Looking forward, we will strengthen international cooperation on science and technology, and let technological development benefit the common well-being of humanity. Thank you.

Beijing Youth Daily:

Under the impact of the COVID-19 epidemic, some macroeconomic policies introduced in the government work report last year were called unusual measures in unusual times. This year, we are carrying out regular epidemic controls, so what are your considerations in adjusting the macroeconomic policies? Thank you.

Sun Guojun:

Thank you for your question. The macro policies last year were formulated and implemented to meet the urgent needs of market entities. In terms of the targets and focuses of the macro policies this year, the Central Economic Work Conference held at the end of last year made clear plans for this year's economic work. The government work report implemented the guiding principles from the Central Economic Work Conference and made specific plans for macro policies. Generally speaking, we should ensure the continuity, consistency, and sustainability of macro policies this year, continue with and optimize the policy logic and focuses of last year, maintain necessary policy support, and avoid sharp turns in policy, so as to continue to ensure macro policies alleviate the difficulties of market entities.

This can be reflected in several aspects. For example, central and provincial-level governments will further increase funding allocations to prefecture- and county-level governments to assist local businesses and residents. The government work report highlights two notable increases. First is that the general transfer payments from the central government to local governments will be raised by 7.8% — which marks a significant increase over last year — while continued cuts will be made in central government expenditures. Second is the increased efforts to ensure employment, living standards and the operation of market entities at the grassroots level. This year, 2.8 trillion yuan of central government funding will be placed under the mechanism of directly allocating budgetary funds to prefecture- and county-level governments, meaning that financial resources will reach local governments more quickly. This year's government work report introduces many practical measures to ease the burden of market entities. Regarding tax cuts, for instance, we will continue to implement systematic tax cut policies, adjust and improve the temporary tax cut policies adopted last year, and extend the duration of some temporary policies. Meanwhile, we have introduced new policies for MSMEs, and policies granting extra tax deductions on R&D costs to encourage innovation. In addition, we will raise the VAT threshold for small-scale taxpayers from 100,000 yuan to 150,000 yuan in monthly sales, and halve the income tax of small and micro enterprises on annual taxable income below 1 million yuan, which are big discounts.

As for reducing enterprises' production and operating costs, we will cut the electricity rates for general industrial and commercial businesses, take firm measures to rectify irregular height and width limits and checkpoints that affect freight transportation, and lower the average broadband rates for small and medium-sized enterprises by an additional 10%. Many policies are aimed at MSMEs and self-employed individuals, which although they have seen improved operations, still face many difficulties. We need to provide more policy assistance to help them stand firm and achieve greater development. Thank you.

Cover News:

Last year, 11.86 million new urban jobs were added in China, far exceeding the target set in last year's government work report. We've noticed that the target for this year is to create more than 11 million new urban jobs. How was the target set? And, is there some leeway in this employment target? Thank you.

Guo Wei:

Because of the COVID-19 epidemic and other serious shocks, employment faced particularly grave challenges last year. As mentioned before, in the first quarter of last year, China's economy shrank by 6.8% year on year. The government work report last year set a target of creating more than 9 million urban jobs, which was actually rather demanding, given the situation at the time. In order to achieve this goal, the CPC Central Committee and the State Council gave high priority to ensuring stable employment, and stepped up efforts to ensure employment, people's livelihood and market entities. In fact, ensuring market entities also helps ensure employment. Local governments and relevant departments have also proposed many ideas and introduced various policies to stabilize employment. As the economy recovered and policies yielded results, employment gradually recovered. Last year, 11.86 million new urban jobs were created, exceeding the target set in the government work report, and no large-scale unemployment occurred. This was not an easy task.

Employment still faces great pressure this year. Around 15 million new urban jobs need to be created, including those for over 9 million college graduates. The government work report, in accordance with the decisions and arrangements of the CPC Central Committee, continues to prioritize ensuring employment, and clearly states that improvements should continue to be made to the employment-first policy to enhance its performance. Based on the employment demand and economic recovery trend, the report sets the employment target at 11 million new urban jobs — the same as 2019 — and surveyed urban unemployment rate at about 5.5%. The economy is still recovering, market conditions are still complex and serious, and uncertainties are still on the rise. Under such circumstances, the targets are not easy to meet and greater efforts are required to do so. Thank you.

Shangyou News:

The government work report is an annual guiding document for the exercise of government power. How did the drafting of the report respond to the concerns of the whole society and listen to and incorporate the views of various sectors of the society? Thank you.

Sun Guojun: 

Thank you for your question. In accordance with General Secretary Xi Jinping's requirement on soliciting public opinions in an open way, we pay great attention to the public's concerns and fully understand the opinions of people from all walks of life while drafting the government work report. The drafting process of the report was a process of gathering the wisdom of the people and pooling their efforts, as well as a process of planning specific policy measures, which was also introduced in the opening speech earlier.

Premier Li Keqiang collected views and suggestions by presiding over a number of symposiums, attended by representatives from non-communist political parties, chambers of commerce, public figures without party affiliation, experts and entrepreneurs, and representatives from the education, science and technology, culture, health, and sports sectors, as well as members of the public. Premier Li also solicited opinions by convening symposiums to analyze the economic situation. We were able to sort out 48 specific suggestions from the symposium attended by representatives from non-communist political parties, chambers of commerce and public figures without party affiliation.

We also extensively solicited suggestions from all localities and departments. After deliberation at the plenary meeting of the State Council, the revision of the drafted report was printed and distributed in accordance with due procedures to all localities, central departments in the Party, the government, the military, and people's organizations and some enterprises. Another thousand suggestions were then collected after this large-scale soliciting of views and suggestions.

In addition, we also collected opinions via media platforms. The event "Share your ideas with China's premier" was launched on www.gov.cn for the seventh year to solicit netizens' opinions by joining hands with 21 online media platforms. The event classified 22 topics and received nearly 1 million suggestions. After sifting through the comments, www.gov.cn submitted more than 1,200 representative views to the drafting team.

Meanwhile, during the drafting of the report, we paid great attention to social concerns and hot issues, and organized investigations into the prominent issues most concerned by the public so as to propose policy recommendations accordingly.

Generally speaking, despite the impact of the COVID-19 pandemic, we still adopted all possible methods to make sure the report reflects the true concerns of the public. Thank you.

Guo Wei:

I'd like to add that the proposals and suggestions reflected in the report are not limited to those collected during the drafting process. This year's report has implemented the guiding principles of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, making detailed arrangements for the 14th Five-Year Plan period and clear requirements for the work ahead. Actually, the process of formulating the documents of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference was a process of soliciting opinions widely. General Secretary Xi Jinping extensively took in views and suggestions by presiding over meetings of relevant departments, localities, and professional fields, and held a series of special symposiums before the two abovementioned meetings. The documents of the two meetings had gone through repeated opinion-soliciting before the formal versions were presented.

This year's report was drafted in accordance with the decisions of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, and fully reflects people's desires and their wisdom after soliciting extensive opinions from people of all walks of life. The drafting process can guarantee that we uphold the leadership of the CPC in the economic and social development of our country, and ensure that various measures are implemented following the people-centered development philosophy, and ensure that the government makes decisions in a sound, democratic and effective way. We can see significant institutional strengths from the drafting process of the report. Thank you.

Yicai:

The Report on the Work of the Government proposes to pursue a higher-standard of opening up. Will the opening of the financial market and capital accounts, as well as RMB internationalization remain your focus this year? What other measures will you take, and will the pace of opening up be changed? Thank you.

Sun Guojun:

Thank you for your question. According to the fifth plenary session of the 19th CPC Central Committee, China will advance the internationalization of its RMB through prudent measures, adhere to market-driven policies and enterprises' independent choices, and build a new mutually beneficial and cooperative relationship based on the internationalization and free use of the RMB.

In recent years, China has taken steady steps to realize capital account convertibility and RMB internationalization and actively develop the open economy. At present, direct investment has opened relatively high, investment channels of cross-border securities have expanded, and restrictions on cross-border financing have significantly eased. Cross-border use of the RMB has continuously increased, and RMB assets have become more attractive. According to the IMF's latest data, the RMB is already the world's fifth-largest official reserve currency.

Next, we will implement the guiding principle of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, steadily promote the orderly opening of capital accounts, and take prudent measures to advance the internationalization of the RMB. Specifically speaking, we will serve the real economy, accelerate trade and investment liberalization and facilitation, optimize relevant policies on the use of the RMB, and strengthen infrastructure for RMB internationalization. We will pursue a high-quality and two-way opening of financial markets, facilitate an orderly two-way flow of cross-border capital, and foster the sound and coordinated development of domestic and foreign currencies as well as offshore and onshore markets. Thank you.

Red Star News:

Last year, the Chinese government released a series of policies to ensure stability on six fronts and security in six areas. What feedbacks did you receive from small and medium-sized enterprises when preparing the Report on the Work of the Government? How did those policies help them and what supporting policies, including policies regarding the alleviation of financial burden among MSMEs, will be extended this year? Thank you.

Sun Guojun:

I have mentioned this previously when answering questions regarding last year's macro policies and this year's policy focuses. Please let me add a couple of things. Last year, the difficulties rarely seen in history directly impacted Chinese MSMEs, as well as self-employed individuals, creating significant pressure. The macro policies of the central government helped them overcome these difficulties. Local authorities carried out a series of flexible policies according to practical needs, including reducing and waiving house rent to support MSMEs, as well as self-employed individuals. A sentence in the Report on the Work of the Government says, "Market entities, over one hundred million in number, responded to shocks with fortitude and resilience." All businesses have paid a lot; many of them didn't cut jobs, or only cut a small number of jobs, and made it through together with their employees. Last year was truly challenging both for the whole country and for every market entity. 

This year, in accordance with the deployment of the CPC Central Committee, we will continue to help market entities solve difficulties. Fiscal and monetary policies, and policies on employment and even reform all aim to stimulate business vitality, improve business environment, and provide further support to MSMEs, as well as self-employed individuals. Thank you.

Shou Xiaoli:

Thank you to our speakers, and also to all the friends of the press. That's all for today's press conference. Goodbye, everyone.

Translated and edited by Yang Xi, Li Xiao, Wang Qian, Zhu Bochen, He Shan, Liu Jianing, Lin Liyao, Fan Junmei, Zhang Tingting, Huang Shan, Xu Xiaoxuan, Li Huiru, Guo Yiming, Liu Sitong, 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: 

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

Zhao Huan, chairman of China Development Bank

Gu Shu, chairman of the Agricultural Bank of China

Luo Xi, chairman of the People's Insurance Company of China

Song Shuguang, chairman of China Export & Credit Insurance Corporation

Chairperson: 

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

Date: 

March 2, 2021

Shou Xiaoli:

Good morning, ladies and gentlemen. Welcome to the press conference of the State Council Information Office. The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) made it clear that China will promote high-quality development. The high-quality development of the banking and insurance sectors is of great significance in achieving high-quality economic and social development. Today, we are pleased to invite Mr. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, to brief you on issues regarding promoting the high-quality development of the banking and insurance sectors, and field questions. We also have with us Mr. Zhao Huan, chairman of China Development Bank; Mr. Gu Shu, chairman of the Agricultural Bank of China; Mr. Luo Xi, chairman of the People's Insurance Company of China; and Mr. Song Shuguang, chairman of China Export & Credit Insurance Corporation. Next, I will give the floor to Mr. Guo. 

Guo Shuqing:

Thank you. Ladies and gentlemen, comrades and friends, good morning. First of all, on behalf of the China Banking and Insurance Regulatory Commission (CBIRC), and all the chairmen present at today's press conference, I would like to express my sincere gratitude to friends from the media who have been supporting the reform and development of the banking and insurance sectors for a long time. I hope you all enjoyed the Chinese New Year and are doing well.

Faced with the severe and complex domestic and international situations in 2020, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the CBIRC and the entire banking and insurance sectors resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council. We have been enhancing the Party's political building as the overarching principle; strengthening 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; staying confident in the path, theory, system, and culture of socialism with Chinese characteristics; upholding General Secretary Xi Jinping's core position on the CPC Central Committee and in the CPC as a whole, and upholding the CPC Central Committee's authority and its centralized and unified leadership. Under the command of the Financial Stability and Development Committee of the State Council, we have risen to the challenges and acted proactively, remained committed to the general principle of pursuing progress while ensuring stability, pursued supply-side structural reform as our main task, resolutely worked to win the battle to forestall and defuse financial risks, and strived to advance the modernization of the financial governance system and capabilities. Solid progress has been made in various tasks. 

First, we have contributed to the rapid recovery of the national economy which shifted from stagnation or decline to normal growth. Since the COVID-19 outbreak began, we have put people and life first and immediately formulated a series of policies and measures to ensure an overall victory in the battle against the virus, including issuing a total of 5.3 trillion yuan in special emergency credit bonds and completing relevant insurance payments of more than 500 million yuan. By the end of 2020, outstanding RMB loans rose by 19.6 trillion yuan from the beginning of the year, and we extended the repayment of principal and interest on loans of 6.6 trillion yuan in total. Emergency loans of 24.27 billion yuan were issued in five pilot provinces and cities. We have achieved the target of making interest concessions of 1.5 trillion yuan to boost the real economy throughout the year. Our actions have strongly supported the resumption of work and production, helping to ensure stability on the six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations), and maintain security in the six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government). Manufacturing loans increased by 2.2 trillion yuan throughout the year, exceeding the total of the previous five years; 5.7 trillion yuan flowed into private enterprises, up 1.5 trillion yuan over the previous year; and health insurance spending stood at 292.1 billion yuan, a year-on-year increase of 24.2%. We have kept 1.57 trillion yuan as long-term health protection reserves stashed away against future risks. We also actively helped win the battle against poverty. Over the past three years, a total of 9.2 trillion yuan of targeted poverty alleviation loans have been issued nationwide, and a total of 3.5 trillion yuan has been provided via agricultural poverty alleviation insurance. We have actively participated in the battle against pollution, and the green credit balance of 21 major banks stood at 11.5 trillion yuan by the end of 2020.

Second, digital transformation contributed to the development of inclusive finance. The banking and insurance sectors have accelerated product and service innovation to promote the transformation and upgrading of the national economy. According to reports from relevant international organizations, China's inclusive financial services have met international standards, with electronic payments, digital credit and online insurance leading the world. In 2020, banking institutions and insurance institutions invested a total of 207.8 billion and 35.1 billion yuan in information technology respectively, representing year-on-year increases of 20% and 27%. The five largest banks have established special fintech companies, which has significantly enhanced the availability and convenience of financial services. For example, giving full play to its advantages in technology and data, China Construction Bank implemented process re-engineering to facilitate lending to small and micro enterprises. It also established a "quick loans for micro and small enterprises" online business model, and innovated a series of exclusive service solutions for inclusive finance. At the end of 2020, the national inclusive loans to small and micro enterprises stood at 15.3 trillion yuan, with a growth rate of over 30%. For the five largest banks, growth was 54.8%. Basic financial services have been extended to all administrative villages. The serious disease insurance scheme has covered 1.13 billion urban and rural residents.

Third, decisive achievements have been made in the battle to forestall and defuse financial risks. As regards the tasks and requirements put forward by General Secretary Xi Jinping at the Central Economic Work Conference at the end of 2016 and the 2017 National Financial Work Conference, risks to the banking and insurance sectors have been gradually constrained, and several major potential pitfalls and problems have been avoided. We have held the bottom line and fended off systemic risks. First, the financial leverage ratio has dropped significantly, and the blind expansion of financial assets has been fundamentally curbed. From 2017 to 2020, the average annual growth rates of total assets in the banking and insurance sectors were 8.3% and 11.4%, respectively, roughly half of the average annual growth rate from 2009 to 2016. The proportion of interbank assets idling within the financial system has also dropped significantly. Second, solid progress has been made in the identification and disposal of non-performing assets in the banking industry. We disposed of 8.8 trillion yuan of non-performing loans from 2017 to 2020, exceeding the total of the previous 12 years. Third, shadow banking has been dismantled in an orderly manner, dropping by about 20 trillion yuan from its historical peak. Fourth, financial crimes have been severely punished and the risks of illegal financial groups have been gradually defused. A large number of illegal fundraising cases have been dealt with in an orderly manner, and online financial risks have been well addressed. Fifth, with timely and effective response to external risks, we ensured that the financial system maintained strong resilience. Sixth, the financialization and bubbles in real estate have been curbed. The growth rate of real estate loans in 2020 was lower than that of various other loans for the first time in eight years. Seventh, the incremental risk over the hidden debt of local governments has been basically controlled, and we have been pressing ahead with the resolution of existing risks in an orderly manner. Eighth, the debt risks of large- and medium-sized enterprises have been handled steadily. By the end of 2020, a total of 20,000 creditors' committees had been established nationwide; the country had implemented 1.6 trillion yuan in debt-to-equity swaps according to market-oriented and law-based rule, and more than 500 large- and medium-sized enterprises had implemented joint credit granting pilot projects.

Fourth, we have fostered a positive atmosphere of strict supervision and regulation. Through unswervingly enforcing full and strict discipline over the Party and combating corruption in the financial sector, we have strengthened supervision and enforced discipline. A batch of corrupt officials who colluded with businessmen and committed embezzlement have been brought to justice. We have rigorously implemented regulations relating to separation between public and private interests, and assignment avoidance, and have increased supervision and accountability. A total of 164 people working in the banking and insurance regulatory sector received disciplinary punishment in 2020. We have accelerated supervision improvement and plugged loopholes in the system. A total of 61 items of supervision rules were completed in 2020. We have addressed disorder with severe punishment and maintained a tough position on violation punishment and accountability. We punished 3,178 banks and insurance institutions for violating laws and regulations, penalized 4,554 liable persons and confiscated a total of 2.28 billion yuan in 2020. We have resolved financial disputes through multiple means. We repaid and compensated 17.7 billion yuan to consumers, thus guaranteeing the legitimate rights and interests of financial consumers. 

Fifth, the corporate governance of banks and insurance institutions with Chinese characteristics has improved step by step. We treated enhancing corporate governance as a focal point in transforming the systems and mechanisms of banks and insurance institutions. Following the consensus reached at the 2016 Hangzhou G20 Summit, we endeavored to carry out effective implementation of the G20/OECD Principles of Corporate Governance and urged to integrate the leadership of the Party into corporate governance. We should guarantee the Party's role at the core of leadership through mechanisms like cross appointment and integrating intra-Party supervision into corporate regulations. Banks and insurance institutions have established organizational structures containing shareholders meetings, boards of directors, board of supervisors and senior management. We have strengthened the penetrating supervision of major shareholders and conducted rectification work on related-party transactions. Currently, China's commercial banking system has been optimized with sufficient market competition. The operational efficiency of China's four large-scale commercial banks has approached the advanced level of international counterparts and overtaken many others in aspects like labor productivity, cost-income ratio, profitability, and scientific and technological innovation. The large-scale insurance companies have sufficient capital, being well-matched with counterparts in the U.S., Europe and Japan. 

Sixth, the reform and opening up in the banking and insurance sectors keeps deepening. We have deepened reform of small and medium-sized banks and steadily improved their ability to ward off risks. Specific local government bonds totaling 200 billion yuan have been issued to increase the capital supply for small and medium-sized banks. We have deepened reforms on using of insurance funds and pricing mechanisms for commercial vehicle and accident insurance; promoted commercial pension schemes reform and health insurance development; channeled long-term funds, such as wealth management products, insurance and trust assets into supporting capital market development. We have continuously advanced opening-up measures and achieved desirable effects. We have given approval to foreign banks and insurers to set up more than 100 institutions in China since 2018. Some leading international institutions in wealth management, commercial insurance, credit rating and other fields have entered the Chinese market by means of establishing wholly foreign-owned institutions, holding controlling stakes and holding shares. Foreign institutions have become much more enthusiastic to make investments in Chinese financial market. 

The year 2021 is the first year of China's 14th Five-Year Plan period. CBIRC will stick to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; implement the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference held in December; promote fostering of a new development paradigm by making breakthroughs in high-quality development of banking and insurance sectors. We will make efforts in the following aspects: first, we will improve systems and mechanisms facilitating financial institutions to support the real economy efficiently and provide targeted support to key areas and key industries, including those conducive to China's self-reliance in science and technology, advanced manufacturing, private enterprises, small and micro businesses, rural vitalization and green development. Second, we will deepen the supply-side structural reform in financial sector, and adopt the customer-centered and market-oriented philosophy, incubate more professionally-competent and specialized financial institutions, develop more banking products to meet people's needs, and advance the regulated development of the commercial endowment insurance - the third pillar in China's three pillar pension system and other insurance services. Third, we will treat risk prevention as the eternal theme of the financial sector. There will be no let-up in our efforts to monitor and defuse various financial risks, strengthen the rule of law in the sector, and improve long-term mechanisms in this regard. Fourth, we will maintain a fair market environment, reinforce anti-monopoly and prevent capital from expanding in a disorderly fashion, and guarantee financial innovation is conducted under prudent supervision. Fifth, we will carry out deeper reforms of the financial market and institutions, advance financial opening-up to a higher-level, facilitate flows of relevant factors, and invigorate market vitality. Sixth, we will stick to comprehensively enforcing strict Party self-governance and fight corruption in the financial sector, strengthen internal management and self-improvement, and cultivate a supervision team who are loyal to the Party and people, have moral integrity, and demonstrate a keen sense of responsibility. Through our earnest efforts, we will do solid work and realize a good start in the beginning of the 14th Five-Year Plan period and celebrate the CPC's centenary with remarkable achievements. 

That's all for my introduction. Now, my colleagues and I are willing to answer your questions. Thank you. 

Shou Xiaoli:

Thank you, Mr. Guo. The floor is open for questions. Please identify your news outlet before asking question. Thank you.

CCTV:

My question is for Mr. Guo. Last year was the concluding year of the campaign of preventing and defusing financial risks. My question is, what key progress has we made over the past three years? What's the next step of financial risk prevention and control? You have pointed out that real estate has become the most daunting "grey rhino" among China's financial risks, so what's your opinion on the current risk in this regard? Are there new measures to be rolled out this year? All the banks have accelerated digitalized transformation over the past two years. My question is, what kind of challenges has digitalization brought on supervision? What kind of risks should we focus on during the process? Thank you. 

Guo Shuqing:

Thank you. Your questions are all very good, but actually you put forward seven or eight ones. I can not take up too much time, and will answer them briefly and give more chances to other reporters and my colleagues. 

To prevent and defuse financial risks, the top priority for banking and insurance industries is to follow the requirements of the CPC Central Committee and cut high leverage in the financial system. The financial system witnessed a long period of rapid growth. Then between 2017 and 2020, the annual average growth rate of the total assets in the banking and insurance industries dropped to relatively low levels, with that of the banking sector down to 8.3%, and the insurance sector down to 11.4%, roughly half the growth rates between 2009 and 2016. The share of interbank assets circulating within the financial sector without entering into the real economy has decreased noticeably. This is a remarkable achievement and is also crucial for the banking and financial systems to run in a smooth manner and keep financial risks under control.  

Moreover, the banking sector has stepped up efforts to dispose of non-performing assets. Disposal of non-performing loans in the banking sector over the past four years, which was mentioned just now, equals the same amount as the previous 12 years combined. 

Third, the "shadow banking" sector has been dismantled in an orderly manner. The "shadow banking" industry was large in the past and the essence of the shadow banking business such as investment, wealth management, or peer-to-peer lending is credit. It provides credit business like banks but operates outside banking regulations. For example, a bank must maintain enough capital but these [shadow banking] platforms operate without being subject to any requirement for capital, regulations, or market restraints, which will consequently lead to serious problems. The shadow banking sector has contracted by about 20 trillion yuan, which makes the overall financial system healthier and more stable.  

Moreover, financial crimes have been severely punished and risks of illegal financial groups have been gradually defused, with a large number of illegal fundraising cases being dealt with in an orderly manner. Sound progress has been made in these areas.

Regarding the housing issue that you asked about, I would like to say that the risk of a real estate bubble and financialization of the sector is still acute. However, last year, the growth rate in the number of loans channeled into the real estate sector has, for the very first time, dropped to a level lower than the average growth rate of credit. This is a hard-won achievement. We are confident that problems in the real estate sector will be solved gradually. We are ramping up efforts to put a series of measures in place. Some of you may have noticed that many cities have rolled out city-specific real estate control policies to keep land prices, housing prices, and market expectation stable and ensure that housing problems will be tackled step by step. As I also mentioned, the problem of "the gray rhino," i.e. people buy homes not for living in but for investment or speculation, is very dangerous. By owning so many properties, they stand the chance of suffering huge losses in terms of personal assets once the property market goes down. Moreover, they may not be able to repay their mortgage loans and banks may not be able to take back loan principles and interest accordingly, which will lead to economic chaos. Therefore, it is necessary for us to promote the steady and healthy development of the real estate market in a proactive and prudent manner. Thank you.

MNI:

Compared with major Western economies, China has taken the lead in normalizing its policy, especially its monetary policy. What impact will the difference in policy pace between China and other countries have on China's policy and its market? Many are concerned that capital inflows and asset bubbles could lead to imported inflation. Do you see any reason for such concern? Thank you.

Guo Shuqing:

This is a really good question, and many others also have the same concern. The COVID-19 pandemic has represented a shock for the world's economy which is generally in a downward spiral. China experienced economic headwinds last year with its economy hit hardest in the first and second quarters. In the third and fourth quarters, China's economy began to return to normal but the annual economic growth rate dropped significantly compared to that of the previous years. Developed European and American countries, countries that are severely affected by the pandemic, and some developing countries all adopted proactive fiscal policies and ultra-loose monetary policies. We understand these macroeconomic policies are necessary for stabilizing the economy but we should take more consideration of the force and consequences of these measures, which have side effects that have started to show gradually. First, the financial markets are trading at high levels in Europe, the U.S. and other developed countries, which runs counter to the real economy. The financial market should be a reflection of the real economy. Problems will occur if the performance of the financial market and real economy become too different, and the financial markets will be forced to make adjustments sooner or later. So we are worried about the financial market, especially the possibility that foreign financial asset bubbles may burst one day.

Second, China's economy is closely intertwined with other countries as the economy has become highly globalized. After the increase in liquidity, the volume of foreign capital that flows into China will increase noticeably, which has been the case. China's economy is still recovering, and the prices of assets are appealing, with a larger interest rate spread compared with that of other countries. In this regard, it is inevitable to see foreign capital inflows. For now, the size and speed of foreign capital inflows remain controllable. On the one hand, we have been studying how to put more effective measures in place to encourage cross-border capital flows at an increasingly open level, while not causing huge fluctuations in the domestic financial market on the other hand. We are confident that we are able to do the job well.

CRI:

The pandemic spread across the globe in 2020. Foreign trade companies are facing severe difficulties due to a sharp decline in global trade. What measures have been adopted in the banking and insurance industries to support the resumption of work and production, and stabilize the overall performance of foreign trade? Thank you.

Guo Shuqing:

Our export situation was better than expected last year. Due to the global economic slowdown, there was no sharp decline in demand for China's products compared to previous years. Some countries even increase their imports from China. So our export situation is quite good. We've rarely seen such a big surplus in trade, which is inconsistent with the trends of the previous years, and this was aided by the special situation. Concerning this, my colleague Mr. Song, who is proficient in export credit insurance, may understand the situation better.

Song Shuguang:

Since the outbreak of COVID-19 early last year, General Secretary Xi Jinping has underscored the vital role of export credit insurance on three occasions. Over the past year, SINOSURE has fully implemented the guiding principles of General Secretary Xi's remarks as well as the decisions of the CPC Central Committee and the State Council. Under the guidance of CBIRC and other relevant departments, our company has actively enforced policies and made contributions to ensure stability on six fronts and security in six areas. During the initial outbreak, we rolled out ten measures to address the urgent need to import medical supplies in the fight against COVID-19. We also published 23 phased and extraordinary measures to ensure stability in foreign trade, increasing our support in six aspects that covered underwriting, compensation, and service. The work has delivered positive results, and progressed as follows:

First, we further increased the coverage of export credit insurance. In light of growing external risks, we carried out active underwriting policies. Last year, SINOSURE underwrote over US$700 billion worth of insured businesses, up 15% year on year, and much higher than the export growth rate. We supported exports worth US$580 billion, accounting for 22% of the total volume of exports — much higher than the average global growth. Last year, we served 147,000 clients, including more than 40,000 new clients, up by 58%, which maintained around 15 million export-related jobs. 

Second, we gave firm support to our clients in major markets and industries. SINOSURE has actively promoted progress made at the Belt and Road Forum for International Cooperation and strengthened the cooperation of the third-party market. Last year, our company fully supported exports and investments to countries along the Belt and Road, with a combined business volume of over US$150 billion. SINOSURE has underwritten more insured businesses with the U.S., supporting exports to the U.S. worth over US$50 billion, up by 13%. We also formulated tailored underwriting policies for electronic information and home appliance industries, giving priority to protecting leading companies with global influence and key links, to better serve the smooth operation of industrial chains and supply chains. Last year, we supported the trade volume of the electronic information industry, which exceeded US$100 billion, up by 23%. As for the risks resulting from canceling orders or refusing to accept goods and to pay, our company increased support to guarantee sales for companies before the export, underwriting 3.4 times more than the year before in this insured business .

Third, we effectively mitigated difficulties faced by companies in accessing financing. We combined the export credit insurance risk management mechanism with the financing services of banks. The major works fall into three aspects. First, our company worked together with 167 domestic and foreign banks to provide premium financing services for foreign trade enterprises as well as tailored products. For example, we worked together to roll out the Credit Insurance Financing project to provide premium financing services for micro and small-sized companies. The service offered affordable interest rates and gives companies access to financing through an online review process without requiring a mortgage. Second, our company utilized refinancing and interest subsidy policies. Some of our funds were allocated to micro and small-sized foreign trade companies, which delivered positive results, especially in Jiangsu, Zhejiang, and Shanghai. Third, SINOSURE worked with governments and banks to establish 53 platforms nationwide for financing. Last year, SINOSURE supported companies to obtain financing, with a combined figure of 310 billion yuan, including 196 billion yuan for short-term export credit insurance, up by 34%, supporting over 4,800 companies.

Fourth, we created new services for micro and small-sized companies. Over the past two years, SINOSURE has sped up its digital transformation and upgraded its database for global companies and banks, allowing companies to access the information of 200 million overseas companies and 60 million Chinese companies. On that basis, we developed several products to serve micro and small-sized companies. First, we developed the product "alarm sensor" for micro and small-sized companies to collect information about risks and threats in a bid to support them to avoid risks and accept orders. Second, we developed the product "navigation system" for micro and small-sized companies to expand to new markets and accept new orders with the support of our database on international trade. Third, we offered professional and convenient training services for micro and small-sized companies. We then selected 1,000 micro and small-sized companies that focused on the new generation of information technology, high-end equipment manufacturing, new energy and new materials, and other industries and provided them training to help them grow. In 2020, SINOSURE served more than 100,000 micro and small-sized companies, covering 36% of the micro and small-sized companies with export businesses. SINOSURE's insurance for exports from micro and small-sized companies stood at nearly US$100 billion, up by 41%. And the claims paid to those enterprises totaled US$120 million, up by 28%. In addition, the average premium rate for micro and small-sized companies dropped by 35%, offering more benefits to those companies.

Fifth, we actively help companies to prevent and respond to risks. Since the outbreak of COVID-19, SINOSURE has taken measures in the following aspects. First, we continued to publish information on trade-restricting policies across the world to inform companies. Due to the outbreak, many countries have adjusted their trade policies, including trade-restricting policies. So we published information about these policies and other industry information from major countries to inform our companies of risks. Second, we published reports on country risk ratings, evaluating country risk and sovereign credit risk of 192 countries and regions across the world to provide a reference for companies. Third, we helped companies retrieve their losses. Via over 300 channels, SINOSURE helped companies avoid defaulting, which saved nearly US$4 billion and retrieved losses worth US$300 million. In addition, we opened a "green channel" for companies to receive compensation and eased conditions to ensure companies were able to receive compensation efficiently. Last year, claims paid to enterprises totaled US$1.8 billion, up by 32%. The average time for the closure of short-term export credit insurance was cut sharply by 41%, marking a record low.

All in all, faced with complex environment of foreign trade and unprecedented risks and challenges, SINOSURE, as a policy-oriented financial institution, played a unique role in preventing risks, promoting financing, and ensuring stability in foreign trade and employment, contributing to the support of China's foreign trade and bucking the trend of recession. Thanks. 

Guo Shuqing:

Sorry to interrupt. I think Mr. Song answered your question very well. They did a very good job last year. Under the pressures of the worst pandemic for a century, they supported businesses, especially micro and small businesses, in their foreign trade by underwriting 22% of China's exports. It was, of course, a measure under special conditions. Normally, people may wonder if the measure was a special support given by the government, and if it abides by the WTO rules or the rules of fair trade. I see a lot of foreign journalists here today, so I'd like to ask you this question for them.

Song Shuguang:

Export credit insurance is a tool to promote exports and overseas investment permitted under the WTO rules. Our company has been doing business under the WTO's requirements. Our three major goals are to effectively serve national strategies, support the development of enterprises and ensure financial sustainability.

Nikkei:

When speaking with the media last August, Mr. Guo, you said there would be intensified efforts to dispose of non-performing loans (NPLs) in 2021. How do you see the current situation of NPLs in the banking sector? Have you made any specific plans to dispose of those loans? Thank you.

Guo Shuqing:

We will continue with our efforts to dispose of NPLs. Every year, we see approximately 12% net growth in loans. Last year was special as we saw a faster growth rate in loans. But the growth rate was still under 13%. From this, you can see that we hadn't adopted an overly relaxed monetary policy. After the COVID-19 outbreak, the productions and operations of some companies were abnormal and they faced difficulty in repaying their loans. A considerable number of enterprises may even face bankruptcy restructuring or bankruptcy liquidation, and even less ability to repay the loans. This is why the rise in NLPs is an inevitable trend. In 2020, we already started to increase our efforts to dispose of non-performing loans, with 3.02 trillion yuan in non-performing assets disposed of for the year. We have yet to set any definite goals for this year, and are communicating with banks to see their respective conditions. We might need to dispose of more NPLs this year and some may extend to next year as some are long-term loans. However, we have confidence and the capacity to dispose of those loans. While intensifying our efforts, we should seek steady progress to ensure that the impact of NPLs disposal is within the capacity of the economy and the banking system. For this question, I think bank chairmen can give you an authoritative response. Mr. Gu Shu, would you like to answer this question? Mr. Gu is now the chairman of Agricultural Bank of China (ABC) and used to be the president of the Industrial and Commercial Bank of China (ICBC). So, he is quite familiar with the situations of both banks.

Gu Shu:

I'd like to give you some figures to support Mr. Guo's words. Reducing credit risk has long been a major part of our risk prevention and control efforts. Currently, we have credit assets of 15 trillion yuan. In recent years, under the direction of CBIRC, the Agricultural Bank of China has continued to increase its effort to dispose of NPLs. Despite the COVID-19 pandemic in 2020, we disposed of a relatively high number of NPLs and maintained stability in our credit assets. As Mr. Guo just said, the banking system disposed of over 3 trillion yuan in NPLs last year. Our bank is a public company, so I'm not in a position to tell the exact number here today, but the scale of our NPLs disposals matches our position in the banking system. So, my first point is that we have intensified our efforts in disposing of NPLs and maintained stability in regards to our credit assets.

Second, despite the COVID-19 pandemic and the impact of economic fluctuations, the asset management capacity of Chinese commercial banks is improving. Take the Agricultural Bank of China as an example. We have adopted very strict definitions regarding NPLs. According to the regulation, loans are considered non-performing if the borrower is 90 days past due. But in our definition, corporate loans are considered non-performing if the borrower is 20 days past due, in order to increase our foresightedness in asset management. Our bank's NPLs ratio was relatively high for some time, but it has already dropped to the average level of our counterparts. The end of this month is a critical point as the Central Bank, last year, extended the repayment of principal and interest of small business loans to March 31, 2021. We have been recently following the asset quality of those loans. As far as we know, those loans have a higher NPL ratio than other loans but are still under our control. According to our statistics, there is a risk that the NPL ratio may rebound. However, we believe that the risk is controllable under the direction of CBIRC and the concerted efforts of our staff.

That's all. Thank you.

Guo Shuqing:

I'd like to make an explanation here. He said he is not in a position to tell you the exact number of NPLs. However, that number will be announced in accordance with the banks' rules as a public company. Some other information will also be disclosed, such as the level of remuneration of senior executives. So please feel free to ask him any questions. The socialist economic system and market economy system with Chinese characteristics have many similarities with the market economy system and financial system in Western countries. We disclose information about our capital funds, competition, labor productivity, and cost-to-income ratio. Our cost-to-income ratio is less than half of the banks in Europe and the United States. The main reason is that our salaries are relatively low. China is still a developing country. We need to take taxes, dividends paid to our shareholders, and other contributions such as poverty alleviation as well as our social responsibilities into account. Large banks in China need to assume many responsibilities, but our counterparts in other countries don't. We follow the same business and sustainability principles but our national condition is different from Western countries. Thank you.

The Paper:

During the Spring Festival, new data about the birthrate in China drew wide attention, and many are worried that China's aging population may affect its economic sustainability. What kind of long-term and institutional arrangements will China's banking and insurance sector make regarding its participation in improving the social security system and developing the old-age insurance system? Thank you.

Guo Shuqing:

What you've asked is very important. China is a developing country and an emerging market economy, but it didn't take long for China to become an aging society. Currently, more than 12% of China's total population are aged 65 and over. This figure is much lower than Japan and Europe. It is also lower than that of the U.S., which is about 16%. Nevertheless, according to experts' analysis, China may surpass the U.S. in this regard pretty soon. Therefore, aging populating is indeed a big challenge for China. We have been doing research on many aspects. A couple of days ago, the Ministry of Human Resources and Social Security held a press conference and briefed on the issue. It said that relevant measures will be adopted, including raising the retirement age. In contrast with the past, people nowadays are not willing to have more children, and this is a big challenge. We will also take other measures, including developing the third pillar of old-age insurance. The Central Economic Work Conference made specific arrangements on the issue, urging regulation of the development of commercial endowment insurance, more commonly referred to as the third pillar of China's pension system. Mr. Luo will give more information in this regard.

Luo Xi:

Thank you for your question. This is an issue of public concern among the media and society. As we know, China has entered an era of high life expectancy, and it faces the challenge of an aging population. Just now, Mr. Guo introduced the situation. The large number of China's aging population, the country's fast speed into an aging society, as well as the arduous tasks it has for elderly care have been rarely seen in the world. Compared with some developed countries, China's pension system is relatively complete. More than 1 billion people have been covered by basic old-age insurance, which has basically achieved full coverage. The system of enterprise annuities, occupational annuities, and group annuities is developing gradually. Despite the small proportion these types of annuities take, they have been developed for over ten years. The development of personal pension has been rather slow, and the proportion it takes in China is much smaller than in Western developed countries.

General Secretary Xi Jinping made deployments on the issue at the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. The State Council also held many meetings last year to study the issue. CBIRC conducted extensive research and formulated relevant policies and implementation plans. These efforts have sped up and strengthened the development of the third pillar of old-age insurance amid relevant reform and innovation efforts.

Compared with the first two pillars of old-age insurance, the third pillar has different functions and distinctive features. First, it provides a channel for personal pensions for high-income groups. Second, it provides a commercial guarantee of old-age care for employees of new business models and multiple working ways. Third, via the long-term funds for elderly care, we can promote the healthy development of the capital market, including cross-cyclical investment. There are more short-term investments and less long-term cross-cyclical investments in China. Thus, pension funds, especially commercial pension funds, can greatly promote the healthy development of the capital market once they enter into it.

In accordance with the deployments being made by CBIRC, The People's Insurance Company of China (PICC) has made some proactive efforts regarding the issue.

First, the PICC has proactively been introducing products of commercial endowment insurance. Through traditional life insurance products, nearly 330 billion yuan has been stashed away for people on elderly care and life insurance. In response to the deployments of CBIRC, we have been working to develop old-age insurance products which are suitable for the elderly of all income groups. In cities such as Shanghai, Fujian, and Suzhou, we have introduced tax-deferred personal commercial pension insurance. As the taxation is still insufficient, we suggest that the government make comprehensive considerations from multiple aspects and increase tax exemption appropriately. In addition, we took the lead and attempted to introduce reverse mortgages pension insurance in 29 cities. Traditionally, Chinese people are used to owning their own houses. How should people be financially prepared for elderly care when they get old? We have been proactively making attempts in this regard and opening a channel for them.

Second, the PICC has been actively introducing long-term care insurance, in a bid to address the nursing care issue of elderly people and those with disabilities and dementia. In 2020, the PICC established 96 long-term care insurance programs, providing services for some 42 million people. We have been actively working on these insurance services in all provinces and cities.

Third, the PICC has been proactively developing the pension industry. We have given full play to the advantages of long-term pension funds, established a PICC investment fund of senior care industry, and focused on the investment of senior care industries such as long-term care providers and comprehensive care providers for the senior. We have explored new insurance models of elderly care and launched the development of multi-layered elderly-care communities, in which elderly people have access to insurance, hospitals, and elderly care services for their various needs. The PICC is China's largest health insurance company, and we are also cooperating with some well-established global health insurance companies, in order to introduce some good business models into China.

Fourth, the PICC has actively participated in managing the funds of pension insurance. The amount of enterprise annuities and occupational annuities managed by the PICC has reached 250 billion yuan, more than twice the amount of last year. The rate of return of our business last year exceeded 10%, which played a good role in maintaining and increasing the value of our pension assets. 

The financial reform of pensions is crucial in coping with the aging society. The PICC will resolutely put into practice the deployments being made by the CPC Central Committee and work under the unified guidance of CBIRC, further giving full play to commercial insurance's role in pension risk protection and long-term fund management. The PICC will participate in developing a multi-layered and "multi-pillar" pension insurance system, accelerate the development of commercial pension products, and help develop the third pillar of old-age insurance. The PICC will make innovations on products and services, working to meet people's diversified needs on old-age care and make contributions in extending adequate old-age support. Thank you.

Bloomberg:

There is a question regarding fintech that I would like to ask Mr. Guo. What role should Ant Group's fintech company have in the domestic financial market? Are there any businesses that are not suitable for them? Thank you.

Guo Shuqing:

Thank you for the questions. Both domestic and foreign media are very concerned about the issue and have published quite a few reports. I believe you are well-informed about the situation. Four financial authorities (the People's Bank of China (PBOC), the CBIRC, the China Securities Regulatory Commission (CSRC), and the State Administration of Foreign Exchange (SAFE)) have carried out regulatory talks with Ant Group's top executives, and released update of their discussions in a timely manner. Pan Gongsheng, deputy head of the PBOC, has also made remarks on the issue.

China takes leads the world in online platforms' provision of financial services, in terms of both scale and scope. Much positive progress has been made, especially in digital credit and digital insurance to micro, small and medium-sized enterprises, among other services. Many innovations have been rolled out, and we encourage innovation.

But at the same time, we require that all forms of financial services, without exception, should be regulated in accordance with the relevant laws, rules, and regulations. For example, CBIRC recently released a notice on regulating commercial banks' internet loan businesses. According to the notice, when commercial banks jointly contribute funds to issue internet loans with a partner, the proportion of capital from the partner in a loan should not be less than 30%. It also set out requirements on the proportion of the balance of internet loans from a bank to its net worth. A one-year grace period was given to ensure steady implementation of the requirements.

We also encourage the development of private online banks, such as MYbank under Ant Financial Services Group, WeBank under Tencent, and another one based in Sichuan province. But the operation of these banks must be regulated in accordance with financial rules. We don't think of these as constraints on their business. But all their businesses, such as insurance, trust, leasing and other financial services, should comply with the rules of the financial sector. I believe those institutions will meet the requirements and achieve more healthy development. Thank you.

Phoenix TV:

Mr. Guo, we noticed that the U.S. administration has imposed sanctions on some Chinese companies and individuals. What's the impact of the sanctions on China's financial market and system? Where do Chinese financial regulators stand and what measures will be taken in response to the sanctions? In addition, what new steps will be introduced this year to advance the opening-up of the financial sector? How will the security review mechanism on foreign investment affect the investment of foreign financial institutions in China? Thank you.

Guo Shuqing:

Every country has its own sovereignty. This is a long-established consensus among the international community. Both China and the U.S. are sovereign countries, and we all have our own sovereignty. Therefore, financial institutions in China must be regulated in accordance with Chinese rules, just as financial institutions in the U.S. must follow U.S. rules. The U.S. has interfered a lot in Chinese internal affairs, which we think is groundless and unreasonable. We firmly oppose such interference. CBIRC as well as China's banking and insurance system as a whole will never act in accordance with U.S. laws and regulations. We must implement China's laws and regulations. Financial institutions in Hong Kong, including Chinese-funded institutions and foreign-funded institutions, must conform to Hong Kong's laws and regulations. We will not implement the U.S. sanctions, and we firmly oppose such sanctions, which are totally non-binding. However, we are willing to cooperate with American financial institutions, companies in all sectors, and intermediary agencies. In fact, China's opening-up has been advanced at a fast pace. As I mentioned just now, over the past three years, we have approved the establishment of more than 100 foreign banking and insurance institutions in China. For example, German insurer Allianz was approved to set up a 100% foreign-owned subsidiary in China; Crédit Agricole Corporate and Investment Bank and Bank of China jointly established a wealth management subsidiary; the largest asset management company BlackRock cooperated with China Construction Bank in pension fund management; and British multinational asset management company Schroders is cooperating with the Bank of Communications. Up to now, we have approved the establishment of 25 wealth management subsidiaries. Many are in cooperation with foreign capital. We welcome more foreign investment, no matter if it's in the form of sole proprietorship or joint ventures. Many of the examples I gave now are joint ventures. This year, we will continue to consider expanding cooperation in these areas and further lowering the threshold for foreign investment to ensure they receive the same treatment as Chinese-funded institutions. In fact, no field is not opening up.

There is concern among the domestic public, including some officials and intellectuals, that foreign capital may bring about disruption and damage to China's financial market. As far as we know, foreign-funded institutions generally observe Chinese laws in their operations. The amount of their total assets, loans and deposits in the Chinese market is on the rise, but the proportion is in decline. For example, foreign-funded banks now account for only 1% of China's banking industry, down from 1.3% and 1.4% before. Their market competitiveness is limited. Foreign-funded insurance companies account for about 6%, higher than that of the banks, but their influence is also limited. Therefore, we continue to encourage foreign financial institutions to enter the Chinese market for common development. Thank you.

China Daily:

This year marks the start of the 14th Five-Year Plan. What measures are the banking and insurance sectors taking in terms of serving innovation-driven strategies, developing technological finance and supporting strategic emerging industries? What do you plan to do next? Thank you.

Guo Shuqing:

I would like to invite Mr. Zhao Huan, chairman of CDB, to talk about this issue. As we have just discussed, the development bank is involved in development finance. It is very courageous, doing business that others haven't, so its development business is pioneering. However, since the investment risks in the technology and innovation industries are very high, I asked him about how to manage the risks of investment loans. Since we do not have special policies for CDB, it has to achieve business sustainability on its own terms. So, I'd like to invite Mr. Zhao to answer this question.

Zhao Huan:

Thank you for your question. And thank you Mr. Guo for providing this opportunity to introduce the current situation, which demonstrates how development finance has served science and technology innovation and innovation-driven development.

In recent years, in order to implement the new development concepts, under the guidance and support of CBIRC and other departments, CDB has vigorously developed technological finance and served innovation-driven development, achieving positive results.

First, we have given our full support to major science and technology innovation projects. In 2020, we issued a total of 149.4 billion yuan in loans to support science and technology, which is an increase of 23% year on year. We have served a series of major scientific and technological projects, in such areas as integrated circuits and commercial aircraft, assisting new breakthrough achievements in core technologies within key areas.

Second, we have actively supported the development of strategic emerging industries and advanced manufacturing industries. In 2020, we issued 330.4 billion yuan in loans to strategic emerging industries, and issued 265.9 billion yuan in medium- and long-term loans to manufacturing industries, representing an increase of 37% year on year, which is a record high.

Third, we have vigorously supported investment in the integrated circuit industry. CDB's subsidiary companies have successfully completed the first phase investment for the national integrated circuit industry investment fund, and supported the rapid development of key enterprises in the integrated circuits industry, with the investment achieving a remarkable economic effect. We have been operating on a market-oriented basis. Last year, the value of technology companies increased significantly, and the funding investment also achieved a significant economic effect. The market-oriented operation was very successful. At the same time, we have also participated in setting up the second phase investment for the national integrated circuit industry investment fund, and raised a total of 200 billion yuan. The fund has now entered the investment phase.

This year marks the first year of the implementation of the 14th Five-Year Plan. CDB will earnestly implement the major decisions and deployments made at the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. We will continue to support technological finance, provide services to make the science and technology industry more self-reliant, and better serve the innovation-driven development strategy. Our work will cover four measures:

First, we will set up special loans to serve and strengthen the national strategic science and technology capabilities. We will synergize with the 10-year action plan for national basic research, the strategic science and technology plans, and the construction of major national science and technology projects, laboratories, science and innovation centers. We will set up special loans for scientific and technological innovation and basic research, and plan to issue more than 50 billion yuan in special loans for major scientific and technological projects this year.

Second, we will continue to provide more credit resources and support the high-quality development of strategic emerging industries and advanced manufacturing industries. Starting this year, we are planning to launch special financial activities as part of the "Bailian Qianqi" program. We will select a hundred leading enterprises in the field of science and technology innovation and a thousand of their key upstream and downstream industrial chain businesses to provide special financial services. We are also planning to arrange more than 400 billion yuan in loans for strategic emerging industries and advanced manufacturing industries.

Third, we will increase equity investment and offer services for modernizing the industrial and supply chain. We will apply the industrial investment funds and science and technology innovation funds managed by the CDB and continue to increase equity investment in integrated circuits, advanced manufacturing, and science and technology innovation. We are planning to increase the equity investment by over 50 billion yuan.

Fourth, we will create new models for technological finance and provide effective support for innovation-driven development. We will use a combination of multiple financing models, including equity investment, credit loans, structured financing and "debt financing plus investment options," to support innovation-driven development. In addition, we will play a guiding role in partnering with other financial institutions to integrate various resources and social capital, and are planning to increase the intensity of serving innovation-driven development through syndicated loans, joint loans and joint investment.

Finally, I would like to thank you again for your interest in technological innovation-driven development and development banks. Thank you.

Cover News:

We know that in recent years, financial institutions have done a lot of work in poverty alleviation, but there are still many farmers and township enterprises reporting that there is a problem with loan difficulties. As the poverty alleviation task has been completed as scheduled, may I ask what new achievements will be made in terms of consolidating the results of poverty alleviation and rural revitalization? Thank you.

Guo Shuqing:

We should all give our respective answers to your question, but due to time constraints, we will get Gu Shu, chairman of the Agricultural Bank of China, to answer it.

Gu Shu: Thank you for your question. I understood your questions had two parts. First, what are the bank's plans for consolidating the results of poverty alleviation and rural revitalization? The second is to reflect on the availability of rural finance. I will answer them separately.

For the first part of your question, taking the Agricultural Bank of China as an example, I would say that we are ready to focus on three aspects in the next step. The first is to ensure that we embark on a program of rural revitalization after the victory in poverty alleviation. The second is to support the development of modern agriculture and rural industries. The third is to support rural construction. This is the answer to your first question. 

In terms of focusing on the effective connection between poverty alleviation in financial services and rural revitalization, I will talk about one main point due to the time limit. In the 832 key counties that have benefited from national poverty alleviation initiative, the Agricultural Bank of China will continue to provide strong credit lines and loans in 2021. The growth rate of loans to poverty alleviated counties continues to exceed the average growth rate of loans of the entire bank. This is the point I want to stress. In terms of modern agriculture and rural industries, we plan to focus on the national food security industry belt, the construction of high-standard farmland, and the turnaround of the seed industry, and provide financial support in these three areas. Our current loan balance in the field of food security is 160 billion yuan, and we plan to further invest more than 60 billion yuan this year. In addition, we will increase credit allocation for primary processing and deep processing of specialty agricultural producing localities. Previously, the Central Rural Work Conference pointed out that the main body of the industrial chain should be kept at the county level, and the benefits of the value chain should be reserved for farmers. The third is rural construction. We will focus on 11 key areas of national rural and agricultural investment, and continue to increase support for eligible rural aspects such as water, electricity, road, natural gas and housing. The Agricultural Bank of China's loan scale in the field of rural construction has exceeded 1 trillion yuan. We will further increase our investment in the future to ensure that the growth rate of loans does not decline. This is my brief answer to the first aspect of your question. 

Regarding the second part of your question, you mentioned the availability of financial services and the difficulty of obtaining loans in financial services. I want to talk about the plan of the Agricultural Bank of China.

Serving agriculture, rural areas and farmers are surely demanding us to be more down-to-earth, but on the other hand, we are also considering how to solve the problem of accessibility. The key point is that we think that the "three rural" services should not only be grounded, but also have wings -- the wings of technology. This is mainly reflected in channel innovation and product innovation, with two key points.

One is channel innovation. We will strengthen the construction of offline physical outlets and build more outlets in counties and towns, and at the same time increase the promotion of mobile banking in rural areas. Mobile banking is very common in cities, and next we must make mobile banking more in line with the needs of rural areas and farmers. By the end of last year, the Agricultural Bank of China had registered 165 million mobile banking customers in rural counties, and the number of its monthly active customers was close to 50 million. This year, we will further increase efforts in this area to allow farmers to obtain financial services more conveniently and quickly. The other aspect is product innovation. We will launch online financing products to make it easier for farmers to obtain loans and financial services. For example, an innovative online financial product has been launched called "Huinong e-Loan." This product realizes online application, online approval, online issuance, and online repayment of rural clients' loans, thus comprehensively improving the coverage and processing efficiency of rural clients' loans. It provides more credit and loan support to more farmers. By the end of last year, the balance of this product had exceeded 350 billion yuan, benefiting 2.76 million rural households. We plan to invest another 160 billion yuan this year to make the balance of "Huinong e-Loan" exceed 500 billion yuan. This product is very effective in many places, especially in some remote areas. Let me give you an example: Tibet. Based on the characteristics of its industry, our Tibet bank branch has innovatively launched a group of farmer-benefiting products that poor people can understand and find easy to operate, such as the "yak loan," "highland barley loan". At the end of last year, the balance of targeted poverty alleviation loans exceeded 6 billion yuan. More than 70% of poverty-stricken households with registered cards in Tibet received microfinance support from our bank, accounting for more than 90% of the loans provided by the financial institutions in Tibet. We are also making a lot of effort in this regard to solve the problem of financial availability for rural households, especially in hinterlands as you mentioned just now. Thank you again for your question.

New York Times:

I'm from New York Times. A question for chairman Guo and also a question for Mr. Song, please. Chairman Guo, some people argue that fintech companies have so much information on their customers that they don't need in the medium or long-term to make the same capital adequacy standard as banks. Do you agree with that or is your medium-term goal here or over next several years to push the fintech sector directly or indirectly towards the same capital adequacy standard as banks? And second, Mr. Song, you mentioned near the end of your remarks a 32% jump in compensation last year for Sinosure's payout, and we've all seen there have been tremendous difficulties in many commodity-rich developing countries that have borrowed a lot through Sinosure. So where does the money come from for that 32% increase in compensation? Did Sinosure need some kind of additional injection of money from the Finance Ministry or others, or was that mandatorily through big jumps in the premiums that you charge exporters? Thank you.

Guo Shuqing:

Your question is a very good one. As I mentioned above, if a company's financial operations are carried out through the internet platforms, whether it be banks, micro-loan companies, or consumer financing companies, we do require them to have adequate capital like other financial institutions. At a thematic meeting held by the National Committee of the Chinese People's Political Consultative Conference in May 2018, Vice Premier Liu He made some remarks, which I think are very informative for all sectors of society. First, he said you need capital to do business. You need even more capital in the financial sector. China's financial sector ran well as early as more than two thousand years ago, and back then people had capital. How do you promote finance without capital? The same is true of other industrial and commercial businesses. Second, Liu stated that money borrowed needs to be repaid. You lend money and you must get repayment, otherwise business is unsustainable. The same applies to banks. Why are there many illegal fundraising cases? Many people tricked into fundraising happily think that the profits are high, say 8%, 10%, and 12%. When explaining why the earnings from banks are so low, those behind the illegal fundraising say that banks face high costs due to a large number of employees and property, so they can't provide high returns. This is not true and the main reason is actually because of capital constraints. Banks are more cautious and they must get back what they have lent, otherwise, they would collapse. Third, Liu noted that investment involves risk. Whether it be for individuals, institutions, or enterprises, investment can be risky and we must be aware of this. Fourth, Liu remarked that you will pay a price for bad doings. Therefore, we require internet platforms to have the same capital adequacy ratio as long as they have the same financial business. However, for historical reasons, we have given them a transitional period, some until the end of this year and some until the end of next year, and we may do some research and make the period even longer for some platforms. In the past, some financial institutions served small and micro enterprises, especially low-end clients, and we had relatively low requirements for these institutions. They offered 2% or 3% of loans as intermediaries between lenders and borrowers. We don't want to affect these clients so that they can continue to receive loans steadily. The transitional period can be longer, for them and that depends, but the maximum is two years, after which all the institutions should move back on track and are subject to capital constraints.

Song Shuguang:

I'm happy to answer this question. Sinosure is a policy-backed insurance company but it also operates based on the market and following commercial principles, which forms both the backdrop and premise.

You mentioned the increase in compensation last year and wonder where the money came from. Well, we operate completely as a commercial company and we set aside reserves every year based on reported losses, settled yet-to-be-paid losses, and losses that have been compensated and paid. The accumulated reserves set aside over the years support our compensation and payment. Risks were on the rise last year but manageable on the whole. Thank you.

Hong Kong Economic Herald:

I have a question for Mr. Guo. You said earlier in Hong Kong that Hong Kong is an irreplaceable bridge. What new measures will the CIRC take to support and stabilize Hong Kong's status as an international financial center during the 14th Five-Year Plan period, especially to support Hong Kong as an offshore RMB center as well as the issuance of digital currency bonds?

Guo Shuqing:

Digital currency is mainly a matter of the central bank. Although I work in the central bank, today is a special session of the CIRC. You may seek an answer another time from the staff of the central bank.

My colleagues and I share the same attitude towards the issue of Hong Kong. We are full of emotion and we firmly support the long-term prosperity and stability of Hong Kong. As an important financial center in the world, Hong Kong has played an irreplaceable role in the past 40 years of reform and opening up on the Chinese mainland. As far as the utilization of foreign capital is concerned, the vast majority of foreign direct investment and the vast majority of foreign capital flowed in through Hong Kong. At present, investment in the capital market, such as the "Shanghai Hong Kong Stock Connect," "Shenzhen Hong Kong Stock Connect" and "Bond Connect," also came in through Hong Kong. I still remember that when I was the chairman of the CSRC in 2012, two officials from the Hong Kong Stock Exchange and the Shanghai Stock Exchange studied and put forward the idea of the "Shanghai Hong Kong Stock Connect". When we discussed it together, we thought it was very feasible and indeed it has played a very good role. In the course of future development, Hong Kong can also provide support for mainland enterprises in listing and issuing bonds. We support foreign debt, US dollar debt, foreign currency debt, RMB, Hong Kong dollar and other forms. We also support the listing of banking and insurance institutions in Hong Kong and the development of more Hong Kong banking and insurance institutions on the mainland. We hope to continue this trend in the future.

Recently, we have formulated the development plan of the Guangdong-Hong Kong-Macao Greater Bay Area, in which the financial sector accounts for a large proportion, and there will be many new initiatives. There will be more new initiatives especially in the aspect of financial management, such as financial links. These initiatives are now being studied and discussed and will be gradually implemented. We believe that Hong Kong's economic growth will turn from negative to positive this year, and there will be good prospects. Thank you.

Hong Kong Commercial Daily:

Mr. Guo just mentioned that the banking industry has fulfilled a lot of social responsibilities. Last year, financial institutions provided 1.5 trillion yuan worth of benefits to society. My question is, can this policy continue this year? What measures will be taken to support the real economy? Thank you.

Guo Shuqing:

A lot of existing policies will continue. Since the interest rate of the whole market is picking up this year, I expect the interest rate of loans will also rise. There may be some adjustments, but overall, the interest rate is still relatively low. In addition, there will be no big change in fees, and the reduced fees will not be recovered. We will continue to support enterprises and reduce their burden by supporting financial restructuring, debt restructuring, enterprise restructuring, debt to equity swap and other forms.

Zhao Huan: 

Last year, the China Development Bank provided 33.5 billion yuan worth of benefits to the real economy by reducing the loan interest rate, and reducing and remitting the charges for intermediary business. This is a direct transfer of benefits, not including the support for financial restructuring, bankruptcy restructuring, bad debt write-off and other aspects mentioned by Mr. Guo just now. This year, the China Development Bank will continue to actively support the development of the real economy and maintain a low level in loan pricing. Of course, the cost of loan capital will change with market changes. On the whole, the net interest margins of banks will remain at a low and stable level. In terms of charges, it will continue to provide benefits to the real economy to strongly support the "six stabilities" and "six guarantees". Thanks.

Shou Xiaoli: 

Today, our press conference lasted about 100 minutes. Thank you, Mr. Guo. Mr. Guo not only released information as a speaker, but also asked questions as a reporter. Thanks to all the speakers, and also to all the friends of the press. That's all for today's press conference. Goodbye, everyone.

Translated and edited by Cui Can, Guo Yiming, Liu Qiang, Zhu Bochen, Li Huiru, Zhang Liying, Wang Yanfang, Yan Xiaoqing, Fan Junmei, Zhang Rui, Wang Zhiyong, Xiang Bin, Mi Xingang, Huang Shan, Wang Wei, Wang Yiming, Yuan Fang, 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.