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Speaker:

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

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Oct. 19, 2020

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this SCIO press conference where we are releasing China's latest economic data. We are pleased to welcome Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of its Department of Comprehensive Statistics, to introduce details of the economic performance in the first three quarters of 2020 and answer your questions. First, let's give the floor to Ms. Liu.

Liu Aihua:

Thank you. Good morning, everyone. I'll first give you a brief introduction of economic performance in the first three quarters of 2020, and then answer your questions. The economic growth in the period shifted from negative to positive.

Faced with the great impact of the COVID-19 pandemic and the complicated and severe environment both at home and abroad, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments coordinated their efforts to advance both the epidemic prevention and control and the economic and social development in a scientific way, and effectively promoted restoration of production and life order. Economic growth shifted from negative to positive, the relations between supply and demand gradually improved, the vitality and dynamics of the market were enhanced, and the employment and people's livelihood were well guaranteed. The national economy continued its steady recovery and overall social stability was maintained.

According to preliminary estimates, the gross domestic product (GDP) was 72.28 trillion yuan in the first three quarters, a year-on-year growth of 0.7% at comparable prices. Specifically, the GDP for the first quarter declined by 6.8% year-on-year, increased by 3.2% in the second quarter, and up by 4.9% in the third quarter. By industry, the added value of the primary industry was 4.81 trillion yuan, up 2.3% year-on-year; secondary industry 27.43 trillion yuan, up by 0.9%; tertiary industry 40.04 trillion yuan, up by 0.4%. GDP for the third quarter grew by 2.7% quarter-on-quarter. 

In detail, first, agricultural production maintained good momentum with another bumper harvest expected for autumn grain.

In the first three quarters, the added value of agriculture (crop farming) grew by 3.8% year-on-year, matching the first half of the year. Specifically, that of the third quarter grew by 3.9%. The total output of summer grain and early rice totaled 170.10 million tons, a year-on-year growth of 2.24 million tons. The sown area for autumn grain saw a stable increase, major crops for autumn grain grew well and another bumper harvest is expected for autumn grain. The planting structure was further optimized, with the sown areas of quality rice and soybean continuing to expand. In the first three quarters, the output of milk grew by 8.1%, and that of eggs 5.1%. The output of pork, beef, mutton and poultry dropped by 4.7%, a decline narrowing by 6.1 percentage points compared with that of the first half of this year. Specifically, the output of poultry grew by 6.5%, and output of beef, mutton and pork dropped by 1.7%, 1.8% and 10.8% respectively, a decline narrowing by 1.7 percentage points, 0.7 percentage points and 8.3 percentage points compared with that of the first half of this year. Pig production capacity gradually recovered. By the end of the third quarter, 370.39 million pigs were registered in stock, up by 20.7% year-on-year, among which, 38.22 million were breeding sows, up by 28.0%. 

Second, industrial production continued to accelerate with high-tech manufacturing and equipment manufacturing growing fast.

In the first three quarters, the total added value of industrial enterprises above designated size grew by 1.2% year-on-year, while that of the first half of this year was down by 1.3%. Specifically, the third quarter saw growth of 5.8% year-on-year, 1.4 percentage points faster than the second quarter. In September, the total added value of industrial enterprises above designated size rose by 6.9% year-on-year, growing for the sixth consecutive month, or 1.3 percentage points faster than the growth of August, with month-on-month growth of 1.18%. An analysis by ownership type showed that, in the first three quarters, the added value of State holding enterprises grew by 0.9% year-on-year; that of share-holding enterprises was up 1.5%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan up 0.3%; and that of private enterprises up 2.1%. In terms of sectors, the added value of mining went down by 0.6% year-on-year, a decline narrowing by 0.5 percentage points compared with the first half of this year; manufacturing was up 1.7% and the production and supply of electricity, thermal power, gas and water rose 0.8%, compared with a decline of 1.4% and 0.9% respectively in the first half of this year. In the first three quarters, the added value of high-tech manufacturing and equipment manufacturing grew by 5.9% and 4.7% year-on-year. In terms of the output of products, in the first three quarters, production of trucks, excavators and shoveling machinery, industrial robots and integrated circuits respectively grew 23.4%, 20.2%, 18.2% and 14.7% year-on-year. In the first eight months, the total profits made by industrial enterprises above designated size totaled 3.72 trillion yuan, down by 4.4% year-on-year, a decline narrowing by 3.7 percentage points compared with that of the first seven months. The Manufacturing Purchasing Managers' Index stood at 51.5% in September, 0.5 percentage points higher than August, staying above the threshold for seven consecutive months.

Third, service sector recovered steadily and modern service industries grew well.

In the first three quarters, the service sector witnessed steady recovery. In the third quarter, the total value added of the tertiary industry grew by 4.3%, which was 2.4 percentage points faster than in the second quarter. In the first three quarters, in the modern service industries, the value added for information transmission, software and information technology services, and financial services grew by 15.9% and 7% respectively, or 1.4 percentage points and 0.4 percentage points higher than that in the first half of the year. The Index of Services Production fell by 2.6% year on year, a decline which narrowed by 3.5 percentage points compared with that of the first half of the year; specifically, that of September grew by 5.4%, 1.4 percentage points faster than that of August. In the first eight months of this year, the business revenue of service enterprises above designated size dropped by 2.5% year-on-year, a decline narrowed by 1.3 percentage points compared with that of the first seven months; specifically, that of information transmission, software and information technology services went up by 11.4%. In September, the Business Activity Index for services was 55.2%, 0.9 percentage points higher than that of August. In particular, the Business Activity Index for transportation, telecommunication, internet and software, and accommodation and catering all remained above 60%. In terms of market expectations, the Business Activities Expectation Index for Services was 62.2%, 0.9 percentage points higher than in August.

Liu Aihua:

Fourth, market sales improved significantly with online retail sales of physical goods sustaining fast growth.

In the first three quarters, the total retail sales of consumer goods reached 27.33 trillion yuan, down by 7.2% year-on-year, a decline narrowed by 4.2 percentage points compared with that of the first half of this year; specifically, that of the third quarter grew by 0.9%, the first positive quarterly growth in 2020. In September, the total retail sales of consumer goods reached 3.52 trillion yuan, up by 3.3% year on year, and 2.8 percentage points faster than that of August, maintaining growth for two consecutive months. In terms of different regions, retail sales in urban areas in the first three quarters reached 23.68 trillion yuan, marking a decline of 7.3%, and retail sales in rural areas reached 3.64 trillion yuan, a decline of 6.7%. Grouped by consumption patterns, the income from catering was 2.52 trillion yuan, down by 23.9%; and retail sales of goods was 24.81 trillion yuan, down by 5.1%. Upgraded consumer goods grew quickly. Retail sales of telecommunication equipment, sports and recreational goods, and cosmetics grew by 7.2%, 6.8% and 4.5% respectively. In the first three quarters, online retail sales reached 8 trillion yuan, a year-on-year growth of 9.7%, and 2.4 percentage points faster than that of the first half of this year. Specifically, the online retail sales of physical goods hit 6.64 trillion yuan, up by 15.3%, and accounting for 24.3% of the total retail sales of consumer goods. 

Fifth, investment in fixed assets shifted from negative to positive growth and investment in high-tech industries and social sector continued to rise.

In the first three quarters, investment in fixed assets (excluding rural households) reached 43.65 trillion yuan, up by 0.8% year-on-year and shifting from negative to positive for the first time in 2020, while that of the first half of this year was down by 3.1%. Specifically, investment in infrastructure grew by 0.2%, shifting from negative to positive for the first time this year, while that of the first half of 2020 was down by 2.7%; investment in manufacturing dropped by 6.5%, a decline narrowed by 5.2 percentage points compared with that of the first half of 2020; and investment in real estate development grew by 5.6%, 3.7 percentage points faster than that of the first half of 2020. The floor space of commercial buildings sold reached 1.17 billion square meters, down by 1.8%, a decline narrowed by 6.6 percentage points compared with that of the first half of 2020; and total sales of commercial buildings reached 11.56 trillion yuan, up by 3.7%, while that of the first half of 2020 fell by 5.4%. By industry, investment in the primary industry rose by 14.5%, a growth of 10.7 percentage points higher than that of the first half of the year; the secondary industry fell by 3.4%, a decline narrowed by 4.9 percentage points compared with that of the first half of the year; and the tertiary industry increased by 2.3%, while that of the first half was down by 1%. Private investment reached 24.39 trillion yuan, down by 1.5%, a decline narrowed by 5.8 percentage points compared with that of the first half of 2020. Investment in the high-tech industry grew by 9.1%, which was 2.8 percentage points faster than that of the first half of the year. Of this total, investment in high-tech manufacturing and high-tech services grew by 9.3% and 8.7% respectively. In terms of high-tech manufacturing, investment in pharmaceutical manufacturing, and the manufacturing of computers and office devices grew by 21.2% and 9.3% respectively. In terms of high-tech services, investment in e-commerce services, information services and services for the commercialization of research findings grew by 20.4%, 16.9% and 16.8%. Investment in social sectors grew by 9.2%, which was 3.9 percentage points higher than that of the first half of 2020. Of the total, investment in the health sector and education sector grew by 20.3% and 12.7% respectively, or 5.1 percentage points and 1.9 percentage points faster than that of the first half of 2020. In September, investment in fixed assets (excluding rural households) grew by 3.37% month on month. 

Liu Aihua:

Sixth, imports and exports of goods shifted from decline to growth and trade structure continued to optimize.

In the first three quarters, the total value of imports and exports reached 23.12 trillion yuan, up by 0.7% year-on-year, shifting from negative to positive for the first time in 2020; specifically, that of the third quarter grew by 7.5% year on year, while that of the second quarter was down by 0.2%. The value of exports rose 1.8% to 12.71 trillion yuan, while the value of imports dropped 0.6% to 10.4 trillion yuan. The trade balance was 2.3 trillion yuan in surplus. In September, the total value of imports and exports was 3.06 trillion yuan, up by 10% year on year. The value of exports was 1.66 trillion yuan, up by 8.7%; and the value of imports was 1.4 trillion yuan, up by 11.6%. The trade structure continued to optimize. In the first three quarters, the import and export of general trade accounted for 60.2% of the total value of imports and exports, 0.8 percentage points higher than the same period last year. Exports of mechanical and electrical products grew by 3.2%, while that of the first half of 2020 was down by 2.3%. Imports and exports by private enterprises grew by 10.2%, accounting for 46.1% of all imports and exports, which was 4 percentage points higher than the same period last year.

Seventh, growth of consumer prices fell and producer prices for industrial products declined year-on-year.

In the first three quarters, the national Consumer Price Index increased by 3.3% year on year, 0.5 percentage points lower than that of the first half of 2020. Specifically, prices rose by 3.1% in urban areas and by 4.1% in rural areas. In September, consumer prices were up by 1.7% year on year, rising by 0.2% month on month. Grouped in terms of commodity categories, in the first three quarters, the prices of food, tobacco and alcohol increased by 10.9% year on year; clothing was down by 0.2%; housing dropped by 0.3%; articles and services for daily use were up by 0.1%; transportation and communication fell by 3.5%; education, culture and recreation rose by 1.4%; medical services and healthcare were up by 1.9%; and other articles and services increased by 5%. In terms of food, tobacco and alcohol prices, prices for grain rose by 1.2%; fresh vegetables increased by 6.1%; and pork increased by 82.4%, down 21.9 percentage points compared with the first half of this year. Core CPI excluding the prices of food and energy went up by 0.9%. 

In the first three quarters, producer prices for industrial products decreased by 2% year on year. Specifically, prices in September were down by 2.1% year-on-year, or up by 0.1% month on month. In the first three quarters, the purchasing prices for industrial producers fell by 2.6% year-on-year; specifically, in September, prices were down by 2.3% year-on-year, or up by 0.4% month-on-month.

Eighth, the surveyed unemployment rate in urban areas dropped, and the employment situation is generally stable.

The first three quarters saw the addition of 8.98 million new urban jobs, meeting 99.8% of the annual target. In September, the surveyed unemployment rate in urban areas was 5.4%, or 0.2 percentage points lower than that of August; the surveyed unemployment rate of the population in the 25-59 age range was 4.8%, lower than that of the surveyed unemployment rate in urban areas by 0.6 percentage points, the same as August. The surveyed unemployment rate in 31 major cities was 5.5%, down 0.2 percentage points from August. The average weekly working hours of employees in enterprises across the country stood at 46.8 hours. At the end of the third quarter, the total number of rural migrant workers stood at 179.52 million, a decrease of 3.84 million compared with the same period of last year, with a year-on-year decrease of 2.1%.

Ninth, the real growth rate of residents' income turned from negative to positive, and the ratio of per capita income of urban and rural residents decreased.

In the first three quarters, the per capita disposable income of all residents reached 23,781 yuan, a nominal increase of 3.9% over the same period of the previous year. Deducting the price factor, the actual increase being 0.6%. It was the first time to turn positive this year, with a decrease of 1.3% in the first half of the year. In terms of permanent residents, the per capita disposable income of urban residents was 32,821 yuan, with a nominal increase of 2.8% and an actual decrease of 0.3%; the per capita disposable income of rural residents was 12,297 yuan, with a nominal increase of 5.8% and an actual increase of 1.6%. The per capita disposable income ratio of urban and rural residents was 2.67, or 0.08 less than that of the same period last year. The median per capita disposable income of all residents was 20,512 yuan, a nominal increase of 3.2% year-on-year.

On the whole, the economic operation in the first three quarters continued a steady recovery, and the overall epidemic prevention and development achieved remarkable results. However, it should also be noted that the international environment is still complicated and with lots of instability and uncertainty; the pressure of preventing both inbound cases and domestic resurgence is huge. The economy is still in the recovery mode, and the foundations for sustainable recovery and improvement still need to be consolidated. The work in the next stage should be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We will conscientiously implement the instructions and deployment of the CPC Central Committee and the State Council, sticking to the general line of maintaining steady progress in line with the requirements of promoting high quality development and building a new development pattern, firmly grasp the strategic basis for expanding domestic demand, and do a solid job in ensuring stability on six fronts and maintaining security in six areas while maintaining vigilance against the virus. We will vigorously seek deeper reform and opening up, help enterprises to solve difficulties, strive to smooth over the economic cycle, build a solid foundation for people's livelihood, and strive to complete the annual economic and social development goals and tasks.

Shou Xiaoli:

Thank you. The floor is open for questions. Please state the news outlet you represent first.

CCTV:

In the first three quarters, China's economic growth has turned positive. How do you evaluate the overall economic performance? The growth rate in the third quarter rebounded steadily, and the main indicators improved significantly in September. What do you think of this performance? Thank you.

Liu Aihua:

Thanks for your question. Facing the COVID-19 pandemic and especially complicated and severe environment both at home and abroad in the first three quarters, all areas and departments have made comprehensive arrangements for epidemic prevention and control, as well as promotion of economic and social development. Production and normal life have been restored effectively. On the whole, the economic growth rate in the first three quarters turned from decline to increase, and the economic operation continued to recover steadily. The main characteristics can be seen from three aspects:

First, the growth rate of the main indicators has turned from negative to positive. From the cumulative point of view, GDP in the first three quarters increased by 0.7% year-on-year. Considering the GDP had decreased by 1.6% in the first half of the year, we can say that the decline has been reversed. The added value of the three industrial categories rebounded in an all-round way. The added value of the primary industry increased by 2.3%, that of the secondary industry increased by 0.9%, and that of the tertiary industry increased by 0.4%, all of which were positive. Investment in fixed assets increased by 0.8%, the total import and export of goods increased by 0.7%, and per capita real disposable income increased by 0.6%. From the perspective of the current quarter, GDP in the third quarter increased by 4.9%, 1.7 percentage points faster than that in the second quarter; the added value of industries above designated size increased by 5.8%, 1.4 percentage points faster than the second quarter; the added value of the service industry increased by 4.3%, 2.4 percentage points faster than the second quarter. There are also two indicators turning from negative to positive: first, the total retail sales of consumer goods, which fell 3.9% in the second quarter, but increased by 0.9% in the current quarter; the total import and export of goods, which declined 0.2% in the second quarter, increased by 7.5% in the current quarter. In September, the added value of industries above designated size increased by 6.9%, maintaining positive growth for six consecutive months; the production index of the service sector increased by 5.4%, meaning positive growth for five consecutive months; total retail sales of consumer goods increased by 3.3%, meaning positive growth for two consecutive months; and the total import and export of goods increased by 10%, positive growth for four consecutive months. With the change of these main indicators, we can say that China's epidemic prevention and control and economic recovery are leading the world, demonstrating the strong resilience and vitality of China's economy.

Second, jobs and people's livelihood are well guaranteed. In the face of unprecedented employment pressures at the beginning of this year, all local authorities and government departments implemented a policy giving priority to employment. People's livelihood has guaranteed and improved with the continuous increase of coffer budget. First of all, let's take a look at employment. A total of 8.98 million new urban jobs were created in the first three quarters, almost meeting the annual target. The surveyed unemployment rate is stable with a decline in September in urban areas to 5.4%, compared to 6.2% at the beginning of this year. The national per capita disposable income of residents in the first three quarters witnessed a real increase of 0.6%, roughly in line with the 0.7% of economic growth. Price increases have been moderate. The consumer price in the first three quarters grew by 3.3% year-on-year. Specifically, the consumer price index in September went up by 1.7% year-on-year. Social security has provided particularly strong bottom-line support this year. The national per capita pension and retirement pension posted an 8.7% nominal increase year-on-year; per capita income from social relief and subsidies grew 12.9% and per capita income from policy-based living subsidies expanding 11.1%. They all maintained rapid growth, far faster than the overall growth of residents' income.

Third, new growth drivers are playing a leading role. Under the impact of the epidemic, the impetus for industrial transformation and development has accelerated significantly. New driving forces represented by the Internet economy are growing and have played a positive role in helping the epidemic prevention and control, ensuring people's livelihood and boosting economic growth. In the first three quarters, the added value of high-tech manufacturing and equipment manufacturing grew by 5.9% and 4.7% year on year respectively, both faster than the growth in the first half of the year. Investment in high-tech industry grew by 9.1%, posting big growth of 2.8 percentage points faster than the first half. New business forms and models like online shopping and livestream selling has continued apace. There is a strong emerging demand for working from home, online medical consultation and online education. The online retail sales of physical goods in the first three quarters went up by 15.3% year-on-year, one percentage point faster than the first half of the year, accounting for 24.3% of the total retail sales of consumer goods. The new infrastructure and consumption featured by 5G construction and rail transportation has played an enhanced leading role. In September, the output of urban rail vehicles, smart watches and new energy vehicles increased by more than 50%, 70% and 50% year-on-year respectively. Generally speaking, these new economic sectors are playing a significant role in driving the overall economy.

On the whole, the overall national economy continued a steady recovery in the first three quarters. However, while fully recognizing the trend of recovery, we should also note that the current epidemic situation overseas is still severe and the international environment remains instable and uncertain, together with insufficient effective domestic demands and imbalanced recovery in different regions, sectors and enterprises. The foundation for sustained recovery needs to be consolidated. So, next we would stick to the requirement of promoting high-quality development and building new development pattern, and making solid efforts to stabilize employment, finance, foreign trade, foreign investment, domestic investment, and meeting market expectations, comprehensively, implementing the tasks to safeguard employment, people's livelihood, market entities' prosperity, food and energy security, stability of industrial and supply chains and operations at grassroots levels, forge a solid foundation for safeguarding people's livelihood and assist enterprises addressing difficulties in order to fulfil the whole-year targets for development. Thank you.

Beijing Youth Daily:

Recently, the International Monetary Fund (IMF) raised its forecast for China's economic growth for the whole year. Do you think China's economic recovery will accelerate in the fourth quarter? How would you forecast China's economic trend for the whole year? What do you think the main difficulties are facing China's economic operation at present? Thank you.

Liu Aihua:

Thanks for asking. Given the fact that the economy as a whole showed sustained and steady recovery in the first three quarters, with a growth of 4.9% in the third quarter in particular, people are more concerned about whether the trend will continue in the next stage. In terms of various factors including demand and production as well as the confidence and vitality of the whole market, we believe we have the foundation, conditions and confidence to maintain the current trend in the fourth quarter and even for the whole year.

First, demand is gradually picking up. Investment in fixed assets went up by 0.8% year-on-year in the first three quarters, shifting from negative to positive for the first time in 2020. In terms of leading indicators, the total planned investment in new projects registered year-on-year growth of 14.6% in the first three quarters, a double-digit growth rate that is 1.1 percentage points faster than the first half of the year. The funds actually allocated for fixed asset investment increased by 4.8% this year, flat with that in the first half of the year. Investments will continue the current trend from negative to positive and further rebounding. Regarding consumption, the quarterly growth rate of total retail sales of consumer goods turned positive for the first time this year. In terms of growth, the growth rate of 14 of the 18 surveyed commodity categories turned positive, and six of them achieved double-digit growth. Regarding the service industry, the average daily sales of the national retail and catering businesses under close monitoring grew 4.9% year-on-year during the golden week of the National Day and Mid-Autumn Day holiday, according to data from relevant monitoring authorities. You might have felt the popularity of scenic spots and cinemas during the golden week. On a comparable basis, the number of visitors has rebounded to 80% of that of last year while the revenue has recovered 70%. The recovery is good and indicates that residents' demand for both physical goods and services consumptions is recovering against the context of the current effective epidemic prevention and control.

Second, the industrial cycles continue to improve. We have stepped up efforts this year to break through the industrial and supply chains sticking points in order to ensure the production of key industries and products. Generally speaking, the industrial cycles are gradually improving. Firstly, the rate of capacity utilization is rising quarter by quarter. China's industrial capacity utilization rate was 76.7% in the third quarter, up 2.3 percentage points from the second quarter. Specifically, auto manufacturing rebounded three percentage points, general equipment manufacturing 1.7% points, and computer communications and other electronic equipment manufacturing 0.5% points. The recovery of downstream industries, which had been lagging behind upstream industries, has also improved in recent months. The added value of consumer goods manufacturing above the designated size rose 3.2% year-on-year, compared to the 0.8% decline of last month and shifting to growth for the first time from declines in consecutive months. Most of the service sector registered positive growth. Six of the eight sectors that make up the service production index have registered positive growth, with double-digit growth in information transmission software and information technology services.

Third, market entities are showing rising confidence. In the first three quarters, the sense of gain among enterprises has been significantly enhanced because we have fully implemented policies to provide relief to businesses and advanced reforms to streamline administration and delegate power, improve regulation, and upgrade services. Positive results were achieved in tax and fee reductions. From January to August, the taxes and fees were further cut by a total of 1.88 trillion yuan, effectively reducing the burden on the operations of market entities. In August, industrial enterprises above designated size reduced their costs by 0.47 yuan per 100 yuan of business income on a year-on-year basis. Business profits have also continued to grow. In August, the profits of industrial enterprises above designated size increased by 19.1% year-on-year, with positive growth for four consecutive months. In August, the profits of service enterprises above designated size increased by 15.5% year-on-year, also an encouraging double-digit growth. Among them, profits of high-tech service enterprises increased by 34.7%. In terms of business expectations, the manufacturing purchasing managers' index stood at 51.5% in September, and for the non-manufacturing business activity, the figure was 55.9%, an increase of 0.5 and 0.7 percentage points respectively over August, both staying above the threshold for seven consecutive months. 

In the next stage, the favorable conditions reflected in these three aspects will enable us to further exploit the potential and stimulate the demand of China's super-large market. Generally speaking, we are confident in the economic development of the whole year. Thank you.

Bloomberg: 

In the data, the retail sales were down 7.2% in the nine months through September and real disposable urban income is down 0.3% in the same period. With income falling, it's not surprising that retail sales haven't rebounded. What will the government do to support private incomes so that you can realize the new model of dual-circulation which is meant to boost domestic demand. Thank you. 

Liu Aihua:

Thank you for your question. Indeed, as you said, judging from the figures of the first three quarters, total retail sales of consumer goods fell by 7.2% in the first three quarters. The decline is mainly because of the impact of the epidemic on consumption demand. In recent months, the growth rate of total retail sales of consumer goods has shown a trend of rebounding. As I mentioned earlier, the growth rate in September was 3.3%, and we have achieved positive growth for two consecutive months. Viewed from the trend, it can be said that the current retail industry has managed to get through the heavy blow from the epidemic and is recovering. In terms of actual performance, while online consumption is maintaining rapid growth, consumption in physical stores also shows momentum of accelerated recovery. I said that the online retail sales of physical goods were up by 15.3% year-on-year. Our research shows that consumption in physical stores is also in the process of recovery. For example, the sales of some supermarkets in the first three quarters increased by 2.9%, indicating that, with the effective control of the epidemic, more people are willing to leave their homes and spend money in physical stores. Hence, consumption in physical stores has bounced back to a certain extent.

The second change is that while consumption of physical goods maintains a relatively rapid growth, service consumption is also recovering. The retail sales of consumer goods in September increased by 4.1%, showing positive growth for several consecutive months. In terms of service consumption, industries that were previously hit hard by the epidemic, such as the accommodation and catering sector, have also shown a recovery trend. The income of the catering sector fell by 2.9% in September. The decline has narrowed for several consecutive months, and has gradually returned to normal levels. 

The third is that, while consumption of basic consumer goods has maintained relatively rapid growth, products related to consumption upgrading also saw growing momentum. In the first three quarters, staying at home due to the COVID-19 made people spend more on items such as food, tobacco and alcohol. These kinds of products maintained relatively rapid growth. At the same time, the consumption of products related to consumption upgrading, including cosmetics, gold and silver and jewels, and automobiles, also grew rapidly. These categories realized double-digit returns in September.

Judging from these aspects, the overall recovery of domestic demand is relatively obvious, especially consumption demand. In the second quarter, contribution of final consumption expenditure to GDP growth was a negative 2.3 percentage points, while in the third quarter, the contribution was a positive 1.7 percentage points. From a negative 4.4 percentage points in the first quarter, narrowing down to a negative 2.3 percentage points in the second quarter, to a positive figure of 1.7 percentage points in the third quarter, I think the changes indeed show final consumption expenditure has rebounded after the falls of the previous two quarters. Therefore, generally speaking, the contribution of domestic demand continues to recover and rise. It provides favorable conditions for us to foster a new dual-cycle development architecture. The unlocking of the potential of China's super-large market is not only a manifestation of our strategic focus of boosting domestic demand, but also benefits world economic recovery. Thank you.

CNBC:

I have two questions. The first one is concerned with the employment of graduates and migrant workers. What is the employment situation in the hometowns of those migrant workers who did not choose to return to cities this year? The second question is on consumption. What is the future of e-commerce, after securing rapid growth this year, when its proportion has undergone fewer volatilities than others?

Liu Aihua:

Thank you for your questions. The first one involves the employment status of graduates from institutes of higher education as well as migrant workers. Based on the data, the pressure to ensure fresh graduates' employment has been relieved since September, and the job market has gained good momentum. The pandemic earlier this year has negatively impacted the employment prospects of graduates. However, the turning point appeared in September when the graduation season came to an end, and the employment rate showed robust signs of recovery. In September, the unemployment rate observed for graduates aged 20 - 24 from junior college and above dropped by 2.4 percentage points. Concerning the employment of migrant workers, there were 179 million migrant workers in the third quarter this year, an increase of 2 million compared with the second quarter, which indicates the growth of the migrant labor force. The unemployment rate in cities and towns among migrant workers has continued to decline each month, indicating a good momentum regarding employment in this particular sector.

However, it remains challenging to find employment this year. Despite the monthly drop of 2.4 percentage points of the unemployed graduates aged 20 - 24 from junior college and above in September, the rate remains 4 percentage points higher year on year, indicating a much-strained scene for this year's graduates. Meanwhile, despite the growth of the migrant labor force from the third quarter, employed laborers remained about 3.8 million less compared to last year, registering a year-on-year decline of 2.1%. That is why we need to reinforce the implementation of policies designed to protect market entities, assist enterprises in solving financial problems and stimulate flexible employment so that the employment of those targeted groups can be improved. 

Your second question is on online consumption. Based on today's data, e-commerce retailers are growing against the trend. In the first three quarters, sales of physical commodities from those retailers jumped 15.3% year-on-year, accounting for 24.3% of the total sales. The growth compared to the 7.2% fall of the entire retail sector is both uneasy and remarkable to achieve. So the 24.3% proportion is a result of gradual growth. Generally speaking, e-commerce consumption has played a significant role in upholding people's livelihoods, maintaining economic growth and preventing and controlling the pandemic from further spreading. Thank you.  

Market News International:

Could you please explain in detail how expenditure makes up the entire 1.7% consumption, including the capital formation？

Liu Aihua:

With this year's unique situation, a few contribution rates or three major points of demand turned negative. Therefore, we intended to release the data based on the points. During the first three quarters, the final consumption expenditure dropped by 2.5 percentage points; however, the aggregation of capital formation was up 3.1 percentage points. The net export of both commodities and services was up 0.1 percentage points, registering a GDP growth of 0.7% year-on-year. However, the rates or points are more discernible when we take a closer look at each quarter. During the third quarter, the final consumption expenditure rose by 1.7 percentage points, the capital formation up 2.6 percentage points and the net export of commodities and services up 0.6 percentage points. Compared to the second quarter, the final consumption expenditure increased by 4 percentage points, shifting from minus 2.3 percentage points to 1.7 percentage points. The capital formation fell by 2.4 percentage points from 5 percentage points to 2.6 percentage points. The net export of commodities and services was almost even -- between 0.5 percentage points in the second quarter and 0.6 percentage points in the third quarter. The impact of the coronavirus pandemic at the demand end, especially consumption, was prone to a significant impact in the first quarter. Therefore, with changes in the general situation, especially that in the second and third quarters, the final consumption expenditure grew gradually while the capital formation started to fall, which combined indicate a growing contribution of domestic demand. Thank you.

New York Times: 

The 0.6 percentage points contribution from foreign trade was a considerable widening in the trade surplus. Is that sustainable going forward? Particularly, is it sustainable given that it partly seems to depend on a decrease in the number of imported education services, in effect, due to the decline in students going out? Thank you. 

Liu Aihua:

Thank you for your question. The net exports of goods and services contributed 0.1 percentage points to the GDP growth in the first three quarters, and 0.6 percentage points in the third quarter. China's GDP grew 4.9% year-on-year in the third quarter. Net exports of goods and services contributed 0.6 percentage points; final consumption expenditure and gross capital formation contributed 4.3 percentage points. Generally, domestic demand is the primary driving force behind economic growth. You asked why export performance is good this year, saying that the widening trade surplus may result from a decrease in imports. This seems inconsistent with the statistics of the month. In September, China's exports grew by 8.7%, and imports by 11.6%. Generally, the increase in exports was attributable to some objective factors. For example, China leads the world in epidemic control. Chinese enterprises' returning to normal work contributes to global work resumption and epidemic control. In terms of imports, as China's economy rebounds and domestic demand picks up steam, our demand for imports is also increasing. Overall, China's current economic rebound not only drives its own growth but also boosts global economic recovery.

CNR:

Door-to-door registration for China's seventh national population census has kicked off. Could you brief us on the latest progress? Different from previous ones, this year's census is being taken in the context of epidemic control. Does the NBS have any plan to deal with the special situation? What role does the population census play in formulating China's 14th Five-Year Plan and future targets for 2035? Thank you.

Liu Aihua:

Thank you for your attention to the national population census. As many of you may know, door-to-door registration kicked off on Oct. 11 and will continue until Oct. 31. Some residents have already received phone calls or household visits. I want to share some knowledge about the national population census, as everyone present here is the object of the survey. The population provides the most basic information about the national condition and serves as the most fundamental production factor. China conducts a national population census every 10 years, and the current one is the 7th national population census. The nationwide census is of great significance because it is a major survey of our national condition and strength, conducted as socialism with Chinese characteristics, which has entered a new era during the decisive stage in building a moderately prosperous society in all respects and the period in which the time frames of the two centenary goals converge. From a macro perspective, an accurate census can give a full picture of the population size, structure and distribution, as well as the trend of the demographic change, providing support for formulating China's 14th Five-Year Plan.

An accurate census can also provide local governments with essential information which helps them supply and distribute elderly care and education facilities more reasonably. In this sense, a national population census concerns the interest of everyone. Door-to-door visits are an important exercise ahead of the national population census registration and a comprehensive test on the census' design and preparation work. Door-to-door visits started on Oct. 11 and will continue until Oct. 31. During the 20-day period, about 7 million staff will visit the homes of more than 400 million residents. The staff will introduce registration methods and ask questions about the basic demographic data of the households. For the first time, a population census can be conducted digitally this year. Census takers will offer appropriate assistance when residents choose to use mobile terminals such as cell phones to declare personal and family information. At present, door-to-door registration is being carried out in an orderly and steady manner.

As autumn turns to winter, the 7th nationwide population census being conducted, along with COVID-19 prevention and control, may present challenges to both census takers and residents. We've already developed an emergency plan in response to potential sporadic cases in some locations. The plan introduces registration methods for regions at different risk levels. In high-risk regions, data will be collected through phone calls and online questionnaires. In medium-risk regions, we will gather information by setting up outdoor registration stations and sending out online questionnaires. In low-risk regions, we will continue to make door-to-door household visits. In accordance with requirements for epidemic prevention and control, census takers on duty should be in good health and have normal body temperature. During household visits, they are required to wear masks, perform disinfection, and ensure personal protection for themselves and residents.

Out of concern for their privacy, some respondents hesitate to take part in door-to-door registration. On behalf of the national population census office, I would like to assure you that we will strengthen protection over residents' personal information throughout the census. Census offices at all levels and their staff are obliged to keep the obtained information private or bear the corresponding legal liability. Please feel secure about receiving phone calls and household visits. I hope the large program concerning 1.4 billion people can gain widespread support from the public. Thank you.

Shou Xiaoli:

A census taker has already visited the neighborhood where I live. Please continue. The floor is open for the last two questions. 

Reuters:

In terms of the retail sales of consumer goods, which sectors have experienced comparatively weak growth, and which have seen rapid growth? Is such growth sustainable? What is the situation in retail services in the third quarter? Thank you.

Liu Aihua:

Thank you for your questions. Based on the statistics for September, the retail sales of petroleum and related products saw comparatively slow recovery with the largest decline, followed by that of telecommunication equipment. These two categories of goods experienced negative growth. The decrease in retail sales of petroleum and related products can be mainly attributed to price factors, since the total retail sales of consumer goods are calculated using current prices. The retail sales of petroleum and related products in the first three quarters saw negative growth, down 16.7% year-on-year, which is a larger decrease than that in September. Therefore, the decline is currently slowing. The retail sales of telecommunication equipment in September declined by 4.6%, while the figure in the first three quarters increased by a total of 7.2%. As for the fluctuation this month, our preliminary estimates show that it is a short-term one as the total increase in the first three quarters is relatively high. The fluctuation is probably due to the fact that various companies launched cellphones onto the market in particular months, or because the period for releasing new products is different from last year, changing from September last year to October this year. It has something to do with these factors.

In general, the retail sales of these two categories declined in September; but the trend shows that they are also improving, and that the decline is narrowing. In general, the retail sales of enterprises (businesses) above the designated size in quite a few categories declined in the first three quarters. It is also worth noting that consumer demand is indeed recovering. In terms of monthly fluctuations, the total retail sales of consumer goods have maintained positive growth for two consecutive months, but the growth is relatively weak. The total retail sales of consumer goods in September increased by 3.3% year-on-year, which is still a low level of recovery. In total, retail sales in the first three quarters fell by 7.2% year-on-year, and this is a relatively big decline. Although recovering, the overall level is relatively low, and there remains work to be done to return to normal levels.

Going forward, we will adhere to the strategic focus of boosting domestic demand, and continue to work on aspects such as raising people's income and improving the consumption environment, so as to further promote the recovery of consumer demand. Thank you.

South China Morning Post：

I want to add a question about the outlook for economic growth. The International Monetary Fund (IMF) forecasts that China's economy will grow by 1.9% this year, while other market institutions predict growth of between 2.5% and 3%. I wonder if the National Bureau of Statistics has any forecast for the specific growth rate this year. Is it necessary to reach a level of around 3% to achieve the employment and livelihood targets set in the government work report, and to get close to the goal of doubling GDP set previously? Thank you.

Liu Aihua:

Thank you for your question. Your focus is still on the future economic trends. The IMF's latest growth forecast for China reflects the confidence of the outside world, especially international organizations, in China's economic growth. From the perspective of what I have just described, both the demand and production sides are in the process of recovery to varying degrees, which is reflected in the overall economy. Currently, the trend of a sustained and stable recovery of the economy as a whole is relatively clear. In the fourth quarter, in terms of the external environment of economic growth, there are still uncertainties about the development of the epidemic and its impact on the world economy and trade. Internally, the economy is still in the process of recovery. Most of the indicators have not yet returned to the normal levels, and some of the cumulative growth rates have also declined. Generally speaking, on the one hand, we have the foundation and conditions for the recovery, and the fundamentals for stable growth of the Chinese economy as a whole remain unchanged, but on the other hand, we should also recognize the uncertainties in the domestic and international environments. We must further abide by the decisions and arrangements made by the CPC Central Committee, make solid efforts to stabilize employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. We must comprehensively safeguard residential employment, people's livelihoods, market entities, food and energy security, the stability of industrial and supply chains and operations at grassroots levels in order to fulfil the whole-year targets for economic and social development. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu and our media friends. That's all for today's press conference. Goodbye.

Translated and edited by Chen Chao, Wang Qian, Zhang Rui, Zhang Liying, Zhu Bochen, Duan Yaying, Yuan Fang, Xiang Bin, Fan Junmei, Huang Shan, Gong Yingchun, Wu Jin, Xu Xiaoxuan, Wang Zhiyong, Zhou Jing, Zhang Junmian, Wang Yiming, Geoffrey Murray, David Ball, Laura Zheng, and Jay Birbeck. In case of any dispute over a perceived discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Maj. Gen. Luo Wei, director general of the Peacekeeping Affairs Center of the Ministry of National Defense

Senior Col. Ren Guoqiang, spokesperson of the Ministry of National Defense

Senior Col. Pan Qinghua, officer from the Bureau of Publicity of the Political Work Department of the Central Military Commission

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

Sept. 18, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). The SCIO today released a white paper entitled "China's Armed Forces: 30 Years of UN Peacekeeping Operation," and we are holding this press conference to introduce and explain some of the details. We are joined by Maj. Gen. Luo Wei, director general of the Peacekeeping Affairs Center of the Ministry of National Defense; Senior Col. Ren Guoqiang, spokesperson of the Ministry of National Defense; and Senior Col. Pan Qinghua, officer from the Bureau of Publicity of the Political Work Department of the Central Military Commission. I'm Hu Kaihong, spokesperson of the SCIO.

First, I will give you a brief introduction on the main content of the white paper.

Hu Kaihong:

This year marks the 75th anniversary of the founding of the United Nations (U.N.) and the fifth anniversary of President Xi Jinping's attendance at the U.N. Leaders' Summit on Peacekeeping. It is also the 30th year since China's armed forces first participated in the U.N. peacekeeping operations (UNPKOs). At this particular historic moment, the Chinese government decided to release a white paper entitled "China's Armed Forces: 30 Years of U.N. Peacekeeping Operations." As the first peacekeeping-themed white paper, it comprehensively reviews the journey and practice of China's armed force in UNPKO activities s over the past three decades, as well as the contributions made. It fully showcases key achievements as China's armed forces have implemented the pledges announced by President Xi Jinping during the U.N. Leaders' Summit on Peacekeeping. The white paper systematically explains the founding mission and propositions of China's armed forces in the UNPKOs. It elaborates on how China's armed forces have engaged in various operations for maintaining world peace, firmly contributing to building a community with a shared future for mankind. The full text of the white paper is about 14,000 Chinese characters. It consists of four parts including preface, main body, closing remarks, and annexes.

Hu Kaihong:

In the past three decades, China's armed forces have always aspired to fulfill their mission of meeting the responsibilities of a major country, safeguarding world peace, contributing to the building of a community with a shared future for mankind, and embarking on missions in this regard. As the white paper explained, China's armed forces participate in the UNPKOs, because the pursuit of peace is embedded deep in the genes of the Chinese nation; that the Chinese people care about the wellbeing of all humanity; that serving the people is the fundamental purpose of the people's armed forces; and that China honors its responsibilities as a major country. Throughout their participation in the UNPKOs, China's armed forces have always upheld the purposes and principles of the U.N. Charter; closely followed the basic principles of the UNPKOs, championing the vision of global governance based on extensive consultation, joint contribution and shared benefits; pursing common comprehensive, cooperative and sustainable security; staying committed to peaceful means in settling disputes; and building stronger peacekeeping partnerships.

Over the past 30 years, China's armed forces have become a critical force in the UNPKOs. The white paper shows how China's armed forces have undertaken diversified tasks and missions, including ceasefire supervision, stabilizing volatile situations, protecting civilians, providing force protection, deploying enabling capabilities, and sowing the seeds of hope. They have made a tremendous contribution to facilitating the peaceful settlement of disputes, safeguarding regional security and stability, and promoting economic and social development in host nations. They have stood firm as a disciplined force for peace and justice.

In the past five years, China's armed forces have fully implemented the pledges announced by President Xi Jinping during the U.N. Leaders' Summit on Peacekeeping. They have honored the commitments with real actions and tangible results and much important progress. The white paper notes that China's armed forces have expanded the composition of their peacekeeping troops from an initial single service into multiple military branches, enabling Chinese peacekeepers to perform diverse tasks in addition to enabling functions. The objectives of China's peacekeeping efforts have extended beyond conflict prevention to building lasting peace. As a result, the peacekeeping capacity of China's armed forces has been further strengthened.

Hu Kaihong:

World peace is the responsibility of all countries and peacekeeping calls for expanding multilateral cooperation. The white paper points out that China's armed forces has been actively working for greater international cooperation. They have cooperated in peacekeeping with over 90 countries and 10 international and regional organizations. They have enhanced mutual understanding, extended practical cooperation, strengthened bilateral and multilateral relations, and continuously promoted peacekeeping capability.

The world is going through profound changes unseen in a century, and there are diverse threats to world peace. The white paper notes that looking back through history, people are more keenly aware that peace has not come easily and to safeguard it requires great efforts. It stresses that, no matter how the international landscape may evolve, China will always strive to maintain world peace, promote global growth, and uphold international order. China's armed forces will always be a force of justice for world peace and development.

The white paper "China's Armed Forces: 30 Years of U.N. Peacekeeping Operation" is published in eight languages – Chinese, English, French, Russian, German, Spanish, Arabic and Japanese. It is published respectively by People's Publishing House and Foreign Languages Press; and is available in Xinhua Bookstores across China. 

That's all for the introduction. Next, let's give the floor to Ren Guoqiang, spokesperson of the Ministry of National Defense.

Ren Guoqiang:

Friends from the media, good morning. Today we officially publish the white paper – China's Armed Forces: 30 Years of UN Peacekeeping Operations. Just as Director Hu has said, this is the first thematic white paper issued by the Chinese government on our armed forces' participation in United Nations peacekeeping operations (UNPKOs). We all know this year marks the 75th anniversary of victory in the Chinese People's War of Resistance Against Japanese Aggression and the World Anti-Fascist War, as well as the 75th anniversary of the founding of the United Nations and the 30th year since China's armed forces first participated in UN peacekeeping operations. It also marks the fifth anniversary of President Xi Jinping's attendance at the Leaders' Summit on Peacekeeping at U.N. headquarters (UNHQ). We are releasing the white paper at this critical moment mainly to review the glorious journey of involvement by China's armed forces in the UNPKOs, to expound our ideas, policies and practices regarding safeguarding of world peace in the new era, to present the new actions being undertaken, new responsibilities assumed and new contributions made since President Xi's attendance at the summit, and to reveal a vision for future participation in UNPKOs, and to call on the international community to work together to safeguard world peace and build a community with a shared future for mankind. 

This white paper comprises of 14,000 Chinese characters in four parts – the preface, the main body, the closing remarks and annexes. The main body is made up of five chapters:

The first is "Embarking on Missions for World Peace." This chapter mainly introduces the original aspirations and the mission of China's armed forces taking part in UNPKOs, and expounds the policies and ideas they have upheld through the process of safeguarding world peace. This chapter also raises issues such as upholding the purposes and principles of the U.N. Charter and following the basic principles of the UNPKOs, emphasizing a vision of global governance and new concepts of security issues, advocating peaceful means in settling disputes and cementing peacekeeping partnerships. 

The second is "A Key Force in UNPKOs." This chapter introduces the important practices of China's armed forces while participating in UNPKOs, shows the diversified tasks they have undertaken, reflects on their achievements and contributions from different angles through data and examples, and tells touching stories of Chinese military peacekeepers. 

The third is "Implementation of the Pledges Announced at the U.N. Summit." This chapter presents the progress that has been achieved in the past five years in the thorough implementation of the pledges made by President Xi Jinping at the Leaders' Summit on Peacekeeping at UNHQ, so as to show that, as a responsible major country, China has taken on international responsibilities through the new actions taken, new responsibilities assumed and new contributions made by China during the process of participating in UNPKOs.  

The fourth is "Active Efforts for Greater International Cooperation." This chapter states that China's armed forces have been upholding the principles of reciprocity, mutual trust, and cooperation for win-win results and have proactively carried out exchanges and cooperation with the international community in close strategic communications, the sharing of experiences and building on developing greater capabilities. It shows the global image of China's armed forces which is open and confident, and demonstrates the efforts they have made and the sincerity they have entertained in jointly improving international peacekeeping capabilities and in contributing Chinese wisdom. 

The fifth is "Contributing to Building a Community with a Shared Future for Mankind." This chapter introduces the future vision and initiative of China's armed forces in participating in UNPKOs, highlights how they are contributing to building a community with a shared future for mankind, and lets the international community see that they will actively participate in UNPKOs as usual to make new and more important contributions to safeguarding world peace. 

Next, my colleagues and I will answer your questions.

Hu Kaihong:

Now you may ask questions. Please state the news outlet you represent first.

CCTV:

We have noticed that many concepts contained in this white paper haven't been seen in previous news coverages regarding Chinese military peacekeepers' operations, such as the original aspirations and the mission of China's armed forces in participating in UNPKOs and the types of tasks the Chinese military peacekeepers have undertaken. Could you give us a comprehensive introduction of the main features of the peacekeeping-themed white paper? Thank you.

Luo Wei:

With the title of China's Armed Forces: 30 Years of UN Peacekeeping Operations, the first thematic white paper on the participation of China's armed forces in UNPKOs takes an overall view of the glorious journey of China's armed forces in the UNPKOs over the past 30 years and expounds on their ideas and practices of safeguarding world peace in the new era, with a strong approach that is systematic, authoritative and innovative. I think the main features of white paper can be categorized into "five firsts":

First, the white paper, for the first time, clarifies the original aspirations and the mission of China's armed forces' participating in UNPKOs. It clearly states that the nature, the original aspirations and the mission of China's armed forces to participate in UNPKOs was to meet our responsibilities as a major country to safeguard world peace, and contribute to the building of a community with a shared future for mankind. The formation of the original aspirations and mission evolved from the pursuit for peace in the genes of the Chinese nation, that the Chinese people care about the wellbeing of humanity, that serving the people has always been the fundamental purpose of the people's armed forces, and that China honors its responsibilities as a major country. 

Second, the white paper, for the first time, offers a structure for the system of policies regarding China's armed forces' participation in UNPKOs, which can be summarized into "six insistences", namely, insisting on the purposes and principles of the U.N. Charter, insisting on closely following the basic principles of the UNPKOs, insisting on the vision of global governance based on extensive consultation, joint contribution and shared benefits, insisting on the pursuit of common, comprehensive, cooperative and sustainable security, insisting on peaceful means in settling disputes, and insisting on building stronger peacekeeping partnerships.

Third, the white paper, for the first time, explores the main tasks undertaken by China's armed forces in UNPKOs. It systematically analyzes all sorts of peacekeeping tasks undertaken by China's armed forces in UNPKOs over the past 30 years, and divides them into six main types - ceasefire supervision, stabilizing volatile situations, protecting civilians, providing force protection, deploying enabling capabilities, and sowing the seeds of hope. Among the six, the last on sowing the seeds of hope contains distinctive Chinese characteristics. 

Fourth, the white paper, for the first time, introduces the full implementation undertaken in the past five years of the pledges made by President Xi Jinping at the Leaders' Summit on Peacekeeping at UNHQ in 2015. There, he announced six measures that China would take to support U.N. peacekeeping. Over past five years, the Chinese government and armed forces have faithfully implemented the decisions and directions of President Xi Jinping, and taken concrete steps to honor the promises. We have set up a U.N. peacekeeping standby force of 8,000 personnel, deployed more enabling troops to participate in UNPKOs, trained large amounts of peacekeepers for foreign countries, offered free military aid to the African Union, deployed a first peacekeeping helicopter unit, and established a China-U.N. Peace and Development Fund to support peacekeeping efforts. All of these represent the new actions taken and new contributions made by China's armed forces in support of UNPKOs in the new era.

Fifth, the white paper, for the first time, presents the vision and initiative of China's armed forces in participating in UNPKOs. The world is going through profound changes unseen in a century, and the COVID-19 pandemic is accelerating such changes. The white paper calls for the international community to uphold the vision of a community with a shared future for mankind, proposing Chinese ideas and Chinese solutions for strengthening and improving UNPKOs on six aspects. 

China News Service:

We learn from the white paper that the Chinese armed forces completed the registration of an 8,000-strong peacekeeping standby force at the U.N. in 2017. There were comments then saying this was an attempt to present a more positive international image. Could you introduce the force's development at present? And how does China plan to use this force? Thank you. 

Luo Wei:

When attending the U.N. peacekeeping summit in 2015, President Xi Jinping made a solemn pledge that China would assemble a standby force of 8,000 peacekeepers. The Chinese government and the military have resolutely implemented President Xi's decisions and plans and set high standards in planning and implementation. Based on an in-depth review of the achievements and experiences drawn from previous participation in U.N. peacekeeping operations, we enhanced communications and coordination with the U.N., scientifically planned the types and numbers of the members of China's peacekeeping standby force, and strived to develop it as suitable for U.N. peacekeeping operations. In September 2017, registration was completed with the U.N. of the standby force of 8,000 peacekeepers, which has a total of 28 units in ten categories and then conducted targeted training in accordance with the requirements and conditions required. In October 2018, 13 of these units were elevated to PCRS Level 2 after passing an assessment approved by the U.N. Later, six units were upgraded to PCRS Level 3 from Level 2 successively. Since the Chinese peacekeeping standby force was assembled, it has always taken peacekeeping capacity building as a priority in its training and development, including the study of the theories, laws and regulations of U.N. peacekeeping operations as well as improvement of professional operational capacity, emergency response and international communications capacity.

We are confident that the Chinese peacekeeping standby force will respond to the U.N. needs at any time and become a reliable, well-equipped, well-trained and disciplined professional force for U.N. peacekeeping operations. Thank you.

Global Times:

The West has been accusing China of using its participation in peacekeeping operations to expand its military strength. As mentioned in the white paper, China will continue to increase its support and participation in U.N. peacekeeping operations. Does it mean that China will send more forces to carry out overseas missions? Do you have any plan for participating in combat missions? Besides, I'd like to take this opportunity to ask a question on a hot issue. The U.S. and Taiwan recently have had frequent interactions, including U.S. Under Secretary of State Keith Krach's visit to Taiwan yesterday. What is your comment? What is the response of the PLA? Thank you.

Ren Guoqiang:

With regard to your first question, the People's Republic of China has steadfastly followed a road of peaceful development and resolutely safeguarded its sovereignty and security as well as promoted world peace and stability since its founding more than 70 years ago. In the face of the once-in-a-century transformations unfolding in our world, China's great journey of development over some 70 years, together with the participation of the Chinese army in U.N. peacekeeping operations for 30 years, fully demonstrates that China has all along played its part in promoting world peace and development and upholding the international order. Entering the new era, the Chinese military is actively striving to promote the building of a community with a shared future for mankind, and is willing to provide strategic support for world peace and development.

First, we will continue to fully fulfill the important pledges made by President Xi Jinping at the U.N. peacekeeping summit in 2015 to dispatch more peacekeepers to U.N. operations and provide personnel and equipment within our capacity to support U.N. and regional organizations in their peacekeeping missions.

Second, we will continue to actively participate in U.N. peacekeeping operations, support reasonable and necessary reform of U.N. peacekeeping operations, actively respond to the Action for Peacekeeping initiative, improve the efficiency of peacekeeping operations and better play the role of U.N. peacekeeping operations.

Third, we will continue to enhance international cooperation in peacekeeping. U.N. peacekeeping operations in themselves are a model and outcome of international cooperation. We will further conduct peacekeeping exchanges and cooperation with international and regional organizations and countries and peoples committed to the cause of world peace based on the principles of mutual trust, mutual benefit and win-win cooperation. We will enhance mutual understanding, exchange experiences and practices and strengthen practical cooperation to jointly promote the sound and sustainable development of U.N. peacekeeping operations through visits of delegations, exchanges of experts, joint exercises and training, and personnel training.

As for your second question, I would like to respond by saying the PLA's Eastern Theater Command conducts a real-combat exercise near the Taiwan Strait starting from today, a legitimate and necessary move aimed at coping with the current situation in the Taiwan Strait to safeguard national sovereignty and territorial integrity. Taiwan is an inalienable part of the Chinese territory. The Taiwan question is purely China's internal affair and allows no outside interference. The United States and the Democratic Progressive Party authority in Taiwan have recently intensified their collusion, often creating trouble. Trying to use Taiwan to contain China or relying on foreign strength to build itself up is wishful thinking and doomed to fail. Those who play with fire will get burnt. The PLA has the firm will, abundant confidence, and enough capabilities to thwart any interference by foreign forces or "Taiwan independence" activities and resolutely safeguard national sovereignty and territorial integrity.

Asahi Shimbun:

What is the impact of the COVID-19 pandemic on China's U.N. peacekeeping operations? Has anyone been infected among the overseas force? Thank you.

Luo Wei: 

Since the outbreak of COVID-19, President Xi Jinping and the leadership of the Central Military Commission have attached great importance to the prevention and control of the epidemic among military staff carrying out overseas missions. In this regard, we have adopted four main measures as follows:

First, we established an epidemic response mechanism. We have maintained close communication and coordination with the U.N. and peacekeeping missions and set up an emergency response mechanism for reporting cases among overseas peacekeeping forces, and kept close track of the epidemic prevention and control and staff health in the host countries and areas for missions.

Second, we have conducted stricter staff control. We have strengthened the self-protection awareness and ability of overseas peacekeeping forces to conduct strict individual protection and organized epidemic prevention and control drills. We have undertaken strict review of personnel into and out of the camps by setting up temperature checkpoints at the camp entrance. We have special places to receive visitors from outside, and have strictly controlled gathering activities.

Third, we have enhanced the raising of materials and medical treatment. In accordance with the needs of epidemic prevention and control and carrying out missions, we have organized materials, equipment and related drugs, purchasing masks, protective suits, and disinfectants. We have standardized the procedures for receiving patients during the epidemic, required medical staff to carefully protect themselves from the epidemic and strengthened remote medical assistance.

Fourth, we have conducted strict quarantine before dispatching peacekeepers or after their return. Prior to the dispatch of peacekeepers, we strictly implement the requirements of a 15-day quarantine for medical observation, strengthen professional training in epidemic prevention and control, equip them with personal protective gear and necessary epidemic prevention equipment, carry out nucleic acid testing for all of them and conduct disinfection and protection treatment for materials transported by sea and air. All the peacekeepers have been strictly quarantined upon their return to China. All Chinese peacekeepers overseas are in good health. Thank you.

China Daily:

A certain foreign research institute said China's peacekeeping troops were the most professional, well-trained, and most disciplined force. At the same time, we noticed that a recent TV documentary entitled "In the Course of Peace" focused on peacekeeping troops. How are China's peacekeeping troops trained? What is the secret behind their success? Thank you.

Pan Qinghua:

The Chinese army has an open secret, which is the political work. This is the major source of the professional ability of Chinese troops, and also the biggest feature and greatest superiority they possess. No matter what tasks Chinese troops are asked to perform and in whatever environment, the political work will always help them strengthen their ideals and beliefs and be united with strong morale, implementing strict discipline; it enables us to cultivate soldiers to fight against hardship and face death bravely. All this provides a strong ideological and political guarantee for the troops to effectively fulfill their missions.

China's peacekeeping troops have creatively carried out political work by facing the harshest environments, heaviest tasks, security threats, life or death situations in participating UNPKO. We have guided soldiers to safeguard the purposes and principles of the U.N. Charter, strictly implement U.N. guidelines and disciplinary requirements, strictly abide by the laws and regulations of the host country, respect the ethnic, religious and cultural norms of the people in the host country, and provide public services including protection, medical rescue, road and bridge construction, transportation support, agricultural planting, and improvement of living standards. For example, the Chinese medical team sent to the Democratic Republic of the Congo teamed up with SOS Children's Village in the city of Bukavu to help children receive a proper education and ability to cope with life's challenges. Meanwhile, Chinese female soldiers were called "Chinese mothers" by the children for care shown. The action of love has been going on for 17 years, wining a great reputation among local people.

Over the past 30 years, Chinese troops have participated in 25 UNPKOs involving more than 40,000 personnel to perform various activities. There is no war in China, but Chinese soldiers have sacrificed their lives on occasions for a wider cause. So far, 16 Chinese soldiers have sacrificed their lives for the cause of peace. Their names are recorded in the white paper on page 39, forming a historical monument. China commemorated and paid tribute to the heroes in a solemn way. No matter which country they are in, no matter how complicated and difficult the mission they are undertaking, China's peacekeeping troops have always performed their duties and lived up to the trust placed in them. They have always maintained a good ideological and political performance, good work style, good discipline requirements, and good mental state. One of our peacekeepers wrote in his diary: "If someone asks us why we travel so far and undertake peacekeeping work in such a dangerous place, please tell him, because we want to maintain the bottom line of human civilization."

China's peacekeeping troops is working for peace and justice. In the past 30 years, groups of Chinese peacekeepers have marched forward bravely and forged ahead for world peace, and accomplished their mission in the risky peacekeeping battlefield. The lifeline of political work is fully demonstrated in the front line of peacekeeping. Thank you.

Xinhua News Agency:

At the U.N. commemorative ceremony of the International Day of UN Peacekeepers held on May 29 this year, a female Chinese military officer received the honorary certificate of the U.N. Military Gender Advocate Award. As we know, China dispatched a large number of female medical workers as part of its peacekeeping medical team, and there is a female infantry squad in the South Sudan peacekeeping infantry battalion. Please introduce some details about the female Chinese peacekeepers. Thank you.

Luo Wei:

There are many female journalists participating in this press conference today, and I would like to answer the question. A writer in the former Soviet Union wrote a documentary book called The Unwomanly Face of War, mainly about Soviet women in World War II. In China, we all know that, in ancient times, Hua Mulan joined the army in place of her aged father, and today there are female peacekeepers working for the people. These stories are well-known to the public. Today, all the positions in the UNPKOs, female soldiers are also playing unique and important role in promoting gender equality and protecting women's rights, and even in preventing and managing conflicts and promoting peaceful development. 

China firmly supports the Women, Peace and Security Agenda of the United Nations and implements the UNSC Resolution 1325 on women, peace and security by action. Over the past 30 years, the Chinese military has sent more than 1,000 female officers and soldiers to participate in UNPKO. Currently, we have 85 female soldiers performing peacekeeping tasks at the U.N. headquarters and multiple missions, mainly participating in medical support, liaison and coordination, mine sweeping and explosive ordnance disposal, patrol and observation, promotion of gender equality and protection of women and children.

This journalist mentioned the deeds that led to the award of a certificate of honor by the United Nations. I will give you a brief introduction. The female soldier who was awarded the honorary certificate is Major Xin Yuan. She was assigned to the United Nations Interim Force in Lebanon (UNIFIL) last October as a senior mine clearance staff officer of the Combat Engineering Office and is also the only female officer to be in charge of mine sweeping. Her main job is to undertake mine sweeping planning, supervising and managing troops' mine sweeping operations. After arriving in the mission area, the first task she received was to organize and implement a humanitarian mine sweeping mission. In order to complete this task with a high standard, Xin took risks in going into the minefield with a mine-sweeping squad. She acquired first-hand information and formulated a thorough plan, which was completed 34 days in advance and swept more than 1,500 square meters of minefields. Her work has also received special awards from UNIFIL. This year, on the International Day of UN Peacekeepers on May 29, she received the honorary certificate of the United Nations Military Gender Advocate Award. Xin is a young female soldier born in the 1990s, and is also the mother of a two-year-old child. As far as I'm concerned, her deeds vividly showed the spirit of brave and dedication of contemporary Chinese female peacekeepers.

Shenzhen Satellite TV:

Some people believe that, since the launch of the UN peacekeeping operations (UNPKOs), the world is far from being peaceful. Conflicts and wars still exist in many regions. They believe that the peacekeeping operations have failed to fully play their desired role. What's your comment on this?

Ren Guoqiang:

A few days ago, the Ministry of Foreign Affairs (MFA) issued the Position Paper of the People's Republic of China on the 75th Anniversary of the United Nations, which clearly pointed out that the UN has always taken peace as its mission over that past 75 years. The practice of the UN peacekeeping operations over the past seven decades shows that, despite some insufficiencies, it still plays an instrumental role in preventing new world wars, mitigating regional conflicts, alleviating humanitarian disasters, and promoting world peaceful development. In response to the challenges and difficulties faced by the UN peacekeeping operations, we believe that countries should continue to uphold the purposes and principles of the UN Charter, work to build a new type of international relationship structure featuring mutual respect, equity, fairness, justice and win-win cooperation, further strengthening the central role of the UN in peacekeeping operations, and fully leverage the role of peacekeeping operations in safeguarding international peace and security. All members of the international community should join hands to build a community with a shared future for mankind. Thanks. 

Thecover.cn:

It is noted that complex and profound changes have occurred in the international landscape. The same is true for UN peacekeeping operations. Given that, how does the White Paper assess the current international peacekeeping situation? Thanks.

Luo Wei:

About the situation of peacekeeping operations across the world, we didn't dedicate a specific chapter to discussion of it. However, we do believe that the world is going through profound changes not seen in a century, and the COVID-19 pandemic is impacting on and accelerating such changes. Uncertainties and destabilizing factors in the international security situation are on the rise, and there are diverse threats to world peace. The UN peacekeeping operations are faced with multiple challenges, including increasing constraints, heavier tasks and a more complex security environment. China will continue to play its part as a permanent member of the UN Security Council, firmly support and participate in peacekeeping operations, actively respond to the Action for Peacekeeping (A4P) initiative, and support reasonable and necessary reforms in the UNPKOs. China will contribute its fair share to building an open, inclusive, clean, and beautiful world that enjoys lasting peace, universal security and common prosperity.

Hong Kong Economic Herald:

There are opinions that participation of Chinese peacekeeping troops in UN efforts presents a window for the world to gain better understanding of China's armed forces, maybe in many different ways. So, what does the rest of the world see through the window? Thanks. 

Pan Qinghua:

As the world is moving toward multi-polarity, China's armed forces have been taking a more active part in shouldering responsibilities and playing an increasingly important role in international affairs. 

Over the past three decades, China's armed forces have continuously in upholding ideas such as "harmony without uniformity" and "harmony for common development" and committed to spreading the policies and decisions, and achievements and contributions of UN peacekeeping operations. We actively support and work towards creating a good neighborly environment for UN peacekeeping operations. In February, 2019, the Political Work Department of Central Military Commission (CMC) held a themed exhibition at UN headquarters to showcase Chinese armed forces' contributions in safeguarding world peace, which were lauded by UN officials and diplomats. Atul Khare, UN under-secretary-general, said China was a major force supporting peacekeeping operations and promotion multilateralism. Carlos Humberto Loitey, UN military adviser from the Department of Peacekeeping Operations, said China's contribution to peacekeeping operations should be well valued. Without China's support, there would not have been able to achieve the level peacekeeping operations have achieved.

For a long time, China's armed forces have taken part in ceasefire supervision, stabilizing the situation, protecting civilians, providing force protection, supporting various peacekeeping operations. We have demonstrated our willingness to promote international cooperation on peacekeeping operations and worked hard to build a community with a shared future for all humanity. We pass on hope and love, and safeguard peace. Our actions have been highly commended by the UN and people of the host countries. A Kenyan military officer once said that, during difficult times, China's armed forces not only bring security but also kindness. People in Lebanon gave Chinese peacekeeping troops a lovely name "the most admirable friend from the east". A UN official said he was able to discover the most precious virtues of the Chinese nation from the Chinese peacekeeping troops, which are the kindness and ingenuity. He also expressed his appreciation for China's efforts to make our world a better place.

Time will tell. Our actions over the past 30 years have presented to the world that the Chinese military is a force for safeguarding security and respecting for the lives. And through contributions and dedications, we demonstrated to the international community our loyalty and strength and will always preserve our nature, purpose and character as the undefeated forces of the people from a major responsible country. Thanks.

China Review News:

The White Paper mentioned several times that Chinese peacekeeping troops have made important contributions to safeguard the regional peace and security. We know that UN peacekeeping operations is an important part of the international collective security. My question is that what kind of role that Chinese peacekeeping troops play in the UN peacekeeping mechanism? And what are their contributions? Thanks. 

Luo Wei:

It has been 30 years since China began to take part in the UN peacekeeping operations. Over the past three decades, we have stepped up fulfillment of our responsibilities as a major country and taken concrete actions to honor our promise to safeguard world peace. Chinese military peacekeepers have made a tremendous contribution to facilitating the peaceful settlement of disputes, safeguarding regional security and stability, and promoting economic and social development in host nations.

Here I would like to share with you some figures. Over the past 30 years, China's armed forces have contributed more than 40,000 service members to 25 separate UN peacekeeping missions. Sixteen Chinese military peacekeepers have sacrificed their lives for the noble cause of peace. China's armed forces have cooperated in peacekeeping with over 90 countries and 10 international and regional organizations. In 2015, President Xi Jinping attended the UN Peacekeeping Summit and made a six-point commitment to support peacekeeping operations. Over the past five years, a peacekeeping standby force of 8,000 troops has been generated. Twenty-five enabler troops totaling over 7,000 individuals have been committed to missions. China has provided training programs to over 2,800 peacekeepers from more than 60 countries, including more than 1,000 peacekeeping police officers and more than 300 professionals for mine sweeping. The PLA helicopter unit, with four helicopters, made its first flight on a peacekeeping mission. The PLA has honored China's commitment of free military aid to the value of $100 million to support the African Union. China has established a China-UN Peace and Development Fund. The fund has financed 23 projects to support peacekeeping operations, which cost more than $10 million. As of now, 2,521 Chinese military peacekeepers have been serving on eight UN peacekeeping missions and at UN headquarter.

In addition, China is the second largest contributor to UN peacekeeping operations, and the largest troop-contributing country among the permanent members of the UN Security Council. I believe that all these figures fully demonstrated that, in the past 30 years, especially in the recent five years, China has made great contribution. Thanks.

Beijing Daily:

The White Paper points out that "to contribute to building a community with a shared future for mankind, China's armed forces have stepped up their support for and participation in the UNPKOs". In the fifth chapter, it is stated that, "to participate in the UNPKOs is integral to China's joint efforts with other countries to build a community with a shared future for mankind." How should we interpret these words?

Ren Guoqiang:

In today's world, we have increasingly become a community with a shared future of intertwined interests, shared security and prosperity. Peace has been people's most enduring aspirations. Only by achieving peace is it possible to guarantee progress and development, bring prosperity to all. History, with its periods of peace and war, tells us that peace needs to be fought for and safeguarded, and that comes from cooperation. UN Peacekeeping, as an instrument developed for peace, is an important means to safeguard world peace and security .

China's armed forces are always a key force for safeguarding world peace and building a community with a shared future for mankind. Over the past 30 years, China's armed forces have resolutely delivered on the purposes and principles of the UN Charter, faithfully performing their duties, and making a significant contribution to world peace and stability. In the new era, the world is going through profound changes unseen in almost a century, and the COVID-19 pandemic is accelerating such changes. China's armed forces actively contribute to building a community with a shared future for mankind , resolutely uphold the UN Charter and basic principles of the UNPKOs, firmly support the core role of the UN in peacekeeping operations, and promote sound and sustainable reforms of UN peacekeeping. China's armed forces will remain as a steadfast force safeguarding world peace. Thank you.

DZwww.com:

The white paper states that China's armed forces have cooperated on peacekeeping with a number of countries and international and regional organizations. The UNPKOs are led by the UN, and Chinese peacekeeping troops are just one of the participants. So, why do we need to exchange and cooperate with other countries? Thank you.

Ren Guoqiang:

As I just mentioned, the UNPKOs are a successful example and product of international military and security cooperation. China's armed forces believe that advancing cooperation in regard to peacekeeping is beneficial to mutual understanding, strengthened bilateral and multilateral relations, as well as sound and sustainable development of the UNPKO mission. Therefore, Chinese peacekeeping troops will continue to uphold the principles of mutual trust and prosperity through win-win cooperation, and further promote international communications and cooperation in regard to peacekeeping. We will: first, continue to strengthen communication with the UN and support reforms of its peacekeeping operations; second, actively boost communication through the exchange of visits, share experiences and practical cooperation with other troop-contributing countries; third, organize joint peacekeeping exercises and training, including table-top and real exercises, so as to enhance the coordination capacity of peacekeeping forces of participating countries.

In a word, China's armed forces will continue to support the UN in upgrading its peacekeeping training level, exchange experiences with other troop-contributing countries, hold peacekeeping training courses on a regular basis, and enhance the peacekeeping capacity of the international community. Thank you.

Hu Kaihong:

The last question, please.

Red Star News:

We have noted that there is a provision entitled "sowing the seeds of hope" encompassed in the chapter on "A Key Force in UNPKOs", which reads so different from the rest of the parts on mission. Would you please tell us what prompted you to say this? Thank you. 

Luo Wei:

As you pointed out, and the rest of you may take note of it, there is a special section named "Sowing the seeds of hope" in the second chapter focusing on the mission concept held by China's peacekeeping troops. We added this part to identify the distinctiveness of our own contribution to the mission. Under the UN's general framework of peacekeeping operations, China's peacekeeping troops have strengthened coordination and cooperation with various international organizations and humanitarian agencies, and have actively facilitated post-conflict reconstruction, livelihood improvement and social development in host nations. We have played an active role in providing humanitarian assistance, and public services in infrastructure construction, medical care, health education, gender equality promotion, environmental awareness promotion, vocational training.

During UN peacekeeping missions, Chinese peacekeeping troops provide public services and "sow the seeds of hope", which was determined by their original aspiration. It embodies the concept that serving the people wholeheartedly is the fundamental purpose of the people's armed forces, and loving and helping the people is their fine tradition. For example, Sudan's Darfur is one of the regions in the world's facing the most severe water shortage, which is a main cause of many armed conflicts. Since arriving in the mission area in 2007, besides fulfilling its commitments to the UN, Chinese peacekeeping troops made every effort to find water and drill wells for local villages to alleviate drinking water difficulties for people and livestock. From 2007 to 2013, the Chinese military has sent seven batches of specialized water supply forces to the region and Chinese military engineers drilled 14 wells, effectively alleviating the problem of water scarcity for the locals. Such efforts have been acclaimed by local people. There are numerous examples like this. Over the past 30 years, Chinese peacekeeping troops have safeguarded peace with their perseverance and sowed the seeds of hope with their love, leaving touching stories one after another in host nations. Thank you.

Pan Qinghua:

I would like to add something. As one of our peacekeepers who sacrificed their lives during their missions once said, the highest value of a soldier is not only winning a war, but also preventing a war, and seeking great harmony for the whole world. Wining a war asks for strength, but wining peace calls for greater strength, as well as goodwill toward the world, love and responsibility. Love can light hope. I think this is why we introduce "Sowing the seeds of hope" in the second chapter. Thank you.

Hu Kaihong:

That's all for today's press conference. Thank you all.

.

Read in Chinese

Speakers:

Yang Xiaowei, vice minister of the Cyberspace Administration of China;

Zhao Long, member of the Standing Committee of the CPC Fujian Provincial Committee, vice governor of Fujian province;

You Mengjun, deputy secretary of the CPC Fuzhou Municipal Committee, mayor of Fuzhou Municipal People's Government;

Shen Zhulin, deputy director general of the Department of High-Tech Industry of the National Development and Reform Commission (NDRC);

Xie Shaofeng, spokesperson for the Ministry of Industry and Information Technology (MIIT), director of MIIT's Department of Information Technology Development.

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office.

Date:

Sept. 17, 2020

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). The 3rd Digital China Summit will take place in October in Fuzhou, the capital of east China's Fujian province. Today, we are delighted to be joined by Mr. Yang Xiaowei, vice minister of the Cyberspace Administration of China; Mr. Zhao Long, member of the Standing Committee of the CPC Fujian Provincial Committee and vice governor of Fujian province; Mr. You Mengjun, deputy secretary of the CPC Fuzhou Municipal Committee and mayor of Fuzhou Municipal People's Government; Mr. Shen Zhulin, deputy director general of the Department of High-Tech Industry of the National Development and Reform Commission (NDRC); and Mr. Xie Shaofeng, spokesperson for the Ministry of Industry and Information Technology (MIIT) and director of MIIT's Department of Information Technology Development. They will brief you on issues regarding this year's summit and answer your questions.

Yang Xiaowei:

Ladies and gentlemen, friends from the media, good afternoon. First, I would like to thank you for your interest in the 3rd Digital China Summit. The previous two summits have played a significant leading role in promoting both the application of information technology in China and the development of a "digital Fujian."

The sudden outbreak of the COVID-19 pandemic at the beginning of 2020 has brought unprecedented disruption to economic and social development. Due to its impact, the 3rd Digital China Summit, which was originally slated to open in April, was unable to be held as scheduled.

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 taken a major step forward in its nationwide virus control efforts. The economy is developing in a steady manner, and the normal order in work and daily life has been fully restored. With the approval of the CPC Central Committee, the 3rd Digital China Summit will be held in the city of Fuzhou from Oct. 12 to 14. This year's summit is co-organized by the Cyberspace Administration of China (CAC), NDRC, MIIT, and People's Government of Fujian Province; and will be hosted by the Fuzhou Municipal People's Government and relevant institutions. General Secretary Xi Jinping made important instructions on developing a "digital Fujian" back on Oct. 12, 2000 when he worked in the province. This October marks the 20th anniversary of the province's digital agenda, and the summit's opening ceremony will take place on Oct. 12, the same day the instruction was made 20 years ago.

General Secretary Xi Jinping recently chaired a symposium on economic and social work, and made the significant assessment that China's development is entering a new stage. He stressed establishing a new development pattern which takes the domestic market as the mainstay, while allowing domestic and foreign markets to boost each other. Currently, China has taken a major step forward in its nationwide virus control efforts, and has made significant progress in coordinating prevention measures with economic and social development. The year 2020 marks the successful conclusion of both the 13th Five-Year Plan and the dawn of the 14th Five-Year Plan. This year's Digital China Summit will thus further boost all sectors' creativity and their active participation in building a "digital China," and is of crucial importance in unleashing the potential of the nation's digital development.

The theme of the 3rd Digital China Summit is "digital transformation driven by innovation; high-quality development led via intelligence." The summit aims to act as a platform which releases national policies on information technology; showcases the latest achievements of "digital China"; boosts communication regarding theories, experiences and practices of e-government and digital economy; and promotes global cooperation to build a "digital China" and "digital Silk Road." The summit, to be held both online and offline, will consist of seven sessions: opening ceremony, main forum, sub-forums, exhibition, innovation contest, launch event for application scenarios, and closing ceremony. In the meantime, a series of events commemorating 20 years of digital development in Fujian will also be held to review the digital progress in the province and look ahead to the country's digital agenda.

The 3rd Digital China Summit will commence in less than a month, with preparations for the event progressing steadily. 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 ensure the summit is economic, efficient and safe. People from all sectors are very much welcome to participate. Let's look forward to the successful convening of the 3rd Digital China Summit. Thank you.

Shou Xiaoli:

Next, let's give the floor to Mr. Zhao Long.

Zhao Long:

Friends from the press, ladies and gentlemen, good afternoon.

I am very pleased to brief you about the preparations for the 3rd Digital China Summit. First of all, on behalf of the CPC Fujian Provincial Committee and the Fujian provincial government, I sincerely extend my invitation to you all to visit Fujian province and Fuzhou city, and experience the vitality and infinite charm brought by digital China.

Twenty years ago, when General Secretary Xi Jinping worked in Fujian, he established a major strategic and forward-looking plan for the construction of digital Fujian, which was the prelude to the construction of digital China. In the past two decades, we have seen the development of digital Fujian and digital China; and China, as one of the world's key players in cyberspace, has set out a national strategy for cyber development. Under the guidance of General Secretary Xi Jinping's important thoughts on cyber development, we have fostered new growth drivers based on information technologies, which in turn promote new development and create new glory. The construction of digital China is now showing great vitality. At this historic moment, it is of great significance to hold the 3rd Digital China Summit. Under the careful guidance of the relevant ministries and commissions such as the Cyberspace Administration of China, the National Development and Reform Commission, and the Ministry of Industry and Information Technology, we will go all out to do our best in preparing for the summit and strive to come out with new features, new results, and new influences.

First, we will highlight high-tech and smart conferences. In line with the development trends of pandemic prevention and control as well as digital exhibitions, the summit will set up a "cloud summit" platform to broadcast the grand scenes of the summit simultaneously online and offline. As for the achievement exhibition, we will simultaneously launch a "cloud exhibition" to fully demonstrate the latest achievements in the construction of digital China through cloud computing, virtual reality (VR), artificial intelligence (AI), and other methods. We will use new technologies such as touch-free face recognition and digital identity authentication to further improve our conference services. Smart application scenarios including full 5G coverage, subway facial recognition, and smart parking lots will be unveiled during the summit, allowing guests to experience the limitless capabilities of digital empowerment.

Second, we will hold colorful activities. We will arrange a series of exciting and fascinating activities at the 3rd Digital China Summit, focusing on the development and application of digital technologies such as AI, big data, cloud computing, and blockchain. The NDRC will also release hundreds of application scenarios for the digital economy and launch the digital transformation partnership action among the second batch of enterprises. Meanwhile, the National Health Commission will host a special exhibition on the "Application of Digital Technologies for Epidemic Prevention and Control," displaying the achievements of how digital technologies can be applied to coordinate the advancement of epidemic prevention and control as well as economic and social development, and showing the great anti-epidemic spirit. Leading enterprises in the industry such as Huawei, Alibaba, and Tencent will hold special ecological exhibitions to showcase their latest scientific and technological achievements, and 50% of their new products at the summit will be unveiled for the first time. The summit will host a main forum with the theme of "innovation drives digital transformation, intelligence leads high-quality development" as well as 12 sub-forums that span topics such as e-government, digital economy, blockchain and financial technologies, and digital ecology. A group of heavyweight guests will deliver visionary speeches, looking forward together to a bright future for China's cyber development, a digital China, and a smart society. The summit will also host other important events such as the mayors' dialogue on digital cities, an academicians summit, a dialogue on the future, and an innovation contest, to introduce guests to new technologies.

Third, we will give full play to the role of the summit as a platform. During the summit, we will introduce activities related to the 20th anniversary of the construction of digital Fujian. We will invite guest provinces Hainan, Shandong and Henan to introduce their outstanding achievements in digital construction and industrial development. We will provide a more open platform for deepening government-enterprise and enterprise-enterprise exchange and cooperation, and promote the signing of digital economy deals by various localities during the summit.

Media friends, digital technology has risen strong and digital applications are infinitely attractive — the digital future is full of vitality. The 3rd Digital China Summit will kick off in 25 days. For it, we will practice General Secretary Xi Jinping's important thoughts on cyber development and major expositions on digital China, and present a wonderful, high-quality event. We sincerely welcome all old and new friends to gather in Fujian to renew their friendship and jointly contribute wisdom and strength to the construction of digital China. Digital Fujian welcomes you!

Thanks again to our media friends for your long-term care and support for the economic and social development of Fujian. Thank you all!

Shou Xiaoli:

The reporters can now ask questions. According to the usual practice, please name the news organization you work for before asking your question. The floor is now open.

CCTV:

My question goes to Vice Minister Yang. As the 3rd Digital China Summit is approaching, could you elaborate on the achievements that have been made in the past three years to build digital China? Thank you.

Yang Xiaowei:

Thanks for your question. Since the 18th CPC National Congress, the CPC Central Committee, with Comrade Xi Jinping at its core, has attached much importance to the development of information technologies (IT). China's IT industry is developing at a rapid pace, and the country has published the Outline of National IT Development Strategy and the 13th Five-Year Plan on IT Development. To serve the overall strategy of the great rejuvenation of the Chinese nation and in the face of profound changes rarely seen in a century, the 19th CPC National Congress outlined the strategic arrangements for building strength in cyberspace, a digital China and a smart society. In the past three years, we have made much headway in this respect. From 2017, the Cyberspace Administration of China has begun publishing progress reports on digital China every year in collaboration with related departments. As seen in the newly published 2019 Digital China Development Report, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, significant progress has been made in IT development in different regions and departments, and the industry is trending from larger quantity to higher quality.

Progress can be seen from the following five aspects:

First, IT infrastructure has improved. IPv6 deployment is gathering momentum. By the end of last year, the number of IPv6 active users reached 270 million, accounting for one third of China's total number of internet users; over 1.39 billion IPv6 addresses have been distributed nationwide. 5G commercial use is also gathering pace. By the end of 2019, China had a total of 130,000 5G base stations. The number of 5G users is also rapidly increasing. The BeiDou-3 satellite navigation system, with all its key components independently developed by China, went fully operational on July 31, offering a global positioning service with 10-meter or less accuracy. Products linked to the BeiDou Navigation Satellite System have been exported to over 120 countries and regions.

Second, innovations are driving IT development. According to the World Intellectual Property Organization (WIPO), China was ranked 14th in Global Innovation Index among other leading innovative nations in 2019, moving up three spots from last year and marking a rise for the fourth consecutive year.

Third, the digital economy is developing in full swing. In 2019, the digital economy maintained high growth as its added value reached 35.8 trillion yuan, accounting for 36.2% of the GDP and contributing 67.7% to GDP growth. The structure of the digital economy is also improving. The value added in industrial digitalization accounted for 80.2% of the overall digital economy, promoting high-quality development of China's industries.

Fourth, digitalization is increasingly benefiting the general public. In the newly published e-government development index ranking by the UN, China was ranked 45th compared with 65th in 2018, joining the very high performing group in e-government. Poverty reduction through internet services is also making tangible progress as an IT service system for alleviating poverty has been largely established nationwide. China is also implementing the digital village strategy, which has brought fresh momentum to rural vitalization. The internet has empowered the disabled to enjoy equal access to all kinds of social activities. On China's main e-commerce platforms, the number of online stores run by the disabled has reached over 170,000, with a combined sales revenue of nearly 30 billion yuan.

Fifth, digital development along the Belt and Road is making new progress. The construction of the China-ASEAN Information Harbor and the China-Arab Online Silk Road is in full swing as China continues to build partnerships in promoting digital economic growth. By the end of last year, China had signed 197 Belt and Road cooperation documents with 137 countries and 30 international organizations, as well as bilateral e-commerce cooperation documents with 22 countries. China has also built terrestrial and submarine cables with countries along the Belt and Road to improve connectivity.

The Cyberspace Administration of China will continue to implement the arrangements made by the CPC Central Committee and the State Council and plan ahead for the IT development in the 14th Five-Year Plan period to boost high-quality digital development in China. We'll mainly carry out the work in the following aspects.

First, draw up the plan for national IT development during the 14th Five-Year Plan period. Second, seize opportunities and speed up new infrastructure development. Third, improve capacity building and advance core technology breakthroughs. Fourth, boost digital transformation in the real economy. Fifth, promote poverty alleviation through internet services. Sixth, enhance governance capacity and speed up the building of e-government. Seventh, embrace innovation and advance rural development through digitalization. Eighth, stay committed to openness and cooperation, and press ahead with digital development in building the Belt and Road. Thank you.

CNR:

In recent years, the integrated development of the real economy and the internet, big data and artificial intelligence (AI) has been accelerating. Could you please introduce the progress in promoting the in-depth integration of informatization and industrialization? What new steps will be taken in the future? Thank you.

Xie Shaofeng:

Thank you for your question. The integrated development of informatization and industrialization refers to the application of new-generation information technology — such as the internet, big data, AI and blockchain — in the industrial sector. It serves as a "connection point," connecting the targets for developing the country into a manufacturing and internet technology-power. It also showcases the path of the new-style industrialization with Chinese characteristics. The Party Central Committee and the State Council have attached great importance to the integrated development of informatization and industrialization. General Secretary Xi Jinping has, on numerous occasions, stressed that industrialization and the use of information should be integrated deeper. In recent years, China's integration of informatization and industrialization has entered a period of fast development where application, innovation and transformation have become priorities, and the manufacturing industry has become smarter and more interconnected with digital and information technology, which are promoting the fundamental changes in production models and forms of enterprises. The main achievements are as follows:

First, the integration of informatization and industrialization has witnessed remarkable achievements. In 2019, China's digital economy accounted for more than one third of GDP. As of this June, the penetration rate of applying digital R&D tools for enterprises reached 71.5%, and the digitalization of key processes hit 51.1%. Integrated development has accelerated the growth of the information technology industry. Given the impact of the pandemic, the revenue of software businesses reached 4.2 trillion yuan between January and July, marking an increase of 8.6% year on year. Software has been playing a bigger role in enabling industries to become more competitive and the economy to become more dynamic and intelligent.

Second, industrial internet platforms and applications have witnessed further development. In the wake of the pandemic, some enterprises have distributed their resources on industrial internet platforms, made flexible adjustments to their manufacturing facilities, and turned to producing other products in the fight against the coronavirus, so as to maintain supply chains. This has provided support for the control and prevention of the virus, as well as the resumption of work. At present, there are over 70 influential industrial internet platforms across the country, connecting more than 40 million industrial devices and providing services for over 400,000 industrial enterprises. In addition, more than 250,000 industrial apps can be found on these platforms.

Third, new models and forms of business continue to emerge. New business models, such as digital management, intelligent production, online collaboration, personalized customization services, and extension of intelligent services have become more popular. As of this June, the penetration rate of industrial e-commerce nationwide had reached 63%, and the penetration rate of entrepreneurship and innovation platforms for key enterprises in the manufacturing industry had surpassed 84.2%.

In the future, the Ministry of Industry and Information Technology will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, seizing the opportunities of the new industrial revolution, so as to promote integration between industrialization and informatization on broader, deeper and higher levels. Our priorities will be as follows:

First, we will accelerate the transformation of manufacturing processes and enhance the level of digital, networked and intelligent manufacturing models. We will continue to establish and promote the standard system for the integration of industrialization and informatization. The new generation of information technology will also be further applied and promoted rapidly in the manufacturing industry when enterprises implement the standards.

Second, we will establish multi-tiered and systematic industrial internet platforms, and further promote the industrial internet innovative development program, so as to foster cross-sector and cross-industry comprehensive industrial internet platforms, as well as distinctive and specialized platforms. We will increase efforts to turn the assembly line production model into a networked manufacturing model, and supply chains to supply networks.

Third, we will continue to foster and integrate new models, forms and industries. We will give full play to the exemplary role of pilot programs and promote the development of personalized customization services, industrial e-commerce, shared manufacturing and the gig economy.

Thank you.

People's Daily:

This year marks the 20th anniversary of digital Fujian development. Could you brief us on its major achievements as well as specific measures for the next step? Thank you.

Zhao Long:

Thanks for your question. Deputy Director Yang Xiaowei has just expounded on the development of digital China from a national perspective. The same developments apply to Fujian Province. Since General Secretary Xi Jinping put forward the important strategic plan for digital Fujian development in 2000, the Fujian Party committee and provincial government have attached great importance to it ever since. As we strengthen top-level planning and enhance the integration of resources, the digital Fujian development has made remarkable achievements, injecting strong impetus into the high-quality development of Fujian province.

Here is a figure that I think illustrates this point. In 2019, the total digital economy of Fujian province reached 1.73 trillion yuan, accounting for 40 percent of the provincial GDP, with the growth rate ranking second nationwide. Meanwhile, the digital government service index of Fujian province topped the national ranking. I'd like to elaborate on those in four separate aspects:

First, the provincial information infrastructure construction registered leapfrog growth. At present, all of the province's prefecture-level cities have reached the standard of an optical-network city while urban and rural areas have realized full 4G network coverage, especially that all villages within the province are equipped with fiber-optic networks. Additionally, the Narrow Band Internet of Things (NB-IoT) covers the whole province and commercial use of 5G network has been speeding up. The province's internet penetration rate ranks fourth in the country. The e-government service network has covered five administrative levels of Fujian, including the provincial, city, county, town, and village levels.

Second, the province's digital government service has improved. Fujian has developed a network for government approvals that spans the entire province, with 97 percent of government approvals and services now available online. Over 90 percent of government services require no physical presence of the applicants, or need one visit at most. Improved functions of the province's all-in-one mobile service platform, the MZT App, have allowed public access to handy services basically anytime online. The wide use of electronic certificates enables the public to access services using their ID numbers and allows enterprises to handle business through their legal person codes.

Third, the province's digital economy has grown rapidly. At present, the province is home to 13 registered electronic information manufacturing enterprises with an output value of over 10 billion yuan, as well as seven of the top 100 internet enterprises in China. The province's online retail sales volume ranks sixth in China. Also, the province is top in the number of enterprises that have reached the national implementing standards for the integration of information and industrialization. A number of 100-billion-yuan digital industry clusters are growing fast. Over the past two summits in particular, the province has registered a total of 462 signed digital economy projects with a total investment of 382.6 billion yuan, of which 130 projects have been completed and 295 others are underway. The digital economy has brought about an increasingly cumulative, amplifying, and multiplying effect on high-quality development.

Fourth, a smart society has brought added convenience to the public and enterprises. The internet has been widely applied to social services in the province. In particular, the province accelerates the sharing of high-quality educational resources between urban and rural areas via a network. It has introduced equipment for sharing educational resources to all the middle and primary schools in the region, offering a strong guarantee for students' continued studies during class suspension due to the epidemic. Remote medical services cover the province's tertiary public hospitals and 83 percent of its community medical institutions, which has effectively alleviated public concern over difficulties in receiving medical treatment. Social security cards are widely used by the province's urban and rural residents, having realized medical treatment and settlement with one card. The payment by a smart transportation card enables the interconnection between cities and prefectures throughout the province. The construction of a smart society gives people an increased sense of gain, happiness, and security.

Next, we will earnestly implement General Secretary Xi Jinping's important thought on cyberspace development and the spirit of his congratulatory letter to the first Digital China Summit, deepening the digital Fujian development in the new era. We will make additional efforts in the following four areas:

First, we will accelerate the construction of the national pilot zone for developing digital economy innovatively. Since Fujian has been listed among the national pilot zones, we will further implement plans for the digital economy to take the lead as well as initiatives regarding cloud services, big data application and intelligent transformation so as to further integrate the digital economy with the real economy.

Second, we will speed up the construction of new infrastructure. The province has just set out a three-year new infrastructure initiative, in which we plan to implement a number of new infrastructure projects, including new network, new technology, new computing power, new security, new integration, and new platform.

Third, we will speed up the development of digital government capacity. We will promote enhanced government services online, so as to make services for businesses and the public as convenient as online shopping.

Fourth, we will accelerate data development in the province. We are working on the effective integration of government data, social public data, and business data. We will further accelerate the development of a data factor market and clarify data property rights and data value to promote data trading and maintain data security, as well as to further release data resource dividends. We will strive to build Fujian into a national digital economy development highland and a model and demonstrative zone for digital China development, injecting new impetus into the promotion of high-quality development across the board.

Thank you.

Hong Kong Economic Herald:

Fujian province is the starting point where the idea of Digital China took shape and was first put into practice. Several achievements have been made here in digital science and technology. What role have these achievements played in helping micro and small businesses overcome difficulties? Thank you.

Zhao Long:

Thank you for your question. As we all know, Fujian has a prosperous private economy with a great number of micro, small, and medium-sized enterprises (MSMEs). To fully implement the deployment and requirements of the CPC Central Committee and the State Council, we have made great efforts to help MSMEs. Specifically, since the COVID-19 outbreak this year, we have advanced epidemic control and promoted economic and social development, making solid progress in stabilizing the six fronts -- employment, finance, foreign trade, inbound investment, domestic investment, and market expectations, and guaranteeing the six priorities -- jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government. We have deepened our efforts to assist sectors that face operation difficulties, as well as MSMEs, to ensure that enterprises can survive and develop. In the first half of this year, more than 47 billion yuan has been saved for enterprises throughout the province through tax and fee cuts, burden easing, and cost reduction. Meanwhile, based on the province's strengths as Digital Fujian, we have made full use of various digital technologies, including big data, to help MSMEs effectively offset the impact of the epidemic. Our efforts were mainly focused on these four areas.

First, by making full use of Financial Services Cloud as a platform. We established a cloud platform for financial services by integrating finance, technology, data, and policies. The platform pooled enterprise data on nearly 4,400 items from 17 government departments covering electricity, taxation, commerce, etc. It then addressed information asymmetry between banks and firms and provided cloud financing services to thousands of enterprises, to effectively address the difficulties and high costs of financing for MSMEs. To date, the Financial Services Cloud platform has helped more than 7,100 enterprises secure their financing needs, totaling 30 billion yuan. During the epidemic, in particular, the platform has seen an explosion in user growth, with a more than 20-fold increase in newly registered users and helped address over 26 billion yuan worth of financing needs.

Second, by encouraging MSMEs to use our cloud service platform. We established a resource center for the industrial internet, introducing them to leading domestic industrial internet companies. We provided enterprises with services, including cloud computing, cloud storage, cloud security, and digital production through the joint efforts of industrial enterprises on the cloud platform and cloud services providers. Some big enterprises are capable of establishing cloud services platforms of their own, while many MSMEs are unable to do so. As a result, we established public services platforms based on the resources of big enterprises and provided services to MSMEs. Up to now, Fujian province has introduced more than 600, high-quality cloud service institutions, launched more than 500 cloud service products and attracted more than 44,000 enterprise users from cloud platforms.

Third, by establishing service platforms including a communication channel connecting enterprises to the provincial government and an app informing users of beneficial policies for enterprises. Using big data technology, these platforms published more than 800 pieces of enterprise-related policies pooled from various government departments, through which people got to know related beneficial policies provided to enterprises by the country and the province in a direct and timely manner. The platforms removed the last crucial hurdle in policy transfer and implementation, ensuring that MSMEs could access policy information more rapidly, conveniently, and precisely. Meanwhile, we strengthened big data analytics and quickly pooled monitoring data on 167 items from 14 departments, including electricity, telecommunications, and taxation, to precisely keep abreast of production resumption and help decision-makers provide targeted assistance to enterprises.

Fourth, by deepening the application of big data in promoting employment. We planned and established a provincial employment database, through which employment information in different regions could be posted and shared by users all over the province, helping to address the needs of both enterprises and job seekers. To provide effective employment services to MSMEs, we enhanced the application of big data analytics in employment, precisely assessed the demand of the human resources market, and forecasted the total demand for the next year, as well as the separate demand of different sectors and professions based on a big data forecasting model. Up to now, the database has provided services to 437,000 enterprises and 24.91 million people from various groups in cities and townships.

The Poster News APP:

Data shows that by March 2020, China's rural online population had reached 255 million, with a rural internet penetration rate?of 46.3%. How will we narrow the gap between the rates in urban and rural areas so as to "balance out" the online population?

Yang Xiaowei:

Thank you for your question and your interest in the internet penetration rate in rural areas. We're proud to say that China tops the world in internet development and internet infrastructure. Looking at the situation abroad, we can see that almost no other country can provide such 4G network coverage as China. The optical-fiber penetration rate in China also ranks number one in the world. Your question shows you care about whether rural residents can enjoy our latest achievements regarding the internet.

The "Broadband China" initiative was launched nationwide because of the priority given to the matter by the CPC Central Committee and the State Council. Following are the major steps taken so far:

The first is improving the level of network coverage. There are five batches of nationwide trials into universal telecommunications services, providing optical fiber to a total of 43,000 poverty-stricken villages and 4G base stations for 9,200 such villages. Currently, over 98% of administrative villages in China are covered by optical fiber or 4G, and generally speaking, there is no gap between urban and rural areas.

The second is reducing expenses. Relevant departments have supported basic telecom operators in cutting expenses, which has benefited over 12 million poor families, changing their way of life and narrowing the urban-rural gap at a lower cost after receiving access to the internet and various information apps.

Next, the relevant departments will further carry out the decisions and deployments of the CPC Central Committee and the State Council to constantly improve rural broadband networks. The sixth set of trials into universal telecommunications services is underway, and its compensation system will be improved. With the aim of allowing people in both cities and the countryside to enjoy the same smooth internet access under the same network, the optical-fiber and 4G coverage of administrative villages, and poverty-stricken villages in particular, will be raised.

Bauhinia Magazine:

We all know that Fuzhou, the capital of Fujian province, is an important city along the Maritime Silk Road. My questions are: What role will the Digital China Summit, known as a foundation for global cooperation, play in building the Digital Silk Road? And, what achievements has it made in recent years? Thank you.

You Mengjun:

Thank you very much for your questions and interest in Fuzhou. Five years ago, the city was designated as one of the strategic hubs of the development of the Maritime Silk Road. From then on, we have kept firmly in mind the Party Central Committee's plans and strived to add new substance to the summit and enhance its influence, so as to share the benefits of digital economy development with other countries and regions along the Maritime Silk Road.

There are two major points which demonstrate the role played by the summit in building the Digital Silk Road:

First, it has promoted the communication and interaction of ideas and thoughts related to the digital world. Proposals regarding the Belt and Road Initiative and the application of digital technologies were deliberated during the previous summits by leading entrepreneurs, investment institutions and high-level experts and scholars. Thanks to such exchanges, the concept of the Digital Silk Road has been promoted, and a wide consensus has been reached that digital technologies can empower social and economic development.

Second, it has stimulated the cooperation and application of digital technologies. Agreements on digital projects were reached during the previous summits, fostering cooperation among countries and regions along the Maritime Silk Road in sectors of business, trade, finance, education and culture. Local Fuzhou enterprises have received positive results from their various explorations. For example, the digital products of NetDragon Websoft Holdings Limited have reached over 100 million users in more than 190 countries. The Newland Group has spread mobile payment technology to almost all countries involved in the Belt and Road Initiative. In addition, the one-stop purchase model of Yonghui Superstores has been welcomed by both retailers and customers, thanks to its construction of global supply chains for consumer goods.

It has been proved that countries and regions along the Maritime Silk Road are looking to share in the dividends produced by the new generation of information technologies, illustrated by the high demand for smart cities and digital applications. Therefore, we hope to take advantage of the summit to reinforce mutual trust and cooperation and share the dividends of advanced digital technologies with countries along the Maritime Silk Road through exploration of new technologies, new business forms and models.

Thank you.

Southern Metropolis Daily:

It is noted that the digital economy has maintained a strong momentum of growth since the start of the COVID-19 outbreak this year. Would you like to brief us on what innovative measures were put in place to develop the digital economy? Thank you.

Shen Zhulin:

Thanks for your question. Since the start of the COVID-19 outbreak this year, the digital economy has grown rapidly, bucking the trend of economic slowdown, which plays a vital role in our fight against the COVID-19 outbreak and promoting the resumption of work and production. I believe the achievement is evident. From health code and online education to expos held on the cloud, the digital economy changes the way we live and work, giving strong impetus to socioeconomic development. General Secretary Xi Jinping pays great attention to the development of the digital economy. This March, during his inspection in Zhejiang Province, General Secretary Xi Jinping pointed out that we should seize the opportunities of industrial digitization and digital industrialization to deploy digital economy. The National Development and Reform Commission (NDRC) has fully implemented the guidance made by General Secretary Xi Jinping and carried out the policy decisions and plans of the CPC Central Committee and the State Council. We have remained sensitive to changes, responded to them with well-judged actions, been ready to adjust the approach when necessary, and actively promoted the development of the digital economy. The measures we have taken are mainly in two aspects, which are as follows.

First, we have faced up to the difficulties and stepped up efforts to promote the digitalization of industries. We know that digital transformation has always been a problem for small and medium-sized enterprises (SMEs). In particular, they were not active in digital transformation. The COVID-19 outbreak has made them realize the benefits that digital transformation can bring. In the past, many enterprises regarded digital transformation as one of their options for development. Now it has become their first choice. However, prominent problems emerged as some of these enterprises have been hesitant to transform or have found it hard or impossible to transform. To solve such problems, the NDRC worked with the Cyberspace Administration of China (CAC) and other related departments to issue an initiative of cloud services and big data application as well as making enterprises smarter. By cooperating with nearly 150 institutions, we launched a digital transformation partnership action plan, mobilizing all sectors of society to drive change. We carried out over 500 measures to support companies to transform. And more than 300 free or discounted services were provided to SMEs. Preliminary statistics show that, since the action plan was launched four months ago, about 3 million individuals and MSMEs have received the support, and their digital transformation problems have been effectively solved.

Second, we have followed the trends and actively promoted the industrialization of the digital economy. While the outbreak has imposed a crisis for us, it has also created new opportunities. New business forms and modes, such as online education, remote work and telemedicine, have emerged quickly, playing an important role in supporting the epidemic prevention and control work, improving people's livelihoods, promoting economic recovery, and stabilizing employment. To seize the opportunity, the NDRC and 12 other departments jointly issued the Opinions on Supporting Sound Development of New Business Forms and New Modes, and Activating the Consumer Market to Drive and Increase Employment to support 15 new business forms and modes. These measures covered 19 aspects, focusing on fostering a healthy environment for development through reform of government functions and accommodative and prudential regulation, in order to energize market entities and drive the sound development of the digital economy.

According to recent statistics, digital economy has maintained a good momentum of growth. In the first eight months of this year, the online retail sales of goods grew by 15.8% year-on-year, accounting for nearly a quarter of total retail sales of consumer goods, which means that the digital economy plays a vital role in stimulating the public's consumption potential and fostering the market. Meanwhile, some of the new business forms and modes have attracted more private investors, enabling some internet platform firms to achieve business revenues of more than 170 billion yuan in the first half of this year, up 13.6% year-on-year.

From the data application perspective, the digital economy also plays an important role in stimulating economic growth and encouraging enterprises to migrate to the cloud and use digital tools. In the first half of this year, the revenues of internet data services was up by 14.3% year-on-year. I believe the statistics show again that the digital economy maintains a robust momentum of growth and offers great potential. We have reason to believe that the digital economy will further inject real momentum into high-quality development. Thanks.

Red Star News:

Mr. You, my question is: How have the previous two summits hosted in Fuzhou influenced the city's social and economic development? Thank you.

You Mengjun:

Thank you for your question. In my opinion, the previous two Digital China Summits have had a deep and lasting impact on Fuzhou in the following four main areas:

First, the summit has helped reach a consensus about development in Fuzhou. General Secretary Xi Jinping put forward the digital Fujian strategic decision 20 years ago, which has proven to be insightful, significant and influential. In sponsoring the summit, we understand and focus more on the necessity, urgency and importance of the city's digital development. Following decisions made last year by the municipal party committee and local government on Fuzhou's strategic digital development, 141 key projects with investment totaling 140 billion yuan were launched there. This year, in line with new decisions by local authorities, we launched 175 cutting-edge information technology projects, including 5G base stations, AI and the industrial internet, with total investment approaching 230 billion yuan. A consensus has been reached that these projects have reinforced the engine of Fuzhou's economy.

Second, the summit promotes Fuzhou's development. With the influence of the Digital China Summit, a number of leading companies in the field, including Huawei, Alibaba, Baidu, ByteDance, Ant Financial and Bitmain, have launched business operations in the city. Over the past few years, the overall investment of Fuzhou's 159 major digital economic projects reached a total of nearly 160 billion yuan. This year, the local digital economy is expected to rise to 450 billion yuan, accounting for 45% of the city's GDP. The number of high-tech enterprises will increase from nearly 700 in 2016 to 2,000 today.

Third, the summit has stimulated industrial upgrading. Concrete progress has been made in the integration of informatization and industrialization. For instance, the establishment of "internet plus textiles" through a cloud service platform that enables enterprises to complete seamless procedures from product promotion and two-way communication to bill confirmation, has saved costs amounting to tens of millions of yuan. Meanwhile, according to our calculations, the Fuyao Glass Industry Group Co Ltd has raised its production efficiencies by 30.5%, thanks to the industrial internet platform which enables its data-based, internet-supported and smart-operated R&D, design, production and sales sectors to run more smoothly. Industrial upgrading can also be seen by the swift bulk transactions of food worth trillions of yuan at the Yuanhong International Food Industrial Park which has partnered with JD.com. Last but not least, the Foxconn Industrial Internet Co Ltd in Fuzhou has integrated manufacturing industry with industrial big-data, industrial AI and 5G technologies, enabling an interconnected network between manufacturers, suppliers and customers. In doing so, production resources are distributed more efficiently.

Fourth, the summit has helped promote more tech-applications in the city. As Mr. Zhao just said, Fuzhou has spearheaded the application of digital technologies in different realms, receiving a warm welcome from the public. For instance, we have created a QR code for our "e-Fuzhou" app, which allows local residents easy access to hundreds of public services, such as public transportation, social and medical insurance, payments and consultations. With data facilities, we provide credibility scores for local enterprises on our "Jasmine Credit Platform" and allow those with high marks to pay after consumption. We also launched a facial recognition service platform which lets passengers take the subway by simply having their face scanned. In addition, our smart parking lots allow drivers to leave and then pay fees later. These scenarios demonstrate the wide range of uses for digital technologies. In the upcoming third summit to be hosted in Fuzhou, a digital asset operation company focused on exploring data-based asset management is scheduled to open. It is the first of its kind to be set up in the country.

Please allow me to take this opportunity to emphasize one more point. During the epidemic outbreak early this year, we adopted diverse and effective approaches to prevent and control the disease from spreading further using the wide range of digital technology applications. With our timely response, the anti-epidemic efforts received positive results. Applications included booking nucleic acid tests via "e-Fuzhou," issuing guidelines via the "e-Prevention" mini program, and fulfilling remote treatments using "internet plus" technologies. All these demonstrate our digital-buttressed anti-epidemic efforts.

The two previous summits have created opportunities that have transformed Fuzhou. We believe that with the hosting of more summits, growing impact will be felt, and we will improve the social and economic development through the meeting.

Thank you.

Cover News:

We know that the digital upgrading of small and medium-sized enterprises is of great significance to the economic and social transformation. What are the difficulties and keys to such digital upgrading? How will the Ministry of Industry and Information Technology push forward such upgrading? In addition, I would like to ask the NDRC to introduce what innovative measures have been carried out to promote the development of digital economy since the epidemic outbreak? What are the main directions in promoting the digital economy development in the next step? Thank you.

Xie Shaofeng:

Thank you for your question. At present, digitalization provides an important driving force for the high-quality development of economy. I should say there are bright prospects to empower SMEs with digitalization and accelerate their recovery and transformation and growth. The difficulties and keys of digital transformation and upgrading of SMEs are mainly reflected in the following aspects:

First, the digitalization and networking of the underlying equipment of some small and medium-sized manufacturing enterprises have not been fully popularized, and the foundation for implementing digital transformation is relatively weak. Second, the degree of digitalization in the R&D and production lags behind that in the management. Third, the cost of digitalization is still relatively high for some micro and small enterprises. Fourth, there is a shortage of talents at this disposal. There is a lack of compound talents who understand both industry and digital technology. Therefore, professional digital talents with strong learning ability and knowledge in many fields are urgently needed to provide services for the transformation of SMEs.

Facing these difficulties, the Ministry of Industry and Information Technology vigorously promotes the SMEs to seek access to cloud computing and various platforms, which are helping to promote digital transformation of SMEs, and also promotes the financing and development of large, medium and small-sized enterprises. It has issued a special action plan for digital empowerment of small and medium-sized enterprises. It focuses on promoting the digital transformation of SMEs in four ways. First, widely soliciting and promoting a number of digital service providers and excellent digital products and services for SMEs. Second, summarizing and introducing a number of cases of digital enabling benchmarking SMEs to promote more SMEs to accelerate the transformation to digitalization, networking and intelligence. The third is to organize a series of activities, such as "a trip of innovation in China" or a high-end forum on digital empowerment of SMEs that promotes the docking of supply and demand, and the application of various digital products. The fourth is to carry out a number of digital, network and intelligent technical training by using online platforms such as " micro classes for enterprises."

By far, the Ministry of Industry and Information Technology has printed and distributed two issues of recommended catalogue of digital enabling service products and activities for SMEs through local governments, industry associations, relevant units and self-recommended enterprises, and has introduced 223 service providers and 254 service products and activities, encouraging local departments supervising SMEs and relevant units to promote the independent selection, docking and use. The ministry has also guided small excellent enterprises and SMEs to become the first to establish a benchmark through digital empowerment. At the same time, in accordance with the idea of "enterprises spend a little more, service providers earn a little less, and the government gives a certain amount of subsidy," we encourage local governments to increase financial support for the digital transformation of SMEs so as to promote such companions to accelerate their digital transformation and achieve high-quality development. Thank you.

Shen Zhulin:

I'll answer the second half of your question first. As for the work we undertook during the epidemic, I have already answered that aspect just now. As the next step, we will seize opportunities provided by the development of the digital economy, maintaining the current good momentum of the development of the digital economy, and further stimulate its potential, further demonstrating its driving forces for industrial development and social transformation. Next, the National Development and Reform Commission (NDRC) will follow the decisions and deployments of the CPC Central Committee and the State Council, and further implement relevant arrangements together with other government departments. Our work will focus on the following five aspects.

First, it is necessary to accelerate the establishment of the data factor market. This is a new task set out at the Fourth Plenary Session of the 19th CPC Central Committee, which is also a fundamental system for the development of the digital economy. We will work with relevant departments to improve standards, regulations and systems on data rights confirmation, sharing, circulation, trading, income distribution, and so on. All these are expected to effectively promote and give full play to data circulation.

Second is to strongly boost construction of the innovative development pilot zones of digital economy. During the World Internet Conference (WIC) last year, the NDRC and the Cyberspace Administration of China (CAC) jointly launched the first batch of digital economy pilot zones, and Fujian province is a focus of such activity. Just now, Governor Zhao have a comprehensive introduction on Fujian's efforts in promoting its development. In this and the following years, we will encourage more pilot zones to innovate boldly on areas such as digital transformation, cultivation of digital new industrial forms, elements circulation, and construction of digital infrastructure. By doing so, we hope to accumulate and sum up more experience that can be copied and spread, so as to advance digital transformation in more regions.

Third, there is a need to improve the digital infrastructure, which is a topic we all concerned about. We will focus on accelerating the building of integrated big data centers around the country, and speeding up the layout of national nodes and key regional clusters of the integrated big data center. All these developments should help improve the utilization efficiency of the data center, deepen data innovation and application, and support digital transformation in all industries and fields.

Fourth is to boost digital industrialization and industrial digitization. I have already introduced this part in answering previous questions. We have launched the SMEs partnership initiative of digital transformation and the initiative of cloud services and big data application as well as making enterprises smarter, and have carried out relevant measures about cultivation of new industrial forms and modes. Next, we will continue to deepen our work. Taking the partnership initiative as an example, we will launch the second batch, and maybe even to a third batch, in order to implement both digital industrialization and industrial digitization pragmatically.

Fifth is to speed up the formulation of the digital economy plan during the 14th Five-Year Plan period (2021-2025), which will be the first special plan on digital economy in China's history. In the plan, we will define the main goals and tasks for the development of digital economy during the 14th Five-Year Plan period, and deploy major constructions, projects and reform measures. Thank you.

Phoenix TV:

From digital Fujian to digital China during the past two decades, what experience and highlights can Fujian province share with us? Thank you.

Zhao Long:

Thanks for your question. Since the digitalization construction is under rapid development, I'd like to talk about some preliminary experience based on our practice, mainly in the following three aspects:

First, the vision and foresight of General Secretary Xi Jinping and the CPC Central Committee. As I mentioned previously, 20 years ago, the Internet and the computer has not been fully popularization, many people even didn't know what was the digital economy. General Secretary Xi Jinping proposed the strategy of building digital Fujian when he worked there, and also worked as the group leader to guide its construction. The group set construction targets for digitalization, network, visualization and intelligentization, and proposed a series of requirements to strengthen top-level design, resources integration, scientific and technological innovation, data sharing, and data security guarantee. Since then, 20 years have passed, and the statements made and requirements raised by the General Secretary are still important for us to follow in today's work. During the two decades, digitalization has penetrated into various areas, including the economy, politics, society, culture and ecology. From digital Fujian to digital China, from technological innovation to wide application, the leapfrog development of digitalization in China has fully demonstrated the vision and foresight of the General Secretary and the CPC Central Committee, as well as the profound connotation and scientific guidance of General Secretary Xi Jinping's thought of building China into a cyber power, which have provided us the foundation and guidance for the construction of informatization.

Second, digital transformation is the trend of economic and social development in the future. During the China International Fair for Trade in Services (CIFTIS) that closed on Sept. 9, General Secretary Xi Jinping delivered a keynote speech. I was deeply impressed by one sentence that, "a new round of technological and industrial revolution in recent years has spurred a boom in digital technologies." Although we can't predict its final outcome, digital technology and digital application will certainly change our way of life and production, and even the shape of economic and social development, and profoundly impact competitive visions in the future. In terms of government management, the application of digital technology will further optimize business environment, enhance government services, and modernize the government's governance system and capacity. In terms of social governance, the application of digital technology will further optimize the distribution and effective allocation of public resources, transform the social governance model from the current one-way management to two-way interaction, from offline to online and offline integration, so as to greatly enhance the sense of gain, happiness and security of our people. In terms of economic high-quality development, the application of digital technology will, on one hand, give birth to a number of digital enterprises, and promote the digital industrialization and development of digital industry and new infrastructures including artificial intelligence, 5G, industrial Internet, big data, cloud computing and blockchain. On the other hand, it will accelerate industrial digitalization, further change industrial forms, boost reorganization of production factors, and especially speed up deep integration of production and service, blur the distinction between production and service, and promote high-end, personalized and customized services. At the same time, intelligent manufacturing will emerge as a new force. Through digital application, enterprise production efficiency has been constantly improved, bringing about new industrial forms and modes such as smart factories and "turn-off-lights factories". It will further bolster leading industries, cultivate emerging industries, as well as promote the transformation and upgrading of traditional industries.

The third thing we have learned is that in this era when the digital construction is developing rapidly, the person successfully seizing this opportunity will gain the initiative in pursuing development. Digital technologies are advancing rapidly, digital applications keep emerging and industrial iteration is accelerating. Pursuing digital development and digital construction is like sailing against the current: you either forge ahead or drift back downstream. One either accelerates one's development or is quickly surpassed, left behind, marginalized and even eliminated. For example, optical film left the stage of history after the emergence of the digital camera which, in turn, was soon replaced by smart phones, indicating the rapid progress brought about by digital technologies. As a result, only those able to keep pace with the development of technological innovation and application coverage can gain the initiative in the fierce competitive environment. Learning from Fujian's experience, the key to promoting digital construction is to uphold the principle of government guidance, businesses as the major actors and market mechanism. Government should provide guidance for digital construction by constantly improving the rules and standards of information application management; stepping up policy incentives for technology research and development, transformation and application; accelerating distribution of new types of infrastructure; and building a favorable environment for the development of new infrastructure. Meanwhile, the government should further promote the orderly and open sharing of digital resources to provide general, high-quality and efficient services for MSMEs through various platforms. To rely on enterprises as the major actors is to stimulate their enthusiasm for innovation and entrepreneurship. In the course of digital construction, enterprises should seek solutions in response to market demand, and then promote implementation. Meanwhile, we encourage digital enterprises to boost the scale and strength, promote the digitalization of traditional enterprises, lower the cost of resources and accelerate transformation to smart manufacturing.

Finally, to uphold market mechanism is to foster an open, fair and just market environment. We will step up our efforts in four areas. First, lowering institutional transaction costs; second, clarifying big data property rights; third, evaluating data resources to promote orderly transaction; fourth, guaranteeing data security. In my opinion, digital-driven development and digitalization are the order of the day. We should ride on the trend of the times, providing new drivers and making more contributions to the economic and social development of Fujian.

Thank you.

Shou Xiaoli:

Please go on. The last question.

Beijing Daily:

The digital economy has attracted wide attention from all sectors of society. Recently, the CPC Central Committee proposed to foster a new, dual-cycle development architecture with domestic and international development reinforcing each other. How will the digital economy promote the building of this new, dual-cycle development pattern? Thank you.

Yang Xiaowei:

Thank you for your question. Facing the complicated COVID-19 epidemic control situation and the conditions of economic and social development, General Secretary Xi Jinping has overseen the general situation, kept pace with the main trend, comprehensively coordinated China's domestic and international efforts, and made a thorough analysis of the challenges and opportunities before us. Meanwhile, he has proposed to make full use of the strengths of China's mega-sized market and the huge potential of domestic demand, and set out the goal of fostering a new, dual-cycle development architecture with the domestic cycle as the mainstay and with domestic and international development reinforcing each other. Combining this key strategic goal with our practice, the Cyberspace Administration of China has fully implemented the deployment of the new development architecture proposed by General Secretary Xi Jinping, and drawn up an outline for our work to further optimize the digital business environment and dual-cycle development of digital economy. For the domestic cycle, we will foster a fair, just and non-discriminatory digital business environment, punish misconducts such as unfair competition and monopoly in the platform economy, safeguard privacy and personal information of consumers, and ensure various rights and interests of consumers in the digital economy. For the international cycle, we will improve rules of digital governance through international cooperation and avoid closed-door development, ensuring the safe and orderly utilization of data. Meanwhile, we understand that as a major nation in digital economy, China should foster a market-oriented, law-based, and internationalized digital business environment that is commensurate with the level of its economic development. Also, China should draw up a new development architecture for digital economy. China is willing to strengthen cooperation with other countries, uphold open market and pursue win-win cooperation.

Thank you.

Shou Xiaoli:

The 3rd Digital China Summit will be opening soon. Let's look forward to this event. Today's news conference concludes here. Many thanks to our speakers as well as our media friends. Goodbye.

.

Read in Chinese

Speaker:

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

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office.

Date:

July 16, 2020

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), and director general of the Department of Comprehensive Statistics at the NBS. Ms. Liu will introduce China's economic performance in the first half of 2020, and answer your questions.

First, let's give the floor to Ms. Liu Aihua.

Liu Aihua:

The coordinated efforts for epidemic control and economic development delivered notable results with the national economy gradually recovering in the first half of 2020. In the first half of 2020, faced with serious challenges posed by the COVID-19 outbreak and a complex and fast-changing environment both at home and abroad, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at the core, the whole nation coordinated efforts to advance both the prevention and control of the epidemic and socioeconomic development, and firmly implemented the decisions and arrangements made by the Central Committee and the State Council. Sustained improvements were made in epidemic prevention and control, and the resumption of work, production, business and market was advanced at an accelerated pace. As a result, the national economy shifted from slowing down to rising in the first half of 2020 with economic growth in the second quarter changing from negative to positive and main indicators showing restorative growth. The national economy recovered gradually, the basic livelihood was ensured effectively, market expectation was generally good, and the overall social development was stable.

According to preliminary estimates, China's gross domestic product (GDP) was 45.66 trillion yuan in the first half of 2020, a year-on-year decline of 1.6% at comparable prices. The GDP for the first quarter declined by 6.8% year on year and that for the second quarter grew by 3.2%. The value added of the primary industry was 2.61 trillion yuan, a year-on-year growth of 0.9%; that of the secondary industry was 17,28 trillion yuan, down by 1.9%; and that of the tertiary industry was 25.78 trillion yuan, down by 1.6%. The GDP in the second quarter grew by 11.5 % quarter on quarter.

First, agricultural production was sound and bumper harvest of summer grain was continued.

In the first half of 2020, the value added by agriculture (crop farming) grew by 3.8% year on year, 0.3 percentage points higher than that in the first quarter; specifically, the figure grew by 3.9% in the second quarter, 0.4 percentage points higher than the growth in the first quarter. The overall output of summer grain was 142.81 million tons, an increase of 1.21 million tons over that of the previous year, up 0.9%. The structure of crop farming was further optimized, as areas sown with cash crops such as rapeseed increased. In the first half, the output of milk grew by 7.9% year on year and that of eggs grew by 7.1%. The output of pork, beef, mutton and poultry fell by 10.8%, the decrease of which narrowed by 8.7 percentage points compared with that of the first quarter. Specifically, the output of poultry increased by 6.8%, up 5.7 percentage points; that of mutton, beef and pork dropped by 2.5%, 3.4% and 19.1% respectively, the decrease of which narrowed by 5.2 percentage points, 3 percentage points and 10 percentage points respectively. The production capacity of pigs continued to recover. By the end of the second quarter, 339.96 million pigs were registered in stock, an increase of 5.8% over the end of the first quarter, among which 36.29 million were breeding sows, up by 5.4% year on year, an increase of 7.3% over the end of the first quarter. 

Second, industrial production recovered quickly and high-tech manufacturing and equipment manufacturing registered growth.

In the first half of the year, the total value added by industrial enterprises above designated size declined by 1.3% year on year, 7.1 percentage points slower than the decline of the first quarter; specifically, the figure grew by 4.4% in the second quarter and declined by 8.4% in the first quarter. In June, the total value added by industrial enterprises above designated size grew by 4.8% year on year, 0.4 percentage points faster than that of May, growing for the third month in a row, or up by 1.3% month on month. An analysis by types of ownership showed that the value added by state holding enterprises decreased by 1.5% year on year; that of share-holding enterprises decreased by 0.8%; enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan decreased by 3.4%; and private enterprises decreased by 0.1%. In terms of sectors, the value added from mining went down by 1.1%, from manufacturing down by 1.4%, and the production and supply of electricity, thermal power, gas and water declined by 0.9%, 0.6 percentage points, 8.8 percentage points and 4.3 percentage points slower than the decline of the first quarter respectively. The value added by high-tech manufacturing and equipment manufacturing grew by 4.5% and 0.4% respectively in the first half; specifically, the figures went up by 10% and 9.7% respectively in June. The output of some engineering machinery and new products witnessed fast growth. In the first half of the year, the production of excavators and shoveling machinery, integrated circuits, industrial robots and trucks grew by 16.7%, 16.4%, 10.3% and 8.4% year on year, respectively. In the first five months of 2020, the total profits from industrial enterprises above designated size totaled 1.84 trillion yuan, down by 19.3 percent year on year, the decline of which continued to narrow. Specifically, the figure went up by 6% year on year in May, while that in April decreased by 4.3%. The Manufacturing Purchasing Managers' Index stood at 50.9% in June, 0.3 percentage points higher than that of the previous month, staying above the threshold for the fourth consecutive month.

Third, the decline of service sector narrowed and modern service industries demonstrated favorable momentum.

In the first half of the year, the total value added by the tertiary industry dropped year on year, 3.6 percentage points less than the decline of the first quarter; specifically, the figure grew by 1.9% in the second quarter and dropped by 5.2% in the first quarter. By sectors, the value added by information transmission, software and information technology and that of financial services grew by 14.5% and 6.6% respectively; wholesale and retail trades, accommodation and catering declined by 8.1% and 26.8% respectively, 9.7 percentage points and 8.5 percentage points slower than the decline in the first quarter. In the first half of 2020, the Index of Services Production decreased by 6.1% year on year, 5.6 percentage points slower than the decline of the first quarter; specifically, the figure in June grew by 2.3%, 1.3 percentage points higher than that in May. In the first five months, business revenue of service enterprises above designated size dropped by 6.4%, the decline of which narrowed by 2.2 percentage points compared with that in the first four months; specifically, that of information transmission, software and information technology services grew by 8.4%. In June, the Business Activity Index for services was 53.4%, 1.1 percentage points higher than that in May. Specifically, the Business Activity Index for railway transportation, road transportation, air transportation, postal services, telecommunication, broadcasting, television satellite transmission services, internet, software and information services, monetary and financial services, capital market services and insurance stood at 55% and above. In terms of market expectation, the Business Activity Expectation Index for services was 59%.

Fourth, market sales gradually improved and online retail sales grew fast.

In the first half of 2020, the total retail sales of consumer goods reached 17.23 trillion yuan, down by 11.4% year on year, or 7.6 percentage points slower than the decline in the first quarter; specifically, the figure decreased by 3.9% in the second quarter, the decline of which narrowed by 15.1 percentage points compared with that in the first quarter. In June, the total retail sales of consumer goods reached 3.35 trillion yuan, a year-on-year decline of 1.8%, 1 percentage point slower than the decline in May, or a month-on-month growth of 1.34%. In the first half, analyzed by different areas, retail sales in urban areas reached 14.93 trillion yuan, down by 11.5%, and retail sales in rural areas stood at 2.29 trillion yuan, down by 10.9%. Grouped by consumption patterns, the income of catering was 1.46 trillion yuan, down by 32.8%; and the retail sales of goods were 15.76 trillion yuan, down by 8.7%. The retail sales of goods for basic living and medical supplies grew quickly. The sale of grain, oil and food, beverages and traditional Chinese and Western medicines by businesses above designated size grew by 12.9%, 10.5% and 5.8% respectively, 0.3 percentage points, 6.4 percentage points and 2.9 percentage points higher than the growth in the first quarter. Upgraded consumer goods grew fast. The retail sales of sports and recreational items and that of telecommunication equipment by businesses above designated size grew by 6.1% and 5.8% respectively, despite a decline of 5.1% and 3.6% in the first quarter. Online retail sales reached 5.15 trillion yuan, growing by 7.3% year on year, while that fell by 0.8% in the first quarter. Specifically, the online retail sales of physical goods was 4.35 trillion yuan, up by 14.3%, 8.4 percentage points higher than that in the first quarter, accounting for 25.2% of the total retail sales of consumer goods, or 1.6 percentage points higher than that in the first quarter.

Fifth, the decline of investment in fixed assets narrowed remarkably and the investment in high-tech industries and the social sector picked up.

In the first half of the year, the investment in fixed assets (excluding rural households) reached 28.16 trillion yuan, down by 3.1% year on year, the decline of which narrowed by 3.2 percentage points compared with that in the first five months, or 13 percentage points compared with that in the first quarter. Specifically, the investment in infrastructure was down by 2.7% and that in manufacturing down by 11.7%, the decline of which narrowed by 17 percentage points and 13.5 percentage points respectively compared with that in the first quarter; real estate development went up by 1.9% and down by 7.7% in the first quarter. The floor space of commercial buildings sold reached 694.04 million square meters, down by 8.4%, and the total sales of commercial buildings were 6.69 trillion yuan, down by 5.4%, 17.9 percentage points and 19.3 percentage points slower than the decline in the first quarter respectively. By industries, the investment in the primary industry grew by 3.8% despite a decline of 13.8% in the first quarter; that in the secondary industry went down by 8.3% and that in the tertiary industry down by 1%, 13.6 percentage points and 12.5 percentage points less than the decline in the first quarter respectively. Private investment reached 15.79 trillion yuan, down by 7.3%, 11.5 percentage points slower than the decline in the first quarter. The investment in high-tech industries went up by 6.3%, while that in the first quarter went down by 12.1%; specifically, the investment in high-tech manufacturing industries and high-tech services went up by 5.8% and 7.2% respectively. In terms of high-tech manufacturing, the investment in pharmaceutical manufacturing and the manufacturing of computers and office devices grew by 13.6% and 8.2% respectively. In terms of high-tech services, the investment in services for e-commerce services and commercialization of scientific and technological research findings grew by 32% and 21.8% respectively. Investment in the social sector increased by 5.3%, while declining by 8.8% in the first quarter. Specifically, investment in the health sector and education sector grew by 15.2% and 10.8% respectively, despite a decline of 0.9% and 4% in the first quarter. In June, the investment in fixed assets (excluding rural households) grew by 5.91% month on month. 

Sixth, imports and exports exceeded expectation and the trade structure continued to be optimized.

In the first half of the year, the total value of imports and exports of goods was 14.24 trillion yuan, a year-on-year decline of 3.2%, 3.3 percentage points slower than the decline in the first quarter; specifically, that in the second quarter dropped by 0.2%, and that in the first quarter dropped by 6.5%. The total value of exports was 7.71 trillion yuan, down by 3%; the total value of imports was 6.52 trillion yuan, down by 3.3%. The trade balance was 1.19 trillion yuan in surplus. The trade structure continued to be optimized. In the first half, the import and export of general trade accounted for 60.1% of the total value of the imports and exports, an increase of 0.4 percentage points compared with that in the same period last year. The exports of mechanical and electronic products accounted for 58.6% of the total value of exports, an increase of 0.5 percentage points compared with the same period last year. In June, the total value of imports and exports was 2.70 trillion yuan, a year-on-year increase of 5.1%. The total value of exports was 1.51 trillion yuan, up by 4.3%, and the total value of imports was 1.18 trillion yuan, up by 6.2%. In the first half, the export delivery value of industrial enterprises above the designated size reached 5.43 trillion yuan, a year-on-year decline of 4.9%, 5.4 percentage points slower than the decline in the first quarter. In June, the export delivery value of industrial enterprises above the designated size shifted from a year-on-year decline of 1.4% in May to a growth of 2.6%.

Seventh, consumer prices rose slightly and producer prices for industrial products declined year on year.

In the first half of the year, the consumer price increased by 3.8% year on year, 1.1 percentage points lower than that in the first quarter. Specifically, the price went up by 3.6% in urban areas and up by 4.7% in rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 12.2% year on year; clothing down by 0.1%; housing down by 0.1%; articles and services for daily use up by 0.1%; transportation and communication down by 3.2%; education, culture and recreation up by 2%; medical services and health care up by 2.1%; and other articles and services up by 5%. In terms of food, tobacco and alcohol prices, prices for grain increased by 1%, fresh vegetables up by 3.4%; and pork up by 104.3%, 18.2 percentage points lower than that in the first quarter. Core CPI excluding the price of food and energy went up by 1.2%. In June, the consumer price went up by 2.5% year on year, and down by 0.1% month on month. 

In the first half of the year, the producer prices for industrial products decreased by 1.9% year on year. The figure in June dropped by 3% year on year, or up by 0.4% month on month. In the first half, the purchasing prices for industrial producers decreased by 2.6% year on year. The figure in June dropped by 4.4% year on year and up by 0.4% month on month. 

Eighth, the urban surveyed unemployment rate declined slightly and employment was generally stable.

In the first half, the newly increased employed people in urban areas totaled 5.64 million, accounting for 62.7% of the whole-year target. In June, the surveyed unemployment rate in urban areas was 5.7%, 0.2 percentage points lower than that in May. Specifically, the surveyed unemployment rate of population aged 25-59 was 5.2%, 0.5 percentage points lower than that of the surveyed unemployment rate in urban areas, or 0.2 percentage points lower than that in May. The urban surveyed unemployment rate in 31 major cities was 5.8%, 0.1 percentage points lower than that in the previous month. The employees of enterprises worked an average of 46.8 hours per week. By the end of the second quarter, the number of rural migrant workers reached 177.52 million.

Ninth, the decline of residents' real income narrowed and urban-rural per capita disposable income ratio dropped.

In the first half of the year, the nationwide per capita disposable income of residents was 15,666 yuan, a nominal growth of 2.4% year on year, 1.6 percentage points faster than that in the first quarter, or a real decrease of 1.3% after deducting price factors, a decrease of which narrowed by 2.6 percentage points. In terms of permanent residence, the per capita disposable income of urban households was 21,655 yuan, a nominal growth of 1.5%, or a real decrease of 2%. The per capita disposable income of rural households was 8,069 yuan, a nominal growth of 3.7%, or a real decrease of 1%. By sources of income, the nationwide per capita wage income went up by 2.5% in nominal terms, net operating income down by 5.1%, net property income up by 4.2%, and net transfer income up by 8.2%. The per capita disposable income of urban households was 2.68 times that of the rural households, 0.06 less than that of the same period last year. The median of the nationwide per capita disposable income was 13,347 yuan, a nominal increase of 0.5% year on year. 

Generally speaking, the national economy gradually overcame the adverse impact of the epidemic in the first half of the year and demonstrated a momentum of restorative growth and gradual recovery, further manifesting its development resilience and vitality. However, we should also be aware that some indicators are still in decline and the losses caused by the epidemic need to be recovered. Given the continuous spread of the pandemic globally, the evolving huge impact of the epidemic on the global economy and the noticeably mounting external risks and challenges, the national economic recovery is still under pressure. Next, we should take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, coordinate efforts to advance routine epidemic prevention and control and economic and social development, stay goal-guided and problem-oriented, gather strength and strategize moves, recognize, seek and respond to changes, focus on key areas, address inadequacies and shore up weaknesses. We must make solid efforts to stabilize employment, finance, foreign trade, foreign investment, domestic investment, and market expectations, comprehensively implement the tasks to safeguard residential employment, people's livelihood, market entities, food and energy security, stability of industrial and supply chains and operations at grassroots levels, and ensure the implementation of decisions and arrangements so as to win the battle against poverty, achieve the goal of building a moderately prosperous society in all aspects and promote the long-term and stable growth of the economy.

Shou Xiaoli:

Now the floor is open for questions. Please identify your news outlet before asking questions.

CCTV:

The economy has improved significantly in the second quarter. How would you evaluate the overall performance in the first half? Thank you.

Liu Aihua:

Thank you for your question. According to the data presented in the initial briefing, since the beginning of this year, the impact of the COVID-19 outbreak is unprecedented, plunging the world economy into its worst recession since World War II. In the first half, facing severe risks and challenges, the entire nation coordinated its efforts to advance both prevention and control of the epidemic and continue to promote economic and social development. With the implementation of a series of policies, China's economy shifted from slowdown to gradual recovery. The characteristics of economic performance in the first half are mainly reflected in following five aspects:

First, the main indicators showed restored growth. GDP for the first quarter declined by 6.8% year-on-year, while the second quarter saw growth of 3.2%; The total added value of industrial enterprises above designated size declined by 8.4% in the first quarter, but then grew by 4.4% in the second quarter; The total added value of tertiary industry fell by 5.2% in the first quarter, yet then grew by 1.9% in the second quarter; The decline of total retail sales of consumer goods narrowed by 15.1 percentage points in the second quarter compared to the first quarter; The decline of investment in fixed assets narrowed by 13 percentage points from the first to the second quarters. Therefore, the quarterly indicators showed the economy has obviously improved. Looking at the monthly figures, the total added value of industrial enterprises above designated size grew for three consecutive months. The Index of Services Production increased for two consecutive months. The decline of the total retail sales of consumer goods narrowed for four consecutive months. The total value of exports increased for the third straight month. It is by no means easy for China, a large developing country with a population of 1.4 billion, to effectively control the epidemic in a short period of time and ensure its economy can be shifted from slowdown to a rise. China has made it, which shows the strong resilience and potential of the national economy and reflects the effect of the policies issued by the CPC Central Committee and the State Council in a holistic way.

Second, employment levels and consumer prices are generally stable. In June, the surveyed unemployment rate in urban areas was 5.7%, a slight decrease for the second straight month. Specifically, the surveyed unemployment rate of population aged from 25 to 59 was 5.2%, 0.5 percentage points lower than the overall urban rate. In June, enterprise employees worked on average 46.8 hours per week, up by 0.7 hours from the previous month. The increase of consumer prices showed a downward trend. In the first half-year, consumer price went up by 3.8% year-on-year, 1.1 percentage points lower than the first quarter figure; the core CPI rose 1.2% year-on-year, achieving basic stability. In June, consumer prices rose by 2.5%, within the range of a moderate rise.

Third, basic livelihood was ensured effectively. The poverty alleviation drive has achieved outstanding results. In the first half of the year, in places with a large number of poor people such as Sichuan, Guizhou, and Guangxi, the nominal annual growth of per capita disposable income of rural resident was between 5.5% and 7.6%. We continued to strengthen social security and assist those most in need. In the first half of the year, the nominal growth of per capita transfer income reached 8.2%, of which per capita old-age pension and retirement pensions increased by 9.3%, and social assistant grants and subsidies per capita increased by 13.2%. Basic living consumption of residents maintains rapid growth. In terms of the retail sales of goods above designated size in the first half of the year, grain, oil and food grew by 12.9% year-on-year and daily necessities increased by 5.2%.

Fourth, new growth drivers have become stronger in various emerging fields. In the first half, the added value of high-tech manufacturing and equipment manufacturing grew by 4.5% year-on-year, accounting for 14.7% of the added value of industries above designated size, an increase of 0.9 percentage points from the same period last year. Investment in the high-tech sector continued to increase. In the first half, investment in high-tech manufacturing industries and high-tech services went up by 5.8% and 7.2% year-on-year respectively. Investment in the pharmaceutical industry increased by over 10%, and the e-commerce service industry achieved a gain of over 30%. New infrastructure and other related products grew relatively fast. In the first half, urban rail vehicles in service increased by 13%, and the output of charging piles increased by 11.9%. In the first half, online retail sales of physical goods increased by 14.3% year-on-year, accounting for 25.2% of the total retail sales of social consumer goods, up by 5.6 percentage points from the same period last year.

Fifth, market expectation was generally good. The Manufacturing Purchasing Managers Index stood at 50.9% in June, staying above the threshold for the fourth consecutive month. The Business Activity Index for the non-manufacturing sector was 54.4%, achieving a rise for the fourth straight month.

In general, judging from these five characteristics, it can be seen that China's economy overcame the adverse impact of the epidemic in the first half of the year and rebounded gradually. However, we should also be aware that some indicators in the first half, including GDP, industry, service industry, consumption, and investment, are still in decline. Therefore, growth in the second quarter is just a matter of restorative growth. The losses caused by the epidemic still need to be recovered and there is much work to be done to get the economy back to normal.

CNBC:

I have two questions. First, please introduce the consumption situation in first-tier cities. Second, what impact will the pandemic have on economic growth in the third and fourth quarters?

Liu Aihua:

Thanks for your questions. Let me answer the second question first, which is about the trend of economic growth in the third and fourth quarters. 

The recovery of economic indicators in the first half of the year, especially in the second quarter, shows that the economy's sustained recovery in the second half of the year has foundations. 

First, the stable economic recovery in the first half of the year has laid a solid foundation for a sustained recovery in the second half of the year. Since March, many indicators have seen significant gains or narrower declines, which indicates that the impact of the pandemic is generally controllable, and the Chinese economy has a strong capacity for self-adjustment. Our country has a perfect industrial system, increasingly sophisticated infrastructure and the advantages of a super large market, which will continue to help respond effectively to the impact of the pandemic in the next stage.

Second, during the pandemic, many new industries, business forms and business models have been created, which will continue to provide strong support for the economic recovery. During the first half of the year, we noticed that new business models, such as working from home, online education, intelligent construction, and driverless delivery, have efficiently resolved some problems in our lives. New technologies, such as cloud computing, big data and artificial intelligence, are developing rapidly. New industries, such as the digital economy, smart manufacturing and life and health, have become new growth poles, which will provide more support for economic growth in the next phase. 

Third, the effect of macro policies will further pay off. During the first half of this year, to deal with the pandemic's impact, our country has provided fiscal and taxation support, financial support and comprehensively strengthened the policy of giving top priority to employment. All these policies have paid off so far, which provided experience for better responding to the outbreak's impact in the second half of the year and further strengthened our confidence. Meanwhile, the epidemic has exposed some problems, which prompted us to further address problems and reinforce weak links. We will step up innovation to strengthen the basis for sustained growth and vitality of the economy. 

Given these favorable conditions, we are confident of a sustained economic recovery in the second half of the year. Meanwhile, economic recovery has its foundations, potential and conditions to be realized. However, it must also be emphasized that the rapid spread of the pandemic in other countries has made it difficult for the world economy and trade to recover. The recovery of domestic demand is constrained to some extent, and there is still considerable pressure to keep businesses and employment stable. So we must think about worst-case scenarios, fully understand the breadth, complexity and persistence of the impact of the outbreak, focus on ensuring 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 ensuring stability in the six areas of employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. We should pay close attention to the implementation of policies and work hard to fulfill the goals of economic and social development set for the year. 

Your first question is about consumption in first-tier cities. We need to make a new statistical grouping based on your question and redefine the first-tier cities. You can contact the information office of the NBS after the press conference, and we will reorganize the statistics. Thank you. 

Market News International:

As the speaker said just now, China's economic rebound is expected to continue in the second half of 2020. If so, will the emergency policies adopted in the first half, such as expansionary fiscal and monetary stimuli, be slowed down or phased out? In H1, China's real estate investment registered robust growth, providing considerable support for economic recovery. Will real estate investment remain strong in H2? The total retail sales of consumer goods still suffered a year-on-year decline in June. Do you think China's domestic demand is now obviously weak? What policies will be taken to boost domestic demand?

Liu Aihua:

Thank you for your questions. The first question is whether the policies introduced in H1 will be adjusted. We need to have a correct understanding of the current economic situation. China's economy showed a significant recovery in the second quarter. Most economic indicators improved or declined at a slower pace in H1. Meanwhile, we also need to be aware that, judging from the cumulative speed seen in H1, GDP and most other indicators in such areas as industry, service, investment and consumption are still in a state of decline. Therefore, we define the current economic recovery only as restorative growth. As for policy adjustment in H2, the Government Work Report has made specific plans. Macro policies should be both forceful and sustainable, and they may be adjusted as called for. In other words, the polices we've adopted are flexible, and they will be moderately adjusted according to future developments in H2, as well as the implementation of measures to ensure stability on six fronts and maintain security in six areas.

The second question is about the current situation regarding real estate investment and its trend in H2. China's real estate investment rose 1.9% in the first six months year-on-year. However, many other indicators are still flat, such as floor space under construction , land purchased and sales of commercial housing. So, further observation is required to judge the trend in real estate development in H2.

The third question is about the total retail sales of consumer goods in H1. The total fell 11.4% year-on-year in the first half. It shows that there are still constraints on the recovery of consumption. As regular COVID-19 control is continued, some forms of consumption involving gatherings or human contact are still being restricted. So, catering industry revenue is still only moving towards restorative growth. Concerning the development of the consumer market in H2, as effective epidemic control measures continue to deliver progress, people will find it more convenient to go out for purposes of consumption. In addition, as supply-side structural reform is further advanced, there will be constantly optimized provision for high-quality goods and services. Despite these favorable conditions, we also need to recognize unfavorable ones. As you noticed, China's per capita disposable income increased in nominal terms in the first half of this year, but fell 1.3% in real terms. So, greater efforts will be needed to boost consumption in the second half of the year.

China News Service:

The NBS released data on its surveyed urban unemployment rate for June. Does this truly reflect the current job market situation in China? As college graduates leave university, are they going to face bigger pressures in finding jobs? Thank you.

Liu Aihua:

Thank you for your question. According to the figures, in the first half of this year, the surveyed urban unemployment rate continued a downward trend. China has adopted some strong measures at various levels to stabilize employment and ensure people's well-being, and the employment-first policy is being fully implemented. These efforts have proved to be effective as the surveyed urban unemployment rate kept declining in recent months. The figure was 5.7% in June. The labor participation rate was also similar to last year's level, at only 0.5 percentage point lower than the same period last year. The proportion of furloughed employees, which people concern a lot, also declined to 0.8% in June, basically matching the figure last year. Even without the COVID-19 outbreak, there are also some people on furlough due to various reasons in daily life. Therefore, as we prioritize employment, the situation has made a positive turnaround in the first half of the year.

We can also see that the COVID-19 outbreak has had a significant impact on the job market. In the first half of this year, the number of newly increased urban jobs was 1.73 million lower than the same period last year. Meanwhile, some major groups such as migrant workers have been impacted disproportionally. By the end of the second quarter, the number of rural migrant workers dropped 2.7% year on year, with a reduction of 4.96 million. The unemployment rate of college graduates also hit a record high compared to the same period in previous years due to a decline in demand and certain restrictions in job seeking and interviews caused by the coronavirus outbreak. The surveyed unemployment rate among those with a junior college or higher degree aged 20-24 (mostly new graduates) was 19.3% in June, up 2.1 percentage points compared with the previous month, and 3.9 percentage points higher than the same period last year. Therefore, as we see some positive changes in the employment situation, some major groups still face significant pressures in finding jobs. Our surveyed urban unemployment rate also reflects this trend.

Next, according to the government work report, we will fully implement the employment-first policy, and continue to work hard to stabilize and expand employment. First, we must implement policies to reduce taxes and fees, social security spending and rents to help businesses navigate difficulties in order to stabilize employment. Second, we should encourage market-based employment and solve the employment problem among college graduates through measures such as expanding enrollment in graduate schools. Third, we must provide greater assistance to job seekers, encourage employment in new business models and in flexible forms, and help rural residents seek jobs or start businesses in places close to their homes. Thank you.

South China Morning Post:

Right now, large parts of southern China are hit by severe flooding, and so I wonder whether you have estimated the disaster's impact on the overall economy? Have the impact been taken into account when you estimated GDP data for the second quarter of 2020? How much impact will the disasters, including the current flooding and the COVID-19 epidemic, impose on Chinese economy in the second half of the year?

Liu Aihua:

Thank you for your questions. Recently, there are many reports about the flooding in China's southern regions. I have paid close attention to the impact of the disaster just as has everyone else. The currently released statistics for June reflect the impact on some fields such as consumer prices. The consumer price index (CPI) data in June showed that prices for fresh vegetables rebounded in that month compared to month-on-month and year-on-year declines registered in May. Prices for fresh vegetables went up 4.2% year-on-year in June, compared with the 8.5% decline in May. However, the impact of flooding in other fields is still being closely monitored. We will continue to keep a close watch and take such impact into account in the future calculations.

For the second question, you asked how the flooding in southern regions would affect economic prospects in the second half of the year. Currently, in some flood-hit areas, people's daily life and work indeed have been greatly affected. In the first half of the year, during the fight against the COVID-19 epidemic, we adopted many macroeconomic policies to strengthen counter-cyclical adjustments, and accumulated rich experience in macro-regulation and ensuring policy space. We will pay close attention to and promptly reflect the impact in this regard. Thank you.

China Mining News:

In the first half of 2020, the mining sector provided coal, nonferrous metals and other energy raw materials for the resumption of work and production, making contributions to the gradual recovery of China's economy. We noticed that from January to May, profits from the mining sector decreased by more than 40% compared with the same period last year, and the rate of decline expanded. What is the reason for this? And, do you predict that the profitability of the mining sector will improve in the second half of the year?

Liu Aihua:

Thank you for your question. The profit level of coal and nonferrous metal industries decreased by a large margin from January to May. The profits of enterprises are affected by many factors such as market demand, price, and production and operation costs. The price factor, especially the international imported price, has had a greater impact on these two industries. There was a dramatic fluctuation in international energy prices in the past six months, and April in particular, with a year-on-year decrease of more than 30% in the first half of the year. Therefore, the price has had a great impact on these two industries. Right now, there are many uncertain factors influencing the international price. We need to further observe the trends for profits in the mining sector. Thank you.

Phoenix TV:

We have noticed that the supply-side has recovered faster than the demand-side, as shown by the statistics. What problems will this imbalance in recovery bring? And what policies will be adopted as part of your efforts to deal with these problems? In particular, what efforts will be taken to make up for the lack of domestic demand? Thank you.

Liu Aihua:

Thank you for your question. Your observation is well noted and it is indeed a matter of public concern. Since this year, the supply-side has been recovering faster than the demand-side as far as the cross-sectional data is concerned. I would like to share my views on this matter from several aspects:

First, the COVID-19 epidemic in the first half of this year had an unprecedented impact on the economy, production and people's lives, including their decision-making toward production and life. Its impact on different sectors and various decisions may be due to our lack of experience. So far, the industrial sector has seen better recovery with positive growth for three consecutive months. The production index of the service sector has registered positive growth for two consecutive months, with some businesses in this sector recovering faster, while other sectors such as accommodation and catering are still in deep decline. In comparison, we have also observed that the supply-side has been recovering faster than the demand-side at present. This may be related to the impact of the epidemic on decision-making by different market players. For instance, the production organization on the supply-side may be a process of centralized decision-making, while on the demand-side it may be more a case of decentralized decisions. That is why there have been some differences in the effects of policies.

Second, cross-sectionally speaking, the supply-side recovers faster than the demand-side, and there are differences even within supply and demand respectively. On the supply-side, the recovery of the industrial sector is faster than that of the service sector, with different performances at different stages. For example, when industrial production slumped after being hit hard by the epidemic, some businesses in the service sector, including financial services, information transmission, software and information services, have indeed shown strong resilience. This shows that some businesses have risen against the tide and bucked the trend during the epidemic. The demand-side is also out of sync. Although the retail and investment data is declining, investments are recovering better than consumption, which reflects that the epidemic's impact on investment is smaller than on consumption. Now, there are still some restrictions on consumption involving contacts and gathering, such as accommodation and catering. This recovery will come slowly.

Third, let's look at the longitudinal trends. In terms of time longitudinally, both the supply-side and the demand-side have shown a trend of rebound or narrowing decline. Despite their different paces, the overall recovery cannot be denied. This may be an objective manifestation of gradual economic recovery from the impact of the epidemic. In terms of macro-policies, a total of 90 policies have been adopted involving enterprise bailouts. We will adhere to the fundamental strategy of expanding domestic demand on the demand-side. With these policies, we will gradually realize unimpeded flow in the economy and production demand, thus finally pushing the overall economy back onto a normal track.

Reuters:

2020 is a very important year for competing the building of a moderately prosperous society in all respects. Do you have confidence that China can achieve the goal of doubling GDP and the per capita income of urban and rural residents compared with those of 2010?

Liu Aihua:

Thank you for your question. You are very concerned about the realization of the goal of building a moderately prosperous society in all respects this year.

First, let me talk about the understanding of a moderately prosperous society in all respects. Since the start of reform and opening up, our understanding of building a moderately prosperous society in all respects has been continuously enriched. Already, the supply of adequate food and clothing has been guaranteed for the people. On this basis, the report to the 19th CPC National Congress pointed out that by the time the CPC celebrates its centenary, we will have developed our society into a moderately prosperous one with a stronger economy, greater democracy, more advanced science and education, thriving culture, greater social harmony, and a better quality of life. Therefore, building a moderately prosperous society in all respects is an intact, systematic and comprehensive set of targets.

Second, the goal of building a moderately prosperous society in all respects is consistent with the goals and tasks of the Five-Year Plans. The 13th Five-Year Plan also includes the goal of building a moderately prosperous society in all respects. This year is the final year of the 13th Five-Year Plan. Judging from the current indicators, after much hard work, most of the quantitative indicators set in the 13th Five-Year Plan will be exceeded or fully completed. For example, the task of doubling GDP and the per capita income is currently close to completion. 

Third, this year's Government Work Report pointed out that winning the battle against poverty is a sign of achieving the goal of building a moderately prosperous society in all respects. After years of hard work, by the end of 2019, the country's rural poor population was 5.51 million, and the poverty headcount ratio fell to 0.6%. Alleviating poverty among these people is the hardest nut to crack. The sudden COVID-19 outbreak this year has also caused certain difficulties and challenges for farmers' income, farmers' out-of-town work as well as the sale of agricultural products in poor areas. Therefore, we must adhere to the current goals and standards in accordance with the established deployment, and take effective measures to resolutely win the battle against poverty.

Generally speaking, the decisive foundation for completing the building of a moderately prosperous society in all respects has been laid. As long as the deployment and policy measures set in the Government Work Report are implemented, the goal of building a moderately prosperous society in all respects will surely be achieved on schedule.

China National Radio (CNR):

We have noticed that prices have remained stable in the first half of this year. At present, we are experiencing a flood disaster, as well as the uncertainties in the epidemic situation at home and abroad. What will happen to our prices in the second half of the year? Recently, due to the impact of the COVID-19 outbreak at Xinfadi market in Beijing, pork prices have shown signs of rising. What will happen to pork prices in the second half of the year?

Liu Aihua:

Thanks for your questions about the consumer price. As you mentioned, consumer prices remained generally stable in the first half of this year, with an overall price rise of 3.8% year-on-year, 1.1 percentage points lower than the first quarter. In terms of monthly changes, the price level has been showing a basical downward trend. In June, the consumer price index rose 2.5% year-on-year, growing within a moderate range. The COVID-19 pandemic and heavy floods posed challenges in maintaining stability. However, we made significant progress in this regard by taking various effective measures. Looking at the composition of the consumer price index, the major growth factor is structural, coming mainly from rising food prices. Among the overall growth of 3.8%, food contributed about 80% of the overall growth, having risen by 16.2% in the first half of the year. In June, the food price rise was 11.1%, and the CPI was 0.1 percentage point higher than the previous month. Food costs also form a major contributor to the overall price level. Looking at the major factors influencing prices in the next half-year, prices of industrial products and consumer goods will not see great changes as the supply and demand situation is basically balanced. Food prices will continue to be a major factor. Yesterday, data from the National Bureau of Statistics showed that the overall output of summer grain increased by 0.9%, creating a pretty solid foundation to maintain grain prices and keeping overall food prices stable. So, there is no reason to expect the price of grain to grow significantly, which means that we are capable of maintaining a moderate growth range.

Your second question is about the trend in the price of hogs. Over the past two years, governments at all levels have taken a series of measures, such as increasing the subsidies and ensuring the level of land used for hog production is sufficient. By the end of the second quarter, the number of pigs registered in stock had grown for three consecutive quarters, measured on a quarter-to-quarter basis. Hog production capacity continues to recover. However, there are challenges in recovering the hog production capacity, such as the impact brought about by heavy floods on the number of pigs that are sent to slaughter in some areas. In June, the pork price increased by 81.6% year-on-year, roughly the same as that of May, which was 81.7%. Positive month-on-month growth was recorded. On the one hand, the measures we took previously are taking effect and the hog production capacity is recovering gradually. On the other hand, we should take notice that the floods affected hog production capacity and hence the pork price. Overall, we have seen notable progress in recovering hog production capacity, and the recovered production capacity will have positive impact on the pork price in the next stage.

Third, there is the impact on vegetable prices caused by floods. Recently, the production, storage and transportation of vegetables in some areas have all been affected by floods. The vegetable price this month reported a positive growth compared to last month. Floods are a temporary problem that may heavily influence the supply of vegetables in the short run, especially in certain areas. However, we all know that the cycle for supplying vegetables is relatively short. And with the supportive policies regarding to production and redistribution of vegetables among different areas, we do not expect great fluctuations in vegetable prices and the vegetable prices will not have a significant influence on the overall price trend in the second half of this year.

Currently, fruit prices are still declining and the price for aquatic products remains stable. Taking these aspects into consideration, food prices overall may fluctuate in the short run but will basically remain stable, with some declines. The overall consumer price will continue to remain stable. Thanks.

Hong Kong Economic Herald:

My question is about employment. The word "employment" was mentioned in the Report on the Work of the Government in 2019 for 30 times, while it was mentioned in this year's government work report for 39 times, with an increase of 30 percent in its frequency. It's clear that the employment pressure is severe in the process of economic downturn. What's your opinion on the employment situation in the next half of this year? Thank you.

Liu Aihua:

Thank you for your question. Employment is indeed the focal point of this year, as it was mentioned many times in the government work report. Stabilizing employment and ensuring people's livelihoods are the focus of this year and also the priority of the tasks of ensuring security in the six areas and stability on the six fronts. Focused on stabilizing employment, governments at all levels have taken active measures. Right now, the trend of economic recovery is obvious and the change of the fundamentals will help stabilize and boost employment.

On the basis of a quick survey conducted by the National Bureau of Statistics, the resumption of work and positions maintain a good momentum; enterprises in many industries are adding new job opportunities. Of course, some industries now do not have a strong need for fresh recruitment. However, as the strengthened employment-first policy continues to work, and with the gradual recovery of the fundamentals and enhanced developmental capacities of enterprises, we are confident we can maintain the overall stability of employment in the next half-year. Thank you.

Shou Xiaoli:

Ms. Liu is very familiar with statistics and the situation. With a sheet of paper in hand, she has answered so many questions over the past hour. That's the end of today's press conference. Thank you, friends from the media. See you next time.

Translated and edited by Zhu Bochen, Li Huiru, Wang Yiming, Wang Qian, Yang Xi, Fan Junmei, Zhang Liying, Zhang Rui, Guo Yiming, Wang Wei, Li Xiao, Wang Yanfang, Duan Yaying, Xiang Bin, Zhang Junmian, Yuan Fang, Cui Can, Huang Shan, Mi Xingang, Jay Berbeck, David Ball, Laura Zheng, Geoffrey Murray. 

In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Shen Chunyao, director of the Legislative Affairs Commission of the National People's Congress (NPC) Standing Committee

Zhang Xiaoming, deputy director of the Hong Kong and Macao Affairs Office of the State Council

Chairperson:

Guo Weimin, vice minister of the State Council Information Office of China (SCIO)

Date:

July 1, 2020

Guo Weimin:

Ladies and gentlemen, good morning. Welcome to this press conference. Yesterday, June 30, Chinese lawmakers voted to adopt the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (HKSAR) at the 20th session of the Standing Committee of the 13th National People's Congress, China's top legislature. A decision was also made to list the law in Annex III to the HKSAR Basic Law.

Today, we have invited Mr. Shen Chunyao, director of the Legislative Affairs Commission of the NPC Standing Committee, and Mr. Zhang Xiaoming, deputy director of the Hong Kong and Macao Affairs Office of the State Council, to introduce the law and to take related questions you might have.

First, we will ask Mr. Shen Chunyao to provide an introduction.

Shen Chunyao:

Friends from the media, good morning! Today marks the 99th anniversary of the founding of the Communist Party of China (CPC), and the 23rd anniversary of Hong Kong's return to the motherland. I'd like to take this opportunity to express my congratulations !

On June 30, 2020, the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (HKSAR) was passed unanimously at the 20th session of the 13th NPC Standing Committee. The adoption of the law fully represents the will of the people, and reflects the wishes and aspirations of all ethnic groups in China, including our Hong Kong compatriots. President Xi Jinping signed a presidential order to promulgate the law, which goes into effect on the date of promulgation. On the same day, the 20th session of the 13th NPC Standing Committee also adopted the Decision on the Addition to the List of National Laws in Annex III to the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, listing the law in Annex III to the HKSAR Basic Law. The decision stipulates that the law shall be applied locally in the HKSAR by way of promulgation by the region. According to the latest information, the HKSAR government completed the procedure for promulgation in the gazette at 11:00 p.m. local time yesterday. The law thus comes into effect in the HKSAR and the rest of the country.

Formulating the law on safeguarding national security in Hong Kong is a major step, a key procedure and an important legislative initiative to implement the spirit of the fourth plenary session of the 19th CPC Central Committee and the third session of the 13th NPC. The promulgation and enforcement of the law will effectively prevent, suppress and impose punishment for offences endangering national security in relation to the HKSAR, as well as plug institutional loopholes in safeguarding national security in the HKSAR. The promulgation and enforcement of the law is of profound and far-reaching significance for upholding and improving the institutional system of "one country, two systems" under new circumstances, and safeguarding China's sovereignty, security and developmental interests, as well as maintaining lasting prosperity and stability in Hong Kong.

On Oct. 31, 2019, the fourth plenary session of the 19th CPC Central Committee adopted the Decision of the CPC Central Committee on Major Issues Concerning Upholding and Improving the System of Socialism with Chinese Characteristics and Advancing the Modernization of China's System and Capacity for Governance. The decision vows to uphold and improve the system of "one country, two systems," establish and improve the legal system and enforcement mechanisms for special administrative regions in safeguarding national security, as well as supporting them in strengthening law enforcement. The decision stipulates there can be no tolerance shown in regard to any act designed to challenge the bottom line of the "one country, two systems" principle and advocate secession. Considering Hong Kong's current situation, and in order to implement the spirit of the plenary session, efforts must be made at national-level to promote the development of systems and mechanisms for safeguarding national security, and to establish and improve the legal system and enforcement mechanisms for the HKSAR to safeguard national security. Multiple measures for this purpose are available at national-level. For example, the NPC and its standing committee can make decisions, enact, amend and interpret laws, as well as list national laws in Annex III to the HKSAR Basic Law. The Central People's Government can also issue directives. Related departments of the CPC Central Committee and the State Council undertook earnest study, discussion and evaluation, and, considering various factors, they proposed an approach combining "decision plus legislation" to advance the issue. As you know, on May 28, 2020, the third session of the 13th NPC adopted an important decision, namely, the Decision on Establishing and Improving the Legal System and Enforcement Mechanisms for the Hong Kong Special Administrative Region (HKSAR) to Safeguard National Security. It is an important institutional arrangement made by China's top legislature in accordance with the Constitution and the HKSAR Basic Law, to meet the needs created by new circumstances. The decision provided a constitutional basis for the NPC Standing Committee to formulate related laws.

Shen Chunyao:

The Standing Committee of the National People's Congress (NPC) held its 19th and 20th sessions in mid- and late June successively, and adopted the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region. With the promulgation and implementation of this law, the important institutional arrangements for safeguarding national security in regard to the HKSAR have been shown completely, firstly through the decision of the NPC and then by the law adopted by the NPC Standing Committee. The newly-adopted law consists of 66 articles forming six chapters. These are Chapter I General Principles, Chapter II The Duties and the Government Bodies of the Hong Kong Special Administrative Region for Safeguarding National Security, Chapter III Offences and Penalties, Chapter IV Jurisdiction, Applicable Law and Procedure, Chapter V Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region, and Chapter VI Supplementary Provisions.

This is a comprehensive law displaying three types of legal norms, namely, substantive law, procedural law and organic law, that are fully reflected in the various provisions. The text of the law has been promulgated. Let me provide you with a brief summary of the contents. Firstly, the law clearly defines that the Central People's Government has an overarching responsibility for national security affairs relating to the HKSAR, and it is the duty of the latter under the Constitution of the People's Republic of China to safeguard national security. Second, it clearly defines the important principle of the rule of law to which Hong Kong should adhere so as to safeguard national security. Third, it clearly defines the duties and functions of governmental entities in Hong Kong for safeguarding national security. Fourth, it clearly defines the four categories of offences endangering national security that must be prevented, suppressed and punished, including activities promoting secession, subversion, terrorist activities and collusion with a foreign country or with external elements to endanger national security. It also sets out corresponding penalties in every regard. Fifth, it clearly defines the jurisdiction over cases, applicable law and related procedural matters. Sixth, it clearly defines that an office for safeguarding national security of the Central People's Government in the Hong Kong Special Administrative Region is to be established, and the office is to be known as the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region. It also defines the circumstances in which this office and relevant national authorities will act to exercise jurisdiction over a case concerning any offence deemed to endanger national security, and the procedures to be followed.

In short, we believe that, with strong leadership and effective measures undertaken by the central authorities and with the extensive support of people across the country, including our Hong Kong compatriots, the promulgation and implementation of this law will effectively safeguard the national security in the HKSAR and ensure the steady implementation of the policy of "one country, two systems" there.

That's all I would like to introduce at this stage.

Guo Weimin:

Thank you, Mr. Shen. Now let's welcome Mr. Zhang Xiaoming to give his introduction.

Zhang Xiaoming:

Good morning, friends from the media. Today marks the festive 23rd anniversary of Hong Kong's return to the motherland and the establishment of the Hong Kong Special Administrative Region. Let us first offer wishes for a happy holiday to more than 7.5 million residents there. Many friends here may have noticed two identical numbers in the topic of today's press conference, that is, we have waited for 23 years for implementing Article 23 of the Basic Law of the Hong Kong Special Administrative Region. Now, finally, we have the promulgation and implementation of the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region. It can indeed be said that it was bound to happen like this, and that is just the way it is. It is an incident in history, yet being inevitable as it is in line with the law of development. Taking this opportunity, I would like to share thoughts on four points in regard to the significance and influence of this law.

First, the law marks a milestone in advancing the cause of "one country, two systems."

We were bound to encounter many challenges when pushing forward the unprecedented "one country, two systems" cause, with a need to address new problems continuously. Since the return of Hong Kong, the central government has made five interpretations and four decisions on issues related to the implementation of the Basic Law of the Hong Kong Special Administrative Region. However, this time, it was the NPC that made the decision and the NPC Standing Committee that enacted the law, making it the most important measure taken by the central government in handling Hong Kong affairs. This is the second important law undertaken by the Central Government tailored to the needs of Hong Kong after the Basic Law of the Hong Kong Special Administrative Region. It embodies the general requirements for the comprehensive and accurate implementation of the "one country, two systems" policy, further incorporating its principles and the fundamental bottom line into law, and building a firm institutional protective screen to prevent and control national security risks in the region, with far-reaching influence for the steady implementation of "one country, two systems."

Second, this law represents a new landmark in the central authorities' efforts to improve the governance of Hong Kong.

The central government has long been exploring a major topic: how could we under the principle of "one country, two systems" improve the governance of Hong Kong, a city that retains a capitalist system and has a complicated social and political situation? Last fall, the fourth plenary session of the 19th Central Committee of the Communist Party of China (CPC) came up with important measures for improving the framework of "one country, two systems," bearing in mind the overall picture of advancing the modernization of China's system and capacity for governance. This law constitutes an important step to implement these improvements. The legislation embodies the growing importance the central authorities attach to the top-level design of the system for the governance of Hong Kong, to the rule of law mentality, to addressing in a flexible way both the symptoms and root causes of a problem, to better utilizing the rights provided to the central authorities by China's Constitution and the HKSAR Basic Law and effectively integrating them into the city's governance system so that the overall development of the situation in Hong Kong is well reined in. All of them will be transformed into governance efficacy in the future.

Third, this law is the protector of Hong Kong's prosperity and stability.

Although Hong Kong was under British rule for over 150 years, the city didn't begin to really thrive until the 1980s. It is a thought-provoking fact. One of the most important things we've concluded is that Hong Kong must rely closely on the Chinese mainland and connect with the rest of the world; consolidate its status as an international financial, trade and shipping center; and make use of its unique status and advantages to serve the country's reform and opening-up and modernization drive, thus better interacting with the Chinese mainland and other countries. This is of key importance to Hong Kong's prosperity and stability. If we sit back and let various anti-China and separatist forces stir storms in Hong Kong and even turn the city into a base to launch penetrative and subversive activities against the Chinese mainland, it will by no means be a blessing but a misfortune for Hong Kong, and it will destroy not only the "one country, two systems", but also Hong Kong's prosperity and stability and the well-being of its residents. This law, which will only target a tiny number of criminals endangering national security, will serve as a "sharp sword" hanging over their heads to deter any external forces that interfere in Hong Kong affairs. The law will fully protect not only the life and property and the various rights and freedoms of the vast majority of Hong Kong residents, but also the legitimate rights and interests of foreign investors in Hong Kong. Therefore, the law will stabilize Hong Kong's prosperity and stability. 

Fourth, this law is a turning point for Hong Kong to get back to the right track.

A week ago, at a seminar in Hong Kong to solicit opinions on the draft of the law, Hong Kong people from all walks of life, including businessmen, professionals, schoolmasters and taxi drivers, expressed their dismay at the turbulence and chaos triggered by the now-withdrawn extradition bill last June. Some of them still feel disheartened. They said, some Hong Kong residents want to emigrate because they fear violence and riots and see no way out. A member of Hong Kong's Legislative Council told me that one of his good friends recently applied for immigration to Singapore and got his application approved. However, when he learnt that the country was in the process of drafting a law on safeguarding national security in Hong Kong, he tore his application paper into pieces right away and exclaimed with excitement, "there is way out for Hong Kong." At the seminar, many Hong Kong friends expressed the same view. It is high time for Hong Kong to turn chaos into order and emerge stronger. I believe this law can turn things around and produce game-changing effects. In a word, this very law can help restore order in Hong Kong. 

Just as Mr. Shen said just now, today is also the 99th founding anniversary of the CPC. The CPC has not only created the grand vision of "one country, two systems", but also steadfastly steered the ship of "one country, two systems" to break the waves. I remember that ever after the "one country, two systems" principle was proposed, there were more than one waves of emigration and divestment, but all the fears and misgivings have been erased by time and facts. The introduction of this law today will probably fuel misgivings and uncertainties among some people, which is normal. But I firmly believe that time and facts will prove us right. On the 23rd anniversary of the establishment of the HKSAR, we have sent Hong Kong a "birthday present" in the form of this law. It will surely continue to show its precious value.

That's all I'll say for now, thank you all.

Guo Weimin:

Now it's time for questions. Please indicate the news organization you represent before raising a question. Let's begin. 

CCTV:

It took the NPC Standing Committee just one month to complete legislation for the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region and to add it into Annex III to the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China. Please introduce the legislative procedures of the law. And, did you listen to and seek opinions from the HKSAR during this process?

Shen Chunyao:

It was indeed quite unusual for the NPC and itsstanding committee to issue the Decision of the National People's Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region and the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region successively, like you said, in just over a month. Several factors have played very important roles in this process.

First, there had been widespread demand for legislation. When explaining the draft decision at the third session of the 13th NPC, Vice Chairman of the NPC Standing Committee Wang Chen stated that after the promulgation of the decision, the NPC Standing Committee would actively advance related legislative procedures toward plugging the institutional loopholes in safeguarding national security in the HKSAR, enhancing law enforcement agencies, enforcement mechanisms and law enforcement capabilities for safeguarding national security in the HKSAR, and ensuring the effective implementation of relevant laws in the HKSAR. You might remember that, more than a month ago, when the "two sessions" took place this year, NPC deputies, members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and all sectors of society called for speeding up relevant legislation. The department in charge of legal affairs at the NPC Standing Committee had received many similar demands from different sectors before and after that period. The NPC Standing Committee's work report, delivered by Standing Committee Chairman Li Zhanshu and approved at the third session of the 13th NPC, made clear requirements for this year's legislative work, including expediting relevant legislative process. So for some time, people from all walks of life across the nation, including in the HKSAR, had expressed the same demand and wish. This broad social consensus and legislative demand was the first important factor. 

Second, we laid a solid foundation for completing the task. Taking two steps - making the decision and making the law - to advance work concerning the legal system and enforcement mechanisms for safeguarding national security in the HKSAR was a holistic and systematic approach. The NPC was simultaneously studying the drafting of the relevant law while taking the first step to make the decision. The relevant documents of the third session of the 13th NPC demonstrate the close relationship between the making the decision and making the law. In the explanation to the draft decision at the third session of the 13th NPC, there were clear overall requirements for conducting the task, which included adhering to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implementing the spirit of the 19th CPC National Congress and the second, third and fourth plenary sessions of the 19th CPC Central Committee, and upholding and improving the system of "one country, two systems", as well as the five important principles that should be carefully adhered to and understood in conducting the task. The decision is made up of seven articles. These basic points in the new institutional arrangements had been fully reflected during the NPC session. The second step, making the law, was the inevitable requirement, key link and important component for implementing the NPC's relevant decision. In other words, it was a step to fully implement, fully embody and carry out the spirit and requirements of the third session of the 13th NPC in law. So, when laying the foundation for completing the task, we were considering the second step while taking the first. 

The central government and relevant departments organized competent personnel and legal experts, including those very familiar with the laws of Hong Kong, to form a team focusing on completing the text of the draft law in a short time. This was the result of collective wisdom and efforts. Several time points in the process are worth mentioning. Before the formulation of the draft, we listened to and sought opinions. After the draft was formulated, we also listened to opinions through various methods and channels by presenting the draft text. During the deliberation of the NPC Standing Committee, we also listened to opinions through various methods and channels, including the leadership of the central leading group on Hong Kong and Macao work, competent departments, and the legal affairs organs of the NPC, and the Liaison Office of the Central People's Government in the HKSAR. In Beijing, Shenzhen and Hong Kong, before and after the formulation of the text of the draft law and during the deliberation of the NPC Standing Committee, we all listened to opinions from various groups, especially those from the HKSAR, including the chief executive, other relevant top officials, the president of the Legislative Council, representatives of the pro-establishment camp, NPC deputies from the HKSAR, members of the CPPCC National Committee from the HKSAR and some provincial-level CPPCC members from the region, the legal profession, and other sectors of society, including people from economic, education and business circles. This was a very important feature in the deliberation and formulation of the draft law.

Third, the NPC Standing Committee placed great emphasis on the important legislative agenda of the law on safeguarding national security in the HKSAR. The NPC plenary session and the NPC Standing Committee adjusted their work arrangements according to the regulations of the Legislation Law, so as to accelerate the legislation process. Generally speaking, a draft might become a law after being deliberated one, two or three times, depending on specific cases, by the NPC Standing Committee. According to Article 30 of the Legislation Law, a draft can be submitted for voting after two deliberations if there is a broad consensus. The law on safeguarding national security in the HKSAR was adopted after two deliberations at the 19th and 20th sessions of the 13th NPC Standing Committee.

In general, after the first deliberation, a draft law will be released on the official website of the NPC to solicit public opinions. However, according to Article 37 of the Legislation Law, it can also be withheld from public view on the decision of the meeting of the Council of Chairpersons of the NPC Standing Committee. As the national security legislation for Hong Kong was considered very special and sensitive, the meeting of the Council of Chairpersons, after taking all aspects into consideration, decided not to release the full text of the draft law for public response. Instead, it was decided to listen to and solicit opinions from all relevant subjects, especially those in Hong Kong, through various channels and means. Opinions were also solicited from dozens of central and state organs, relevant provinces, autonomous regions and municipalities, as well as cities with districts in the vicinity of Hong Kong and Macao. Moreover, opinions from experts and scholars were closely studied. During the deliberation process, opinions from all walks of life, including those from members of the NPC Standing Committee, were also closely studied. Therefore, this law gathered a broad consensus, reflecting the spirit of the CPC Central Committee, as well as the common will and aspirations of the Chinese people including our Hong Kong compatriots. The law was drawn up in full compliance with the legislative procedures of China.

There was one more job after the adoption of the law, which I mentioned just now, that is, the newly-adopted law should be added to Annex III of the HKSAR Basic Law. This was based on the stipulations and requirements of the NPC decision and the HKSAR Basic Law. It involved a very important procedure: The NPC Standing Committee, before adopting a decision to add the law to Annex III of the HKSAR Basic Law, should consult its HKSAR Basic Law Committee and the HKSAR government. This was also a very important channel to solicit the opinions of a wide range of Hong Kong society including its government. The process was completed before June 30, in a short period of time, though. Therefore, the legislation and relevant decisions of the NPC Standing Committee were strictly in line with the legal procedures of China.

TASS:

Media outlets in some countries have recently published editorials claiming the law on safeguarding national security in HKSAR is a move that is against the principle of "one country, two systems". What's your comment on this? In addition, the same countries even threatened that China would become subject to severe sanctions. What's your take on that?  

Zhang Xiaoming:

First, the law on safeguarding national security in the HKSAR fully complies with the "one country, two systems" principle. It perfectly combines upholding the "one country" prerequisite and respecting the differences between "two systems". The purpose of the legislation is actually to safeguard "one country, two systems", and the content of the law does not go beyond the established framework. Its legislative effect is now foreseeable, and it will ensure the steady and long-term implementation of the "one country, two systems" policy. Certain occurrences deviating from the right track of the "one country, two systems" principle have occurred in Hong Kong, including some that have even challenged the bottom line of this policy. This law, to some extent, is intended to correct these deviations. Figuratively speaking, it intends to move closer to the side of "one country". This is ultimately to uphold and improve the "one country, two systems" policy rather than change it.

I noticed that certain politicians in some countries said we are now practicing a policy of "one country, one system" in Hong Kong. If that was so, it would be easy. We could simply implement China's national laws, including the Criminal Law, the Criminal Procedure Law and the State Security Law, in the HKSAR. Why would we go to such lengths to tailor-make a specific law on safeguarding national security in Hong Kong? A key issue lies in whether one understands the "one country, two systems" policy fully and faithfully. We all know that the central government has been repeatedly stressing the importance of fully and faithfully implementing this policy, because some people in Hong Kong and somewhere else in the world always intentionally distort it. Every time when the central government exercises certain powers, some people in Western countries will jump out and unwarrantedly accuse it of undermining the "one country, two systems" policy and of eroding Hong Kong's high degree of autonomy. It seems to them that the central government of China should keep out of Hong Kong's affairs, while they can point their fingers at will. But, how could it be possible for the central government to sit and do nothing when the anti-China forces seeking to disrupt Hong Kong are rampantly carrying out acts and activities to split the country and jeopardize national security? Is there any country in the world that would turn a blind eye to the constant occurrence of crimes endangering its security?! "One country, two systems" is our national policy. No one cherishes it more than us; no one understands its true essence better than us; and no one enjoys more rights to define and interpret it than us.

As for the comments you have just mentioned, that some countries are threatening to impose severe sanctions on certain Chinese officials, I think that is the logic of banditry. What we are doing right now is formulating a law on safeguarding national security in one of China's local administrative regions. It's none of your business, because it's entirely our own domestic affair. What I have done should not offend you, so why should you use force against me? Hong Kong people like to ask, "Is there any mistake?" and say, "It's none of your business!" It is certain that we are not scared by these threats. The days when Chinese people took cues from others and were at their beck and call are long gone.

Sing Tao Daily:

Hong Kong society pays much attention to the issues of law enforcement and jurisdiction over criminal cases. Does the Office for Safeguarding National Security of the Central People's Government in the HKSAR belong to the entities set up in the HKSAR by departments of the Central Government, covered in Article 22 of the Basic Law of the HKSAR of the People's Republic of China? According to Article 60 of the Law of the People's Republic of China on Safeguarding National Security in the HKSAR, the acts performed in the course of fulfilling the duty by the office are not to be subject to the jurisdiction of the HKSAR. So, how should we understand this? With the Law of the People's Republic of China on Safeguarding National Security in the HKSAR coming into force, how will the office perform its duties? Will criminal suspects be sent to Chinese mainland for trial? Will they be tried in accordance with the Law of the People's Republic of China on Safeguarding National Security in the HKSAR or the law prevailing in the Chinese mainland? Thank you.

Zhang Xiaoming:

The central authorities have the power and the responsibility to take all necessary measures to safeguard national security. This is a general principle and the basic starting point in considering specific issues. According to the Law of the People's Republic of China on Safeguarding National Security in the HKSAR, the Central People's Government establishes in the HKSAR an office for safeguarding national security. The name of the office is specified in the Law as the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region. This office is established on the basis of the decision taken by the National People's Congress last month, and the just adopted The Law of the People's Republic of China on Safeguarding National Security in the HKSAR. Its name also shows it is an organ of the Central People's Government. Thus, it's different from "offices set up in the Hong Kong Special Administrative Region by departments of the central government, or by provinces, autonomous regions, or municipalities" as written in Article 22 of the Basic Law of the HKSAR of the People's Republic of China. They are not the same thing.

According to Article 60 of the Law of the People's Republic of China on Safeguarding National Security in the HKSAR, actions performed in the course of fulfilling the duties of the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region and its staff in accordance with this law, are not subject to the jurisdiction of the HKSAR. This is very clear, and it means the executive, legislative and judicial organs of the HKSAR cannot intervene. In other words, they have no means to seek to govern the acts performed by the office and its staff, deemed necessary by the office in performing its duties in accordance with the law. Because the power exercised by the office extends beyond the autonomy of the HKSAR, and many of the cases the office will investigate involve state secrets, it's entirely reasonable that the exercise of its legal duties should not be subject to the jurisdiction of the HKSAR. This provision also refers to the relevant provisions of the Law of People's Republic of China on Garrisoning the Hong Kong Special Administrative Region as well as certain international practices. As we know, there were three organs dispatched by the Central People's Government to the HKSAR. These are the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region, the Office of the Commissioner of the Ministry of Foreign Affairs in the Hong Kong Special Administrative Region, and the Hong Kong Garrison of the Chinese People's Liberation Army. The Law of People's Republic of China on Garrisoning the Hong Kong Special Administrative Region has such provisions. Since the establishment of the Office for Safeguarding National Security of the Central People's Government in the HKSAR, the number of the organs dispatched by the Central People's Government to HKSAR has, therefore, become four. In the United States, there exist federal and local state judicial systems. In regard to some issues, the states have no rights to assume overall governance. However, this does not mean that no one is responsible to the Office for Safeguarding National Security of the Central People's Government in the HKSAR. The Law of the People's Republic of China on Safeguarding National Security in the HKSAR provides strict regulations on the procedures and supervisory mechanisms for the office in performing its duties.

You have asked several questions on how the Office for Safeguarding National Security of the Central People's Government in the HKSAR will perform its duties. According to Article 55 of the Law of the People's Republic of China on Safeguarding National Security in the HKSAR, the Office for Safeguarding National Security of the Central People's Government in the HKSAR will exercise jurisdiction in three specific situations. The law enforcement work of the office mainly focuses on initiating investigation into specific cases, taking necessary investigatory measures, and arresting relevant criminal suspects after submitting the case to the designated people's procuratorate for approval. As for the following steps, including "Jian Kong" in Hong Kong law or "Qi Su" in law on the mainland, as well as trials, the law clearly stipulates that the Supreme People's Procuratorate designates a prosecuting body to undertake this role, and the Supreme People's Court designates a court to adjudicate on it. The reason why the law has such provisions is that Hong Kong has a different legal system from that of Chinese mainland. The relevant authorities of the central government and the relevant authorities of the HKSAR form two different law enforcement and judicial bodies that should, and indeed can only enforce their own laws. It is impossible to ask Hong Kong police, prosecutors or judges to enforce the law of Chinese mainland, nor ask police, prosecutors or judges of Chinese mainland to enforce the law of Hong Kong. Due to lack of understanding, such activities will lead to conflicts and confusion in terms of jurisdiction and application of the law. Therefore, in accordance with the design and provisions of the Law of the People's Republic of China on Safeguarding National Security in the HKSAR, the law enforcement and judicial teams of the central government and the HKSAR authority will have separate but complete jurisdictional processes consisting of case filing and investigation, examination and prosecution, trial and punishment. The two teams will be responsible for themselves, featuring clear division of labor and jurisdiction. Meanwhile, they will support, coordinate with and complement each other, establishing a relationship of support, coordination and complementarity, and jointly constituting a system and mechanism for safeguarding national security in the HKSAR. That's my answer.

Guangming Daily:

As we know, the law is called the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, and it not only covers the Hong Kong Special Administrative Region (HKSAR). How do you interpret safeguarding national security in the HKSAR? Thank you.

Shen Chunyao:

The key words are safeguarding national security in the HKSAR. Let us take a minute to look back over progress that has been made. According to the Decision at the fourth plenary session of the 19th Central Committee of the Communist Party of China (CPC) last year, efforts must be made to establish and improve the legal system and enforcement mechanisms for the special administrative regions to safeguard national security. Later, efforts were focused on the HKSAR — because we another special administrative region. The third session of the 13th National People's Congress (NPC) this year decided, at the national level, to establish and improve the legal system and enforcement mechanisms for the HKSAR to safeguard national security. As you said, the Law of the People's Republic of China on Safeguarding National Security in the HKSAR includes, but is not limited to, the HKSAR. So, we can interpret safeguarding national security in the HKSAR from the following three levels:

First, the HKSAR should safeguard national security in accordance with the law. It has been made clear in the Decision at the national people's congress and the newly adopted law that the HKSAR should fulfill its constitutional duty. The HKSAR's administrative, legislative and judicial bodies should fulfill their duties in safeguarding national security in accordance with this law and other related laws and regulations. The HKSAR is extremely important and assumes major responsibilities.

Second, national security should be safeguarded in the HKSAR. As Mr. Zhang said, the central government will set up an office, called the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region. Several existing offices of the central government in Hong Kong are also, to some extent, related to safeguarding national security. As such, the second interpretation is that it is regional, but is not limited to safeguarding national security in the HKSAR.

Third, the Central People's Government has an overarching responsibility for national security affairs relating to the HKSAR. What is the overarching responsibility? It is the top responsibility, the ultimate responsibility, and the overall responsibility. This level contains more meaning than the previous two - the HKSAR itself should safeguard national security and safeguarding national security in the HKSAR. The central government is in Beijing and it has overarching responsibility for national security affairs related to the HKSAR. As such, we should understand the law in a broader sense. All six chapters in the law have clear stipulations. The second chapter specifies the HKSAR's duties and institutions of safeguarding national security, while the fifth chapter specifies the institutions of the Central People's Government in the HKSAR for safeguarding national security . So overall, the law has a broad significance.

Reuters:

Could you please elaborate on the definition of collusion with foreign forces? Specifically, what actions constitute inciting hatred towards the central government or the Hong Kong government? How broadly will this collusion with foreign forces be applied? 

Zhang Xiaoming:

First of all, Article 29 specifies the meaning of "collusion with a foreign country or with external elements to endanger national security." "Collusion" here does not refer to normal international exchanges, which do not involve suspected crimes. Some people in Hong Kong may not be familiar with the word "collusion." Actually, it can be found in the criminal law of China and other countries as well. "Collusion," a derogatory word, literally means a secret agreement between two or more parties to do bad things. But in criminal law, collusion is not about merely doing bad things, but committing criminal offenses. Article 29 specifies acts that could be classified as collusion and what kind of collusion may constitute a crime.

I have the legal text here and it specifies very clearly. It includes two main kinds of misdeeds. The first involves those who steal, spy, obtain with payment, or unlawfully provide State secrets or intelligence concerning national security for a foreign or external institution, organization or individual. It is similar to what we usually call espionage. The second involves those who request a foreign or external institution, organization or individual, or conspire with them, or directly or indirectly receives instructions, control, funding or other kinds of support from them to commit crimes. Collusion here involves committing criminal acts with a foreign country or with external elements. "Collusion with a foreign country or with external elements to endanger national security" should involve misdeeds done deliberately. Article 29 lists five acts that may constitute this crime.

Just now you asked what the term "provoking hatred" refers to. First, I would like to say that the word "hatred" or the term of "provoking hatred constitutes a crime" is taken from the laws of Hong Kong. There is the Crimes Ordinance in Hong Kong's existing laws. Article 9 and Article 10 of the Crimes Ordinance stipulate that it may constitute a crime to incite hatred among residents and against the government. This shows that, in the process of enacting this law, the actual situation of Hong Kong, the provisions of Hong Kong's existing laws and some concepts and customs of Hong Kong's common laws, were fully considered and adopted as much as possible. Of course, a general sense of "hatred" will not constitute a crime. In this law, it is clearly stipulated that "provoking hatred" which may cause serious consequences may constitute a crime. For example, inciting the whole society's hatred against the government by spreading rumors may constitute a crime, similar to a case in the turbulence over the amendment bill last year that impressed me deeply. Last year, there was a rumor about the killing of people at the Prince Edward Station in Hong Kong, which led to social discontent against the Hong Kong police. It was groundless. Some rumors may be made against the central government, and those malicious ones that cause serious consequences may constitute a crime. Acts or activities of colluding with foreign forces to endanger national security can be treated and punished as a crime. For example, in last year's turbulence over the amendment bill, some people went abroad to implore foreign governments to enact laws to impose sanctions on the Chinese government. This was intentional, and can be punished as a crime if it causes serious consequences.

China Daily:

Article 23 of the Basic Law of the HKSAR stipulates that the HKSAR shall enact laws on its own to prohibit any act and activity endangering the national security. After the Standing Committee of the NPC completes this particular piece of legislation, will the HKSAR still need to complete the legislative process in regard to Article 23? How should the relationship between Article 23 and relevant laws passed by the NPC Standing Committee, as well as the existing laws in Hong Kong be handled? Thank you.

Shen Chunyao:

Article 23 of the Basic Law of Hong Kong is the most well-known clause both in Hong Kong and on the mainland. Therefore, when our country is taking legislative measures this time, including decisions made by the NPC and the promulgation of laws by the NPC Standing Committee, many people are concerned about Article 23. This issue has been studied seriously in the process of forming, proposing and promoting the work plan of "decision plus legislation." Article 3 of the NPC Decision on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region adopted at the third session of the 13th NPC made clear requirements. And Article 7 of the newly adopted Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region has also clearly stipulated that HKSAR shall complete, as early as possible, legislation for safeguarding national security as stipulated in the Basic Law of Hong Kong and shall refine relevant laws.

Just now, Mr. Zhang mentioned 23 years, which is a long period of time indeed. Article 23 also happens to relate to the same number. So, the requirement for HKSAR to complete the legislative process as early as possible is very clear. HKSAR's chief executive and the HKSAR government have also made clear statements that relevant laws will be refined after the promulgation of national laws. I would like to explain the following situations, as many Chinese people including Hong Kong compatriots are very concerned about.

First, what does Article 23 stipulate? It stipulates that HKSAR should enact laws on its own to prohibit seven types of acts, including treason, secession, sedition, subversion against the Central People's Government, and theft of state secrets, as well as two types of activities related with foreign political organizations or bodies. Article 6 of the decision adopted by the third session of the 13th NPC authorized the NPC Standing Committee to enact relevant laws to effectively prevent, suppress and impose punishment for four types of acts and activities endangering national security, namely, secession, subversion of state power, organization and perpetration of terrorist activities, and collusion with a foreign country or with external elements to endanger national security in relation to the HKSAR. So, Article 23 lists seven types of acts and activities, whereas the national security law stipulates four. Secession and subversion are included in both. As for the elaboration of subversion, it is "subversion of the Central People's Government" in Article 23; while it is "subversion of state power" in the national security law, whose connotation is more extensive and comprehensive.

Second, the two are very different. In addition to the four categories of crimes endangering national security that are punishable, the newly introduced law also includes a lot of other important content. I just mentioned that the newly introduced law displays three types of legal norms, namely, substantive law, procedural law and organic law. To expand my interpretation a little bit, I would say the content has "two levels," including institutional arrangements at the special administrative region level and at the national level. And "two aspects:" one is to establish and improve the legal system, and the other is to establish and improve the enforcement mechanisms. Namely, the two aspects of the legal system and the enforcement mechanisms. The legal norms of substantive law, procedural law and organic law I just mentioned are all included. That is to say, the newly introduced law contains much broader content than that originally envisaged for Article 23 of the HKSAR Basic Law.

Third, it is not a replacement. Neither the Decision of the NPC nor the law promulgated by the NPC Standing Committee can replace the provisions of Article 23 in the HKSAR Basic Law that require the HKSAR to make legislation on its own.

Fourth, the HKSAR shall perform its duties of safeguarding national security, including completing the relevant legislation as stipulated in the Basic Law as soon as possible. There is also a sentence clearly stated in the law, "refine relevant laws," which means that the establishment and improvement of the legal system for safeguarding national security at the level of the HKSAR may not be limited to the legislation as stipulated by the Article 23. Last year, there was a case in the HKSAR, which was based on the current Societies Ordinance and the Crimes Ordinance. There are still some local laws in Hong Kong that are also related to national security. Therefore, improving the legal system at the special administrative region level certainly includes enacting the legislation required by Article 23 of the Basic Law as soon as possible, as well as other aspects.

Finally, there is one more important point. Any legislation of the HKSAR to safeguard national security and its implementation must not conflict with the NPC's Decision and the law newly adopted by the NPC Standing Committee, which are at the national level. These are important institutional arrangements. The third session of the 13th NPC, and the 19th and 20th sessions of the Standing Committee of the 13th NPC have made clear judgments: The Decision and the law are in compliance with China's Constitution and the HKSAR Basic Law. The law is also in compliance with the spirit of the NPC's Decision. Therefore, this is an overall and closely-related institutional arrangement that should be able to be effectively implemented.

Hong Kong Ta Kung Wen Wei Media Group:

The law on safeguarding national security in Hong Kong stipulates that a resident of the Region who stands for election or assumes public office shall confirm in writing or take an oath to uphold the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China and swear allegiance to the Hong Kong Special Administrative Region of the People's Republic of China in accordance with the law. It also stipulates that a person who is convicted of an offence endangering national security by a court shall be disqualified from standing as a candidate in the elections and from holding any public office upon conviction. Is this to disqualify the opposition before the Legislative Council election in September? Will opposition candidates lose their eligibility for opposition to the law on safeguarding national security in Hong Kong? Does allegiance to the HKSAR mean allegiance to the People's Republic of China? Thank you.

Zhang Xiaoming:

The public servants' oath and allegiance system is standard international practice. The public servants' oath and allegiance system stipulated in Article 6 of the law on safeguarding national security in Hong Kong refer to the provisions of public servants' oath and allegiance in Article 104 of the Basic Law. There are two differences between what is in the law on safeguarding national security in Hong Kong and Article 104 of the Basic Law. First, the scope of sworn allegiance has been broadened, and it is not about just a few objects defined by the Basic Law, including the chief executive, principal officials, members of the Executive Council and the Legislative Council, judges of the courts at all levels and other members of the judiciary. The new scope is not limited to these categories of people, but includes all public servants. Second, the national security law clearly stipulates that people who assume public office through election shall confirm in writing to uphold the Basic Law of the HKSAR of the People's Republic of China, and are willing to swear allegiance to the HKSAR of the People's Republic of China when they stand for election. In fact, the HKSAR government adopted this approach back in 2016. Whether you stand in the Legislative Council election or the district council elections, you must sign a document making such a commitment. Now, Hong Kong's national security law actually legalizes practices already effective in the region. This is entirely reasonable and very necessary.

I need to add one point here. Whether it is the oath and allegiance system stipulated in Article 6 of the law on safeguarding national security in Hong Kong or the content of the allegiance swearing stipulated in Article 104 of the Basic Law, the words "allegiance to the HKSAR of the People's Republic of China" mentioned there undoubtedly include the meaning of allegiance to the country. The reasoning for this is also obvious and is determined by the legal status of the HKSAR. It is an inseparable part of the People's Republic of China and a local administrative region enjoying a high degree of autonomy in the People's Republic of China. Of course, the objects of public servants' oaths of allegiance should first include the state. You cannot separate the HKSAR from the People's Republic of China, and understand the oath of allegiance merely as allegiance to the HKSAR. I am not saying this pointlessly: some people in Hong Kong do have such an opinion. There is a legal basis for my understanding. In addition to my interpretation of some basic provisions of the Basic Law just now, the NPC Standing Committee previously explained the provisions of Article 104 of the Basic Law concerning oaths in November 2016. The explanation made it clear that swearing allegiance refers to the legal commitments to the People's Republic of China and its HKSAR, which is legally binding. It clearly clarifies the two subjects.

As for your question about whether the national security legislation will be used to provide legal basis for disqualifying opposition candidates in September's Legislative Council election in Hong Kong, I have to say, such speculation about the purpose of the legislation is of an ultra-utilitarian and short-sighted nature. The fundamental purpose of the central government's legislation of such an important law is to safeguard China's national security, restore stability in the HKSAR, and ensure the sound and sustained implementation of the "one country, two systems" principle, which is a much higher purpose than all the speculations. 

You have just asked whether opposition candidates would be disqualified due to their negative attitude to the national security law for Hong Kong. This question needs to be seriously considered. However, I believe that the HKSAR government will provide a specific definition in this regard in accordance with the Basic Law of the HKSAR, the national security law for the HKSAR and relevant provisions of other laws in force there. I would like to stress that the national security legislation doesn't target the opposition or the "pan-democratic" camp in the HKSAR as a hypothetical enemy. This is not our point. The legislation targets only a very few criminals that seriously undermine national security, and does not focus on the entire opposition camp. Hong Kong is a pluralistic society with diverse political views. The implementation of the "one country, two systems" in Hong Kong already speaks volumes regarding the political tolerance of the central authorities. Different political views, including those not favoring the government's approach, can still exist. Comrade Deng Xiaoping once said that, after the return of Hong Kong, the local people could still condemn the CPC if they so wished; however, they should not take any actions or turn Hong Kong into an anti-mainland base under the pretext of promoting "democracy". That is to say, there are bottom lines and boundaries that cannot be crossed in regard to the "one country, two systems". A capitalist society also has political game rules and bottom lines. Therefore, all parties should abide by the rules and avoid breaching established bottom lines. In this regard, I think the opposition in Hong Kong should undertake reflection and make appropriate adjustments.

Xinhua News Agency:

According to the law on safeguarding national security in the HKSAR, the central government have jurisdiction over four categories of crimes endangering national security. What principles and approaches will the central government follow when exercising jurisdiction in regard to such cases? How will the central government and the HKSAR define their respective jurisdiction in this regard?

Shen Chunyao:

This question is very important. Article 55 of the national security law makes stipulations concerning the circumstances under which the central government will exercise jurisdiction over cases concerning offences endangering national security as defined under this law. First, it is the duty of the HKSAR, under the constitution, to safeguard national security. The law stipulates that the HKSAR establishes the Committee for Safeguarding National Security. Its nature is also defined. Article 12 stipulates that the committee assumes primary responsibility for safeguarding national security in the region "under the supervision of, and accountable to, the Central People's Government". This is the overall requirement to be followed in exercising jurisdiction over handling and trial of cases. Article 40 stipulates that the HKSAR has jurisdiction over cases concerning offences as defined under this law, which is one of the general provisions. However, this also includes the following proviso: "except under the circumstances specified in Article 55 of this law" that makes stipulations concerning the specific circumstances under which the Office for Safeguarding National Security of the Central People's Government in the HKSAR will exercise jurisdiction over a case involving an identified offence under this law. What are the specific circumstances? Under the law, the office exercises jurisdiction over a case concerning any offence deemed to endanger national security, in the following circumstances: if the case is complex due to the involvement of a foreign country or external elements, thus making it difficult for the region to exercise its jurisdiction; a serious situation occurs where the government of the region is unable to effectively enforce this law; or a major and imminent threat to national security has occurred. Realistically speaking, we are unwilling to see Hong Kong facing such difficulties and major and imminent threats, but institutional building must take all risks and factors into consideration.

Under these specific circumstances, the initiating procedure of the jurisdiction of the office for safeguarding national security in regard to cases has very strict and specific stipulations. What procedures should be followed? First, the Government of the Hong Kong Special Administrative Region or the office itself shall make a request. Second, the request, no matter who makes it, will be approved by the Central People's Government. Following such procedures, and only under the three circumstances already mentioned, can the jurisdiction of the central authorities over relevant cases be initiated and exercised. When the office exercises jurisdiction over a case concerning any offence endangering national security, the enforcement of this law consists of a series of related links. The office first initiates an investigation into the case, the Supreme People's Procuratorate designates a prosecuting entity to prosecute it, and the Supreme People's Court shall designate a court to adjudicate it. The Criminal Procedure Law of the People's Republic of China and other related national laws shall apply to procedural matters, including those related to criminal investigation, examination and prosecution, trial, and execution of penalty. Overall, this is a complete set of law enforcement and judicial activities, which are stipulated in Articles 55, 56 and 57 of the law.

It is important to note that the Office for Safeguarding National Security of the Central People's Government in the HKSAR and the relevant national authorities only exercise jurisdiction over a very small number of cases that may leave the country's national security in grave peril, as stipulated in the law. Although these cases are rare, the legal institutional arrangements must exist. This is also the manifestation of constitutional order of the HKSAR as mandated by the Constitution and the Basic Law, and the central government's overall jurisdiction over HKSAR. It supports and strengthens the effective law enforcement and judicial activities of the law enforcement and judicial authorities of the HKSAR. It can help prevent the possible situation or the situation that may invoke Article 18(4) of the Basic Law of Hong Kong, where a "State of Emergency" is declared. Once that happens, the situation would be pretty serious. The central government exercising jurisdiction over certain cases under certain circumstances can help avoid the severe situation, as stated under Article 18(4) of the Basic Law. So that we can try to avoid such severe situations and safeguard national security in the HKSAR with low-intensity approach. In conclusion, this institutional arrangement is an integral part of the legislation.

The Times:

What measures in the national security law can guarantee judicial independence in Hong Kong? The national security law stipulates that the chief executive designates judges. Does this violate the spirit of judicial independence? Thank you.

Shen Chunyao:

The Constitution of China clearly stipulates that the people's courts and the people's procuratorates exercise power independently, free from interference by any administrative organ, public organization or individual. This is the clear provision on the independent exercise of judicial power and procuratorial power in the country's rule of law. There are also very clear provisions in the Basic Law of the HKSAR. It is clearly stipulated under Article 85 of the Basic Law that the courts of the HKSAR shall exercise judicial power independently, free from any interference. Members of the judiciary shall be immune from legal action in the performance of their judicial functions. The Basic Law also has clear provisions for prosecution. Article 63 clearly stipulates that the Department of Justice of the HKSAR shall control criminal prosecutions, free from any interference. Judicial independence is clearly stipulated and implemented in accordance with the Constitution, the Basic Law, and other relevant laws.

Just now, you have mentioned the judges who handle cases concerning offence endangering national security. There is a relevant provision in the national security law, which is also an institutional rule. Under Article 44 of the national security law, the chief executive shall designate a number of judges from the magistrates, the judges of the District Court, the judges of the Court of First Instance and the Court of Appeal of the High Court, and the judges of the Court of Final Appeal to handle cases concerning offence endangering national security. It will not affect the independent exercise of judicial power by court judges and is an issue in different dimensions.

Designating judges has the following implications: (1) Judges to be designated will be existing judges, not other people who are not judges. (2) The designated judges are responsible for cases concerning offences endangering national security. Other judges, not so designated, will still be able to handle other cases. The types of judicial cases are quite diverse. Cases concerning offence endangering national security are only one of them. (3) Designating a number of judges from the magistrates, the judges of the District Court, the judges of the Court of First Instance and the Court of Appeal of the High Court, and the judges of the Court of Final Appeal means making a list within a certain range. In specific trials, the judges will be chosen according to the arrangements of existing provisions. (4) The law clearly stipulates that before making such designation, the chief executive may consult the Committee for Safeguarding National Security of the Hong Kong Special Administrative Region and the Chief Justice of the Court of Final Appeal. (5) Speaking specifically about the trial of the case, it is still an independent trial without any interference. Therefore, such an institutional arrangement reflects the HKSAR's constitutional responsibilities, especially the main responsibility of maintaining the national security of the Committee for Safeguarding National Security of the Hong Kong Special Administrative Region. At the same time, it takes the actual situation of Hong Kong's judicial and judge system into consideration. It would also be conducive to improving the efficiency of trials, as the designated judges on the list may have rich experience and be good at handling such cases, which could help unify judgment standards because this is a type of case and this type of case may have relevance and its characteristics.

Take the characteristic of cases of "committing secession" and "subverting the state power." We can't let these offences happen. If the country is divided and the state power is subverted, how can you prosecute the crimes? This is a characteristic of this type of crime. The state power of the People's Republic of China, be it the Central People's Government or the local government authorities at all levels, including the HKSAR government -- the whole country will never tolerate the offences of secession and subversion. We cannot allow criminals to achieve such an ultimate goal. This is the characteristic of cracking down on such crimes. We determine the legal standards which apply to the relevant crime based on the characteristics of such cases. Therefore, the system of designating judges is conducive to formulating a relatively unified standard of judgment and making clear the rules and norms of specific applications of the law.

CGTN:

Article 66 of the HKSAR national security law states that this law shall come into force on the date of its promulgation. Does this mean that crimes endangering national security will not be prosecuted if they were committed before the law is promulgated? Thank you.

Zhang Xiaoming:

Concerning retroactivity, the HKSAR national security law is consistent with the common practices in international criminal laws, that is, the law is not retroactive. It is clear and also shows that the law follows the principle of modern rule of law. Meanwhile, it must be noted that the laws in force in the HKSAR, including the Crimes Ordinance, the Public Order Ordinance, the Societies Ordinance, and the Official Secrets Ordinance, contain provisions concerning national security. These provisions shall be applied to punish crimes that have already been committed which endanger national security. Article 8 of the HKSAR national security law reads: "In order to safeguard national security effectively, the law enforcement and judicial authorities of the Hong Kong Special Administrative Region shall fully enforce this Law and the laws in force in the Region concerning the prevention of, suppression of, and imposition of punishment for acts and activities endangering national security." This shows that it is the legal responsibility of administrative, law enforcement and judicial authorities of the HKSAR to punish acts and activities endangering national security by applying the laws in force in the HKSAR. 

Of course, the function of a criminal law is not limited to the punishment of crimes, but more importantly, it shall be applied to prevent crimes. Therefore, we sincerely hope that after the HKSAR national security law is promulgated, the Hong Kong society can seriously study and understand this law, and enhance the national consciousness, and the awareness of national security and the rule of law. In particular, the missed lessons in this regard shall be made up in school education. We hope that all young people in the HKSAR can love both our country and the region, observe disciplines and obey laws, and have a promising and bright future.

Phoenix TV:

Since the HKSAR national security law came into force, people have been concerned about whether the rights and freedoms of Hong Kong residents will be restrained in the prevention of, suppression of, and imposition of punishment for acts and activities endangering national security in the HKSAR. Will the law conflict with some international covenants and local laws on human rights in the HKSAR? Thank you.

Shen Chunyao:

In studying and drafting laws, China attaches great importance to the principle that human rights shall be respected and protected. The HKSAR and the whole country have placed great emphasis on promoting all-round progress on human rights. The Constitution of the People's Republic of China clearly states that the People's Republic of China shall practice law-based governance and that the state shall respect and protect human rights. Relevant provisions are also found in other Chinese laws such as the Criminal Law of the People's Republic of China and the Criminal Procedure Law of the People's Republic of China. It is also clearly defined in the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region and placed in a prominent position. The law's General Principles, which govern the full text, clearly state that human rights shall be respected and protected in safeguarding national security in the HKSAR and the principle of the rule of law shall be adhered to.

Important principles of criminal law shall be implemented in handling cases and imposing punishment for offences that endanger national security. These are clearly defined in the General Principles section of the HKSAR national security law, including the principle of legality, which is also known as "no crime without the law and no punishment without the law." A person who commits an act which constitutes an offence under the law shall be convicted and punished in accordance with the law. No one shall be convicted and punished for an act which does not constitute an offence under the law. Another very important principle is presumption of innocence. The law stipulates that the rights in judicial proceedings that a criminal suspect, defendant, and other parties in judicial proceedings are entitled to under the law shall be protected. The principle of protection against double jeopardy is also reflected in the law, where it is clearly prescribed that no one shall be liable to be tried or punished again for an offence for which he or she has already been finally convicted or acquitted in judicial proceedings. All of these important principles are stipulated in the General Principles section of the law.

Moreover, respect for and protection of human rights shall not be limited to criminal proceedings. The law also clearly stipulates that the rights and freedoms enjoyed by HKSAR residents under the Basic Law of the HKSAR and the provisions of the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights as applied to Hong Kong shall be protected in accordance with the law. Hence, the law is in line with the relevant provisions and principles of the Basic Law of the HKSAR and protection of human rights under the law is not just limited to criminal proceedings, but also widely covers rights and freedoms of speech, of publication and of assembly.

To safeguard national security, it is necessary to impose punishment for offences endangering it in accordance with the law. Law enforcement and judicial authorities shall prevent and suppress such offences according to law and those who are involved in them shall be investigated for criminal responsibility in accordance with relevant provisions of the criminal law. Therefore, many people are concerned about the impact on human rights, especially in regard to personal freedom, right to free expression, including press and publication work, freedom of assembly, and so on. Any right has clear boundaries and their scope is prescribed by law. As Mr. Zhang Xiaoming mentioned, "one country" has a bottom line, and "two systems" has a certain boundary. It is not permitted to breach the bottom line and the boundary required by rule of law. That is the case for the HKSAR, and the same also goes for China and any other country in the world. Rights and freedoms should be fully exercised, but within the scope of the law and in accordance with legal requirements. People who breach the bottom line and challenge its scope should bear corresponding legal responsibility. In terms of the bottom line and requirements of safeguarding national security, the relevant provisions of the International Covenant on Civil and Political Rights are very clear, fully guaranteeing the exercise of these rights and freedoms while stipulating the exercise of them should be within the scope as prescribed by law. Some people have wondered whether legal provisions are arbitrarily introduced. It does not work like that. Legal provisions have requirements and scope. For example, in the areas of national security, public order, public health, and even social decency, there are limits, a distinct bottom line and boundaries that cannot be crossed. Absolute rights and freedoms are impossible. 

Today, our friends from the press here are wearing masks, except for the few of us. In order to prevent and control COVID-19, we acted quickly in January. One of the measures taken, which seems simple but actually is of great importance, is that everyone is required to wear a mask. However, some countries don't see it that way, and they think it limits people's freedom and rights. I just take this as an example, since everyone has personal experience in regard to epidemic prevention. Likewise, there are boundaries and requirements for national security and public order. The situation varies from country to country. Just now, Mr. Zhang Xiaoming talked about the United States. Americans have the freedom to carry guns; however, is this true in other countries of the world? During the formation of China's newly adopted Civil Code, there were opinions calling for the legal recognition of same-sex marriage. We were talking about heterosexual marriage. Some might say same-sex marriage has been legalized in a certain country, and that might be possible. However, rights and freedoms have boundaries, and the situation varies from country to country. So, in safeguarding national security in the HKSAR, there are certain limits, a bottom line and boundaries, and we must strive to achieve a balance. In safeguarding national security, human rights must be respected. To respect human rights, national security must be maintained. These two are basically consistent and complement each other.

Lianhe Zaobao:

As China enacted the law on safeguarding national security in the HKSAR, the United States recently announced a string of sanctions, including restrictions on visas for Chinese officials and abolishing special treatment for Hong Kong. How will China respond? What specific countermeasures will be taken? There are also concerns that a financial war may break out between the two countries due to the escalating sanctions imposed by the U.S. and China's countermeasures, which may undermine Hong Kong's status as a financial center. What is China's response to that? Thank you. 

Zhang Xiaoming:

I have already stated China's attitude towards the so-called sanctions when answering questions from TASS news agency just now. Some people in the United States do like to stretch their hands too far. If they continue such bullying actions, if they don't think they have enough chaos at home, if they don't care that the so-called sanctions may do more damage to themselves than to others, if they want to shift the crisis onto others and shirk their responsibilities, then they should certainly go ahead and try. They will just give us a chance to demonstrate our determination and ability to fight back in self-defense. In fact, everyone may have noticed that U.S. Secretary of State Mike Pompeo and U.S. Secretary of Commerce announced several so-called sanctions in the past two days, and China has also decided to impose visa restrictions on U.S. individuals who have acted maliciously on Hong Kong-related issues. As an old saying goes in China, we will "answer blows with blows." As long as the United States takes actions, the Chinese government and the HKSAR government are bound to react with countermeasures. Relevant measures will be taken according to circumstances.

The HKSAR's special economic status, including its status as an international financial center, has been formed over a long period, and forged through the hard work of several generations of Hong Kong people. Its status has been widely recognized by international society and guaranteed by the Basic Law, and certainly cannot be plundered by any country or group. We are not worried about maintaining its international status, because its position as an international financial center, and its prosperity and stability, basically depend on two factors: whether Hong Kong's own advantages in regard to its business environment and financial system will be weakened, and whether the momentum of China's economic development and the central government's support for Hong Kong will continue. We have confidence in these two factors, and so we have full confidence in Hong Kong's future.

Guo Weimin:

Today's press conference concludes here. Thank you all！

In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Lin Nianxiu, deputy director of the National Development and Reform Commission

Zou Jiayi, vice minister of finance 

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

Pan Gongsheng, deputy governor of the People's Bank of China and head of the State Administration of Foreign Exchange

Li Guo, deputy head of the General Administration of Customs

Liu Cigui, secretary of the CPC Hainan Provincial Committee and chairman of the Standing Committee of the People's Congress of Hainan Province

Shen Xiaoming, deputy secretary of the CPC Hainan Provincial Committee and governor of Hainan 

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

June 8, 2020

Hu Kaihong:

Good morning, ladies and gentlemen. Welcome to this press conference held by the State Council Information Office. A master plan for the Hainan Free Trade Port (FTP) was officially released on June 1. The plan drew considerable public attention and is very important. Today, we are pleased to invite Liu Cigui, secretary of the CPC Hainan Provincial Committee and chairman of the Standing Committee of the People's Congress of Hainan Province; Shen Xiaoming, deputy secretary of the CPC Hainan Provincial Committee and governor of Hainan; Lin Nianxiu, deputy director of the National Development and Reform Commission; Zou Jiayi, vice minister of finance; Wang Shouwen, vice minister of commerce, deputy China international trade representative; Pan Gongsheng, deputy governor of the People's Bank of China and head of the State Administration of Foreign Exchange; and Li Guo, deputy head of the General Administration of Customs. They will brief you on the plan and then take your questions. First, I will give the floor to Mr. Lin.

Lin Nianxiu:

Ladies and gentlemen, friends of the media, good morning to you all. The construction of a free trade port in Hainan is a major reform and opening-up initiative personally planned, deployed and promoted by General Secretary Xi Jinping. The Central Committee of the Communist Party of China (CPC) has made this strategic decision with an eye on the domestic and international situation, and with in-depth research, overall consideration and scientific planning. Recently, at the critical moment when the construction of the Hainan FTP is about to start, General Secretary Xi Jinping gave important instructions to point out the direction for building the Hainan FTP. On June 1, the CPC Central Committee and the State Council issued a master plan for its construction. The following is the main contents of the plan, which I will make to you in the light of the important instructions of General Secretary Xi Jinping. 

The general plan can be divided into three key points. First, it adheres to the Party's centralized and unified leadership, and insists on the system of socialism with Chinese characteristics; second, it aligns with the high-standards of international economic and trade rules, prioritizing the innovation of institutional integration and promoting the smooth flow of production factors; and third, it highlights ensuring enduring progress. I would like to sum it up very simply by saying that it is all about right direction, innovation of institutional integration, liberalization and facilitation, and a step-by-step approach.

The main content of the plan can be summarized as "6+1+4".

"6" means liberalization and facilitation on six fronts, including trade, investment, cross-border capital flows, the movement of people, the movement of transport and the secure and orderly flow of data. Centering round these six aspects, a series of institutional arrangements have been made in the plan. I will give you a brief introduction.

In terms of trade liberalization and facilitation, the arrangement will feature zero tariff for the trading of goods and relaxed restrictions on both market access and business operations for trading services. 

In terms of investment liberalization and facilitation, to put it simply, the market access of Hainan will be significantly expanded to further boost the vitality of various market entities.

In terms of cross-border capital flow, the plan emphasizes that financial services must serve the real economy. Based on the liberalization and facilitation of trade and investment, capital projects will be launched in stages to promote free and convenient capital flow of Hainan FTP and overseas in an orderly manner.

In regards of the free and easy entry and exit of people, we have implemented a more open talent and residency policy for attracting talent in high-end industries, with the aim of creating a highland where talents can gather.

With regard to the freedom and convenience of transport exchanges, a highly liberal and open transport policy will be implemented to promote the construction of a new western land-sea corridor and an international shipping and aviation hub.

In terms of the secure and orderly flow of data, we will expand openness in the data sector, and cultivate and develop the digital economy on the premise that the data flow is secure and under control.

"1" refers to the building of a modern industrial system. Particular emphasis is placed on highlighting Hainan's advantages and characteristics, vigorously developing tourism, modern service industries and high-tech industries. We will also be further consolidating the foundations of the real economy and strengthening economic innovation and competitiveness.

The "4" is to strengthen the institutional arrangements in the four areas of taxation, social governance, rule of law and risk prevention and control. 

The first is to gradually establish a tax system compatible with a high-level free trade port in accordance with the principles of zero tariffs, low tax rates, a simplified tax system, strong rule of law, and a phased implementation.

Second, efforts will be made to promote the reform of government agencies and the transformation of government functions, and to build a governance system for free trade ports that is systematic, complete, scientifically standardized and effectively operated.

Third, a free-trade port rule of law system based on the Hainan FTP law and consisting of local regulations and an economic settlement mechanism for commercial disputes will be established to create a world-class free-trade port rule of law environment.

Fourth, effective measures have been formulated and implemented to prevent and mitigate major risks in the areas of trade, investment, finance, public health and ecology, so as to firmly hold the line against systemic risks.

There are two phases in implementing the master plan — laying the foundation and carrying it out in an all-round manner.

The first phase runs from now until 2025, during which the main work involves laying the foundation and making preparations. The tasks of this phase include highlighting liberalization and facilitation of trade and investment, orderly promoting opening-up on the basis of effective supervision, yielding early results by promoting the convenient and efficient flow of various production factors, and launching the island-wide special customs clearance operation in due course. We will carry out relevant work in a timely manner and strive to make breakthroughs within around three years, so as to lay a solid foundation for launching of the special customs clearance mechanism.

The second phase, which will run until 2035, involves promoting the implementation of a set of free trade port policies in an all-round manner. The tasks during this phase include further optimizing and improving opening-up policies and relevant institutional arrangements; realizing free and convenient trade, investment, cross-border capital flow, personnel movement, and transportation; achieving the safe and orderly flow of data; ensuring a complete system of laws and regulations, a modern industrial system and a modern social governance system are basically formed; and creating a new highland of open economy for China.

In the next step, guided by the spirit of General Secretary Xi Jinping's important instructions, the NDRC will work with Hainan province and relevant departments to give priorities to important links and key areas in line with the requirements of the master plan, adhere to the principle that regulatory streamlining can only serve its purpose when supported with enhanced compliance oversight, implement the plan in steps and phases with all-out efforts in a steady and sound manner, and make a big push to ensure that various policies and measures can come into effect and produce positive results as soon as possible, so that we can build Hainan into a high-quality free trade port with high standards. That concludes my introduction. Thank you.

Hu Kaihong:

Thank you, Mr. Lin. I will now give the floor to Mr. Liu.

Liu Cigui: 

Ladies and gentlemen, friends, good morning. First, thank you for your interest in and support of Hainan's comprehensive deepening of reform and opening-up. I would like to take this opportunity to extend my sincere thanks to all the global investors and various sectors of society.

Building the Hainan FTP is an important national strategy designed, arranged and promoted by General Secretary Xi Jinping. It is a major measure to show that "the door of China's opening-up will not close, but will only open wider and wider." Hainan is the southernmost province of China. It has been supported by the CPC Central Committee and the country's people ever since it became a province and a special economic zone (SEZ) in 1988. On April 13, 2018, General Secretary Xi Jinping delivered an important speech at a conference celebrating the 30th anniversary of the island province and SEZ, announcing the decision to support developing Hainan into a pilot free trade zone and gradually into a free trade port with Chinese characteristics. Hainan was positioned as a pilot zone for comprehensively deepening reform and opening-up, a national demonstration area for the construction of ecological civilization, an international tourism and consumption center, and a zone offering services and support for the country's major strategies. During the past two years, we have pushed forward the high-standard construction of the FTZ in strict accordance with a series of important deployments by General Secretary Xi Jinping and the CPC Central Committee. As such, the development of the FTZ has laid a solid foundation for the building of a free trade port.

We are adhering to high standards and high quality in building the pilot FTZ, and have identified 18 pivotal projects. Guided by the central government's "1+N" policy system, we have refined and promoted its implementation in accordance with the situation in Hainan. Over the past two years, we have laid a solid foundation for the coordinated development across the island in terms of constructing infrastructure for the "five networks" of optical network, power grid, gas network, road network and water network. We held a plenary session to study and implement the important speech delivered by General Secretary Xi Jinping, during which an important decision was made to attract one million talents to Hainan. At the same time, we are planning to promote the Smart Hainan plan. The development of Hainan requires high standards, which means we should have a high starting point. With the support of the NDRC and other departments, the plan has already been approved by the central government.

Liu Cigui:

We highly value institutional innovations in the past two years. We released 77 institutional innovations successively, many of which were national firsts. We formulated 69 measures on business environment meeting World Bank standards. Now, Hainan has made remarkable achievements in streamlining approval procedures, allowing all of them to be handled on a single online platform, with a single approval seal, and at a single window. At the same time, we have strictly controlled the real estate sector. Hainan did not develop the sector by building as much as was wanted and thus turning itself into a promotional vehicle for the real estate sector. In view of the limited land available and drawing on the lessons of history, Hainan should not lack variety when developing a modern industrial system. In the past two years, we have vigorously attracted foreign investment and key market players, with an additional 444,000, up 65%, compared to the period before the April 13 speech in 2018. There are 572 new projects worth over 100 million yuan, registering a total investment of 582.8 billion yuan. Among them, 125 projects are worth over 1 billion yuan, registering a total investment of 443.1 billion yuan; there are even five projects worth over 10 billion yuan. While undertaking all this development, we have attached great importance to environmental protection. Any regulatory streamlining can only serve its purpose when supported with enhanced compliance oversight. To this end, we have established a sound social governance system, under which customs across the island would be closed after implementing zero tariffs at the free trade port, mainly aiming to prevent smuggling. We have been working on prevention in these past two years, and building prevention and control zones for nearshore, offshore, coastline and island areas. The master plan for the free trade port has been released, and we will convene the eighth plenary session of the seventh provincial Party committee shortly to fully implement the important instructions of the General Secretary and the master plan released by the central authorities. It will focus on how to put it in place, and how to make every effort count. Here are a few key points:

First, while always adhering to the Party's leadership, developing a comprehensive leadership, over the construction of the free trade port. We will firmly pursue the correct direction in all aspects of construction, take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guide, further strengthen our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core and maintain constant alignment with the central Party leadership, stay confident in the chosen path, theory, system, and culture of socialism with Chinese characteristics, 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, and resolutely ensure the construction to be pushed forward always under the leadership of the Party Central Committee. Under the direct leadership of the leading group overseeing Hainan's comprehensive reform and opening up, we have broken down the tasks in the plan, worked out timetables and the paths to be followed, specified responsibilities at different levels, and carried out activities across the province calling for contributions to the construction funds. Our motto is: dare to venture, dare to try, dare to be first, and work hard, fully expressing the spirit of the special economic zone. We will try to make each day really count to ensure that all policies are well put in place.

Second, we are committed to adhering to a high-level opening up policies. To attract global investors to invest in Hainan, we will pay more attention to introducing foreign capital and overseas talents, and fully implementing the policies of the free trade port. We will give full play to integrated institutional innovation. The high-standard and high-quality construction of Hainan Free Trade Port requires us to liberate our minds at the systemic grassroots level, and constantly innovate and reform. Of course, we will not launch a policy until it becomes mature, so that we can develop on a steady and sustained course through constant efforts, because the policies of the entire free trade port should form a complete, science-based and efficient whole. We will focus on trade and investment liberalization and facilitation, and set up various systems in an integrated manner, rather than dealing from a single perspective . These systems will include the management system as well as laws and regulations. In particular, it will help to address the relationship between easy access and tight regulation, promote the free flow of production factors and prevent or mitigate various risks, so as to achieve a high level of openness, and make Hainan Free Trade Port a leading light in China's reform and opening up. We will always give top priority to the interests of the people. Building a free trade port will bring a sense of happiness and gain to 9.4 million people in Hainan, as well as the entire national population. Therefore, when constructing the relevant urban and rural systems, especially when we aim for a moderately prosperous society in all respects this year, Hainan must ensure nobody is left behind. We should make investors feel that, through this process, they are here in Hainan to share the dividends of Hainan Free Trade Port.

Third, everything we undertake will fully adhere to bottom-line thinking, and doing a good job in preventing and controlling various risks. We will draw on lessons from the ups and downs experienced by Hainan in the past, uphold the premise that "any regulatory streamlining can only serve its purpose when supported by enhanced compliance oversight," and strengthen the awareness of risk prevention and mitigation. We will carry out science-based anticipation, targeted response, and proper management and control, so as to prevent and mitigate risks in trade and investment, personnel entry and exit, capital flow, ecology, and public health, and put the construction of the free trade port on a stable and sustained course.

Dear friends, Hainan Free Trade Port invites global investors and all kinds of talents to invest and operate business, actively participate in its construction, and share the development opportunities and fruits of China's reform and opening up. Thank you.

CCTV:

It is often said that human resources are most in-demand in the 21st century. Just now, you talked a lot about the demand for talented people. There is an urgent need for human resources in Hainan as it develops itself into a free-trade port. What specific measures will Hainan introduce to attract competent personnel to participate in its free trade port development? Thank you.

Liu Cigui:

Thank you for your question. Hainan has been at the forefront of China's reform and opening up endeavor for more than three decades. Around 100,000 people once crossed the Qiongzhou Strait to start businesses in Hainan. However, Hainan, formerly an administrative region of Guangdong, became a province in 1988. Therefore, human resources are inadequate to meet the needs in its development.

As I introduced just now, we have launched an action plan of bringing 1 million talented people to settle in Hainan by 2025. The Organization Department of the CPC Central Committee and other government departments have offered strong support for Hainan in attracting competent personnel. In recent years, about 200 officials, who served in leadership teams of other places, have been selected and transferred to work in Hainan for two to three years in the leadership of governments and departments at provincial，municipal and county level. This represents an effort of central government departments to firmly implement the important speech by General Secretary Xi Jinping at the celebration of the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone on April 13, 2018. General Secretary Xi said, 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. Here I would like to thank the various central government departments for their support to Hainan in this regard.

To implement General Secretary Xi's speech and our action plan for 2025, the CPC Hainan Provincial Committee established a working committee on human resources for which I act as the director. After regular studies, we have unveiled a series of measures on how to fully utilize talents and provide assistance with their housing and children's education. In the last two years, more than 100,000 people have come to Hainan to find jobs or start their own business. When 100,000 people crossed the Qiongzhou Strait to Hainan 30 years ago, people with PhDs had to work as shoe-shiners since there were no jobs for them. In contrast, all 100,000 people who've settled in Hainan today can secure employment. We've recently released 40,000 job vacancies for global recruitment, and more will be available by the end of this year. Hundreds of thousands of talented people are expected to apply for jobs.

To address the shortage of competent personnel, we need to make Hainan an attractive destination, where worries about life can be lifted and talent realized. Hainan boasts a good ecological environment , clean air, clean water, and delicious food. But most importantly, there need to be enough job opportunities. As I've explained, to attract talented people, we need to ensure there are jobs for them.

We are helping them solve problems regarding the education of their children. We have introduced more than 80 top kindergartens, primary and middle schools from home and abroad. Many of those who came to Hainan to start businesses worry about whether their children can receive quality education. They also worry about whether there are sound health services. We have introduced over 50 top medical institutions worldwide. So, I think talented people are now willing to work in Hainan.

In addition, we must find ways to retain them and put their talents to best use. Low employee mobility in recent years showed that Hainan is able to retain talented professionals. With favorable policies and a pleasant climate, Hainan has attracted a large number of talented people. The master plan for the free trade port and related policies will surely attract more competent personnel to work in Hainan.

Hainan focuses on the development of tourism, modern services and high-tech industries. Apart from individual companies, many teams, headquarters, and high-end enterprises have settled in Hainan. An enterprise may bring hundreds or thousands of talents. As I introduced just now, we had 444,000 new market entities launched in the past two years, an increase of 66%. In fact, the number has grown more than 30% every year. Hainan, with over 9 million people, has more than 1 million market entities. I believe the unique policies will attract more market players to start businesses in Hainan.

While attracting competent personnel from outside, we also leverage the role of local talented people, who are currently the mainstay of Hainan's development. Over the past two years, the CPC Hainan Provincial Committee has attached equal importance to these two aspects of work related to human resources. To leverage the role of local talented people, we provide them with training opportunities. Each year we send hundreds of people to attend training programs organized by national government agencies and overseas institutions. 

The Hainan FTP involves the development of the whole island. The majority of Hainan people live in rural areas, which account for most land in the province. The development of rural areas determines the success of the Hainan FTP. We provide education and training to residents, including those living in rural areas. We've introduced a package of preferential policies for village teachers and rural doctors in terms of professional titles, salary, and housing so that they are willing to stay in rural areas. 

Hainan will promote the integration of urban development across the entire island in its construction of a free trade port. So, we must improve the quality of personnel in rural areas. We've recently honored artists, craftsmen, and other talented rural residents, encouraging them to play a more significant role in Hainan's development. We will continue to make efforts in the two aspects of work related to human resources. Thank you.

China News Service:

We know the construction of Hainan FTP with high quality and high standards cannot go forward without the active participation of a large number of high-quality market players. What are the core policies of Hainan FTP that enterprises can directly enjoy? Thank you.

Shen Xiaoming:

I remember that in the important speech made by General Secretary Xi Jinping on April 13, 2018, he stated: "China welcomes investors worldwide to invest and start businesses in Hainan and participate in the building of a free trade port, thus sharing the country's development opportunities and outcomes of its reform." The construction of the FTP requires market entities, and they need to understand what policies we have established for them. As soon as the master plan was announced on June 1, we extracted 60 pieces of essential information about preferential policies from the master plan and publicized them via the WeChat public account platform. In the first 40 minutes, the article attracted over 100,000 views, and after two-and-a half hours that exceeded 500,000. This indicates market players are very concerned about the policies of Hainan FTP. As there are many policies, here I will choose four of them for simple interpretation.

First is the freedom and convenience of investment. The Hainan FTP will implement a policy of "all can enter if not prohibited," which means that, unless there are compulsory standards and legal prohibitions involved, the government, in principle, cancels permits and approvals, and replaces this with a system of filing and commitment by enterprises. If the commitment meets the conditions, then the business can begin operating. The government agency handling the filings will fulfill its regulatory obligations through supervisions during and after completion of the investment. It implements a pre-entry national treatment plus a special FTP negative list management system for foreign investment. We will further reduce restrictions and prohibitions on the basis of the normal procedures of a free trade zone. For domestic enterprises registered in the FTP, we will support them to raise funds by issuing shares overseas. In addition, if they are engaged in tourism, a sector of the modern service industry, high-tech industries and other areas we wish to encourage, the direct investment income from abroad can be exempted from corporate income tax. Therefore, in terms of investment freedom and convenience, this is a very complete system.

Second is the zero tariffs on trade in goods. After the whole island seals the customs, except for a few special products, no more import tariffs will be imposed. However, before the whole island was closed for the FTP, we also set four types of items exempt from customs duties through list management. They are production materials, raw and auxiliary materials, transportation vehicles, and consumer goods for island residents. I have roughly calculated that the tax cost of importing yachts, for example, can be reduced by about 38%. Originally, when you spent 10 million yuan in importing a yacht, you needed to pay 3.8 million yuan in taxes. But if you buy a 10-million-yuan imported yacht in Hainan, you don't need to pay the 3.8 million yuan in taxes. So you save 3.8 million yuan here, than buying yachts elsewhere. In addition, for the tax on imported entertainment equipment, you can save about 20%. Just a few days ago, I went to a biopharmaceutical R&D service outsourcing company in Haikou to undertake a survey. The person in charge told me that he planned to buy R&D equipment. Before the zero tariffs policy, he would have needed to spend 300 million yuan; now, the cost is only 200 million yuan, saving him one-third. Thus, the cost of building a R&D center in Hainan is lower, and he could buy more equipment and hire more people for the same amount of money. What's more, the Yangpu Bonded Port Area and other special areas will be the first to implement the rules of origin. What does this mean? It's when you have imports among your raw materials for production, if you can achieve more than 30% in added value in a designated sector, the products you produce will not need to pay tariffs when they enter the Chinese mainland market again. Let me give you an example for frozen products. The annual import of frozen products of beef, mutton and pork in our country is about 6 million tons. The import of frozen products in 2019 increased by 45% compared with 2018, and it is growing rapidly each year. Taking beef as example, the general import tariff for whole or half cattle is 70%, and the import tariff for most-favored nations is 25%. If the whole or half cattle are imported through Yangpu Port, they will be divided into thigh meat, beef tendon, etc. through preliminary processing, making it easy to add 30% in value. If that is achieved, the beef will enter Chinese mainland market avoiding 70% or 25% of the tariff. Therefore, the profit margin of the enterprise is very huge, and the common people can eat cheaper imported beef. This means the rules of origin are extremely important monetarily.

Third is the tax rate of income tax . From now until 2025, we will reduce or exempt income tax for eligible companies and individuals. For example, for enterprises from encouraged industries, registered and operating in Hainan FTP, we will reduce the enterprise income tax by 15%. Also, for high-end and urgently needed talents working in Hainan FTP, if they stay in Hainan Island for a minimum of 183 days, in regard to their actual personal income, the portion above standard rate of 15% on that income will be exempted. Therefore, it is also very attractive for high-end talents in short supply.

Fourth is service industry opening. We will greatly reduce market access barriers and intensify the opening for the service industry in the three major sectors of tourism, modern services and high-tech industries, especially the key areas of planting, shipping, telecommunications, business services, finance, medical treatment, education, culture, sports, etc. Let us take the example of basic telecommunications. The policy of our country so far is that basic telecommunications require Chinese control. In the new version of the FTP master plan, it mentions the orderly opening of basic telecommunications for the first time. For another example, we support overseas securities, futures and fund management institutions to set up wholly-owned or joint venture financial institutions. And for another example, we allow foreign universities of science, technology, agriculture, medicine and vocational education to be able to establish and run schools independently in Hainan. These opening policies have never been seen before.

There are many specific contents of the policies. During this time, we will continue to interpret them to society in different forms and answer questions for everyone. If you have any questions, you can check our website www.contacthainan.gov.cn. or you can leave your questions with us. We will answer you in due time. Recently, Hainan has been organizing various forms of investment promotion briefings. The media are welcome to actively participate.

Nikkei:

The objective of this plan is to turn Hainan into an international hub of trade and finance. Does that mean Hainan will replace some of Hong Kong's function and status in the future? Thanks!

Lin Nianxiu:

Thanks for your question. As we know, Hong Kong port, Singapore port and Dubai port are model high-level international free trade ports, each boasting distinctive modes of development, polices and institutions of its own. Hong Kong, as an important international hub of finance, shipping and trade, has been rated by multiple international organizations as one of the freest and most competitive regions in the world. In particular, since its return to the motherland, Hong Kong has remained stable and prosperous under the system of "one country, two systems." It has integrated itself into the great endeavor to realize the rejuvenation of the Chinese nation.

In order to turn Hainan into a free trade port, we should study well-known international free trade ports, integrate high-standard international economic and trade rules and explore a system of institutions featuring openness and international competitiveness. Meanwhile, we should make full use of the island's advantages, including its abundant natural resources, unique geological location and the super-huge domestic market and hinterland economy backing it. Focus should be placed on trade and investment liberalization and facilitation, as well as such industries as tourism, modern service and high and new technology. We should quicken our steps to foster new advantages with Hainan characteristics that inject vigor into the development of global free trade ports.

In this sense, Hainan FTP is different from Hong Kong both in terms of positioning and priority industries. The two are more complementary than competing. Therefore, Hainan will not have a negative impact on Hong Kong. In the process of building Hainan FTP, we will strengthen coordination with the Guangdong-Hong Kong-Macao Greater Bay Area and proactively push forward pragmatic and effective cooperation to help ensure Hong Kong's long-term security, stability and prosperity. We will also smooth the implementation of "one country, two systems." Thanks.

Hainan Television:

The master plan for the Hainan Free Trade Port has decided to establish a system of policies and institutions that will build Hainan FTP with a focus on trade liberalization and facilitation. Could you shed some light on consideration taken when designing policies and institutions related to trade liberalization and facilitation throughout the course of building Hainan FTP? What features will there be? Thanks.

Wang Shouwen:

Thanks for your question. Trade liberalization and facilitation is a basic and common feature of all advanced free trade ports in the world. Today, a lot of regional and bilateral free trade agreements have stressed trade liberalization and facilitation. Of course, trade liberalization and facilitation will be a very important element in the institutional design for Hainan FTP. Actually, it is a focus.

When it comes to institutional design, we attach high importance to innovation. We will not only draw on experience of other countries, but also make it embody Chinese characteristics and suit Hainan's positioning. Trade liberalization and facilitation should align with China's broader efforts to comprehensively deepen reform and expand opening-up. Trade liberalization and facilitation has two aspects: First is goods trade liberalization and facilitation, and second is service trade liberalization and facilitation. The goods trade liberalization and facilitation has several features. First, we will work toward "zero tariffs." That means that we will establish a list of goods to be tariffed in Hainan FTP. All imported items excluded from the list will enjoy "zero tariff" status. Second, we will work toward "zero barriers." In terms of non-tariff measures, such as license and quotas, we will establish a list of exported and imported goods and items to be restricted or forbidden in Hainan FTP. All goods and items excluded from the list will be free to come and go. Third, we will promote facilitation. All imported goods will be handled through a single window of international trade, which will be very convenient. We will put in place effective and convenient customs supervision to facilitate the flow of goods. Fourth, under the circumstances of trade liberalization and facilitation, we will ensure that risks can be prevented and controlled. We will build high-standard port infrastructure and regulate it in a smart and targeted way.

Service trade has four modes. Cross-border supply, overseas consumption and the movement of natural persons constitute cross-border service trade. With regard to the three forms, we will establish a negative list for cross-border service trade. Entry of all service trades of these three forms outside the negative list will be allowed. The fourth mode is called commercial presence, which means providing services locally. Once entry is allowed, persons will have to meet proper standards and qualifications to receive operation permits. Some technologies will have to meet certain criteria for transparency and supervision. We will update regulations to liberalize and facilitate a commercial presence. In terms of service trade, we will make sure entry and operation are both allowed.

According to the master plan for the Hainan Free Trade Port, development will proceed in two phases. The first phase is expected to be completed by 2025. Three aspects of work will be done. First, we will pilot the policy of "opening up at the first line and strengthening regulation at the second line" in the Yangpu Bonded Port Area. Second, we will establish the "One Negative and Three Positives" list. As Secretary Liu and Governor Shen mentioned just now, the "One Negative and Three Positives" list will be put in place before the free trade port system. It focuses on trade and investment liberalization and facilitation to be basically established in Hainan by 2025. The "Negative" list refers to administrative measures for the import of equipment used by enterprises themselves. Goods not on the list will be exempt from tariffs. The "Three Positives" will be established to regulate the import of transportation tools, raw materials to be processed for export goods and everyday use items for the people of the island. Goods on the three lists will be exempt from tariffs. Third, within this year we will put in place a negative list for cross-border service trade, which I just mentioned. Any restrictions concerning the three forms of service trade will be included in the negative list. Those not on the list will be free from restrictions. This institutional innovation is a highlight for Hainan FTP. It will become China's first negative list for cross-border service trade. It's worth looking forward to. Thanks.

China Financial News Agency:

I have a question for Minister Zou. Hainan FTP will adopt a "zero tariffs" policy to have an early harvest before the free trade port system is established in 2025. Could you shed some light on the considerations made by the ministry of finance? Thanks.

Zou Jiayi:

Thanks for your question. All my colleagues have mentioned the "zero tariffs" policy, which is a very important institutional design of the Hainan FTP. To be specific, we will take phased measures to promote trade liberalization and facilitation. This process will feature "zero tariffs." Initial achievements of the "zero tariffs" policy include some of the imported goods becoming exempt from tariffs, import VAT and consumption taxes. The policy covers the following aspects: 

First involves production equipment. A "zero tariffs" negative list will be applied to production equipment used by enterprises. Second involves transportation tools. A "zero tariffs" positive list will be applied to ships and aircraft used for transportation and tourism purposes, as well as yachts. Third, raw materials. A "zero tariff" positive list will be applied to the raw materials used for production within the island and the raw materials to be processed for export goods. Fourth is everyday consumption items. For items of everyday use, we will put in place a "zero tariff" positive list to allow island residents to buy them tariff free. These four kinds of goods, which were mentioned by Mr. Wang just now, will be covered by the "One Negative and Three Positives" list. Fifth, we will relax the duty-free shopping policy to a great extent. The duty-free shopping quota will be raised from 30,000 yuan per person per year to 100,000 yuan per person per year. The scope of duty-free items will be expanded from the existing 38 kinds of goods. We will improve management to provide more convenience to customers. If you want to travel to Hainan, I advise you to take extra money and do a lot of shopping. Sixth, we will support Hainan to develop a convention and exhibition center economy to promote international exchanges. We will study and formulate duty-free policies for the import and sales of exhibited items abroad during nation-level conventions and exhibitions. Such can also be classified as an early harvest.

When conditions are ripe, we will, based on a simplified tax regime after 2025, exempt from tariffs all imported goods beyond the catalog of imported goods to be tariffed. This marks the final arrangement towards "zero tariff." Just as Mr. Wang said, the country needs to establish a catalog of imported goods to be tariffed. Only the goods in the catalog will be tariffed, and the majority of the goods that are not in the catalog will be exempt from import tariffs.

The "early harvest" in the "zero tariffs" policy are wide-ranging, covering nearly all aspects of Hainan's economy and social life. Those who will benefit include manufacturers, such as enterprises, and such consumers as residents and tourists. The industries that will be underpinned include material production enterprises and service enterprises. The scope of goods involved is wide, including large production equipment, transportation tools, and items of everyday consumption. In the future, we will establish a "One Negative and Three Positives" list that focuses on such industries as those of new and high technologies, ecological protection, and those with Hainan characteristics. By doing so, we will lay a solid foundation for the development of Hainan's real economy. In the meantime, we will adjust the "One Negative and Three Positives" list according to the island's actual conditions. In general, we will gradually shorten the negative list, expand the positive list and unleash more benefits of the "zero tariffs" policy. 

What we initially learned from "zero-tariff" policy is to act early, that is, to implement the policy as early as possible so as to see its effects at an early date. On the one hand, it can attract more people, logistics and capital flows to Hainan province, and provide economic support for the development of the Hainan FTP as well as increase people's confidence in Hainan's development. On the other hand, the move will help gain experience and get prepared for the independent customs operations in the whole island after 2025. 

We will follow the requirements of the master plan and actively promote the early implementation of the fiscal and taxation policies of the free trade port to build a high quality and standard construction. The Hainan FTP will be made into a distinctive example of reform and opening up in the new era. Thank you all.

Economic Daily:

The master plan proposes to build a risk prevention and control system to specifically address risks in key areas. What risks are there in promoting the development of the Hainan FTP? How will Hainan enhance its risk prevention? Thank you.

Liu Cigui:

Thank you for your question. The Hainan FTP, which emerges in an era of China's national rejuvenation with the most profound changes of a century, has become a distinctive feature of China's opening-up and reform. Hainan is just getting started as a free trade port. As a free trade port, Hainan is now pulling off a great undertaking as it will be the only free trade port on the Chinese mainland. Nobody has ever experienced this before. Despite that, we will make sure to give top priority to the risk prevention and control measures you just mentioned. There is a saying that goes, "any regulatory streamlining can only serve its purpose when supported with enhanced compliance oversight." There are some risks that can be expected. Mr. Zou just mentioned the negative list and three positive lists. We have analyzed the risks and developed measures to prevent and control them. There are also risks that may come up during development. We will prepare for these too. 

First of all, it must be made clear that the Hainan FTP is administered under the socialist system with Chinese characteristics, which means it will follow the path of socialism with Chinese characteristics. In other words, despite many free trade ports around the world existing in capitalist countries, Hainan's free trade port will exist under a socialist system. Hence, we will uphold the leadership by the CPC and follow the path of socialism with Chinese characteristics. There are some acts that will not be allowed. These include any acts to endanger national security; ideologically undermine the socialist system; smuggle goods and pornography; gambling, drug abuse and trafficking; any act that destroys Hainan's ecological environment; and finally, corruption during construction. We will formulate and make corresponding prevention and control measures to deal with these matters. 

For more than a year, the Hainan Provincial Party Committee has attached great importance to the risk prevention and control of free trade port, and has done a careful analysis, broadly summarizing 13 categories. There are more than 100 risks, large and small. There may be others we can't think of in the development process, but fear not! As long as we have a strong sense of prevention and resolution, we will continue to improve our ability to prevent and resolve risks and improve social governance.

Many are concerned about Hainan's real estate. One has to work in Hainan for at least one year before getting qualified to buy a house there. The Hainan island-wide purchase restriction was implemented gradually. As a matter of fact, it is also a process of risk prevention and control. Earlier in 2015 when General Secretary Xi Jinping presided over the meeting of the Central Commission for Deepening Overall Reform, Hainan was designated to be a pilot zone for integrating multiple regulations. From then on, we suspended land use approval and building approval for real estate developers. At that time, real estate developers had tens of thousands of hectares of land resources that could be used for the construction of commercial housing. Later, we abolished the assessment of fixed asset investment and fiscal revenue in two thirds of local cities and counties, a move which actually served as a fundamental restriction to the local real estate industry. We did this based on the principle that "houses are for habitation not speculation" and given the facts that there were more than 20,000 real estate developers then in Hainan and that many local cities and counties had their taxes and fixed assets investments rely on selling land for real estate development. After General Secretary Xi Jinping delivered an important speech on April 13, we made a tough decision of implementing home-purchase restrictions across the island in June 2018. Now it seems that we have experienced a great pain, but we believe that the risks historically emerging from real estate with several big ups and downs will not appear again after the release of the free trade port policy. That's why we said some risks can be expected and should be prevented in advance. There are many in this case, so we will start with a mechanism for managing risks.

Second, legislatively speaking, Hainan is implementing its anti-smuggling ordinance with clear provisions against smuggling. After a zero-tariff policy is adopted, the free trade port will enjoy the free flow of goods at the frontline of the territory of China while efficient controls must be put in place at the secondary line of the Customs of China. The control measures mainly target smuggling of goods. Hence, the Standing Committee of Hainan Provincial People's Congress has formulated relevant regulations. As for risks from anti-corruption and integrity I mentioned just now, there will not be a good business environment if these risks cannot be controlled as the public power expands with more projects and investments. In this regard, the provincial commission for discipline inspection and supervision and the auditing office of Hainan has formed a group to supervise over the whole bidding and tendering process of all investment projects in Hainan. 

We have established a social management information platform, not just talking about what we can manage, but also being our hardware. Online anti-smuggling controls have been put in place 12 nautical miles out to sea. This covers 1,944 kilometers of coastline. Our entire shoreline can be monitored seamlessly via satellites, shore-based radar and remote capturing. This is our managing mechanism for controlling risks and anti-smuggling. Thank you.

China Daily:

Judging from the experience of the construction of mature international free trade ports, an open financial policy is a basic feature. In the future construction of Hainan FTP, what are the considerations of the People's Bank of China in terms of financial policy design? Thank you.

Pan Gongsheng:

Thank you. The free movement of elements is an essential feature of a high-level free trade port, of which the free movement of capital is the most basic and central element, as well is a fundamental condition for trade and investment facilitation. In the process of building the Hainan FTP, the design and promotion of financial policies will follow three principles: first, the establishment of a free trade port policy and system will be carried out gradually step by step in accordance with the master plan. Second, finance will be positioned to serve the liberalization and facilitation of cross-border trade and investment. Third, the bottom line is that there will be no systemic financial risk. 

The overall framework of monetary policy includes the opening-up of high-level current accounts and capital accounts to facilitate cross-border trade, investment and financing. It also includes the opening-up of the financial services industry, financial reform and innovation to support the development of real economy, and the construction of a financial risk prevention and control system.

Above all, finance is positioned to serve the liberalization and facilitation of cross-border trade investment and financing. The high-level current accounts and capital accounts, opening-up policies and the cross-border fund flow managing policies are the most important and core financial policies in the construction of the Hainan FTP. In terms of cross-border trade, China's fund exchange for current accounts is fully open. Hence, a high-level of fund exchange facilitation can be expected at the Hainan FTP. The authenticity verification conducted by commercial banks will fully shift from pre-audit to post-audit. Meanwhile, we will improve policies for managing new forms of cross-border trade, such as cross-border payments from offshore trade and transit trade, and develop a policy environment that facilitates the operation of the global settlement center for transnational corporations.

In terms of cross-border direct investment, we will fully implement the pre-entry national treatment plus negative list foreign investment management system, exploring new forms of cross-border direct investment to meet market demand. We will also put QFLP (Qualified Foreign Limited Partner) and QDLP (Qualified Domestic Limited Partner) systems into trial application in the Hainan FTP.

Regarding cross-border financing policies, a new institution will be launched to facilitate cross-border capital raising on the island where the administrative framework in charge of transactions will be streamlined on a trial basis. A unified macroprudential management policy will be implemented to empower market entities with greater autonomy, and broader access to foreign currency exchange will be provided to local residents. Given that open financial policies usually lead to strong spillover, a fundamental platform, constituting established domestic and foreign currency, and free trade accounts as well as a holistic digital monitoring network of fund flows, will be created to ensure Hainan's financial openness.

Second, our efforts will be dedicated to securing Hainan's openness by providing financial services and upgrading financial prowess. The Hainan FTP will take the lead in implementing policies designed to expand local financial services and increase financial diversity. Meanwhile, the open economy is expected to be supported by financial institutions such as commercial banks, which are supposed to grow with stronger competences. Moreover, platforms involved in transactions of productive factors, such as global energies, shipping and bulk commodities, will also be buttressed.

Third, policies will be created to promote key areas encompassed in Hainan's modern industrial layout. Reforms, innovation and financial assistance will be fostered to expand essential industrial clusters and upgrade industrial competences. Financial services are expected to focus on trade and consumption, as well as ecological, scientific and technological development.

Fourth, a prevention and control system will be developed at the Hainan FTP to guard against financial risks. Monitoring alarms and evaluation systems as well as the macroprudential management system will oversee cross-border capital flows, and supervisory mechanisms established to counteract money laundering, terrorist financing and tax evasion will come into effect. In addition, a supervisory, administrative and coordinative scheme will be introduced to fortify the Hainan FTP's development.

In the next phase, the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) will take every opportunity to support the reform and opening-up of Hainan province by coordinating with local government and financial administrative bodies in accordance with the deployments made by the CPC Central Committee and the State Council and the schedules stipulated in the master plan. Thank you.

People's Daily:

What significant roles will the free trade port with Chinese characteristics play following the master plan released despite the multipronged impacts caused by the pandemic which has brought about immense pessimism towards globalization among some scholars?

Lin Nianxiu:

Based on my introduction of the major issues incorporated in the master plan, we fully understand that the construction of the Hainan Free Trade Port demonstrates the CPC Central Committee's major strategic decisions implemented to advance the development and encourage innovation of socialism with Chinese characteristics amid the current situations both home and abroad. The plan also represents a milestone in China's reform and opening-up during the new era. Its realistic significance and strategic implications can be concluded in the following four aspects:

First, the plan is designed to meet the fundamental requirements of developing an open economy. The Hainan FTP has been built since the country embarked on its epochal journey for the overall development of a modern socialist country. While building the Hainan FTP, we will learn from advanced experiences abroad, meet the international high-end standards on economy and trade, and develop internationally competitive opening-up policies and institutions. The Hainan FTP will lead a wave of deeper opening-up nationwide to pave a new path and accumulate experiences so as to advance reform and opening-up to a higher level.

Second, it is imperative for the plan to create a market-oriented, law-based, and internationalized business environment. The Hainan FTP is expected to promote the openness based on the flow of commodities and productive factors, and expedite the openness of rules, regulations, administrations and standardized institutions. It can propel the government to alter their role of governance, ensure market competition acts on a level playing field, promote innovations in social governance, and establish modern legal systems, to name just a few. Generally speaking, a high-standard of opening-up will be secured to deepen reform so that a world-class business environment can be created.

Third, the plan is a strategic choice for high-quality development. The Hainan FTP is designed to ensure free cross-border fluidities of multifarious factors, introduce advanced technologies, management concepts and administrative practices from abroad, and create a global cluster of high-end productive factors, including capitals, knowledge, technologies, management and talents. Acting as a model for high-quality economic development around the country, the Hainan FTP is expected to chart a distinctive modern industrial layout with the characteristics of Hainan.

Fourth, the Hainan FTP is being established in accordance with the concept of building a community with shared future for mankind. The construction of the Hainan FTP shows China's resolve in continuing its policies of opening-up, signaling broader access rather than a closed door. China will continue to promote the liberalization and facilitation of investments and trade exemplifying inclusive international cooperation, and play a leading role in advancing economic globalization. As an important platform, the Hainan FTP will deepen China's involvement in global economic governance and enable China's participation in making international economic and trade rules so as to contribute a Chinese proposal and wisdom to building a community with shared future for mankind. Thank you.

CRI:

What will the Yangpu bonded port advance during the early stages of constructing the Hainan Free Trade Port?

Li Guo:

Thank you for your question. The master plan stipulates that the construction strategy of the Hainan FTP will be divided into several different steps and phases. For instance, according to the master plan, 18 highlighted programs are scheduled to be rolled out by 2025. Among them, the first is to place several qualified special customs oversight areas, such as the Yangpu bonded port, under the jurisdictions of first-and-second-line customs with institutionalized administration working on imports and exports. The first-line concentrates on openness, and the second-line on monitoring and regulations. This means that Yangpu can be one of the areas running with special customs jurisdictions. In other words, Yangpu will be the Hainan FTP's pilot zone. In this particular zone, an innovative management institution with liberalizing (the first) and controlling (the second) lines will be launched to yield positive policy-related interests during the early stages. The zone will also act as a trailblazer in taking a raft of measures to reinforce the facilitation and liberalization of trade so as to stimulate and improve the Hainan FTP's development in accordance with the experiences it has gained. From this point of view, the construction and implementation of the Yangpu bonded port will play significant roles in exploring and ensuring the operation of Hainan's closed-off and free trade port policies. 

In accordance with the deployment made by the CPC Central Committee, the General Administration of Customs (GAC) issued the "Regulatory Measures on Yangppu Bonded Port" ("The Measures") on June 3, 2020, after several rounds of research and deliberations. Despite focusing on liberalization and facilitation of free trade, the GAC has abided by the principle that the pursuit of overall openness depends highly on administrators' good command of situations. Therefore, "The Measures" is learning from the experiences of customs administrated with special jurisdictions. While looking into "The Measures," people may notice that Article 31 of Chapter Seven features a number of points regarding trial operations:

First, the pilot processing value-added tax (VAT) policies stipulated in the master plan will exempt a number of enterprises in highly-needed industries from import tariffs. More specifically, processing enterprises with no imported raw materials, or those with imported materials but whose processing value added surpasses 30%, in the Yangpu bonded port, can sell their products to the rest of the country free of import taxes. However, import VAT and consumption tax still need to be levied. There are two critical points in this provision that require pointing out: first, the enterprises should be entitled to the preferential policies, and second, the tax exemption refers to customs duties.

Second, reports submitted to the first-line customs will be streamlined. With risks being controlled, a certain number of commodities transferred between the Yangpu bonded port and overseas markets will no longer need to be reported to customs. Reports will be validated only for goods in need of being checked or quarantined by the entry-and-exit administrations, including those stipulated by international conventions, treaties or agreements, or those on the security list. Despite this, access will be maximized as much as possible at the first-line customs.

Third, the liberalization of the zone will be highlighted with enterprises being dutybound to self-operate and manage. In most cases, enterprises in the zone can transfer, merge, cooperate, process, transact, research, develop, redevelop, inspect, test and change without needing to undertake any customs procedures. Meanwhile, their commodities in the zone can be stockpiled with no time limits. Customs has revoked registration procedures to enable enterprises to forgo the previous normal regulatory procedures, including write-off procedures. At the same time, customs will utilize a big data platform for risk evaluation and artificial intelligence identification to launch critical inspection, and practice precision-targeted administration.

Fourth, the second-line management will be accentuated. The digital network should be strong and passes should be monitored flawlessly with customs inspections being launched for every vehicle (including those for official use), commodities, belongings and people entering and exiting the zone, in accordance with laws and regulations. 

Fifth, the statistical approaches will be reformed. The real-time single-ticket calculation at customs will be substituted by a digital information management platform which enables automatic mathematics to be applied by the administrative bodies in the zone. 

Sixth, the development of interim consolidation services will be supported. International shipping can be streamlined with interim consolidations backed by a digital platform based on which warehouse receipts will be sent online. 

Seventh, a coordinated mechanism will be established. Based on the holistic digital information management services platform established by the regulatory bodies of Yangpu bonded port, a mechanism will be formed using unified regulations and reliable data stock in terms of original accounts. Based on the mechanism, the interconnection among administrative bodies, border regulatory authorities and enterprises in the zone, can be achieved and the responsibilities can be precisely targeted thanks to available data. Therefore, the mechanism will enable local governments to have a big say, ensure coordination between multifaced administrations and regulatory bodies, and promote greater autonomy for enterprises.

Eighth, no facilities established by local residents for commercial use will be prohibited. In view of the business nature of the Hainan Free Trade Port as well as indigenous commerce and consumptions, the facilities for commercial use in the Yangpu bonded port will not be embargoed. This is a major breakthrough since residences and business facilities are not allowed to be established at places under the special jurisdiction of customs. This is an initial attempt.

In the next phase, customs will improve their regulatory work to support the high-quality opening-up and development of the Yangpu bonded port. We will evaluate the pilot performance inside the zone in a timely fashion before expanding and implementing a more mature scheme under the special jurisdiction of customs to the rest of the zones, such as the Haikou Integrated Free Trade Zone. Thank you.

The Poster News APP:

The official release of the master plan is a very important opportunity for Hainan's development. How will Hainan province make use of this policy advantage to further improve its business environment? What benefits will the policies bring to the people through the development of Hainan free trade port? Thank you.

Shen Xiaoming:

The comparative advantage of Hainan is its environment covering three aspects, including its ecological environment, business environment and policy environment. It's fair to say that the business environment is one of the key issues essential to the success of Hainan free trade port. The general goal in this regard is to create a world-class business environment governed by rule of law, meeting international standards, and business-friendly. When optimizing the business environment in Hainan, we've attached great importance to two aspects. The first is fairness, transparency and predictability. Fairness means that all parties will be treated in the same way, regardless of whether it involves domestic or foreign investment, State-owned or private business, local or outside company, and people familiar or unfamiliar to us. Transparency and predictability mean government needs to be transparent about whether a thing can be done or not and how, including the standards, procedures, and courses of action that need to be taken, so that market entities can feel the entire process and results are predictable. The second requirement is to clarify the roles of government and enterprises. The concept of respecting enterprises and entrepreneurs should be reinforced. They have the final say on whether the business environment is good or not. Government, officials, or even the evaluation system itself cannot be the judge. 

Just now you've raised a very interesting question about the benefits for the people brought about by the policies adopted for the development of Hainan free trade port. The reason I think it is interesting is that, if you read the master plan literally, it seems that this document has nothing to do with the people as all it talks about are policies and market activities such as investment and trade. However, a more careful analysis will show the public benefits the free port will bring. For people in Hainan province, statistics show that, over the two years since General Secretary Xi Jinping's important speech in Hainan on April 13, 2018, the number of market entities has increased by 444,000, which is a gain of 66% from the previous level. Among them, the number of businesses has increased by 144,000 (up 68%), creating 400,000 jobs. That's a direct benefit for Hainan people. Among the 144,000 new businesses, 117 were investments by Global 500 companies. Thus, in addition to the increase of jobs, the quality of the jobs has improved, and there are more options available. Of course, benefits brought to local people are not limited only to employment. In terms of consumption, just now Mr. Zou mentioned that the master plan will allow the local community to purchase some imported daily necessities in a tax-free way in Hainan island under a list-based management system. We believe this will mean the price for some imported daily necessities will be much lower than that outside of the Hainan free trade port. 

What does the Hainan free trade port have to do with people across China? First, we will optimize to a great extent the existing Hainan offshore duty-free policy. Just now Mr. Zou elaborated on this topic. Hainan will become an important destination of tourism and shopping. We hope it can become a paradise not only for tourists, but also for shoppers across China. Second, Hainan free trade port will provide unprecedented opportunities for talents in China and around the world. My colleagues have also covered this topic, so I'll not repeat what they have said. Recently people are talking about the old and new generations. This is a relative concept. Whatever generation, you're equally welcome to Hainan free trade port. Thank you.

Bauhinia Magazine:

It has come to our knowledge that, in the recently-released master plan on the development of Hainan free trade port, many policies concerning trade, investment, finance and other aspects have been mentioned. How will the leading group office implement and facilitate these policies in the master plan? Thank you.

Lin Nianxiu:

Thank you for your question. In order to strengthen leadership over the development of Hainan free trade port, the CPC Central Committee set up the Leading Group for for Comprehensively Deepening Reform and Opening up in Hainan Province. Its office is placed in the National Development and Reform Commission, and will take charge of daily work. To better implement General Secretary Xi Jinping's important instructions and facilitate the master plan, the leading group office will further act as a "service provider" and an "accelerator". We will work to provide various services, coordinate relevant parties in a timely manner and exercise strong oversight. We will work closely with Hainan province and relevant government bodies to do the job well. The work of the leading group office in the next step can be briefly concluded in the following four aspects:

First, the list-based management will be strengthened, and the accountability of every task should be clearly stated. The master plan has already been published. Next, we will detail every task specified in the plan, and make arrangements for annual key tasks, including specific requirements, work division and accountability, forms of results, and deadlines. We will make ledgers and advance each and every task to the letter so that we can effectively implement them with practical achievements. We know from the master plan that much work needs to be done to develop Hainan free trade port, thus this project requires arduous efforts. It will be very challenging during the process. The leading group office will list every task and carry out effective efforts to make sure nothing is overlooked.

Second, we will strengthen our study and research efforts and introduce forward-looking policy recommendations. Building a free trade port in Hainan is a new exploration, during which challenges will inevitably occur. Therefore, we think it is particularly important to carry out study and research. The office will regularly visit Hainan to carry out field studies, listen to the opinions of frontline workers, identify and analyze potential problems, and provide suggestions accordingly. We plan to arrange for some staff to work on Hainan island during most of the year to carry out field studies. This is not just an empty slogan; it is tangible work. We will listen to the suggestions of the local party committee and government as well as the demands and voices from market players, especially entrepreneurs. We will listen to people's expectations, collect first-hand materials, and make policy recommendations to the central government.

Third, we will strengthen coordination and create a synergistic policy. The construction of the Hainan FTP is a systematic project, which involves many fields and aspects, and requires coordination and cooperation. The office of the leading group will further improve service and actively communicate with Hainan province and relevant departments. In particular, we will go to the frontline to coordinate on-site and remove the last crucial hurdle for policy enforcement. To speed up the construction of the Hainan FTP, we will make special arrangements and open a green channel to ensure every task is implemented with the fastest speed, the highest efficiency, and the best service.

Fourth, we will strengthen supervision and inspection to ensure policies are fully implemented. The office will track the implementation of the work in a timely manner, coordinate the completion of key tasks on a quarterly basis, carefully investigate inadequacies in work implementation, and introduce improvement measures item by item. At the same time, the office will also establish a work notification system, and particular supervision will be given over the handling of major tasks. It will report important matters to the leading group in a timely manner.

To sum up, under the unified leadership, the office will actively cooperate with relevant departments and Hainan province and promote the construction of the Hainan FTP. Thank you.

Hu Kaihong:

The last question.

Hong Kong Economic Herald:

We all know that Hainan has the best natural environment, air and water quality in the country. How can Hainan balance economic development and environmental protection during the construction of the Hainan FTP? Thank you.

Liu Cigui:

Thank you for your question. In the construction of the Hainan FTP, we must protect the environment. This is the bottom line. The ecological environment of Hainan will only get better and will not deteriorate. This has always been our philosophy guiding economic development. During his inspection tour of Hainan in April 2013, General Secretary Xi Jinping emphasized that green mountains, clear water and blue sky are Hainan's biggest strength in building an international resort island, and must be cherished and taken good care of. We have kept General Secretary Xi Jinping's instructions in mind. No matter how much GDP the project can generate or how much tax we can collect, as long as it affects and harms the environment, we don't do it. In recent years, we have taken a series of measures following General Secretary Xi Jinping's instructions. People are particularly concerned about air quality. The average PM2.5 concentration in 2017 was 18 micrograms per cubic meter; in 2018, it was 17 micrograms; in 2019, it was 16 micrograms. The 1 point drop per year entailed a lot of hard work. We have set a goal that by 2030, the PM2.5 in Hainan will be in the single digits. How can we achieve this goal? We have already taken a series of measures. First, we are using clean energy. By then, the whole island will be using clean energy. Second, we will no longer sell gas-powered cars by 2030. Third, starting from the end of this year, we will prohibit the use of non-biodegradable plastic products, including plastic bags and plastic tableware. Fourth, to address the problem of firewood burning in rural areas, we have built more than 2,000 kilometers of LNG gas supply pipelines. By 2030, we can basically replace firewood with gas. Fifth, our forest coverage rate remains above 62%. We will protect the 4,400 square kilometers of tropical rainforest, which are the "lungs" of Hainan. The Hainan tropical rainforest national park project is under construction upon approval. Sixth, we will continue to improve people's living environment, including the remediation of coastal areas and polluted water and the demolition of illegal buildings. This is our development philosophy.

In terms of the development area, we have restrictions on the locations of the projects. We have established 20 industrial parks. On June 3, 11 of them officially opened at the same time. The projects will be operated inside these industrial parks, and the provincial-level approval authority will be given to the parks. This is what we call, "streamlining the permitting process." There will be supporting facilities like top kindergartens, primary and secondary schools to attract entrepreneurs.

In selecting industries, we mainly focus on three major areas: tourism, modern service, and high-tech industry. For the high-tech industry, we focus on the development of the three well-known industries of land, sea, and air. Land refers to growing hybrid rice at the famous Nanfan Scientific and Research Breeding Base. Sea refers to deep-sea research and development and marine economy. Air refers to the satellite launch at Wenchang Satellite Launch Center on Hainan island and the satellite-related industry. We choose the industries with care. Thank you.

Hu Kaihong:

Today's press conference ends here. Thank you to our seven speakers. Thank you all. 

.

Read in Chinese 

Speakers:

Xu Lin, deputy head of the Publicity Department of the Communist Party of China (CPC) Central Committee and minister of the SCIO

Wang Zhigang, minister of science and technology

Ma Xiaowei, director of the National Health Commission

Ma Zhaoxu, vice minister of foreign affairs

Wang Chen, academician and vice president of the Chinese Academy of Engineering, and president of the Chinese Academy of Medical Sciences

Chairperson:

Guo Weimin, vice minister of the SCIO

Date:

June 7, 2020

Guo Weimin:

Ladies and gentlemen, good morning. Welcome to this press conference.

This morning, the SCIO released a white paper entitled "Fighting COVID-19: China in Action." During this press conference, we will introduce you to its content and provide necessary explanations.

Present at this press conference are Mr. Xu Lin, deputy head of the Publicity Department of the CPC Central Committee and minister of the SCIO; Mr. Wang Zhigang, minister of science and technology; Mr. Ma Xiaowei, minister of the National Health Commission (NHC); Mr. Ma Zhaoxu, vice minister of foreign affairs; and finally, Mr. Wang Chen, academician and vice president of the Chinese Academy of Engineering (CAE), and president of the Chinese Academy of Medical Sciences (CAMS). I'm your host, Guo Weimin, vice minister of the SCIO. 

First, we will give the floor to Mr. Xu for an introduction.

Xu Lin:

Ladies and gentlemen. Friends from the media.

The COVID-19 outbreak is the most widespread global pandemic to hit mankind in the last hundred years and represents a serious crisis and a significant global threat. The virus is currently wreaking havoc throughout the world, and lives are being lost every day. We grieve for those who have been killed and those who have sacrificed their lives during the fight. We extend the greatest respect to those who are struggling to save lives around the clock, and offer true moral support to those who are infected and receiving treatment.

Humanity is at war with the novel coronavirus. Facing this unknown, unexpected, and devastating disease, the CPC and the Chinese government put people's lives and health first. They adopted the most extensive, stringent and thorough containment measures. By working together to overcome the difficulties, the Chinese people have succeeded in containing the spread of the virus. Today, the SCIO releases the white paper entitled "Fighting COVID-19: China in Action," to share China's experience in epidemic control and medical treatment with the rest of the world. The paper introduces what the Chinese people have learned from their adversity, and is intended to bolster confidence and strength in defeating the virus through solidarity and cooperation.

China's painstaking efforts to fight against the disease deserve to be remembered forever. The white paper points out that, "the virus spread faster and wider than any other since the founding of the People's Republic in 1949, and proved to be the most difficult to contain. It was both a crisis and a major test for China." The epidemic outbreak coincided with the Lunar New Year, therefore the massive population movements made the situation extremely grave and complex. The sudden appearance of the previously unknown virus in Wuhan put an overwhelming strain on its medical resources. Restrictions on outbound traffic from Wuhan city and Hubei province were imposed. 60 million people experienced huge physical and psychological stress. Meanwhile, there was enormous demand for daily necessities and supplies to ensure epidemic control and medical treatment. Quarantine and isolation on an unprecedented scale were enforced. The economy faced downward pressure and even a temporary shutdown. In the face of the complex situation and serious challenges, the Chinese people, under the leadership of the CPC, fought the epidemic courageously. We made tremendous sacrifice, and paid a heavy price. However, the decisive results of the defensive battles of Wuhan and Hubei led to major strategic achievements in the prevention and control of the epidemic. The arduous history of China's struggle against the epidemic is the unforgettable common memory of 1.4 billion Chinese people, and they will always remember this part of their history.

China's fight against COVID-19 fully demonstrates the outstanding leadership and science-based decisions of the CPC Central Committee with Comrade Xi Jinping at its core. According to the white paper, since the outbreak of the epidemic, the CPC and the Chinese government have attached great importance to the issue and responded swiftly. General Secretary Xi prioritized the well-being of people and oversaw the general situation. At the critical moment, he made major decisions and led an all-out people's war on the virus. As the virus spread rapidly in Wuhan city and Hubei province, General Secretary Xi sized up the situation and made a resolute decision to close outbound traffic from Wuhan and Hubei, employing extraordinary measures to deal with an extraordinary emergency. General Secretary Xi assumed full command over the control efforts. He chaired many important meetings, including meetings of the Standing Committee of the Political Bureau of the CPC Central Committee, and meetings of the Political Bureau. He inspected the COVID-19 response in Beijing and Wuhan. He ordered major guidelines and overall requirements on the fight against the virus, as well as important principles on epidemic control and medical treatment. Based on changes in the situation, he made major decisions to coordinate epidemic control with economic and social development, as well as take unremitting and meticulous efforts in prevention and control work on an ongoing basis. General Secretary Xi Jinping's personal command and deployment have boosted the confidence of the Chinese people in the fight against the epidemic, gathered strength and set a clear direction.

China's fight against the pandemic demonstrates that it has put the people's interests first and that it considers nothing more precious than people's lives. According to the white paper, China has taken every possible measure to treat patients and save lives at all costs. The country has put in place a centralized and efficient command system to effectively coordinate prevention, control and treatment. It has ensured that no coronavirus patient is left unattended and that all those in need have been tested, quarantined, hospitalized or treated. Severe cases were treated by the best doctors using the most advanced equipment, and critical supplies were pooled to save lives. By doing so, it has improved patient admission and cure rates to the maximum extent possible. As of May 31, 2020, the recovery rate for COVID-19 has reached 94.3% on the Chinese mainland.

China's fight against the epidemic demonstrates its governance capacity and its composite national strength. According to the white paper, the entire country acted promptly after the outbreak to muster the support of the whole country to assist Hubei, and Wuhan in particular, to combat the disease. A total of 346 medical teams composed of 42,600 medical workers and more than 960 public health professionals from across the country and the armed forces were dispatched to assist Hubei during the coronavirus outbreak. To increase the production and supply of medical supplies, medical enterprises operated at full capacity and expanded capacity; meanwhile, enterprises in other industries made rapid adjustments to their manufacturing facilities and turned to producing products for the fight against the epidemic. The country stepped up efforts to ensure material supply in Wuhan and Hubei. From the days when outbound traffic from the city and the province was closed to the days when such restrictions were lifted, millions of tonnes of epidemic prevention and control materials, producer goods and daily necessities were transported to Hubei from across the country.

The Chinese people are the main source of confidence and strength in China's fight against the epidemic. According to the white paper, the 1.4 billion Chinese people represented a formidable force in the fight against COVID-19. After the outbreak, the Chinese people, irrespective of their gender, age or occupation, joined the battle against the epidemic with tenacious, unified willpower. Heedless of their own safety, medical workers headed for the frontline against the virus. The people in Wuhan and other parts of Hubei fought against the new coronavirus with grit in their hearts and the wider interests of others in their minds. Community workers, primary and community-level officials, officials sent to work in communities, police, and customs officers worked day and night. Couriers, sanitation workers, transport employees, enterprise employees, media workers, volunteers and many people from other sectors of society devoted themselves to the fight against the epidemic and bore no grudges. The general public shouldered their responsibilities and united as one, demonstrating two defining values of Chinese culture – solidarity and mutual assistance; and the profound love of the Chinese people for their family and their country.

The Chinese government has made persistent efforts to release information on COVID-19 in a timely, open and accurate manner as required by law. According to the white paper, while making an all-out effort to contain the virus, with a keen sense of responsibility to humanity, its people, history and the international community, China has improved its system of releasing information on COVID-19 and effectively responded to public concern. China wasted no time in releasing information such as the whole coronavirus genome sequence and the specific primers and probes for detecting the coronavirus to the World Health Organization (WHO) and other relevant countries and regional organizations, thus providing fundamental support to global virus prevention and control.

China appreciated the valuable support from the international community during its COVID-19 fight, and it is reciprocating the same goodwill. According to the white paper, the Chinese nation will never forget the help and generosity it received. When the situation in China was at its most difficult point, the international community provided valuable support and assistance to our people, for which China is deeply grateful. Facing a prolonged global pandemic, China has actively carried out exchange and cooperation with the international community, shared information and experiences and done everything it can to provide humanitarian assistance, thereby contributing its methods and strength to the global fight against the coronavirus.

Solidarity and cooperation are the most powerful weapons available to the international community in the war against the pandemic. According to the white paper, the global spread of COVID-19 is currently causing great concern. Every country should make the choice that is right for the interests of humanity and the wellbeing of our future generations. Upholding the vision of a global community of shared future, we should support each other and join hands to build a global community of health for all. As long as the international community maintains its firm confidence, solidarity and cooperation, we will succeed in overcoming the pandemic, and will emerge from this dark moment in human history into a brighter future.

Thank you.

Guo Weimin:

Thank you. The floor is now open for questions. Please identify your media organization before raising your question. Let's begin.

Reuters: 

Chinese scientists have been racing to develop a vaccine for the new coronavirus, and Chinese researchers have launched separately five clinical trials on humans. That's about half of all such trials globally at the moment. So my first question is: Does China plan to conduct such trials overseas, including Belt and Road countries? When China does eventually develop a vaccine, who will it prioritize the shots for, mainland China first, and then outside mainland China afterwards? Lastly, how will China make domestically produced vaccine global public good, as promised by President Xi Jinping, maybe which countries will get them first? The United States? The Belt and Road countries? How would that happen? Thank you. 

Wang Zhigang:

Thanks for the questions from Reuters. Every country has been concerned about the vaccine since the outbreak of COVID-19. The white paper introduced efforts in fighting the pandemic by utilizing science and technology. For example, there are questions that how scientific research, such as medicine and vaccine work, can be integrated into clinical treatments; and how big data and artificial intelligence can be utilized for pandemic control. According to people's understanding of pandemic responses in history, a vaccine currently remains critical to beating the new coronavirus. All countries have prioritized vaccine development in their battle against the COVID-19 pandemic. However, we must understand that vaccine research and development is a very rigorous and complex scientific activity. It is a long and difficult task. Such scientific research is also full of challenges and uncertainties. Some scientists describe vaccine research and development as a carefully-rehearsed dance and not an impromptu performance. Consequently, we must prioritize safety, effectiveness and accessibility during vaccine research and development. Throughout human history, vaccine research and development has played a vital role, but sometimes this process requires taking a few unintended detours. 

A successful vaccine must be secure, effective and accessible. Vaccine research and development generally needs to go through several stages, including virus separation, vaccine construction in the lab, cell experiments, animal trials, clinical trials and then large-scale production. A vaccine must be registered with and approved by the drug administration before it enters the market. Vaccines in China are being developed in five categories, including inactivated vaccines, adenovirus vaccines, recombinant protein vaccines, live attenuated influenza vaccines and nucleic acid-based vaccines. Vaccine research and development and clinical trials both require international cooperation. We have been making efforts toward global cooperation on vaccine research and development, and Chinese scientists and their counterparts from other countries all wish to contribute to building a community with a shared future for mankind in terms of health. Next, once vaccine research and development and clinical trials are completed and China's vaccine is ready to be applied, we will strictly implement the commitment made by President Xi Jinping at the 73rd session of the World Health Assembly by making it available to the world as a public good. 

Thank you.

The Asahi Shimbun:

Premier Li Keqiang said in the Government Work Report at the "two sessions" that many weak links have been exposed in public health emergency management during the COVID-19 response. And academician Zhong Nanshan also said in February that the role of the CDC is too weak, and it should be granted certain administrative powers. Regarding this weakness, what are you going to do to improve it? Thank you. 

Ma Xiaowei:

The COVID-19 global pandemic is a major public health emergency. The virus has spread faster and wider than any other since the founding of the People's Republic in 1949, and has proven to be the most difficult to contain. It is both a crisis and a major test for China. It is also a test for the development and reform of China's medical and health projects. Under the firm leadership of the CPC Central Committee and the State Council, and with joint efforts made by the Chinese people, we made strategic epidemic prevention and control achievements in roughly three months, effectively bringing the outbreak under control and protecting people's lives and their health. Practices in the battle against the epidemic show that China's medical and healthcare system along with its public health emergency management system is generally effective. However, some problems and weaknesses have been exposed.

General Secretary Xi Jinping called for efforts to develop a strong public health system to safeguard the people's lives and their health when he presided over a symposium attended by experts and scholars on the afternoon of June 2. The NHC and relevant departments will shift towards a greater focus on more precise and effective prevention measures, and they will make more efforts to streamline institutional mechanisms, elaborating on the functions of related parties, strengthening early warning capabilities, improving the quality of personnel and reforming mechanisms to ensure related budgetary support. In general, we will strengthen the construction of the public health system and the public health emergency system in the following aspects:

Firstly, we will further improve the mechanism for ensuring related budgetary support. With basic conditions for disease prevention and control improved, we will be able to further implement and improve public health service projects.

Secondly, we will clarify the functions and positions of the CDCs of different levels. In China's four-level disease prevention and control system — namely, national, provincial, municipal and county-level system — we will work to further strengthen the prevention and control of acute infectious diseases and emergency response capabilities. We will also clarify the respective functions and positions of the national CDCs, provincial CDCs, municipal CDCs and county-level CDCs. The national CDC shall be responsible for crucial tasks such as research and development, laboratory testing, professional guidance and etiology and pathogenic analysis. The provincial CDCs shall further strengthen their guidance, supervision, quality assessment and personnel training of regional prevention and control work. The municipal and county-level CDCs shall further strengthen the local epidemiological investigation and improve their daily supervision and monitoring of the local infectious disease spectrum. The county-level CDCs and community-level medical institutions shall strengthen community management and prevention and control work so as to lay a solid foundation for disease prevention at the grassroots level. Therefore, we need to clarify the respective functions of the CDCs at all four levels and streamline institutional mechanisms. In this way, higher and lower level CDCs can work in unison.

Third, we will build up an innovative mechanism combining medical care with disease control and prevention. We will connect the country's system covering the latter with medical care to achieve the smooth flow of personnel, information and resources. As everyone knows, if you are sick, you will go to a hospital. So, the disease will be first found and reported within confines of a hospital. The CDC system has to be closely connected with hospitals, and we intend to ensure that from the perspectives of institutional innovation, guarantee mechanism and personnel management. This is one of our weak spots. This issue has existed for a long time, and there is still some room for improvement.

Fourth, we will work to optimize the monitoring system and enhance our early warning capabilities. Early detection is the essential element within the principle of early detection, reporting, quarantine and treatment, and the key to controlling a major infectious disease. As for early warning, in addition to the online direct reporting system of notifiable epidemics developed after the 2003 SARS outbreak, we now have an administrative reporting system of public health emergencies. And we intend further enhance and improve these two systems. For example, we will establish a public opinion monitoring system, a reporting system for medical personnel, diversified information collection channels for scientific reports, and a multiple trigger mechanism for intelligent early warning. We will improve the emergency plan, establish health emergency teams based on levels and categories, and strengthen overall ability to detect, report, give early warning of, and respond to major public health events.

Fifth, we will enhance the building of the talent pool and develop better ways to motivate them. We attach great importance to cultivating professionals on pathogen detection, epidemiological investigations, laboratory testing, and study and analysis of the overall epidemic situation. It will improve our efficiency and level in routine surveillance, emergency warning, field investigation, situation study and epidemiological survey of major infectious diseases. Moreover, new policies will be formulated to improve public health, personnel training, admission procedures, talent use, salary structure, ongoing evaluation, and an incentive mechanism. As reported, there was once a brain drain in China's disease control and prevention system. We need to improve personnel training and increase the salary structure so that our teams can fully play their role in routine surveillance and management, and can handle emergencies under virtual wartime conditions. Then, we will see a great progress and improvement in our ability of effectively responding to major public health emergencies. Thank you.

NBC News:

There seems to be an information war going on regarding the causes and responsibility for the coronavirus pandemic with the main battle being between the western media on one hand and Chinese state, official media on the other hand. So, it's a very difficult moment when the world needs truthful reporting. Why should people believe in China's official media? How do you respond to accusation that China's official media are apparently engaging in misinformation and propaganda that promote China's image in an attack on the West? Thank you. 

Xu Lin:

Since the outbreak of the epidemic, Chinese media workers together with their international counterparts have undertaken in-depth interviews and delivered reports in a timely manner. They have told stories of fighting COVID-19 in China and all over the world, spread knowledge of epidemic prevention and control, exchanged experiences with other countries, and responded to concerns from society and the public. Their efforts not only help the international community to learn more about China's fight against COVID-19, but also enhance the Chinese people's understanding toward other countries' efforts to contain the virus. In particular, a total of 480 Chinese journalists resolutely went to the front and risked their lives to carry out in-depth reporting in Wuhan, Hubei province, hardest hit at one time by the epidemic. They made a true record of the Chinese people's hard battle against the virus, timely reported problems, and promoted the settlement of these issues. Chinese media workers fully adopted a scientific attitude while reporting on this fight. They are professional and dedicated, and fully deserve our respect. Chinese media's reports about COVID-19, based on facts, are objective. Allegations that Chinese media are making so-called "false propaganda" are not grounded in fact and so are totally untenable. 

We have seen that some foreign politicians and media created a presumption of guilt regarding the origin of the virus, attached a stigma to it, politicalized the outbreak, and even fabricated and spread the so-called theories that "the coronavirus originated in China," "China concealed the facts about COVID-19," or "China should be held accountable for the outbreak." These accusations are groundless, unreasonable and show no respect to science. They have aroused strong indignation of the Chinese people. Chinese media have no interest in the so-called "information war." In fact, in the face of many rumors, slanders and attacks against their country, Chinese media felt bound to respond. Of course, our response does not aim to form part of any "rhetorical war," but aims to tackle problems at the root, make a clear distinction between right and wrong, restore the facts and establish the full truth, spread justice and legal evidence, and uphold morality and conscience.   

As you mentioned, it's now a very difficult moment when the coronavirus is still spreading across the world. In our joint battle against COVID-19, we need unity and cooperation, rather than "playing a blame game," provoking stigmatization, or turning it into a political virus. This virus is the common enemy of humanity, so is misinformation. Now, what the people need most is true, comprehensive and objective information, as well as strength and confidence. The media should show their responsibility in and commitment to reporting global solidarity and achievements in the fight against COVID-19. They should take the initiative to exchange the practices and experiences of various countries in epidemic prevention and control, convey the warmth and strength of all peoples in helping each other in times of difficulty, and inject more confidence and hope into the current global fight. Chinese media have already done this, and will continue to do so. Thank you. 

CCTV:

We have seen that the white paper mentions certain ideas about medical treatment such as "improving the patient admission and cure rates and reducing the infection and fatality rates" and that "the infected were treated in dedicated medical facilities where medical specialists from all over the country and all the necessary medical resources were concentrated." Which of these measures can be shared with the international community? Are there other measures that may be followed in future epidemic treatment? Thank you.

Ma Xiaowei:

In the medical response to COVID-19, the Chinese government has put the people's interests first — nothing is more precious than people's lives. The government introduced the strategy of "early detection, reporting, quarantine and treatment" and the principle of ensuring that "the infected were treated in dedicated medical facilities where medical specialists from all over the country and all the necessary medical resources were concentrated." We have focused on improving the patient admission and cure rates and reducing infection and fatality rates as a major task. Through the strenuous efforts of medical workers, all COVID-19 patients in Wuhan were discharged from hospital by April 26. As of June 2, the recovery rate of COVID-19 patients in the country reached 94.3%, surpassing the average cure rate of viral pneumonia. Since the treatment of COVID-19 patients, we have raised that of severe cases of viral pneumonia to a new level. 

The main measures we have taken are as follows:

First, we have taken resolute and strong measures to control sources of infection and lower the infection rate. We have developed a COVID-19 prevention and control protocol, and this has been updated five times. We have implemented rigorous quarantine and management measures among four categories of people – confirmed cases, suspected cases, febrile patients who might be carriers, and close contacts, making sure that all those in need are tested, isolated, hospitalized or treated in some other away. Under the guidance of the Central Working Group, Wuhan conducted community-based mass screenings twice across the city, leaving no person or household unchecked. This was done in order to rule out all potential sources of infection and make sure all patients and sources of infection among residents and mobile personnel were included, hospitalized and under control where necessary. This played a very important role in the prevention and control of the epidemic. According to the general law of epidemiology, once the source of infection is brought under control, the situation will be hugely different after two recognized latent periods. The measures we have taken have proved to be effective. 

Second, we have speeded up testing. In modern medicine, the testing capacity is essential for identifying and stemming any epidemic. After arriving in Wuhan, the working group on the frontline strengthened guidance in this regard, let China CDC devolve the authority for testing to all hospitals of Grade B and above, expanded laboratories, trained personnel, and involved qualified third parties to enhance testing. The testing period was shortened from two days to four to six hours in Wuhan, and the daily capacity expanded from 300 samples to more than 50,000. A closed-loop system was established, with online reports of cases identified at the fever clinics of medical facilities being submitted to higher authorities within two hours, the test results of such cases being sent back to reporting clinics within 12 hours, and on-site epidemiological investigation being completed within 24 hours. This played a big role in controlling sources of infection. In the early stage of the epidemic, the average time to diagnose a patient was 15.4 days. By the middle stage, it had been shortened to three days. The possibility of transmission was thus reduced significantly. The establishment of the closed-loop system combining epidemiological investigation and testing helped us to have the initiative of epidemic control. 

Third, we have used all available means to guarantee the supply of medical services and improve the cure rate. Across the country, more than 2,000 medical institutions and hospitals for treating severe cases were designated for the treatment of the disease, along with over 10,000 fever clinics. In Wuhan, the Central Steering Group pushed for an increase in hospital beds and the establishment of a network for emergency treatment layered with designated hospitals, temporary treatment centers and isolation points. We built the Huoshenshan Hospital and the Leishenshan Hospital, and transformed a group of general hospitals such as the Tongji Hospital, the Union Hospital and the Hubei General Hospital. The number of designated hospitals increased from 35 to 86. During the prevention and control of the epidemic, we built temporary treatment centers, or Fangcang shelter hospitals, which played a very important role in admitting huge numbers of patients with mild conditions. Because of the construction of temporary treatment centers, we were able to provide hospital beds for confirmed cases identified during community-based screenings. We decided to build temporary treatment centers on Feb. 3. On Feb. 5, the treatment centers started to admit patients. By Feb. 16, we had built 16 such facilities and added 12,000 hospital beds, enabling all those in need at that time to be hospitalized. We realized the goal for available hospital beds to outnumber patients on Feb. 16, and had got the initiative to control the epidemic since then. On Feb. 19, the number of patients discharged from hospitals equaled the number of confirmed cases, thus establishing a turning point. 

Fourth, we have added a group of isolation points. More than 630 guesthouses, schools, training centers and medical facilities were remodeled to host close contacts and suspected cases under isolation. In order to implement epidemic prevention and control work, we have taken effective measures for isolation. Increasing beds was a very important task we have conducted to ensure service provision in the early stage.

Fifth, we have pulled out all the stops to treat and cure patients, improving the cure rate and lowering the fatality rate. Minister Xu Lin just said that we have conducted a massive task of medical care. A total of 346 national medical teams that comprised 42,000 medical workers including 19,000 for treating severe cases were dispatched to Wuhan. The national medical teams took charge of all severe cases and administered the wards as a whole. We let doctors of intensive care unit, respiratory department, cardiovascular department, and infectious disease department take the lead. Large numbers of nurses for intensive care were dispatched to Wuhan. Every patient with severe conditions was looked after by three nurses. We put severe cases together for treatment and continued to improve the level of care. While treating patients with mild conditions at temporary treatment centers, we combined traditional Chinese medicine with Western medicine so as to prevent them from turning into severe cases. With these measures, we significantly improved the level of medical treatment. 

Regarding medical treatment for COVID-19 patients, integrated efforts have been made in the following five aspects. First, the treatment applied has involved a mix of basic medical science and clinical medicine. COVID-19 cases have been studied jointly by doctors and clinicians in virology, anatomical pathology, immunology, and pharmacology. The research in anatomical pathology has played an important role in this aspect. Second, frontline and rear-based medics have made coordinated efforts. When frontline medics encounter problems, those in the rear provided multi-disciplinary support via videoconferencing. Efforts in major medical disciplines throughout China have been organized to support Wuhan. Third, both medical treatment and nursing have been well applied. Nursing is utterly important for patients with severe respiratory diseases. Nursing cares at the early stage to keep the respiratory tract smooth can greatly relieve symptoms amongst COVID-19 patients. Fourth, the combination of medical treatment and management is a very important characteristic. Over 42,000 medics carried out medical treatment in an orderly manner, which demonstrated strong professionalism and administrative and command abilities. Five systems for critically-ill patients were established within a week. The first was a 24-hour report system of critically ill patients. The second was a discussion system of COVID-19 deaths. The third was an inspection system by top experts covering critically-ill patients not only in Wuhan, but also in another 19 cities. The fourth was the management system concerning medical nursing care. A set of unified standards and procedures were applied to nursing care. The fifth was a vertical administrative command system, under which hospitals established medical affairs, nursing and hospital-acquired infection control departments. There were no infections among the 42,000 medics, and no deaths, infections, or relapses among the patients treated in the temporary treatment centers. China's medical treatment in this regard made remarkable progress.

I also want to mention that traditional Chinese medicine has played a very important role in treating both mild and critical COVID-19 patients. This is one aspect that should be thoroughly reviewed and learnt at this time. In addition, when treating COVID-19 patients, medics have fearlessly devoted themselves to saving lives. This reflects the long-built achievement of our medical teams, and it should be inherited. That's all for my introduction. Thank you. 

The Kyunghyang Shinmun:

I have two questions. First, in order to prevent and control the COVID-19 pandemic, personnel exchanges between different countries have been largely impeded. As China has achieved major strategic results in combating the pandemic, when will the existing visa suspension measures be eased? In addition, as China conducts virus control on an ongoing basis along with its economic development, to what extent should the prevention and control work be carried out? Can people take off their facial masks during the Dragon Boat Festival holiday, for example? Thank you. 

Guo Weimin:

There are two questions. The first one is about international personnel exchange, and Mr. Ma will answer that. The second one concerning epidemic prevention and control will be answered by Mr. Wang.

Ma Zhaoxu:

Epidemic knows no border. Since the start of the COVID-19 outbreak, countries have followed the instructions of the World Health Organization (WHO) and adopted some necessary measures concerning personnel exchange including entry and exit control, in order to better prevent and control the epidemic. This is an international practice. Speaking in regard to China's situation, we adopted a targeted, law- and science-based approach, and introduced public health emergency response measures on an unprecedented extensive scale across the country. All those measures aimed to safeguard not only the health and safety of the Chinese people and foreigners in China but also regional and global public health. The COVID-19 pandemic is still spreading across the world, and China is facing increasing pressure to prevent imported cases. Under no circumstance should we slack off. In the meantime, we will pay close attention to the global epidemic situation, and strengthen communication and coordination with various parties and improve in a timely way the prevention and control measures concerning imported cases. On the premise of ensuring the overall situation of domestic epidemic prevention and control, we will coordinate epidemic prevention and economic and social development, making dynamic adjustment to relevant policies and measures. 

We are working with various countries to strengthen cooperation. This includes joint prevention and control on an international level. We aim to restore personnel exchange between China and other countries in a steady, gradual and orderly way and help resume normal work and production and ensure the safety and steadiness of the international industry chain and supply chain. In the meantime, we have provided a "fast channel" for urgently-needed personnel concerning business, logistics, production and technological services, in order to minimize the impact of the epidemic on society and economy. You (the journalist raising this question) come from South Korea, and should know that China and South Korea first established such a "fast channel," and it has so far been doing fine. Based on our experiences with South Korea, China then established "fast channel" with Germany and Singapore. We will discuss with other countries around the world to establish "fast channel" on the premise of ensuring epidemic prevention and control in order to meet the needs of work and production resumption, and further boost the economy of China and the world. 

Wang Chen:

Prevention and control on an ongoing basis are a very important issue. It should first depend on the overall evaluation of the level of epidemic risks and emergency response. Correspondingly, there are relevant measures at each level. The whole society should act systematically based on the requirements of these rules and social management. We should find a balance between effective prevention and control and people's life and production. On May 7, upon the approval of the Central Leading Group for Novel Coronavirus Prevention and Control, through the Joint Prevention and Control Mechanism, the State Council released Guidelines on Conducting COVID-19 Prevention and Control on an Ongoing Basis. The document puts forward a series of measures and guidelines from five aspects and 20 key points as follows:

First, the emphasis is on prevention. It refers to measures taken to prevent the emergence of cases and their spread when there is no case. Wearing masks is recommended among citizens. Social distancing is encouraged and extra protection should be given to vulnerable groups. We should work to further improve people's health literacy through the COVID-19 pandemic, such as frequent hand-washing, mask-wearing when it is necessary, using serving chopsticks when dining in public places, covering up when sneezing or coughing, smoking control and quitting, to name a few.

Second, we should be extra careful that if new COVID-19 cases emerge, timely and effective measures must be taken. The principle of "early in four aspects" should be observed. First is early detection and response. Second is early reporting and swift social actions. Third is early quarantine to stop the virus from spreading. Fourth is early treatment to improve the effectiveness and prevent mild cases from turning critical.

Third, we should highlight the prevention and control of key links. We need to pay special attention to crowded locations, such as hospitals, nursing homes and schools and adopt special measures. We need to raise prevention and control awareness and we need to introduce reinforced measures. For vulnerable populations, such as the elderly and patients with chronic conditions, we will provide them with special protection measures, for if they are infected they are likely to become sicker and have a higher fatality rate than healthy people and those with relatively stronger bodies. The community is the key to pandemic prevention and control work, and it is often the starting place for the spread of the pandemic. It is necessary to make appropriate work arrangements according to the situation of the pandemic and the unique condition of each community. China has good experience with pandemic prevention and control at the grassroots level. These will be better reflected and put to use in future prevention and control work.

Fourth, we should provide more supportive measures. As General Secretary Xi Jinping emphasized, science and technology constitute mankind's most powerful weapon against diseases. As mentioned by Minister Wang Zhigang just now, a series of deployments and advancements have been made in scientific research and development, and many achievements have been made, too. Some available modern methods, such as big data, can be employed to improve the efficiency and effectiveness of pandemic prevention and control. In terms of international cooperation, in addition to China's own experience, it is crucial to develop international cooperation and learn from the pandemic prevention and control efforts of other countries as well as their scientific and technological progress. In promoting the building of a human community with a shared future, special emphasis should be given to international cooperation.

Fifth, we should strengthen organization and leadership. Party committees and governments played a key role during our fight against the COVID-19 pandemic. Governments make judgments on the risk level and response level so as to mobilize all parties in society to better prevent and control the epidemic, allowing for a sound arrangement of life and work.

Regarding the question about masks, Beijing has lowered its COVID-19 emergency response to level III. In this level, most people can actually choose not to wear a mask on most occasions. But it depends on the situation. First, one should be clear when and under what circumstances one needs to wear a mask as well as when they can abstain. For example, one does not need to wear a mask at open places, well-ventilated places or when proper social distancing is maintained. But when facing a patient with respiratory symptoms, staying in an enclosed and crowded space or at a hospital, one should still wear a mask. There is science behind wearing a mask. The Bureau of Disease Prevention and Control of the National Health Commission of the PRC and other relevant international healthcare institutions have all issued guidelines suggesting people should wear masks. In addition, people can always keep a mask at hand in case it is needed. Some key groups of people should wear masks, including those with certain occupations, such as people working in hospitals or in enclosed places, police, community workers who have close contact with others and vulnerable groups who are high risk if infected with the coronavirus, such as patients with chronic diseases and the elderly. Also, people with respiratory symptoms should certainly wear masks. Therefore, whether to wear a mask or not should depend on one's specific situation. Generally speaking, though, as China has achieved remarkable pandemic prevention and control progress, more people are able to take off their face masks on more occasions. Thank you.

The Times:

I have one question regarding China's relationship with the rest of the world, which has been negatively affected by the coronavirus outbreak. What measures will China take to repair its relationship with the rest of the world? 

Ma Zhaoxu:

I disagree with your assertion that China's relationship with the rest of the world has been negatively affected by the coronavirus outbreak. It is not true. The fact is that China's relationship with the majority of countries throughout the world has not been negatively affected by the outbreak; rather, its relationship has been further consolidated and improved. Our friends have become closer and our circle of friends has expanded. This is the truth. 

A friend in need is a friend indeed. As was especially noted in the white paper, when the situation in China was at its most difficult point, leaders of more than 170 countries, heads of 50 international and regional organizations and more than 300 foreign political parties and organizations expressed solidarity and support for China through phone calls, letters and statements. 77 countries and 12 international organizations donated emergency medical supplies to China. People of all countries supported China in different ways. We will never forget these precious acts of friendship.

Therefore, in the face of the increasingly severe global pandemic, China empathizes with other countries and reciprocates the same goodwill. We will do our best to provide support and assistance to all parties and share China's experience and solutions without reservation. The white paper elaborates on this. For example, as of May 31, China had offered aid supplies to 150 countries and four international organizations, sent medical expert teams to 27 countries and held more than 180 expert video conferences with more than 170 countries and international organizations. Local governments, enterprises, non-governmental organizations and individuals in China have donated materials to more than 150 countries and regions as well as international organizations through various channels. We have also facilitated the commercial procurement of Chinese products in China by various countries around the world. From March 1 to May 31, China exported protective materials to 200 countries and regions, including 70.6 billion masks and 340 million protective suits. These facts show that China shoulders its responsibility as a major country. The friendly relationship and practical cooperation between China and other countries in the world have also been greatly promoted. All of this proves that the COVID-19 outbreak actually improved the development of China's relationship with other countries in the world.

The international community has spoken highly of China's outstanding contributions to the global COVID-19 response. Let me quote from a leader of a developing country: "At this difficult time, China has not stayed on the sidelines, but stood with us and helped us. I would like to sincerely thank President Xi Jinping, the Chinese government and Chinese people." We have seen people in many countries hitting the "like" button for China on the internet, illuminating the lights of "China Red" in their cities, playing the Chinese national anthem in their communities and cheering "thank you China" on the streets. There are many more examples.

In sharp contrast, certain countries have gone against the historical tide. In order to shift the blame for their inadequate response to COVID-19, they pulled out all the stops to attack and smear China, creating and spreading political viruses. China will resolutely fight back against such buck-passing behavior. I want to emphasize that when faced with COVID-19, solidarity and cooperation are the most effective weapons. Surmounting difficulties by pulling together is the right way to go. 

Bloomberg News:

I want to ask about the search for the origins of the virus. Are there any updates you can share with us about how that is progressing? And how is international cooperation working to that effort?

Wang Zhigang:

Thank you for your question. As COVID-19 has spread around the world, we should search for its origin, trace its progression, find out where it came from and where it will go, and identify its transmission routes. These are the responsibilities of scientists around the world, and are also a key part of the scientific research into the pandemic. Since the outbreak, China has attached great importance to researching the origin of the virus, in order to study the natural history of its outbreak and progression, and discover the underlying scientific rules. We have made arrangements in this regard since the outset.

In terms of internal logic, determining the origin of a virus is a scientific issue that involves multiple disciplines, including epidemiology as Mr. Ma Xiaowei and Mr. Wang Chen mentioned just now, as well as pathogenic biology, molecular informatics, mathematical statistics and big data. In addition, the whole process of tracing the virus' origins requires very strict logic and solid evidence. So, we should rely on scientists and adopt a science-based attitude and approaches in our work.

At the same time, the only purpose of tracing the origin of the virus is to scientifically respond to the common threat against humankind, namely the novel coronavirus. Specifically speaking, on the one hand, it will allow us to prevent similar outbreaks from happening again. We need to find out where it came from, where it will go, how it parasitizes as a protein, how it poses a threat to human health, and how it is transmitted from animals. There are many assumptions. In short, we should serve one general purpose, which is to prevent similar outbreaks and learn how to deal with them if they happen. On the other hand, if we want to work out a scientific plan for preventing and controlling epidemics and treating diseases, we must trace the virus' origin in a more scientific way. Only by making the tracing work more scientific, effective and targeted, can we carry out the vaccine research and development, drug screening, new drug development, and the scientific research of testing reagents according to developments and changes in the virus. Therefore, that is our only purpose. This is a scientific issue, which should be carried out mainly by scientists. It is a scientific question that needs to be solved and answered. It is science that should be used to support the human response to the pandemic, and eventually stop it. 

The work to trace the origin of the virus is mainly being carried out by scientists, including those from the Chinese Academy of Sciences, the Chinese Academy of Medical Sciences, universities, and enterprises. They are playing a leading role by using various scientific methods, including pathogenic biology, molecular informatics, mathematical statistics, artificial intelligence, big data and other methods just mentioned, and focusing on tracing animals, crowds of people, molecules and the environment in a science-based way.

At present, some achievements have been published in academic papers. By the end of May, Chinese scientists had published 206 papers, overseas research teams published 282 papers, and Chinese scientists, U.S. scientist and British scientists jointly published 19 papers on the origin of the virus. A global information database has been built, collecting 36,442 COVID-19 gene sequences shared worldwide, of which 18,967 are high-quality virus sequences. These achievements are contributions made by scientists to determine the origin of the virus.

But we must recognize that tracing the origin of a virus has always been a scientific challenge throughout human history, especially when it comes to a new virus like the novel coronavirus. We still have a lot to learn about it. Next, we will continue to adopt a science-based attitude, rely on scientists, and carry out more research using scientific methodology. We should also respect science and hold a pure and simple attitude towards the research, that is, it should support our response to COVID-19 — the common threat to humankind. I mentioned this when answering questions on vaccines earlier: whether it is vaccines, drugs, prevention and control plans, diagnostic methods, or the construction of animal models — all of them need the backing of virus source tracing. Therefore, we are still working on it. The entire Chinese science and technology community is still researching and developing vaccines, screening drugs, and developing new drugs, as well as antibody drugs. These also need the support of virus origin tracing. 

Thank you. 

CRNTT:

Some foreign media have said that the Chinese government delayed releasing the genome of the virus for one week, and it is because China covered up the virus and its outbreak that caused it to spread across the globe. What do you think of this? Thank you. 

Ma Xiaowei:

I don't agree with what this foreign media had said, because it goes against the facts. Mr. Xu Lin responded to this earlier: the Chinese government did not delay or hide anything. Instead, it informed the international community of the virus data and the outbreak, making a great contribution to the global prevention and control work. The COVID-19 pandemic is the most extensive to afflict humanity in a century. It is a serious crisis and a daunting challenge for the entire world. Faced with such an unprecedented new virus, there were many things we didn't know during the initial outbreak, including its pathogen, incubation period, transmission methods, pathogenesis, its ability of transmission, source of infection, immunity of people, and so on. This is a process of accumulating evidence, of deepening our understanding, and of learning about its characteristics. We could say that even today, mankind still has a lot to learn about the virus.

Since the onset of the epidemic, acting with openness, transparency, and a high sense of responsibility, the Chinese government has quickly established a coping mechanism and has been carrying out aetiological and epidemiological studies in a race against time. It took eight days to identify the pathogen, and 16 days to successfully develop the detection kit. The Chinese government has informed the WHO and relevant countries about the epidemic outbreak, shared the genome sequence of the novel coronavirus, and launched international epidemic prevention and control in the first instance.

Here, I would like to give you a brief overview of the basic process. On Dec. 27, 2019, the Hubei Provincial Hospital of Integrated Chinese and Western Medicine reported the "pneumonia of unknown etiology" to the Center for Disease Control and Prevention in Jianghan district, Wuhan city. On Dec. 30, 2019, the Wuhan Municipal Health Commission issued an urgent notification to medical institutions under its jurisdiction, ordering efforts to appropriately treat patients with pneumonia of unknown cause. On Dec. 31, 2019, the National Health Commission (NHC) sent a working group and an expert team to Wuhan to guide an epidemic response. On Jan. 1, 2020, the NHC set up a leading group to determine the emergency response to the epidemic. On Jan. 3, 2020, China began to regularly inform the WHO, the U.S., and other countries about the pneumonia outbreak. On Jan. 7, 2020, the China CDC and other research institutions succeeded in isolating the first novel coronavirus strain. On Jan. 9, 2020, China shared with the WHO the initial progress in determining the cause of the viral pneumonia outbreak in Wuhan. On Jan. 12, 2020, China submitted the genome sequence of the novel coronavirus to the Global Initiative on Sharing All Influenza Data (GISAID) and shared globally about the information on the genome sequence of the novel coronavirus. In such a short time, China has identified a new infectious disease, including its pathogen and transmission route, and shared the information with the world. We can see that the Chinese government has adopted an open, transparent, and responsible attitude. On Dec. 31, 2019, the Hubei provincial government released its first briefing on its official website. Beginning Jan. 21, 2020, the NHC started to provide daily updates on epidemic activity on its official website. From Feb. 16 to 24, the China-WHO joint expert team conducted field visits to Beijing, Sichuan, Guangdong, and Wuhan. The team stated that China's decisive, powerful and timely measures had prevented hundreds of thousands of cases. This is a brief timeline of the early stages of the epidemic outbreak.

The timeline is very clear. The work of the Chinese government and Chinese scientists will stand the test of history and time. The virus knows no borders, and the pandemic knows no race. It's a challenge faced by all human beings, and only solidarity and cooperation can be the most powerful weapon for the international community to defeat the epidemic. This is the experience we have learned from our previous work with the international community in the fight against other major epidemics, including AIDS, Ebola, influenza A, and the H1N1 flu. The path we followed then is the correct one to continue to follow in the face of the current pandemic. Since the outbreak of the epidemic, upholding the concept of a community with a shared future for mankind, we have actively fulfilled our international obligations, closely cooperated with the WHO and relevant countries, shared epidemic and virus information with the international community, and provided material and technical assistance to more than 100 countries and international organizations within our capacity.

We will continue to fulfill our international obligations and make due contributions to epidemic prevention and control. Thank you.

The Associated Press of Pakistan:

China's epidemic prevention and control has been successful. Some media outlets believe that China has placed more emphasis on its institutional advantages and the roles of the Party and the government in the fight against the epidemic and has relatively ignored the overall efforts of the people. Do you have any comment on it? What role did the Chinese people play in the fight against the epidemic? Thank you.

Xu Lin:

First of all, I would like to point out that in China, the Party, the government, and the people are an entirety that is closely linked by flesh and blood. During the fight against COVID-19, Chinese people have played an enormous role. Doing all for the people and by the people is the starting point and goal of all the work of the CPC. The fight against the epidemic is no exception. In the battle against the epidemic, General Secretary Xi Jinping made two remarks that I think many of you are familiar with. One is that people come first, and lives come first. We are willing to protect people's life and health at all costs. The other one is that China will resolutely win the all-out people's war against the epidemic. These two remarks fully reflect the purpose and governing philosophy of the CPC and the main role of our people play in the fight against the epidemic. Under the strong leadership of the CPC, Chinese people have united as one and gained great strategic achievements in the fight against COVID-19 through arduous efforts. 

The general public served as the mainstay in the fight against COVID-19. Faced with the outbreak of an unknown virus, the Chinese people showed great faith in the leadership, the Party and the government. They courageously shouldered their social responsibility in the country's fight against the pandemic. The 1.4 billion Chinese people, irrespective of their gender, age, and occupation, shared a consensus that "protecting oneself was protecting others and making contribution to the country." They acted in unity, followed various measures on epidemic prevention and control, and voluntarily acted against the virus. People of different occupations joined the battle against the epidemic and contributed their due share. They united and cooperated to mount a collective response, demonstrating the profound love of the Chinese people for their family and their country. I would like to share with you stories of two persons in their 20s and how they showed their love and care for families and the nation.

One is about a young girl born after 1990 whose family of three were all diagnosed with COVID-19 and treated in different hospitals. In mid-February, her father died of severe symptoms. While coping with grief and her own illness, she pretended to be the father by signing on to his WeChat account every day and talked with her mother, giving her courage, strength and love. The mother and daughter were both discharged from their respective hospitals after the treatment. The strong-minded and smart girl has provided her mother with a will to carry on in the darkest moment.

Another story is about a young man from Changsha, Hunan province. Having known that people in Wuhan faced difficulty in carrying on essential outings after the lockdown, he posted "I do not fear death, but regret in this life" on social media. He then left his friends and family and drove to Wuhan. For a period stretching over dozens of days, he voluntarily drove medical workers to and from their work, and provided convenience to Wuhan residents in need. He was later named as the most lovable driver in Wuhan.

The two young persons are just examples of the national battle against COVID-19. This is also a true picture of the 1.4 billion Chinese people fighting the epidemic. All citizens share a responsibility for the fate of their country. They are filial, patriotic, kind-hearted, diligent, brave and tolerant. The Chinese people represent a formidable force in the fight against the virus. They are the source of strength in the development of the Chinese nation. Thank you.

Russian News Agency TASS:

At the 73th World Health Assembly, President Xi Jinping said China will provide US$2 billion over two years to help with the COVID-19 international response and with economic and social development in affected countries. What is China's plan to deepen and expand international cooperation in the COVID-19 response. Is China planning to work with Russia or other countries in vaccine research and development? Thank you.

Ma Xiaowei:

The global epidemic situation remains complex and grave. In the face of the most serious international public health emergency after the Second World War, many people are concerned about the future of the human community. At this historic moment, President Xi delivered an important speech at the virtual opening event of the 73rd World Health Assembly, introducing China's stance on fighting COVID-19 as well as a series of important initiatives and measures from the perspective of building a global community of health for all, which is of great and far-reaching significance to boost confidence, advance international cooperation in the battle against the COVID-19 and even strengthen global public health governance.

China has always been true to its words and resolute in its deeds. The measures announced by President Xi are now being implemented and making good progress. I would like to share with you some details about the implementation. The US$2 billion package not only includes providing anti-epidemic materials but also supporting economic and social development of the affected countries. China is negotiating bilateral aid arrangements with needy recipient countries in an equal manner to identify assistance projects to help developing nations improve their public health standards, people's livelihood, reduce poverty and resume normal economic activities. On the multilateral front, China has provided two batches of cash support totalling US$50 million to the WHO and made donations to international organizations like the Global Alliance for Vaccines and Immunizations. We also helped WHO's COVID-19 Solidarity Response Fund to raise funds in China. The establishment of a global humanitarian response depot and hub in China in cooperation with the United Nations is under discussion and preparations are under way. China has announced the suspension of debt repayments for 77 developing countries and regions and actively participated in and implemented the Debt Service Suspension Initiative for the poorest countries together with other G20 members. A cooperation mechanism for Chinese hospitals to pair up with 30 African hospitals is also in the pipeline.

Regarding your question about vaccines, Mr. Wang just explained that China has given high priority to international cooperation in terms of vaccine R&D. Our country has participated in the global initiative organized by the WHO for the R&D of specific medicines and vaccines. Not long ago, China joined hands with the WHO to hold a video conference aiming at promoting R&D from which experiments worldwide should be undertaken in great solidarity. China has committed to providing safe, effective and high-quality public products to the world once it has completed the R&D process and put the vaccine into use. It has also promised to contribute to the availability and affordability of vaccines for developing countries. These are commitments that we must fulfill.

China and Russia, in accordance with their comprehensive strategic partnership, have assisted and cooperated with each other since the outbreak of the pandemic. In the next phase, we will follow the significant consensuses reached between the leaders of the two states to expand our cooperation in pandemic prevention and control, including the vaccine R&D. That is how we are contributing to cementing the anti-pandemic efforts being taken by the entire international community. 

China Daily:

Following a series of efforts derived from the R&D for effective medicines and treatments against the COVID-19, China has formed its own anti-virus guidelines. Will China recommend its achievements abroad? How have these approaches, if they have been introduced, worked in other countries? Thank you. 

Wang Zhigang:

Medicine plays a fundamental role in ensuring people recover. Since the start of the pandemic, the R&D of drugs has been prioritized as the most critical effort and involves numerous essential projects being undertaken by more than 160 research institutes and enterprises. We commenced our efforts with "three medicines and three treatments." Specifically speaking, the three existing medicines we experimented on were supposed to take on new clinical efficacies, and the three treatments have been a combination of medical and therapeutic treatments. In different phases and trials that have been developed and refined around the principles of safety and efficacy, our scientists have worked day and night with the pharmaceutical industries which have demonstrated their strong will to join in making relevant products. In this way, we have made remarkable scientific achievements while experimenting on Resochin, favipiravir, carrimycin, tocilizumab, convalescent plasma therapy and stem cell treatment, to name just a few. Among them, 10 medicines and therapies have been included in the treatment plan. They acted as key scientific and technological approaches to save lives on the frontlines where the recovery rate has risen and mortality has fallen.  

We have taken several concrete steps in exploring the potential efficacy of existing drugs. These can be illustrated as follows: first, through the selection of medicines. By applying big data, we have filtered a wide range of medicines available on the market both based on our experience and by using a modern selective approach to identify which drugs are most likely to be effective. Second, we have conducted in vitro experiments, including cell and animal experiments, which have been followed up by small and scaled-up clinical trials before being incorporated in diagnostic and clinical treatments. Through these steps, we have identified specific medicines and recommendable treatments.

In addition to old drugs being used in new treatments, certain breakthroughs have been made in pharmaceutical research that were mentioned by both Mr. Ma at the NHC and Mr. Wang at the CAMS. First, TCM has played a vital role, which can be demonstrated by its own competence as well as by the synchronized efforts taken between it and western medicine, as the impact is indeed hard to ignore. Second, we have done a good job in taking simultaneous steps to both develop medicines and provide clinical treatments. The efficacy of medicines cannot be proven by molecular, animal and small-sized clinical experiments only — they should also be subjected to clinical trials. Only with a continuous cycle of reaction and improvement can the R&D and treatments be coordinated well. Third, interdisciplinary efforts including supercomputing, animal models and artificial intelligence have contributed significantly to selecting medicines and working on their efficacies. Fourth, the application of existing drugs for new uses has brought us some effective medicines, especially some antibody medicines for prevention and treatment, even though, they are not specific ones. Recently, a major breakthrough has been made with an antibody medicine being proven by the National Medical Products Administration and taken for clinical trials.

Regarding your question about recommending our achievements to the world, my answer is that we have been actively sharing our experiences in pharmaceutical R&D and clinical trials with other countries for them to choose whatever they find useful based on their own needs. In this aspect, we have communicated deeply with the rest of the world. As I mentioned, we have published many articles, communicated via numerous video conferences and held face-to-face meetings for exchange. Chinese research teams have published innumerable papers, shared scientific research achievements with more than 200 countries and regions, and supported international multi-center clinical trials with enterprises and relevant institutes. Notable progress has been made in view of these aspects. However, it is up to scientists and medical personnel overseas to tell whether the efforts can pay off in their countries through their practices and improvements while using our experiences. Thank you.  

Guo Weimin:

That concludes today's press conference. Thank you all.

.

Read in Chinese 

Speakers:

Ning Jizhe, deputy head of the National Development and Reform Commission (NDRC)

Cong Liang, secretary general of the NDRC

Zhao Chenxin, deputy secretary general of the NDRC

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 24, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to invite Mr. Ning Jizhe, deputy head of the National Development and Reform Commission (NDRC); Mr. Cong Liang, secretary general of the NDRC; and Mr. Zhao Chenxin, deputy secretary general of the NDRC. They will introduce China's efforts to accomplish its economic and social development goals for 2020, namely to ensure the six priorities and stability in six areas (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations). They will also answer your questions.

First, let's give the floor to Mr. Ning Jizhe.

Ning Jizhe:

Friends from the media, my colleagues and I are pleased to be taking part in this press conference during the "two sessions." Currently, under the personal command and deployment of General Secretary Xi Jinping, positive results have been achieved in coordinating epidemic controls, and economic and social development. On the morning of May 22, Premier Li Keqiang's report outlined deployments and arrangements for the government's work this year. Also, on May 22, NDRC head He Lifeng took part in the "ministerial interview." The plans and report have been submitted to the "two sessions" for review and discussion. The NDRC will fully implement the decisions and deployments made by the CPC Central Committee and the State Council, adopting effective measures to ensure the accomplishment of the economic and social development goals for 2020. We also thank our friends from the media for their consistent support and understanding of the work of the NDRC. Next, we will answer your questions.

Hu Kaihong:

Thank you, Mr. Ning, for your brief opening remarks to allow us more time for questions. Now the floor is open for questions.

CCTV:

Economic statistics from the first quarter of 2020 show that consumption recovery has generally been comparatively slow. Therefore, many people online have spoken of their desire to indulge in "retaliatory consumption" after the epidemic situation improves. However, in the meantime, statistics from China's central bank also show an increase in deposits during the first quarter. Some people have therefore said that "retaliatory saving" is taking place. So, what exactly is happening? is it "retaliatory consumption" or "retaliatory saving"? How does the NDRC evaluate the epidemic's impact on consumption? What measures will be introduced next to boost consumption? Thank you.

Ning Jizhe:

That is a good question, and one which is of great concern to people both in China and overseas. As you've said, the COVID-19 pandemic has had a huge impact on the economy, primarily affecting consumption sectors. People's aggregate, liquidity, and contact consumption behaviors, as well as the consumption of non-essentials, have been affected. In the meantime, we should also note that new consumption models are expanding, such as online consumption and e-commerce. These have ensured the basic needs of 1.4 billion people, and contributed to the resumption of work and production of companies.

China's retail sales of consumer goods dropped 7.5% in April year-on-year, the decline of which narrowed by 8.3 percentage points from March. This also indicates that as the economy continues to recover and work and production resume, the general trend of expansion and structural upgrading of China's consumption remain unchanged. We believe that consumption data for May will be better. As for whether this is "retaliatory consumption," that is not necessarily correct. Consumption is certainly moving towards recovery. Next, the NDRC will follow the requirements set out in the Report on the Work of the Government, adopting multiple measures to help consumption recover.

First, the NDRC will make greater efforts to promote the optimization and upgrading of commodity consumption mainly concerning people's everyday lives. In terms of diets, the NDRC should ensure people are not only well-fed, but also eating in a healthy manner. As for clothing, the NDRC should work to ensure that people can dress both warmly and decently. In terms of items people use, the NDRC should work to ensure that things provided to people are not only useful, but also diverse and of high-quality. The housing and rental markets need to be further developed. Greater efforts need to be made to renovate the city's old neighborhoods in a more convenient and age-friendly way, so that residents can live comfortably. The NDRC will further promote the optimization and upgrading of car consumption, as well as the circulation of second-hand vehicles. It will work to implement favorable policies concerning fiscal and taxation support regarding the purchase of new energy vehicles (NEVs), so as to make traveling easier for people. In the meantime, the NDRC will comply with the trend of people's consumption being upgraded, strengthening the development and supervision efforts of commodity brands, quality, and manufacturing standards, so as to continuously optimize people's consumption environment and improve the level of consumption.

Second, the NDRC will work to improve the quality and scale of consumption-related services in a comprehensive manner. Considering the progress of supply-side reforms in the service industry, the NDRC will release the potential in consumption-related services at an accelerated pace, such as those in the culture, tourism, sports, elderly care, child care, housekeeping, education and training sectors. It will work to diversify the supply of cultural and tourism products, improving the quality of tourism in China and promoting the development and prosperity of China's cultural undertakings and culture industry. The NDRC will also make greater efforts to boost sports-related consumption, making fitness programs and sports-watching activities accessible to all. Currently, 400 million people exercise daily in China. If this figure reaches 800 million, then the sports market will double. The NDRC will work to improve effective supplies for elderly care services, supporting private sectors in making affordable child care services accessible to all. It will carry out the "leading" campaign to improve the quality and scale of housekeeping services. The NDRC will promote integration between industries and schools, supporting private sectors in launching educational and training programs.

Third, we will boost new forms of consumption, including digital consumption, online consumption and information consumption. From January to April of this year, online retail sales of physical goods increased nationally by 8.6% year-on-year, accounting for 24.1% of the total retail sales of consumer goods — which increased by 5.5 percentage points year-on-year — and showing the strength of new forms of consumption. We must take the opportunity to further promote the integration of online and offline consumption and advance the digital upgrading and transformation of traditional in-store consumption. We will innovate non-contact and reduced-contact consumption patterns and explore the new retail models, such as smart supermarkets, stores and restaurants. We will vigorously develop the "internet plus social service" consumption model and expand forms of online consumption, such as online education, telemedicine and online entertainment. We will actively develop new information products, such as mid- to high-end mobile communication terminals, wearable devices and ultra-high-definition video terminals, to promote the upgrading of information consumption.

Fourth, we will actively expand green, healthy, energy-saving and environment-friendly consumption. Guided by green development, we will promote the production, supply and consumption of green, organic ecological and agricultural products. We will step up the improvement of the recycling network to facilitate resource recycling and promote the upgrading of motor vehicles, home appliances and electronic products. For some idle home appliances and electronic products, we can recycle them as a contribution to consumption upgrading. We will optimize the standard system of industrial energy saving and green manufacturing, and promote the application of green and energy-saving products. While responding to the COVID-19 epidemic, we will call for all of society to develop a rational concept of consumption and a healthy lifestyle, and encourage families to keep medical kits that include masks in reserve. Our nation is home to more than 400 million families, and everyone should develop the awareness and habit of storing up medical supplies. We will integrate and optimize medical and health resources and relevant supply chains, and improve the health industry system to expand health services consumption.

Fifth, we will strengthen the infrastructure and service systems of consumption. We will accelerate the construction of new infrastructure that can support 5G networks, data centers, industrial internet, the Internet of Things, etc. We will improve the urban and rural logistics distribution system and promote resource sharing and the construction of smart parcel delivery lockers and other facilities. We will optimize the consumer network, turn more cities into international consumption centers and build a number of regional centers equipped with advantages in resource integration that can drive consumption. We will promote the construction of urban and rural commercial outlets and optimize the planning and distribution of commercial retail enterprises; this will include developing the small business economy and the night economy. These are all promising areas. Thank you.

Nihon Keizai Shimbun:

China didn't set an economic growth target this year, which is something that has rarely been seen in history. When was the last year that China abandoned a GDP target? In addition, facing unprecedented challenges, how can China ensure the achievement of its economic and social development goals and tasks this year? Thank you.

Ning Jizhe:

I am happy to answer questions from Japanese reporters. A few months ago, anti-epidemic supplies from our Japanese friends with the poem "Miles Apart but Close at Heart" written on the boxes were donated to China, and got a positive reaction. I would like to take this opportunity to thank our Japanese friends and thank you for your question.

Speaking of the economic growth targets, this is not the first time that we have dropped a specific target in a government work report. Since the reform and opening-up, there have been three years — 2000, 2001 and 2002 — when we set no annual growth targets in our government work report. It is the fourth time this year. You can check the reports. 

We have not set a specific target for economic growth this year because our country is facing some factors that are difficult to predict in its development due to the great uncertainty surrounding the COVID-19 epidemic and the world economic and trade environment. The targets for development outlined are "giving priority to stabilizing employment and ensuring living standards, winning the battle against poverty, and achieving the goal of building a moderately prosperous society in all aspects." This shows that our development is centered on improving people's lives, and we consider employment to be a priority. It also reflects that our key goal and task is to win the battle against poverty — one of the three tough battles. It points to the connection of development goals set in the final year of the Twelfth Five-Year Plan and the first Centenary Goal of building a moderately prosperous society in all respects.

No mentioning of a specific economic growth target in this year's Government Work Report by no means indicates a less essential role of growth, which serves as an underpinning for ensuring people's livelihood, employment and poverty alleviation. We should pursue reform and opening up as a means to stabilize employment, ensure people's wellbeing, stimulate consumption, energize the market, and achieve stable growth. Though no growth target was set in the Report, it is in fact reflected in relevant indicators for other economic and social development goals.

Now, I will respond to your question about how to achieve our goals. Since the beginning of the year, we have been facing an extraordinary environment both at home and abroad due to the unprecedented impact of the COVID-19 outbreak, and our economic development also been exposed to unprecedented challenges. However, there are always opportunities arising amid crises so long as we surmount the difficulties. After effectively bringing the outbreak under control, China is regaining a steady momentum for economic recovery and improvement. In our next phase, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the NDRC will, in accordance with the requirements in the Government Work Report delivered by Premier Li Keqiang, make solid efforts to ensure stability on the six fronts and security in the six areas, maintaining security to deliver the stability needed to pursue progress and striving to accomplish our annual economic and social development goals. We will strengthen our efforts in the following six aspects: 

First, increasing efforts will be made to secure employment and livelihood. This year, we will give priority to stabilizing employment and ensuring living standards, with a focus on key groups including college graduates, migrant workers and laborers from poverty-stricken areas. In regard to the employment of 8.74 million college graduates this year, we will increase job vacancies in enterprises, expand enrollment in postgraduate schools and open more positions at community-level units. Meanwhile, we will encourage business start-ups as a means to create more jobs. Our public employment services will cover all urban and rural permanent residents (including migrant workers), so as to help more than 200 million migrant workers and tens of millions of workforce in poverty-stricken areas find jobs. We will encourage infrastructure projects to employ more rural labor force and ensure they can work locally and close to their homes. With proper jobs and income, people can enjoy a better life.

Second, we will strengthen our poverty-alleviation efforts. Winning the fight against poverty is an important target and arduous task we must fulfill this year, and we will enhance our poverty-alleviation efforts with employment, industrial development and consumption. We will utilize investments and construction to help people shake off poverty, and exert efforts to overcome the epidemic's impact and accelerate launching or resumption of poverty relief projects. We will expand the scope of the work-relief programs to cover more beneficiaries, and the NDRC has already allocated relevant funds to be distributed in batches throughout the year. Last year, we generally completed our task to relocate people from inhospitable areas a year ahead of schedule in accordance with the "13th Five-Year Plan". From this year on, we will establish more detailed follow-up supportive measures to improve services and facilities including education and healthcare in large resettlement areas, and consolidate our progress in poverty alleviation.

Third, focused policies will be introduced to mitigate the impact of the outbreak. We will pursue a more proactive and impactful fiscal policy, as well as a prudent monetary policy that is more flexible and appropriate, and another package of policies devised to prioritize employment, stimulate consumption, calibrate investments for vulnerable areas, refine industrial structures, differentiate targets for different regions and promote market-oriented pricing. When combined, they can effectively reduce the epidemic's impact.

Fourth, we will strengthen domestic demand to support the economy. We will continue to deepen the supply-side reform, hold firm to the strategy of expanding domestic demand, expand consumption, promote investment and explore potential markets in both urban and rural areas. Based on a population of 1.4 billion people, including a more than 400 million middle-income group, we will promote both traditional and new consumption areas. In regard to investment, we will leverage the 600 billion yuan for investment from the central government budget, special local government bonds worth 3.75 trillion yuan, government bonds approximating hundreds of billions yuan to be issued especially for anti-epidemic efforts and additional financial funds and social capital to address inadequacies and shore up points of weakness.. In this way, we can take great strides in terms of both traditional and new investments. In regard to urbanization, we will endeavor to bring 100 million rural residents to settle down in cities and towns, renovate 39,000 old urban residential communities and support the construction of a new-type urbanization piloted in about 100 counties and county-level cities.

Fifth, assistance to enterprises will be reinforced. We will accelerate our implementation of the policies assisting the development of enterprises and launch a new package of policies as outlined in the Government Work Report. We will adopt multi-faceted measures to help 100 million market entities, especially micro, small and medium-sized enterprises and self-employed people, resume work and production to foster the micro-economic basis that can guarantee employment and stabilize economic growth.

Sixth, the reform and opening up will be strengthened. We will fully implement two major documents recently issued – "The Guideline on Accelerating the Improvement of the Socialist Market Economic System in the New Era", and "The Guideline on Improving the Market-based Allocation Mechanism of Production Factors" – to deepen our reforms to streamline administration and delegate power, improve regulation, and upgrade services. That is how we can improve our business environment, and unleash and develop productive forces. We aim to raise our new institutions of the open economy a notch higher and to continue overall opening-up in a wider, broader and deeper way. Thank you.

Economic Daily: 

The epidemic has had great impact on global supply chains and industrial chains, and some countries have accelerated the withdrawal of their enterprises. My question, therefore, is: what challenges might be imposed on China's supply chain and industrial chain? How can we further upgrade the supply and industrial chains while ensuring their stability and competitiveness? Thank you.

Cong Liang:

Thanks for your questions. As you mentioned, the sudden outbreak has had great impact on China's economic and social development. Under the leadership of the CPC Central Committee and the State Council, regions and departments together have rolled out 90 targeted and powerful policies and measures covering eight aspects, including alleviating the difficulties facing enterprises, smoothing circulation of the supply chain, working in a synergistic way to achieve full resumption of production, and accelerations in the resumption of work on major projects. As things stand, the measures have taken effect as the enterprises resumed work so that production has been enabled to gradually approach or has reached the normal level. The statistics on electric power production is the most telling. According to statistics, this contracted by 4.6% in March year-on-year, and then increased by 0.3% in April year-on-year. The latest figures show that energy production in the first 20 days of May increased by 5.2% year-on-year, and was a gain of nearly 10 percentage points compared to March.

At the same time, however, the outbreak has continued to spread overseas, and this has severely hindered global economic and trade activities, interrupted global industrial and supply chains and increased uncertainty and instability. Our country has become deeply integrated with global industrial chains, so, inevitably, it has been impacted and influenced. It's necessary to spare no effort to ensure the stability of both the industrial and supply chains, which is one important part of the work of maintaining security in six areas as well.

At the same time, while consolidating and expanding the anti-virus achievements, the National Development and Reform Commission intends to further implement the details of the established policies, go all out to maintain the stability of all industrial and supply chains and constantly improve their competitiveness.

We have to ensure that all the various chains involved can circulate in an unimpeded way, by further alleviating the difficulties faced by enterprises and implementing the established policies on fiscal taxation, finance, social security, labor and rentals. These policies have already been introduced and are to be retained until the end of the year. The key is fully implementing the policies to help enterprises, especially these micro, small, and medium-sized ones to stabilize production and overcome any hardships they face. We should focus on getting through any bottlenecks and overcoming barriers appeared in the major industrial chains and significant investment programs, strengthening the key support elements for leading enterprises, synergistically promoting holistic work resumption in regard to upstream-downstream industries, production, sales and supplies as well as large, medium and small enterprises. Although some large enterprises have resumed production, the lockdown of some small enterprises can impact the circulation involving the whole industrial chains. Only by achieving synergy among large, medium and small enterprises can we achieve a full resumption of work and production. At the same time, we should optimize the supply chain system, coordinating domestic and overseas logistic resources to guarantee there are no blockages in railways, civil aviation and sea transportation. 

We also should make efforts to improve the various industrial and supply chains. It requires us to consolidate the advantages of traditional industries, strengthen the leading role of competitive industries, and support enterprises to upgrade their technologies and overcome bottlenecks. It also demands us to improve weak links and increase the resilience of industrial chains. We should also focus on advancing the development of industrial bases and modernizing industrial chains. Meanwhile, we should promote the digitalization, encourage enterprises to accelerate this aspect in their supply chains and improve flexibility and collaborative capacity. Additionally, we should launch pilot projects deeply integrating an advanced manufacturing industry and a modern service industry, striving to develop new industries, new business forms and new patterns, and fostering and expanding new growth points and poles.

Lastly, I would like to emphasize that ensuring the stability of global industrial chains and supply chains cannot be done by one country. The international community needs to enhance cross-border cooperation, jointly confront the challenges, contain the virus as soon as possible, push forward the return of industrial development back onto the normal track and promote dynamic circulation and healthy development of economic and social systems. Thank you.

Reuters:

The government work report has set a target of adding over nine million urban jobs. How many of these job opportunities are expected to be given to migrant workers? Many migrant workers received no income in the first quarter of 2020. What was the extent of their losses? Thanks.

Zhao Chenxin: 

Thanks for your question. You are mainly interested in jobs, especially the employment of migrant workers. Actually, what Mr. Ning said just now did touch upon some employment issues. The CPC Central Committee and the State Council attach high importance to employment. Among the "six areas" and "six fronts" on which the government has vowed to maintain security and ensure stability, job security and employment are first. In the face of the COVID-19 epidemic this year, many enterprises have struggled and some jobs have lost. As Mr. Cong Liang said, various departments, under the leadership of the CPC Central Committee and the State Council, have issued a series of policies and measures to cushion the impact of the epidemic. The aforementioned policies and measures include 90 items focusing on eight aspects. They have been adopted to help enterprises solve real problems and tide over their difficulties. All in all, the focus is to maintain employment stability and ensure people have access to jobs and steady income.

In fact, these policies and measures offer huge supports to enterprises in terms of tax and fee cuts and financial support. As we have learnt from field investigations, many enterprises have seen tremendous improvement in terms of their business operations and employment. The latter has changed for better. I would like to share a figure with you. Between January and April, a total of 3.54 million urban jobs were added nationwide, which I think is a very outstanding report card. In the face of the epidemic, the job growth in China is awe-inspiring compared with that in other countries and regions. From this record card and other data that Mr. Ning and Mr. Cong mentioned, we can see that Chinese enterprises do face some difficulties and every possible means should be taken to help them resolve their problems. At the same time, we should have confidence that the Chinese economy will sustain sound development, and we should have confidence in the resilience of the Chinese economy and the vitality of Chinese enterprises.

As you said, the government work report does set the target of adding over nine million new urban jobs this year. I would like to give you a breakdown. A large portion will go to graduates from colleges and vocational schools and demobilized military personnel. Of course, some of them will go to migrant workers. I would like to share another figure. As the resumption of work and production progresses, over 90% of migrant workers have returned to their posts, and this figure will surely increase as we advance our work in this regard.

You also asked about the income of migrant workers. Affected by the epidemic, some migrant workers have seen their incomes drop temporarily. As China has established a regularized epidemic prevention and control mechanism, along with restoration of economic and social order, the economy will prosper and migrant workers' income will surely increase.

In addition, I would like to add four points in regard to employment. First, we should strengthen macro-regulation with employment as a priority. This is what various departments are doing right now. We will continue to give priority to employment in all our policy tools. Second, we will further promote full resumption of work and production and reach targeted production capacity as soon as possible. Though the overall situation is good, we should pay more attention to "synergy." We should strengthen synergy between upstream, midstream and downstream industries, between production, supply and sales chains, and between small, medium-sized and large enterprises. Only through synergy can we truly realize full resumption of production and restore the targeted production capacity. Third, as Mr. Ning said, we will boost employment through encouraging entrepreneurship, press ahead with reforms to streamline administration, delegate powers, improve regulation, and upgrade services to create a good environment for businesses. Fourth, we should pay attention to key enterprises, industries and social groups. As Mr. Cong said just now, key enterprises and industries include foreign trade companies, micro, small and medium-sized businesses, and private companies. Key social groups include graduates from colleges and vocational schools, demobilized military personnel and migrant workers. We will boost support for all of them. 

In the end, I would like to say that employment is the root of people's well-being and the source of fortune. The NDRC will work together with other relevant departments to unswervingly implement the decisions made by the CPC Central Committee and the State Council. We will do a better job in securing employment to make sure "people will always hold firm their rice bowl." Thank you!

China News Service:

We noticed that a large number of large-scale foreign investment projects were launched in China since last year. What are the prospects for China to attract foreign investment this year amid the pandemic? Will there still be large projects implemented in China? Thank you.

Ning Jizhe:

As China opens its market and improves its investment environment, it is seeing an increase in large-scale foreign investment projects, which has become a prominent feature in use of foreign capital in the past two years. For example, during last year, Samsung's $15-billion flash memory chip project (phase II) in Xi'an completed plant construction, and BASF's $10-billion petrochemical project in Zhanjiang was officially launched. Tesla's $7-billion super factory project in Shanghai was built and went into production and delivered products to customers in the same year. During this year, BMW Brilliance's third factory project in Shenyang held a ceremony marking the start of the construction on April 1. ExxonMobil's petrochemical complex project in Huizhou held a "cloud construction" ceremony at three localities in the two countries on April 22. These all play a demonstrative and leading role in stabilizing foreign investment and promoting opening up. There will be a number of major foreign investment projects successively implemented this year, involving electronic information, new materials, advanced manufacturing and other fields. The NDRC will promote opening up, and maintain stable foreign investment, industrial chains, and supply chains in accordance with the requirements in the government work report, so as to achieve the "four furthers":

First, further promoting the implementation of major foreign investment projects. In addition to advancing the previous 18 projects in three batches, the fourth batch will be launched this year. We will coordinate services and offer support in land use, environmental impact assessment, planning, energy consumption and other aspects. We will increase the reserves of various projects in advanced manufacturing and production-oriented service industries. We will establish and improve the local leadership mechanism for major foreign investment projects, so as to comprehensively improve services. We will also facilitate the exchanges of international economic and trade personnel of some projects through a "fast-track lane" and charter flights, so as to support a faster implementation of the projects. Over 1,000 South Korean technicians working in China have resumed their work through charter flights. The efforts we have made have worked.

Second, further shortening the negative list for foreign investment. We will release the 2020 version of the negative list. The number of items in the negative list has already been cut to 40 over the past three years from 93. We will continue shortening it in accordance with the requirements in the government work report, further open up the service industry, manufacturing and agriculture, continue experiments in the pilot free trade zones, and fully implement the negative list management system. No separate restrictions on foreign investment beyond the list will be imposed. The NDRC has organized the removal of dozens of restrictions set by some organizations and government departments to put the foreign investment law into practice.

Third, further encouraging foreign investment. We will also release the 2020 catalogue of industries in which investment is encouraged. More items will be added to promote higher-quality manufacturing and tap into the potential of the country's central, western and northeastern regions in accepting relocated industries, so that more foreign investment can be covered by the preferential tax policies.

Fourth, further improving the foreign investment environment. Taking the opportunity of implementing the foreign investment law and its implementation regulation, we will improve systems of investment promotion, protection and management, improve foreign investment services, comprehensively promote equal treatment of Chinese and foreign enterprises, protect the legitimate rights and interests of foreign investors in making investment, and promote consistent and coordinated law enforcement in different localities. We will also strengthen exchanges with foreign chambers of commerce and foreign enterprises, and continue addressing problems encountered by foreign enterprises in China in resuming work and production. Thank you.

Bloomberg:

Earlier, you mentioned special bonds and how China is increasing them at the local level to deal with the impact of the COVID-19 pandemic. Is there concern that this will add to local debt pressure, and how can you balance the need for growth with the need to address problems with debts? Thank you.

Ning Jizhe:

This question is very important. I would like to invite Mr. Cong to answer it.

Cong Liang:

Thanks for your question. This is an excellent question, which focuses on a hot issue that has raised a lot of concern. Maintaining a reasonable debt level is conducive to social and economic development, and appropriate social and economic development is also conducive to controlling debt levels. I want to use some data to answer your question from three perspectives:  

First, we will be realistic and raise or reduce debt levels in line with different situations. When the economic performance is declining and demands in domestic and foreign markets are decreasing or contracting, it is necessary to increase government debt levels and increase effective demand appropriately. However, if the economic performance is increasing and demands in domestic and foreign markets are sufficient, government debt levels will be appropriately reduced to reduce total demands. This is something inherent in counter-cyclical adjustments. Currently, raising government debt levels is an extraordinary measure for an unusual time, which has been explained clearly in the government work report delivered by Premier Li Keqiang. Given the sudden impacts caused by the COVID-19 pandemic, a proactive and impactful fiscal policy must be more effective. These fiscal and tax measures were made after careful research, repeated calculations, and comprehensive consideration. They are in line with both China's economic development and the need for debt risk prevention and control. The extra one trillion yuan of fiscal deficit and the one trillion yuan of government bonds for COVID-19 control will be transferred in full to local governments and go straight to prefecture and county governments to directly benefit businesses and people. These funds will be primarily used to ensure employment, meet basic living needs, and protect market entities. This includes giving support to cut taxes and fees, reduce rents and interest on loans, and increase consumption and investment. These special local government bonds should produce benefits, and the financial size shall be balanced with project benefits, which will give rise to financial assets. 

Second, we shall understand this issue in a dialectical manner. China's current deficit ratio is not very high globally. In response to the COVID-19 pandemic, deficit ratios among nations are increasing dramatically. The IMF expects that global fiscal deficits will increase from 3.7% in 2019 to 9.9% in 2020, and deficits in developed economies will jump to 10.7% from 3%, with the United States increasing by nearly 10 percentage points to 15.4%, France to 9.2%, the Untied Kingdom to 8.3%, and Japan to 7.1%. The average fiscal deficits of emerging markets and middle-income countries will reach around 9%. Therefore China's overall deficit level is relatively low. 

Third, we shall be cautious to ensure that the debt risk is controllable overall. The CPC Central Committee and the State Council have attached great importance to the debt risk prevention and control, and regard it as one of the major tasks of the "three tough battles" (preventing financial risks, reducing poverty and tackling pollution). China's government debt ratio was 38.5% by the end of 2019, much lower than that of major developed and emerging economies. For example, the debt ratio of the United States was 106%, the European Union 80%, Japan 238%, India 69%, and Brazil 92%. 

In general, it is feasible, safe, and necessary to raise deficit ratio appropriately and issue special bonds to deal with the COVID-19 pandemic. Such fiscal policies are not only conducive to stabilizing China's economy, but also the global economy. Thank you.  

Ning Jizhe:

Please allow me to add one more point. To deal with the relationship between debt and economy, and give full play on the proactive role of local government debt in boosting social and economic development, the funds coming from the special bonds at the local level will be used for projects in three categories. First, they will be used for major strategic projects designed by the CPC Central Committee and the State Council. Second, they will be used for public welfare projects with certain returns. Third, they will only be used for capital expenditure, not for running expenses. These funds will mobilize private capitals to promote effective investment, expand domestic demand, and maintain growth, which will produce more effective assets.  

I want to make clear that the market economy, from the perspectives of accounting and statistics, is an economy of assets and liabilities. Every company has a balance sheet, so does a country. According to requirements of the Third Plenary Session of the 18th CPC Central Committee, the National Bureau of Statistics has compiled national balance sheets. The latest balance sheet shows that China's total assets have surpassed 1,300 trillion yuan. This asset did not come out of thin air. It is the achievement of years of investment and development. Our infrastructure construction, including transportation, telecommunication, energy, water conservancy, and municipal engineering, has produced effective assets thanks to the support of such investment. We have the most complete industrial system in the world with the most sophisticated classification. Therefore, we will promote some reasonable debt investment to produce a large number of effective assets, which will lay a more solid foundation for economic development and ensure people's well-being. Thank you. 

People.com.cn: 

China has made significant achievements in its response to COVID-19, which have been highly commended by the international community. However, throughout the course of fighting COVID-19, many weak links were also exposed, such as response to major epidemics, emergency medical aid and the emergency supplies reserve. What will you do next to strengthen weakness? Thank you.

Zhao Chenxin:

Thank you for your question. You made a very good point that the international community has highly commended China's epidemic prevention and control. And that is true. In the face of COVID-19, which is a common enemy of the whole world and mankind, we have pooled an unprecedented energy from all reaches of the country. General Secretary Xi Jinping has personally taken charge and planned our response. Under the strong leadership of General Secretary Xi Jinping and the CPC Central Committee, the overall epidemic response has demonstrated China's strength, spirit and efficiency. China's contribution to the global fight against COVID-19 is known to all countries and highly appreciated by forces of justice around the world. Currently, we have entered a stage of further consolidating our gains in epidemic response and conducting a review of our work. During this time, we should review effective practices and successful experiences gained from our epidemic prevention and control work.

At the same time, as you just said, we are also keenly aware of some weak links in responding to major epidemics and ensuring an emergency supplies reserve. We should consider this practically and clear-headedly. In compliance with the requirements of the CPC Central Committee and the State Council, the National Development and Reform Commission (NDRC) has been making adjustments in light of these weak links to optimize the composition of investments from the central government budget. We are now focusing on five major tasks in order to close loopholes and strengthen points of weakness in related areas. Here I would like to brief you on five major tasks.

First, we will build capacity for testing of major infectious disease as well emergency response. We will accelerate improving conditions and promoting upgrades at facilities and for equipment at disease prevention and control institutions. We will also strive to ensure that each province (the autonomous region, municipality) has a biosafety level 3 (P3 laboratory) laboratory and each prefecture-level city has a biosafety level 2 (P2 laboratory) laboratory as soon as possible. By doing so, we will significantly raise the country's ability of rapidly testing, identifying and responding to major epidemics.

Second, we will enhance our capabilities for centralized treatment of patients with major infectious diseases. We will set up a centralized treatment system for major infectious diseases that supports municipalities, provincial capitals and large-scale prefecture-level cities. We will build infectious disease hospitals or relatively-independent infectious disease wards in comprehensive hospitals. Prefecture-level cities with small populations will be required to select qualified hospitals as designated hospitals for the treatment of infectious diseases. Considering our campaign to strengthen points of weakness, we will also ask county seats to build more county-level hospitals. Through capacity-building at different levels, we will establish a tiered, classified system for large-scale infectious disease treatment. Meanwhile, we should increase the flexibility and resilience of the system so that we can be well prepared and able to act with confidence in the event of a sudden epidemic outbreak.

Third, we will upgrade and revamp treatment bases for major epidemics. We will give full consideration to the specific situations of different provinces, such as their population size, and support each province (including autonomous regions and municipalities) to upgrade one to three treatment bases for major epidemics based on their local high-level medical institutions, whether these institutions of a TCM and Western medicine focus. The construction of such treatment bases should take into account their operation both in normal times and during major epidemics. In normal times, the bases will admit and treat those who are severely and critically ill; during major epidemics, however, they will provide centralized treatment of patients. In addition, these bases will build up emergency supplies for the treatment of severe patients and the care of ordinary patients. They will also store the facilities and equipment for makeshift hospitals. These resources should meet the demands of local hospitals for their regular operations, and in the event of a major epidemic outbreak, they will operate according to national deployment. 

Fourth, we will upgrade and construct quarantine sites for major infectious diseases. After accumulating experience from the construction of makeshift hospitals in Wuhan, we will encourage local authorities to fully consider the emergency demand of newly built or under construction projects, including large gyms, sports facilities, exhibition halls and convention and exhibition centers. They should take into account venue design, ventilation systems, logistical systems, water and sewer pipes and reserved access points. Meanwhile, contingency plans should be developed in case major epidemics or emergencies occur, allowing these sites to be quickly transformed into places where mild cases are treated or quarantines are carried out.

Fifth, we will establish a solid system that ensures emergency supplies are on hand. This includes three parts. First, improvements to the purchase and supply system of emergency resources should be made. We will coordinate domestic and international suppliers to ensure the purchase and supply chain is safe and reliable. Second, a relatively strong emergency supplies reserve system should be set up. To do this, we encourage the participation of multiple parties in order to create synergy between the government, enterprises and public institutions, society itself and households. Third, our capacities to produce, allocate and transfer emergency supplies should be raised so that we can produce, supply and replenish emergency materials quickly and constantly whenever needed. In addition, a multi-party coordination mechanism is needed for the allocation and transfer of emergency supplies.

The said five major tasks is I want to introduce. These tasks are both very important and very urgent. We will conscientiously implement the requirements of the CPC Central Committee and the State Council, and we will make all-out efforts to complete the five tasks successfully as soon as possible. This will allow us to build a firm protective barrier that safeguards the lives and health of people, and it will also safeguard our national security. That's all for my answer. Thank you.

The Poster News APP:

China has put forward a series of significant regional development strategies, and regional economic structure is increasingly optimized. What new measures will be adopted to balance regional development this year? 

Cong Liang: 

Thank you for your question. General Secretary Xi Jinping stressed that in view of the new conditions efforts should be made to improve regional economic planning featuring complementary advantages and high-quality development according to objective economic rules. This year, the pandemic heavily impacted social-economic growth, and have a severe effect on regional development. This situation requires us to expedite the implementation of regional development strategies and boost balanced growth so as to accelerate the cultivation of growth drivers that will ease the effect of the pandemic. Efforts should be made in the following four respects:

My first point is this: High-quality growth drivers should be fostered around the country. In 2019, the GDP of the Beijing-Tianjin-Hebei region, the Yangtze River Delta region and the Guangdong-Hong Kong-Macao Greater Bay Area reached 8.5 trillion yuan ($1.19 trillion), 23.7 trillion yuan and 11.4 trillion yuan respectively. This accounts for 44% of the national total, and these three major drivers of the economy have come to constitute an "engine" of economic development. We must bring into full play the leading role of the above regions in order to achieve a high-quality regional development of the entire country.

One aspect of this is that we should push forward the coordinated development of the Beijing-Tianjin-Hebei region. We should make policies that aim at and create pressure for an orderly relocation of all non-essential functions from Beijing, the national capital, to neighboring locations. Major construction projects in the Xiong'an New Area should be expedited to build a structure. The high-quality development policies will be tailored for the Beijing's sub-center.

Another aspect is that we should press ahead with the construction of the Guangdong-Hong Kong-Macao Greater Bay Area. We should continue to uphold the policy of "one country, two systems," act in accordance with laws and regulations, promote scientific innovation and upgrade industries. We should advance the combination and coherence of rules, particularly those between Hong Kong and Macao, and the Chinese mainland, which will improve the happiness, sense of gain and security of the residents living in the Greater Bay Area.

A third aspect is that we should speed up the coordinated development of the Yangtze River Delta region. Initial progress should be made in demonstration zone of the Yangtze River Delta region, the Shanghai pilot Free Trade Zone and other major zones by implementing the coordinated development planning outline.

My second point is this: We should strengthen the ecological protection and quality development of major rivers, particularly the Yangtze River and the Yellow River. On the one hand, we should accelerate the development of the Yangtze Economic Belt, increase funds provided by the central government for its ecological environment restoration and protection, jointly improve the mechanism of well-coordinated environmental conservation and accelerate the cultivation of a number of advanced manufacturing clusters. On the other hand, we should speed up ecological protection and the high-quality development of the Yellow River basin. We will press ahead with the formulation and submission of the development outline on Yellow River basin ecological protection and high-quality development for approval, and we will also accelerate the formation of a system anchored by the guidelines as well as other supplementary planning and policies. This will allow for a number of major projects in ecological and environmental protection to be carried out.

My third point is this: We should strive to narrow the gap between regional development by focusing on four key areas. First, we should promote the development of the western region to form a new pattern. A bi-city Chengdu-Chongqing economic circle will be actively promoted to build and China's inland areas such as Shaanxi province will be opened wider. A number of regions in western areas have been at the forefront of China's reform and opening up endeavor thanks to the rollout of the Belt and Road Initiative, including the operation of China-Europe cargo trains. We need to further narrow the gap there, particularly in the three regions and three prefectures affected by extreme poverty. Second, we should reinvigorate the northeastern region in a comprehensive way. The key lies in continuously improving the business environment and establishing an open and coordinated platform in the face of Northeast Asian countries. Third, we should advance high quality growth in the central part of China. We should organize to implement the package police of Hubei for its economic and social development in accordance with the documents issued by the State Council. Special policies have been rolled out for the province's development for it has been badly affected by the epidemic. Meanwhile, we should make development policies that touch on central areas. Fourth, we should continue to support the eastern areas that are taking the leading role in development, put policies in place regarding the rise of the marine economy and expediting the construction of strategic marine measures.

My fourth point is this: we should bring into full play the leading role of the functional platform. We should establish and improve policies of national-level new zones and induce key areas to perform as industrial relocation platform and build infrastructure projects with investment funds from the central government budget and special development funds. We will move forward with the development of state-level new areas, demonstration zones for industrial relocation. Thank you.

Hong Kong's Bauhinia Magazine:

Mr. Ning, in face of the impact brought by COVID-19 on international economic and trade relations, how should we better play the role of the Belt and Road Initiative in order to promote mutual benefit and win-win results among countries and build a community with a shared future for mankind? Thank you. 

Ning Jizhe:

As you said, the COVID-19 outbreak came unexpectedly and ravaged the world, dealing a severe blow to international economic and trade relations. Thankfully, although economic and trade cooperation along the Belt and Road has also been hit, it was relatively less severe. 

In the first quarter, China's imports and exports with Belt and Road countries registered a positive growth of 3.2%, which is 9.6 percentage points higher than overall trade. This bucked the downward trend, and played a positive role in openness and cooperation. Next, we will follow the principle of extensive consultation, joint contribution and shared benefits. We will promote policy, infrastructure, trade, financial and people-to-people connectivity. We will uphold the philosophy of open, green, and clean cooperation. We will pursue a high-standard, people-centered, and sustainable approach to promote high-quality Belt and Road cooperation. Ultimately, we will build a community with a shared future for mankind. This includes the following aspects: 

First, we will coordinate pandemic prevention and control and Belt and Road construction. We will work on pandemic prevention and control in overseas projects, abide by the laws, regulations and pandemic control rules in those countries, let enterprises play their principal role, and carry out targeted pandemic prevention and control, in order to ensure people's safety and health. We must actively guard against all possible risks, promote work and production resumption in an orderly manner, and help countries along the Belt and Road with their economic stability and recovery work. 

Second, we will promote smooth logistics in the economic and trade cooperation with countries along the Belt and Road. We will support foreign trade companies to resume work and reach their target output, maintain their market and orders, and ensure the stability of the industrial chain and supply chain. This is not only for our own sake, but also to benefit countries that cooperate with us. As of May 10, China-Europe freight train services had registered 3,320 trips. This is a year-on-year increase of 24%, which is also bucking the downward trend. We will enable China-Europe freight trains to better play their role of connecting Europe and Asia. We will consolidate and expand our mutually beneficial economic and trade cooperation with Belt and Road countries, enhance the construction of free trade zone networks, and improve trade and investment liberalization and facilitation. 

Third, we will expand the cooperation fields of the Silk Road of Health and the Digital Silk Road. We will actively participate in global public health governance, provide anti-pandemic assistance to developing countries as much as we can, strengthen medical and health cooperation with Belt and Road countries, promote the construction of the Silk Road of Health, and build a public health community of a shared future for mankind. We will also promote cooperation in big data, the Internet Plus, and smart cities. We will also promote cross-border e-commerce, online exhibitions, online investment promotion campaigns and cloud-based videos, and jointly build the Digital Silk Road. 

Fourth, we plan to strengthen exchanges and cooperation in people-to-people and cultural fields. We will further carry out cooperation in education, science, culture, sports, tourism, archaeology and so on. We will also strengthen exchanges among parliaments, parties, non-government think tanks and media, in order to bring people closer. We will promote soft connectivity such as policies, rules and standards, follow market rules, and match international rules and standards, in order to promote the integration of soft and hard connectivity. This includes promoting cooperation in design, consulting, accounting, legal and other production-oriented services, which are aimed at promoting overall connectivity. 

I took part in the second, third, and fourth Hong Kong Belt and Road Summit. The summit improved each year and attracted more and more participants each time. I observed that most of the participants were small- and medium-sized business owners, freelancers and professionals. They were very interested in it and ready to join in, and they had the strength and capacity in the fields that I mentioned earlier. So, I believe the summit will become better and better. Thank you.  

Hong Kong Economic Herald:

This year marks the finish line for the building of a moderately prosperous society in all respects and achieving the goals laid out in the 13th Five-Year Plan. What are the arrangements of the NDRC in the fight against poverty and how will the remaining poor population be lifted out poverty this year? Thank you. 

Cong Liang:

Thank you for your questions. Mr. Ning Jizhe and Mr. Zhao Chenxin have touched upon this question previously, and I will introduce the following four aspects of the work the NDRC is doing: 

First, we are promoting the completion of poverty alleviation and relocation work. As Mr. Ning Jizhe just said, our construction tasks were roughly finished one year ahead of schedule. But the work that comes after relocation, especially follow-up support, is still under way this year. We have done the following three things. First, we have formulated policies. We worked alongside 12 departments to map out 25 policies and measures for providing post-relocation aid and support. Second, we enhanced supervision. We urged and directed local authorities to fulfill their responsibility, overcome the impact of COVID-19, and expedite the work on the remaining projects as well as the post-relocation support in accordance with different regions and categories. We also carried out supervision over the remaining work at resettlement areas, as well as urging the related provincial-level regions to finish their projects and put them into operation as soon as possible. Third, we coordinated funding. We coordinated and arranged 26.4 billion yuan of general bonds issued by local governments and 4.8 billion yuan of poverty alleviation fund provided by the central government. All of it went to post-relocation support. As of the end of April, decisive progress had been made in the relocation campaign. A total of 9.515 million people from registered poverty-stricken families had been resettled, accounting for 99.4% of the whole. The remaining 0.6% of people will resettle as soon as possible this year. In addition, 17 out of 22 provincial-level regions had completed their resettlement tasks, and in the resettled families with an available labor force, more than 90% of the families had at least one person in employment. 

Second, give play to the role of poverty-relief employment programs in creating more employment opportunities and increasing incomes. Just now, Mr. Zhao also mentioned this issue. We have allocated capital amounting to 5.6 billion yuan in batches for poverty-relief employment programs, especially in extremely poor areas, including Tibet autonomous region, Xinjiang Uygur autonomous region, and parts of Sichuan, Yunnan and Gansu provinces and Hubei province and other areas seriously affected by the COVID-19 pandemic. People living in poverty, especially those who cannot travel to work because of the pandemic, are being widely organized to participate in the programs. The percentage shares of incomes among investment by the central government increased to 15% from 10%. In the past, the lowest share was 10%. These programs are expected to help 300,000 poor people who cannot make it to work because of COVID-19 find jobs in their hometowns and increase their income.

Third, promote poverty alleviation by consumption. We have cooperated with 27 central government departments and units and conducted 30 specific actions to increase the consumption of special products and services in poor areas and relieve the negative impacts of the pandemic. We have coordinated 23 central government departments to utilize the advantages of their own system, industry and sector to directly purchase more than one billion yuan of special agricultural products from Hubei province and help the province sell products of 10 billion yuan worth; these efforts were effective. 

Fourth, coordinated steps will be taken in other poverty alleviation efforts. We will continue to increase support for safe drinking water, education and medical projects in poor rural areas, and we will speed up the construction of roads, power grid and water conservation projects in rural areas. New funds, projects and measures should be weighted toward areas in deep poverty.

In the next phase, the National Development and Reform Commission (NDRC) will fully implement the spirit of General Secretary Xi Jinping's important speech at the symposium on securing a decisive victory in poverty alleviation and Xi's instructions given during his inspection tours in Shaanxi and Shanxi provinces. We will ensure the completion of projects and the follow-up support in order to accomplish targets of relocation during the 13th Five-Year Plan period. Thanks.  

Xinhua:

At the meeting of the Political Bureau of the CPC Central Committee, it was proposed that timely action must be taken to drive reform, and problems in China's development should be solved through reforms. My questions are: What is China's economic reform focused on, and what kind of reforms will the NDRC roll out? Thank you.

Zhao Chenxin:

Thank you for your questions. General Secretary Xi Jinping stressed that the more severe and complex the developmental environment is, the more important it is to deepen reform, improve institutions, improve the governance system, and make good use of institutional strengths to respond to risks and challenges. I think many friends concerned with the reform, such as this journalist, have noticed two important documents on reform issued by the State Council in April and May. One was the guideline on improving the market-based allocation mechanism of production factors, which was issued on April 9. The other one is the guideline to accelerate the improvement of the socialist market economy in the new era that was issued on May 11. These two very important documents were issued at the right moment, which evoked a favorable response. I believe that these two documents illustrate that reforms are under way and are being deepened unswervingly. 

You are concerned about the focus of this year's reform of the economic system and major measures. I think that the focus of reforms has been detailed in the documents. Regarding the measures, I will summarize them in "four focuses" and give a brief introduction here. 

First, the high-standard market system will be promoted and encouraged to build. We will construct a more complete market-based allocation mechanism of production factors. This is a great target. Comprehensive reform pilot projects will be launched, and policies will be set to speed up the cultivation of a data factor market and attract enterprises of different ownerships to take part in building marketplaces for factor trade. This year, we will reform methods of land planning and management, and the provincial-level governments will be given more autonomy over land use. In addition, we will revise the negative list on market access and issue the 2020 version. The list will focus on the service sector, and pilots will be run to relax the restrictions on market access and remove hidden barriers.   

Second, improve the quality and efficiency of the reform of state-owned asset and SOEs. This year, we will formulate guidelines on optimizing the distribution and structuring readjustment of the state-owned economy, and we will push forward 210 mixed-ownership reform pilots. With respect to mixed-ownership enterprises, a governance mechanism and regulatory mechanism that are different from those of common state-owned enterprises should be explored, and we must make efforts to gain experience that can be copied and popularized. We will research and formulate the guidelines of deepening the mixed-ownership reform of SOEs and upgrade the related policies to give better guidance and enable the mixed-ownership reform to better play the role of a breakthrough and feature prominently in the reform of state-owned asset and SOEs. 

Third, we will work to improve the environment for the development of the private sector. First of all, we will carefully implement concrete measures in supporting the development of the private sector in fields such as transportation infrastructure and manufacturing, open up competitive aspects in sectors of power, telecommunications, railways, oil and gas, so as to attract more private capital to participate in project operation and construction in these fields. We will also comprehensively implement business environment regulations and clean up unreasonable discriminatory regulations and practices concerning different types of the enterprises. In addition, we will also work to form a new type of cordial and clean relationship between government and business, and improve the mechanism for entrepreneurs to participate in the formulation of enterprise related policies. We will also make great efforts to solve practical difficulties for private businesses.

Fourth, we will strive to improve the system and mechanism of basic public services. This year, we will promote the introduction of the national standard system for basic public services, through which we can make clear the scope of the basic public services governments at different levels should guarantee, especially making clear the bottom line. This year, the impact brought by the epidemic and the experiences we gained from fighting it, created opportunities for precious thinking. We need to let local governments at all levels know the key point of ensuring basic people's livelihood, and to what extent it should be ensured. We must benchmark the national standard so as to make up for any deficiencies and optimize resource allocation, so as to put the limited capital and resources available into the areas of most concern and most needed by the people.

In addition to the aforementioned four aspects, we will also launch reforms in other areas, including the regulation and control of the price of commodities concerning people's livelihood and green development. In short, to reform is the requirement of General Secretary Xi Jinping and the CPC Central Committee. It represents the shared aspiration of all peoples and is the trend of the times. The NDRC will, together with relevant departments, unswervingly deepen the reform of the economic system, and meet the expectations of the people. Thank you.

Hu Kaihong:

This concludes today's press conference. Thank you, speakers. Thank you all.

Translated and edited by Zhu Bochen, Wang Qian, Wang Yiming, Li Huiru, Wu Jin, Zhang Junmian, Qin Qi, Fan Junmei, Liu Qiang, Zhang Jiaqi, Huang Shan, Gong Yingchun, Zhou Jing, Li Xiao, He Shan, Zhang Tingting, Wang Yanfang, Zhang Lulu, Zhang Rui, Yang Xi, Laura Zheng, Jay Birbeck, David Ball, Geoffrey Murray, Scott Rainen. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

Read in Chinese

The State Council Information Office holds a briefing on the annual Report on the Work of the Government on May 22 in Beijing. [Photo by Jiao Fei/China SCIO]

Speakers:

Huang Shouhong, head of the drafting team of the Report on the Work of the Government and director of the State Council Research Office

Sun Guojun, member of the drafting team of the Report on the Work of the Government and member of the Leading Party Members Group of the State Council Research Office

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 22, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office. The third 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. The public is paying great attention to this report. In order to help people better understand its content, we are very pleased to invite Huang Shouhong, head of the drafting team of the Report on the Work of the Government and director of the State Council Research Office, and Sun Guojun, member of the drafting team of the Report on the Work of the Government and 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. Huang for an introduction.

Huang Shouhong:

Good morning, friends from the media!

This year's "two sessions", the annual sessions of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), are very unusual and draw attention from not only Chinese citizens but also the international community. The Report on the Work of the Government delivered by Premier Li Keqiang follows the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; adheres to the guiding principles of the 19th National Congress of the Communist Party of China (CPC), the second, third, and fourth plenary sessions of the 19th CPC Central Committee and the Central Economic Work Conference of last year; and abides by a series of major decisions and deployments made by the CPC Central Committee with Comrade Xi Jinping at its core on coordinating the advancement of epidemic prevention and control with economic and social development. The report reviews the government work in 2019 and the situation of epidemic control and prevention as well as the resumption of work and production so far this year. It also lays out this year’s main targets and tasks and macro policies and measures for economic and social development, and the overall plan for the next stage of work. Some of you were on the scene while some watched the delivery of the report via video link. Either way, you all could feel the atmosphere and heard the applause the delivery produced. This shows that the report has been well received by the NPC deputies and CPPCC members. Before coming to the briefing, I read some comments about it on the Internet. I feel that the report responds to public concerns and reflects their expectations. It serves to bind people together, warm people’s heart, boost their confidence, and unite them.

We all know that this COVID-19 outbreak is a public health emergency of international concern, which has changed a lot of things. In terms of the drafting of the report, we have also encountered an unprecedented new situation. Since the end of last year, we have drafted the report following due procedures, in accordance with the decisions and deployments made by the CPC Central Committee with Comrade Xi Jinping at its core and the spirit of the Central Economic Work Conference. After deliberation and approval by the CPC Central Committee and the State Council, the draft was sent to all regions, departments, and units to solicit opinions. We then revised the report based on the opinions received. However, influenced by the COVID-19 outbreak, major changes have occurred both at home and abroad, and the "two sessions" were postponed. According to the CPC Central Committee's decisions and deployments, recently we made major adjustments and amendments to the report. General Secretary Xi Jinping chaired two meetings of the Standing Committee of the Political Bureau of the CPC Central Committee and also presided over a meeting of the Political Bureau of the CPC Central Committee to deliberate the draft report and issued clear requirements and important instructions for the drafting and revision work, which provided a fundamental basis for the drafting work . Premier Li Keqiang took charge of the drafting and revision of the report and other leading officials of the State Council offered specific guidance. Premier Li Keqiang presided over two State Council executive meetings and one plenary meeting of the State Council to deliberate the draft.

In the process of drafting and revising the report, Premier Li Keqiang chaired several special symposiums, reaching out to the grassroots and directly listening to the opinions and suggestions of ordinary citizens. Other leaders of the State Council have also listened to people's opinions and suggestions in various ways and forms. All organs of the CPC Central Committee and the State Council have put forward opinions and suggestions, as have so done all sectors of society including a vast of number of netizens. Many opinions and suggestions have been put forward, especially since the outbreak of the COVID-19 epidemic, concerning the trend of China’s economy, the setting of the targets for economic and social development, and the policy-making at the macro level. From the perspective of the drafting group, we certainly paid great attention to the responses from all sectors of society, especially those from netizens. For example, the online portal of the Chinese government (Gov.cn) has worked with 25 internet media platforms and government websites of all regions and departments, launching the "Share your ideas with China's Premier" internet suggestion-box event for the sixth time. The focus of the suggestions collected slightly changed after the pandemic. The recent focus has lain in five aspects, including employment, medical care, housing, income and consumption, and market entities. Gov.cn selected nearly 1,400 suggestions of a highly representative nature that were submitted to us. We have also collected netizens' opinions via the suggestion column on major portal websites such as Xinhuanet.com and People.com.cn.

In addition, as the leading organ to draft the report, the Research Office of the State Council followed the practice of recent years and held symposiums with the Ministry of Science and Technology and the State Administration of Foreign Experts Affairs to listen to the advice of various foreign experts. With a global view and from the perspective of international comparison, 13 renowned experts from nine countries have put forward some extraordinary opinions and suggestions for the work of Chinese government as well as for report drafting. It took us an extensive amount of time to draft the report this year, and this hasn't happened often since the reform and opening-up over 40 years ago. Correspondingly, we've spent much time to listen to opinions from various aspects, and have received a lot of suggestions from different sectors. Based on these, we constantly revise the report as the situation is changing. The global pandemic situation is changing. The achievement of domestic epidemic prevention and control is constantly expanding. The economic situation both within and outside of China also keeps changing. In order to make better judge of the economic and social development, and to better respond to the concerns of all sectors of society, we've engaged in constantly revisions. We have been revising it almost on a daily basis recently. In the coming days, we will continue our revision efforts based on the opinions of the deputies to the NPC and members of the CPPCC National Committee. That's all for the brief introduction of the drafting and revising of the Report on the Work of the Government.

The report briefly reviewed the work and achievement in 2019 and the first few months of 2020. Last year, the growth of the world economy was the slowest in the decade since the global financial crisis. International economic and trade fractions intensified. China's GDP reached 99.1 trillion yuan, nearly 100 trillion yuan, representing a 6.1% increase over the previous year. Around 13 million new jobs were added. These admirable achievements have not come easily. Originally, the economic situation in the fourth quarter is turning toward a promising side. If without the impact of the COVID-19 pandemic, China's economic prospects in the first half of 2020 were expected to be fairly good. The epidemic certainly changed the situation. After the outbreak, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the situation. General Secretary Xi Jinping has been personally commanding and deploying the deeply moving battle against the epidemic by mobilizing all resources, and blocking the spread of the virus. With the arduous efforts of people across the country and the great price we've paid, the fight to defend Wuhan city and Hubei province, the main battlefields of epidemic, has achieved decisive results. Epidemic prevention and control in China have seen a strategic achievement, and the coordinated development of economy and society has also seen a positive progress. "It is only by overcoming enormous difficulties that China has been able to contain COVID-19 in such a short time…" as stated in the report when considering these achievements. Everyone here has experienced this process, and should deeply understand this sentence. All of these fully demonstrate that the CPC Central Committee with Comrade Xi Jinping at its core has extraordinary capabilities to manage complicated situations, firm determination to solve difficulties and face challenges, and farsighted vision to analyze and judge the situations and to implement work. In the meantime, this also fully shows the resilience, potentials and risk-resistance of China's economy, reflecting China's unique political and institutional advantages.

Based on the analysis of both domestic and international situation, the Report on the Work of the Government presents an overall plan for the next stage of work. My understanding is, in order to comprehend the policies and arrangements for the next stage, we should follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and focus on the targets and tasks for completing the building of a moderately prosperous society in all aspects. We should pay close attention to the following five points:

First, we should make sure that implementing regular COVID-19 control measures is the major premise of all our work. The epidemic is a true wild card in the next stage of our development. We have made major strategic achievements in our response to COVID-19. However, the risk of imported cases always lurks as the pandemic continues to spread across the world. Clusters of infections were reported occasionally in China and it has become more complex in regard of the possible resurgence of epidemic. China has switched the epidemic prevention and control measures from "emergency" to "regular," which will possibly be in place for quite a long time. General Secretary Xi Jinping has repeatedly stressed that we should stay alert against the epidemic, because once it rebounds, and gets out of control, the whole economy and society will again be disrupted. We must stay alert, but we also cannot afford further delaying our economic and social development and putting aside people's livelihood and employment. What shall we do? The CPC Central Committee proposed to improve our regular epidemic prevention and control mechanism to ensure timely detection of infections, rapid response, targeted control, and effective treatment, and ensure no possibility of an epidemic rebound. Under such premise, we should enhance our efforts to promote the comprehensive resumption of work, production, market and business, and smooth the circulation of industry, market, economy and society. All the conclusions, policies and measures regarding economic and social development presented in the work report should be implemented and advanced under the premise of regular epidemic control.

Second, we should prioritize efforts to maintain security in six areas. Facing complex and severe external environment and great downward pressure on domestic economy, the CPC Central Committee and the State Council in 2018 proposed to ensure stability on six fronts - employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations. To cope with unprecedented difficulties and challenges this year, the CPC Central Committee and the State Council are insisting on maintaining security in six areas -job security, basic living needs, operations of market entities, food and energy security, stable industrial and supply chains, and the normal functioning of primary-level governments, with the core objective being stabilizing economic fundamentals, ensuring the bottom line in regard to people's livelihood and achieving poverty reduction goals. They are positive and progressive targets and tasks set under new circumstances. Some people seem to think those measures are passive, defensive, and negative. Actually, this is not the case. It is a progressive and forward-looking approach when we can run a little bit faster in ordinary situation. However, severely impacted by external factors, it is also a positive signal if we are able to stand fast and not retreat or fall back even slightly, but at least get ready to stride forwards as soon as possible. Facing an unprecedented impact, stabilizing the economic fundamentals means to protect social productivity as well as ensure the foundations for further development. We have nothing else to worry about when this foundation has been properly secured. The basis of economic and social development will be guaranteed if the bottom line of people's livelihood is ensured. This is done out of concern for overall stability and economic growth. You are aware that we have realized a virtuous cycle featuring improved people's livelihood and boosted consumption and economy. Therefore, when we endeavor to ensure people's basic living needs, we are securing the bottom line as well as stabilizing consumption and promoting economic development. Achieving poverty reduction goals marks completing the building of a moderately prosperous society in all aspects. Poverty-stricken areas are the greatest challenge facing us. It is our most important task to eliminate poverty, a mission we must fulfill. That's why this year's policies are concentrating on ensuring stabilities on six fronts and maintaining security in six areas particularly, highlights job security, ensuring basic living needs and operations of market entities.

The third is about our understanding of poverty alleviation as an obligatory task. When defining a moderately prosperous society, the key is to observe the condition of farmers. Poverty alleviation is a symbolic benchmark of our efforts to build a moderately prosperous society in all respects, to which the CPC Central Committee attaches great importance. Since the 18th National Congress of the CPC, General Secretary Xi Jinping has personally commanded and supervised the battle to eliminate poverty. We have made decisive achievements thanks to our unremitting efforts. According to the report, the poverty headcount ratio had fallen to 0.6% at the end of last year. The number of impoverished people in China dropped to 5.51 million from the figure of 98.99 million at the end of 2012. On March 6, General Secretary Xi Jinping attended a symposium on securing a decisive victory in poverty alleviation and delivered an important speech, issuing a mobilization order to clinch a complete victory in the fight against poverty. More than 10 million people have been lifted out of poverty each year in recent years, and only over five million people now need to achieve their own transformation. However, the COVID-19 pandemic has had a negative impact on the poverty alleviation efforts. For example, the workforce is facing difficulties in going back to work, and sales of agricultural products in some impoverished regions also encounter challenges. Therefore, people face a rising risk of falling into or returning to a state of poverty. In order to ensure final victory, according to the deployment of the CPC Central Committee, major targeted and forceful measures have been put forward in the report. China will attain its poverty alleviation target this year, which means achieving the poverty reduction goal set in the United Nations 2030 Agenda for Sustainable Development 10 years ahead of schedule. This is China's great contribution to the cause of global poverty reduction.

The fourth aspect relates to understanding of how to expand domestic demand as a strategic focus. China is a country with 1.4 billion people and a per capita GDP of more than $10,000. Its consumer spending has been optimizing and upgrading, and its consumer market is the world's largest, with the greatest potential. Moreover, China has gained momentum in its development in terms of new type industrialization, informatization, urbanization and agricultural modernization, and the demand for effective investment is enormous. The two points will unleash the huge potential of domestic demand. This is the biggest advantage for a major economy. As long as we unleash such potential, a constant and powerful driving force for economic growth will be created. Therefore, the report proposed implementing the strategy of expanding domestic demand, in view of the need to cope with the impact of the pandemic, the need to maintain long-term, sustained and sound economic development, and the importance of meeting people's increasing need for a better life. How to implement the strategy? The report has laid out a roadmap, which focuses on deepening supply-side structural reform, improving people's wellbeing, and boosting consumption and investment in a more coordinated, mutually-reinforcing way. Major measures have also been put forward. Economic development in different regions in China is unbalanced, representing a huge potential for economic growth and many growth drivers to expand domestic demand.

You must have paid close attention to the construction of "new infrastructure, new urbanization initiatives and major projects" put forward in the report. It refers to development of new infrastructure projects, new urbanization initiatives and traditionally defined key projects, such as railways, highways, airports and water conservancy projects. There is a broad consensus that we should expand effective investment, but here are various ideas on what should be the priority areas. The report, aiming to promote the high-quality development of the economy and meet people's needs, proposed taking the construction of "new infrastructure, new urbanization initiatives and major projects" as investment priorities. The CPC Central Committee and the State Council made this decision after much study and consideration. Moreover, it was also determined after listening to the views of all sectors of society. Such priorities will not only boost consumption and benefit the people, but also facilitate structural adjustments and enhance the sustainability of growth. It will serve multiple purposes. The construction of new infrastructure serves as a driver to promote high-quality development and meet people's demand for consumption upgrading. Counties are priorities in development of new urbanization. In order to meet the growing demand of rural residents to work and settle in county seats, it is necessary to support them to improve services and carrying capacity. It is also necessary to begin the renovation of old urban residential communities. In regard to the construction of railways, highways, airports, as well as water conservancy projects and energy projects, many are closely related to people's quality of life. Therefore, the construction of "new infrastructure, new urbanization initiatives and major projects" is a major measure which not only prioritizes people's wellbeing, but helps support expansion of domestic demand.  

Fifth, grasp the greater logic of reform and opening up. Previously, some people worried that in order to cope with the impact of the epidemic, we might take the old path of initiating rash and ineffective projects while adopting extensive growth, or take measures to maintain short-term growth but which would harm long-term development. Because some measures are conducive to stabilizing growth in the short term, but if they are handled badly, they will leave residual effects. To cope with unprecedented challenges and achieve our development goals and tasks, there are many specific policies and measures we can take, but what should be the basis? According to the decisions of the CPC Central Committee, the report clearly states that we need to "pursue reform and opening up as a means to stabilize employment, ensure people's wellbeing, stimulate consumption, energize the market, and achieve stable growth. We need to blaze a new path that enables us to respond effectively to shocks and sustain a positive growth cycle." Relying on the approach of reform and opening up, we can stimulate creativity in all aspects of society, stabilize employment and protect people's livelihood, then there will naturally be consumption. And with consumption, the market will be stimulated, effective investment will be driven, and growth will be stabilized. The reform and opening up policy has been an amazing weapon for China to make tremendous achievements over the past 40 years. No matter what difficulties and challenges it has encountered during this time, this effective weapon has been tried and has succeeded again and again, with no exception. The new measures proposed in the report to promote socioeconomic development include ensuring stability on the six fronts and security in the six areas. (The six fronts refer to employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations. The six areas refer to job security, basic living needs, operations of market entities, food and energy security, industrial and supply chains, and the normal functioning of primary-level governments.) It can be said that they follow the "scriptures" of reform and opening up, use the "approaches" of reform and opening up, and "walk the path" of reform and opening up. This allows the market to play a decisive role in the allocation of resources and the government to better play its role.

Next, my colleague Mr. Sun Guojun and I are willing to answer any questions you may have on the drafting of the report.

Hu Kaihong:

Thank you, Mr. Huang, for your introduction and interpretation. Let's start the questions.

CNR:

I noticed that this year's Report on the Work of the Government did not propose specific GDP targets. Why is that? In addition, how should the current economic situation in China be seen? Thank you.

Huang Shouhong:

This is one of the most prominent issues that society is concerned about. Please allow my colleague Mr. Sun Guojun to answer the question.

Sun Guojun:

Your question is uppermost in everyone's minds. Before I came here, I watched CCTV's "livestream room" program and its "ministers' passage" broadcast. The first question raised by a reporter was regarding this year's report not putting forward a quantitative economic growth target, as the annual Report on the Work of the Government usually proposes an expected target for GDP growth rate that year. Of course, there have been occasions in the past when one was not mentioned.

Why didn't we mention economic growth this year? In fact, the biggest factor is uncertainty. This uncertainty comes mainly in two aspects: one reason is the uncertainty in the pandemic’s development trend. There are now nearly five million confirmed cases worldwide, and large increases of almost 100,000 new cases every day. No one can predict the next development trend of the pandemic. The other reason is the uncertainty in the world economy. The pandemic is currently the biggest factor affecting global economic activities. If we cannot accurately estimate the progress of the global pandemic, we cannot accordingly estimate how the pandemic control measures will be adjusted for each country. In the first quarter, the major global economies have experienced relatively large negative growth. Much analysis concludes that the world economy has experienced a severe recession, and even suggest that it may be no less severe than the Great Depression in the 1930s. The economies of all countries are in great uncertainty.

Not setting a specific target for economic growth this year does not mean we are ignoring economic growth or letting economic growth decline. There is a very important sentence in the report, which reads "ensuring stable economic performance is of crucial significance."

At present, there are two aspects that need to be underpinned by economic growth. First, this year, we must give priority to stabilizing employment and ensuring living standards, win the battle against poverty, all of which need to be underpinned by economic growth. Based on the empirical data of previous years, one percentage point of growth corresponds to about two million new jobs. From the perspective of poverty alleviation, there are nearly 30 million members of the labor force who are impoverished and working away from their hometown. Labor income is an important source of income for many rural residents and an important path to poverty alleviation. If there are difficulties attaining employment, people will also have difficulties receiving income, leading to a whole range of problems related to consumption; thus, growth is critical. Second, economic downturns often lead to the emergence of certain risks. For example, in finance and other fields, new potential problems and risks may emerge during economic downturns. Take financial resources at a basic level as another example: If there is no growth in the economy, there will then be difficulties in financial resources, leading to a series of chain reactions. Therefore, ensuring stable economic performance is of crucial significance. 

We have paid a great price for our efforts to prevent and control the COVID-19 pandemic. In the first quarter, the economy posted a negative growth of 6.8%. But considering the health and safety of our people, this is a price that we must pay. It is a price that is worth paying. With the outbreak of the pandemic effectively under control in China and efforts to resume work and production accelerating, the whole Chinese economy is gradually beginning to recover. In April, the industrial growth was at 3.9%, and the growth in electricity consumption, electricity generation and rail freight volume turned from negative to positive, which is a positive sign. Although some indicators, such as total retail sales of consumer goods and investment, were still declining, the rate of decline is slowing down. All this shows that the policies we implemented previously, such as cutting taxes and fees, supporting finance and providing assistance to enterprises to stabilize employment, have paid off.

The report sets out a number of policies to be implemented in the next phase of the year. For example, the fiscal policy focuses on spending money to stabilize employment and ensure people's wellbeing; the financial policy focuses on protecting market entities; the employment and social security policies focus on unfailingly meeting the basic living needs of our people. I believe that with the implementation of these policies, the economy will gradually stabilize and recover. The base of the economy will not have any problems this year, and the people's wellbeing won't have any problems either. Thank you.

Nihon Keizai Shimbun:

You just mentioned that 1% growth will create two million new jobs. In this year's report on the Work of the Government, the target was to create more than nine million new jobs, thus the actual growth target should be around 4.5%. Is this a reasonable understanding? My second question touches on the one trillion yuan of government bonds that are going to be issued. The forecast of the financial market is at about three trillion yuan. How is the actual issuance amount estimated? What are your considerations behind this? Thank you.

Sun Guojun:

You asked two questions. First, I mentioned that one percentage point of GDP growth corresponds to about two million new jobs. This is based on empirical data. In different economic growth ranges, the corresponding number of new employment is different. For example, when GDP grows at around 6%, one percentage point of growth corresponds to about two million new jobs; but when the range is widened, there is no absolute linear relation. When economic growth is relatively low, the policies focus on stabilizing employment. At the moment, the corresponding relationship between one percentage point of growth and new employment differs from what it would be during relatively high economic growth.

This year's employment is under great pressure. The credit policy and policies including unemployment insurance refunds are all related to stabilizing enterprise employment rates and reducing the number of layoffs, so as to ensure the bottom line of employment. This year, we have made proper adjustments to the employment target, so creating over nine million new urban jobs is realistic. More than nine million new jobs and a surveyed urban unemployment rate of around 6% is consistent with the current economic situation.

The second issue is the issuance of 1 trillion yuan of special anti-pandemic bonds, with some expectations in the market being a bit higher. Fiscal policies in a broader sense cover four major budgets, including general budgets and budgets for government funds, all of which will be taken into consideration. The point of issuing the government bonds for COVID-19 control is to "fight the epidemic". The issuance of special bonds for combating the epidemic is a special means taken during a special time. Part of the money will be used directly to cover local spending for combating the epidemic, including expenditures to bolster weak spots. Another part of it will be directly transferred by the central government to local governments. 

In the case of COVID-19 government bonds, I believe the scale is appropriate. Because this year, a total of 3.75 trillion yuan of special local government bonds will be issued, an increase of 1.6 trillion yuan over last year. The use of these bonds should be coordinated. There will also be investment in the central government budget. We cannot simply look at one item to determine the strength of fiscal policy. Instead, we should take the fiscal policies presented in this year's Report on the Work of the Government into thorough consideration. This includes the coordination of monetary policies and the implementation of fiscal policies. For example, the prefecture-level and county-level governments are directly responsible for making efforts to stabilize employment and ensure people's wellbeing. However they currently face direct pressure, so a special transfer payment mechanism will be set up to ensure that the funds will not be withheld by provincial-level governments but go straight to prefecture and county-level authorities. This is a mechanism we have not been seen before. 

Huang Shouhong:

I'd like to add something. Mr. Sun Guojun said that the use of the COVID-19 bonds and fiscal deficit this year would be a reform and innovation that will go straight to the grassroots and directly benefit enterprises and people. As for the relation between employment and growth rate, Mr. Sun just said that under normal conditions, economic growth and employment had a corresponding relationship, but in an unusual time, this corresponding relationship will change. For example, in the first quarter, China's GDP lowered by 6.8%, but we added 2.3 million new jobs. The relationship between the economic growth rate and employment is very complicated and the two factors cannot maintain a corresponding relationship all the time. Employment lags behind and the fluctuations of the two factors do not correspond either. We should see that economic laws are different when under special conditions than during normal conditions. That's what I have to add.

CCTV:

Recently there have been talks across the world regarding the end of globalization, decoupling from China and evacuating from China. I'd like to get your opinion on these remarks. Another question is what China will do to stabilize the overall performance of foreign investment and foreign trade. Thank you. 

Sun Guojun:

Whenever problems or frictions emerge in the global economy, economic arguments such as decoupling from China come to the fore. We should look at the big picture when discussing globalization. Globalization is a general trend. It is hard to imagine what the world would be like without the globalization of investment, trade and movement of people. In the long term, globalization is certain to bring benefits to each nation and all people. That is why the Chinese government unswervingly supports globalization. Small problems are inevitable in the process, but these will not halt the general trend. 

There have been reports about outflows of foreign capital. Some foreign investments have even been moving out. As the economy develops, China's overall development has been improving and a country's comparative advantages differ in different stages of development. There are outflows of foreign capital, but there are also inflows of foreign capital. In the first quarter, our country attracted foreign investment contracted, but in April, we saw sound growth in foreign investment. We also saw that, many surveys, including the ones by some foreign chambers of commerce, showed that more than 70% of multinational enterprises are still bullish about the Chinese market and decide to make investments in the country. Enterprises see China's market as a long-term strategic investment. I think it requires strategic foresight to see this. We should base decisions on strategy and not be subject to the influence of petty remarks. 

I think China has two advantages in this respect. After several decades of reform and opening up, it is fair to say that China has developed the only most complete industrial support system in the world. China is the only country that boasts all the 41 sections, 191 divisions and over 500 groups in the international standard of industrial classifications. It is the biggest trading partner of over 120 countries and its economic growth accounts for 30% of the world's total every year. So, it has a very big market in terms of the supply side. On the demand side, the domestic market is also growing. Either from the supply or demand side, anyone can be optimistic.

This year's Report on the Work of the Government attaches much importance to opening up. First, it makes clear that the Chinese government remains committed to further opening up despite the changing global economy and complex external environment.

Second, it also seeks to expand both exports and imports. On one hand, we need to promote market diversification. For example, our exports to Belt and Road countries now account for 30% of our total. On the other hand, we need to involve more market entities in import and export business. Supporting policies in finance and insurance will benefit more small and medium-sized companies in the foreign trade sector. More support will be channeled to new foreign trade businesses like cross-border e-commerce and new trials of trade in services.

Third, the Report on the Work of the Government also supports investment. This year, the negative list for foreign investment will be significantly shortened, and a negative list will also be announced for cross-border trade in services. Greater autonomy in reform and opening up will also be granted to pilot free trade zones. Both the manufacturing and service sectors will embrace further opening up.

Fourth, China is already seeing an improved business environment, and the Report on the Work of the Government again highlights the need to create a market-oriented, law-based, and internationalized business environment. Also, the Report on the Work of the Government stipulates the need to build a fair business environment in line with the international community. This is important as fair competition meets the demands of both foreign and domestic businesses. We will conduct impartial regulation to ensure fair competition.

Thank you.

Huang Shouhong:

The objective law and historical trend are independent of people's wishes. People's opinions may differ, but facts speak louder than words. Business leaders choose where and how to make investments depending on their own considerations. In the past two years, China has introduced a large proportion of foreign investment at a fast pace in the international community. It means that foreign business leaders are optimistic of the Chinese market.

As Mr. Sun Guojun said, China will further open its market despite great difficulties this year. We did not slow down or cut back opening up, but instead decided to adopt major policy measures to open our door wider to foreign businesses and foreign investment. For example, we will shorten the negative list for foreign investment, further open up service and manufacturing industries, and establish new pilot free trade zones. The idea of reform and opening up is run through the whole work report.

CNBC:

You said you have collected considerable local feedback in preparation for this report. What is the local attitude toward employment and collaborations between SMEs and foreign businesses? What is their plan to boost employment? Thank you.

Huang Shouhong:

One of pressing problems arising in China's current economic development is employment and people's wellbeing. Impacted by the pandemic, some industries, especially in the service sector, and certain enterprises, especially micro-, small and medium-sized businesses, are facing great difficulties. Some companies have laid off employees or reduced pay rates. Why does the report speak of maintaining security in six areas and placing employment at the top of the list under such circumstances? Because employment provides our people a steady livelihood, and it is the most fundamental factor underpinning economic development. What do we rely on to maintain security in employment? The answer is to protect enterprises and market entities, especially micro-, small and medium-sized businesses. These are major channels for people to get jobs, and more than 80% of employment depends on them.

In response to the current difficulties facing enterprises, especially those micro-, small and medium businesses, the report set out a series of measures aimed at maintaining employment security. We have cut taxes and fees for enterprises on a large scale, especially for the vulnerable ones I have mentioned. We cut taxes and fees by 2.36 trillion yuan last year, and we expect that these measures will see additional savings of more than 2.5 trillion yuan for enterprises throughout this year. In addition, there are some policies to reduce enterprise operating costs. For example, the policy of reducing electricity prices will be extended to the end of the year, and the rates for internet access services will be cut by 15% on average. A hot issue in the reports of the recent two years has been the continuous decrease of the rates. Everyone has benefited and happily enjoyed the increased convenience.

The report also specified a series of measures in the financial sector to alleviate the current difficulties of small and micro-enterprises and employment difficulties. In macro policies in particular, it specified development of new monetary policy instruments that can directly bring benefits to enterprises. Stabilizing employment is the most important task for China this year, which will ensure the wellbeing of the people. It is the most important task and where the greatest achievement lies. The reason why we have not set a specific target for economic growth is largely that we aim to focus everyone's enthusiasm, attention and energy on ensuring employment, ensuring the wellbeing of the people, and protecting market entities. All our policies must directly work on the six areas, especially job security, basic living needs, and operations of market entities. We have many measures to maintain employment security.

However, we all know that the unemployment rate will definitely rise this year. Unemployment is a global problem, and the unemployment rates in countries around the world are much higher than usual. For China, although we are making our best efforts and adopting all possible measures, the unemployment rate may still increase slightly, and there will be more people out of work. What should we do in this situation? We have measures not only in expanding employment, but also in extending the coverage of unemployment insurance.

According to the report, the coverage of unemployment insurance will be extended to ensure that all those underwriting the insurance are provided for, and there are some new measures being introduced this year. For example, it was stipulated in the past that people who were in the unemployment insurance scheme for less than a year were not qualified to claim benefits, but they will be covered this year. Another example is that rural migrant workers will be covered in the locality where they are living, and that subsistence allowances will be made promptly available to eligible urban unemployed people and migrant workers who have returned home.

Some people are concerned about our ability to achieve this. Please rest assured. We now have a surplus of over 460 billion yuan in the unemployment insurance fund, and over two trillion yuan of strategic reserves in the social security fund. We will also promote provincial-level coordination of unemployment insurance this year. Through such a series of measures, we have the ability and the means to address the unemployment trend. In the past two years, we have been transferring a portion of state capital to top up social security funds and increasing the centrally-regulated share of basic aged-care pension funds. This year it will be increased to 4%. The people's quality of life will be ensured and improved. In the special and difficult period of this year, governments should take the lead in tightening their belt. As the economic situation improves, employment, especially the operations of small and micro enterprises, will certainly improve accordingly. Thank you.

Southern Metropolis Daily:

According to the Report on the Work of the Government today, the strategy of expanding domestic demand will be steadfastly pursued, but now, consumer spending and investment are declining. How can domestic demand be effectively expanded? How will the relationship between expanding domestic demand, and ensuring and improving the people's quality of life be handled? Thank you.

Huang Shouhong:

Some aspects of this issue has already been mentioned just now. Let's invite Mr. Sun to give a brief introduction.

Sun Guojun:

Let me first add something on the employment. Searching through an electronic version of the report before coming here, I found that the most frequently used word was "employment". This might be the first time in history that the word appeared 39 times.

Regarding the question just now, expanding domestic demand is what China has been doing to develop its economy for a long time. The strategy of expanding domestic demand has also been put forward before. The whole second section of the report in 2000, for example, was about this topic. That was during the ninth Five-Year Plan period. The strategy was put forward again in 2011 during the 12th Five-year Plan period. In fact, we have been insisting on expanding domestic demand, because it is a unique advantage of a populous country, and can provide stable support for economic growth.

Consumption now contributes to more than 60 percent of economic growth. This year, we put forward the strategy to vigorously boost domestic demand. In terms of understanding this strategy, this is not a case of expanding domestic demand merely because there is insufficient demand. Mr. Huang also discussed this issue when he made his introductory remarks earlier. From what I understand, there are a few points as follows:

First, expanding domestic demand must be combined with supply-side structural reform. The supply-side structural reform can both meet the needs of the upgrade in demand and create demand. After China's per capita GDP exceeded $10,000, many residents' demand for mid-to-high-end products increased. The production and supply also need to keep pace. The expansion of domestic demand required the entire industry’s supply system to upgrade at the same time, pushing the economy to realize a high-level of dynamic balance.

Second, we need to increase domestic demand to improve people's living standards. It would be meaningless to expand domestic demand just for the sake of expanding domestic demand. We developed to improve people's living standards, and the ultimate goal of expanding domestic demand is also centered around improving people's living standards. In essence, this is a demonstration of a people-centered approach. We should work to expand domestic demand and improve people's living standards.

Third, in terms of combing consumption and investment, we should make investments to expand domestic demand. For example, new investments could be made on new infrastructure, new urbanization initiatives and major projects.

Fourth, boosting domestic demand and expanding external demand should advance in a parallel fashion. Some people mistakenly think that there is no need for external demand if there is domestic demand, but this is actually not the case. The total amount of China's imports and exports accounts for 30 percent of GDP. We must promote the domestic market along with the external market. We expand domestic demand to promote our openness to the outside market. The ultimate goal of expanding domestic demand is not only bringing good opportunities to domestic enterprises, as it will also present opportunities to companies across the world. Expanding domestic demand in China holds great significance. Thanks.

China News Service:

I'd like to hear about the stories behind this year's Report on the Work of the Government. In particular, is there anything different in the drafting process compared with before? Thanks. 

Huang Shouhong:

Year after year, the flowers are always alike, but people are not the same. Such is the case with this year's report. The drafting of the Report on the Work of the Government is a hard process, especially for this year.

I just provided a brief introduction to this matter earlier. Due to the great changes that happened this year, the drafting of this year's report took quite a long time, which has been rare since the reform and opening-up began. Acting in line with the decisions and plans of the CPC Central Committee, the draft we see today is quite different in terms of form and content when compared to the report we drafted before the Spring Festival. Some of these parts in the report have been completely changed. In terms of content, you may notice that the word count of this year's report is about 10,400 Chinese characters. It is roughly half the length of the reports issued at the annual sessions in previous years when the word count was around 19,500 Chinese characters. Reports in previous years set the work agenda for the whole year, but this year's work agenda is just for the immediate seven months. As the situation has changed, revisions to the Report on the Work of the Government have increased and many parts of the report have been redrafted.

Take a look at the content of this year's Report on the Work of the Government. In the past, our reports offered an introduction to the major work carried out in the previous year in addition to the progress we made in that year. However, this part was not included in this year's report. Another example is that in previous years, reports included regular work arrangements and projects that need to be continually pushed forward. But this year we lack the length and capacity to provide such content, so we didn't deliberate on these parts. You may notice that this year the part on reviewing work mainly talks about landmark achievements from the previous year, pandemic prevention and control and resumption of work and production during this year. This information is provided in a brief introduction. About the part on reviewing the work: The word count of this part was usually about 4,000 Chinese characters in past reports, which were about 19,500 Chinese characters long in total. But this year, the word count is much lower than it was in previous years. Consider the section on the work agenda. In recent years, we usually used three parts to introduce it; namely, there was a part on reviewing work from the previous year, a part presenting general thoughts and an introduction of major work from the year at hand. This year, considering the present state of affairs, we used a list to introduce the work agenda in an attempt to keep the report concise and highlight the next steps of our work. There are many changes in the report, including changes to the content, form, length and so on.

Some explanation needs to be provided here. We still have many work projects that are in progress, such as work that has been pushed forward in the medical and healthcare sector in recent years. This includes the construction of regional medical centers, reform of public hospitals and regulation of health insurance. Given the limited length of the report, we didn't include such matters in this year's report. This year's report focused on new approaches and new measures for coping with the changing situations. The parts we didn't mention in the report still matter and still require continuous effort from us. It should be made clear that just because certain projects were not included in the report does not mean they will not be carried out. Given this year's situation, the report must focus on the major projects and issues that require urgent concern. This reflects the expectations from all sides of society. Similar requirements were put forward in the process of soliciting public opinions.

For a document such as the Report on the Work of the Government, the shorter the version is, the more difficult it is to draft, because we need to convey massive amounts of information and respond to requirements raised by all parties. According to the procedure, after the Report on the Work of the Government is approved at the annual session of the National People's Congress (NPC), all the targets and tasks set by it will be subdivided into more specific ones. Meanwhile, more policies and measures that weren't made into the original version will also be included. Currently, the State Council has been making plans. I trust that you will witness a series of specific policies issued by the CPC Central Committee and the State Council, which stay on the course charted by the Report on the Work of the Government.

It should be noted that all policies proposed in the Report on the Work of the Government are based on the analysis and judgment on the current situation regarding the spread of the pandemic globally, domestic epidemic prevention and control, and the momentum of economic development. If unexpected changes occur, relative policies "may be adjusted as called for," as mentioned in the Report on the Work of the Government. When we adopt a policy, we should both look ahead into the future and back into the past, taking into account both its effectiveness to address the current significant challenges and its sustainability. Just as a military campaign has to be carefully planned out, we also have a host of plans and measures at our disposal in response to possible crises. We have not fired all our bullets in one battle. There are ample room for future policy options. 

Hu Kaihong:

We will invite a reporter from the foreign press to take the final question. 

Reuters:

If there is no national economic growth target set for this year, how will local governments set their targets for local economic growth or fiscal expenditure? Thank you.

Huang Shouhong:

It seems that everyone is concerned about China's economic growth rate. Mr. Sun Guojun has just explained the situation. Normally, the economic growth rate serves as a comprehensive and fundamental indicator based on which arrangements will be made in many aspects. Therefore, it plays a vital role in guiding our efforts moving forward. However, due to the uncertainties this year, all parties have paid great attention to the economic situation before the session. Some suggested a specific target for economic growth should be set, with heated debates about the specific figure. There was also argument suggesting that no specific target should be set due to the current situation. As the question put it, without a specific national target for economic growth, local governments may lack references and basis in their work. Thus, those who advocate setting a growth target also make sense. As we all know, China's economy has been transitioning from a phase of rapid growth to a stage of high-quality development. In this regard, we should treat the economic growth rate in an objective manner and shift away from the GDP-focused growth model. On the other hand, economic growth is important. Facing the current economic decline, we must fulfill our duties and prevent the economy from falling out of control. After all, our efforts to ensure employment and living standards must be underpinned by economic growth.

What should local governments and departments do without a specific GDP growth target as a quantitative indicator? The answer is to continue the work which needs to be done and focus on strengthening efforts to ensure stability on six fronts and maintain security in six areas. Not setting a specific target for economic growth will help ease the burden of local governments for solely pursuing high speed growth. In line with the plans of the CPC Central Committee and the State Council, local governments should concentrate on ensuring job security, basic living needs, and operations of market entities.

The growth rates and GDP figures are final results, rather than the direction of our development. We will not lose direction just because of a lack of growth target. Our direction is clear: In accordance with the decisions and plans of the CPC Central Committee with Comrade Xi Jinping at its core, we will apply the new development philosophy, pursue supply-side structural reform, and promote high-quality development. At present, our focus is to maintain security in the six areas. After the "Two Sessions," through serious discussions and deep speculation, we will share a higher degree of consensus, further clarify the direction of future work, and take actions in all aspects more consciously. Therefore, we will not lose direction without setting a GDP growth target. Thank you.

Hu Kaihong:

Today's press briefing is hereby concluded. Thank you to Mr. Huang and Mr. Sun. Thank you all.

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Read in Chinese

Speaker:

Liu Yongfu, director of the State Council Leading Group Office of Poverty Alleviation and Development

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 18, 2020

Hu Kaihong:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office. In 2020, China will finish building a moderately prosperous society in all respects and meet the targets of the 13th Five-Year Plan. This is also the year for the completion of China's poverty alleviation tasks. Today, we have invited Mr. Liu Yongfu, director of the State Council Leading Group Office of Poverty Alleviation and Development. He will brief you on how we are securing the timely realization of China's poverty alleviation goals. He will also take your questions. Now, I give the floor to Mr. Liu.

Liu Yongfu:

Ladies and gentlemen, friends from the media, good afternoon. Welcome to today's press conference. I would like to thank all of you for your long-term concern and support for China's poverty relief work.

This year, China will finish building a moderately prosperous society in all respects and meet the targets of the 13th Five-Year Plan. This is also the year for the completion of China's efforts in poverty alleviation. The Central Economic Work Conference held at the end of last year set out an overall plan for this year's work. The sudden outbreak of COVID-19 has had a major impact on China's economic and social development, and posed new difficulties and challenges for poverty alleviation. The outbreak made it hard for poor laborers to go outside of their hometowns to seek jobs and for village-based officials to promote poverty alleviation. It impaired the business production and operation of impoverished households, and delayed the commencement of projects focused on poverty alleviation as well as the work and production resumption of such key businesses and workshops. At a symposium on March 6 dedicated to securing a decisive victory in poverty alleviation, General Secretary Xi Jinping stressed that lifting all rural residents living below the current poverty line out of poverty by 2020 is a solemn promise made by the CPC Central Committee, and it must be fulfilled on time. The CPC Central Committee has coordinated pandemic prevention and control with economic and social development, making plans and policies to eliminate poverty - a critical task that must be completed this year. Per important instructions given by General Secretary Xi Jinping and plans made by the CPC Central Committee and the State Council, all regions and government departments at all levels, especially those responsible for poverty alleviation, have risen to challenges and worked tirelessly to promote poverty alleviation.

With concerted efforts on all sides, positive progress has been achieved in poverty alleviation despite the impact of COVID-19. As of April 30, all officials assigned to work in poverty-stricken villages had reported for duty. Under the supervision of relevant authorities, a time limit had been set to promote poverty relief work in an orderly manner. The number of impoverished people going outside of their hometowns to seek jobs had reached 95.4% of last year's total. In central and western regions, 3.43 million poor laborers had taken rural public welfare posts. Additionally, 97.5% of leading companies and 97% of workshops dedicated to poverty relief had resumed work, and 82% of poverty alleviation projects had started construction. Sales of products contributing to poverty alleviation had reached 32.3 billion yuan. Funds and human resources allocated for coordinating poverty reduction efforts between eastern and western regions had been put in place, with both figures surpassing target goals. On the whole, the pandemic will not change the general course of poverty elimination, with its impact gradually being overcome. The goals and tasks involved in defeating poverty will remain unchanged, and we will never leave any loose ends, no matter the impact of the pandemic. The current poverty alleviation standard will remain unchanged and without any drop or increase. The timetable for eliminating poverty will also remain unchanged.

Next, we will take the following measures:

First, we will set a time limit on poverty relief work in designated areas and intensify supervision there. We will continue to oversee the poverty relief work in 52 poor counties and 1,113 villages where there are large impoverished populations and it is difficult to shake off poverty. We will urge the seven provincial-level regions that are involved to act on implementation plans, and we will encourage all counties and villages to implement their specific plans. We will focus on ensuring access to compulsory education, basic medical services, safe housing and drinking water for the poor, as well as providing follow-up assistance for residents who have been relocated from inhospitable areas. We will mobilize private enterprises and social organizations to aid poverty relief in designated villages. All of these efforts aim to ensure the timely achievement of all remaining poverty alleviation goals.

Second, we will strengthen poverty alleviation through employment. The number of migrant laborers in poverty in the country this year will exceed 28 million. The total number of migrant laborers in poverty from the central and western regions absorbed by the eastern regions this year will be on par with last year. The total number of poor migrant laborers from the central and western regions this year will be not less than last year. For enterprises to resume work, production and project constructions, the first priority will be arranging for laborers in poverty to work. And enterprises must continue to implement effective point-to-point connections, especially by generating employment for the laborers from the counties listed as impoverished. We will also strive to stabilize available jobs for poor migrant laborers who have gone out of town to work, and we will facilitate work for poor laborers who are willing to travel to work. We will support leading poverty alleviation enterprises and poverty alleviation workshops in the resumption of work and production, make good use of poverty alleviation public welfare posts, mobilize and organize the poor laborers, marginalized individuals, etc., to participate in the construction of projects that offer jobs as relief and, lastly, we will promote employment locally and in nearby regions.

Third, we will strengthen poverty alleviation by consumption. Poverty alleviation by consumption is an important measure to overcome the impact of the pandemic and boost the development of poverty alleviation industries, which should be combined with the "vegetable basket (non-staple food supply)" and "rice bag (grain supply)" programs in the eastern region and cities. The central and western regions should do their best in the production and identification of poverty alleviation products, while eastern regions should increase the sales of such products and solve the problem of poverty alleviation product sales through various methods, including purchases made by budget units, the establishment of a trading market and social participation in sales.

Fourth, we will bolster assessment and aids. We will enhance the assessment of households that are unstable during progress toward poverty alleviation - along with those that are vulnerable to or on the brink of poverty and those whose income has sharply decreased or whose expenditure has suddenly increased due to the pandemic or other reasons - and enact targeted assistance measures for them in advance. We will support the population segments that are on the brink of poverty but have the ability to work via various poverty alleviation policies, such as small-sum poverty alleviation loans with interest subsidies, skill training and poverty alleviation public welfare working posts. For the impoverished people who are unable to work, we will reinforce comprehensive supporting measures, such as minimum living support, medical insurance, and old-age insurance. 

We believe that with the strong leadership of General Secretary Xi Jinping and the CPC Central Committee, together with the joint efforts of the whole Party, country and all of society, and with the solid foundation laid by previous poverty alleviation efforts over the years, we have the confidence, conditions and abilities to win the battle against poverty on schedule!

Next, I am happy to answer your questions.

Hu Kaihong:

Thank you, Mr. Liu. Please ask your questions. Before you do, let us know the news organization you represent.

CCTV:

We know that the central government has set a time limit to promote poverty relief work in the remaining 52 counties and 1,113 villages this year. The State Council Leading Group Office of Poverty Alleviation and Development has also deployed and arranged this work in 2020. May I ask, Mr. Liu, what is the current progress and actual result of speeding up efforts in lifting poor counties and villages out of poverty? Thank you.

Liu Yongfu:

Thank you. There were 832 poverty-stricken counties in our country. As of April 15, 780 counties have announced that they have been lifted out of poverty. Fifteen out of 22 provinces in the middle and western parts of China have no more poverty-stricken counties, while there are 52 poor counties left in the remaining seven provinces. At the same time, we had 128,000 impoverished villages. At the end of last year, there were 2,707 poor villages. Among these 2,707 impoverished villages, there were 1,113 villages each with more than 1,000 poor people and a poverty incidence rate of more than 10%. A time limit had been set to promote poverty relief work in the 52 counties and 1,113 villages. The plan to urge these efforts onward was issued by the central government at the beginning of the Chinese lunar new year, and we printed and distributed it on the third day of the lunar new year. So far, seven provinces have formulated implementation plans. All counties and villages have also formulated operational plans that detail aspects from what the problems are that must be solved to how to solve them, when to finish them and who will do it - a series of measures that are very practical and specific. In addition, the central and provincial governments have increased investment in these listed counties, and they have invested 30.8 billion yuan in these 52 impoverished counties. Each province has also given preferential poverty relief funding to the more than 1,000 villages.

There has also been an increase in the force of help and support, as we can see that there are fewer and fewer poverty-stricken counties and fewer and fewer impoverished villages. Some counties that have been removed from the poverty list have transferred their forces to these places to provide aid. On April 8 of this year, when some of China's private enterprises knew that there were still more than 1,000 villages being listed as impoverished, 31 companies proposed that each Chinese enterprise could help one poor village. After the proposal was sent out, there was a wide response from private enterprises and social organizations. There are now 833 private enterprises and 228 social organizations that have signed up to participate, and the two sides are negotiating how to cooperate, which has also strengthened efforts. 

The focused acceleration of poverty alleviation efforts has already had some effects. For example, the number of poor laborers from listed counties who left their hometowns to work has reached 102% of last year's total, which is seven percentage points higher than the national number. In the process of exporting laborers, our country established a point-to-point system. Throughout the pandemic, the listed counties have 105,000 people travelling to work. For example, Xinjiang Uygur autonomous region has relatively more poverty relief work. There are more than 300 villages in Xinjiang, as there are more than 300 villages in Liangshan Yi autonomous prefecture, Sichuan province. In those 300 villages of Xinjiang, all the cadres who came to aid did not return to their hometowns during this year's Spring Festival and instead stayed in the villages to perform poverty alleviation work, helping to ensure that the tasks can be completed this year. Thus, overall progress has been smooth. Thank you.

Reuters:

Affected by the epidemic and economic downturn, will those who have been lifted out of poverty fall into poverty again? This has already happened this year. What do you think of this risk? Thank you.

Liu Yongfu:

As I just mentioned, due to the impact of the epidemic, migrant workers in poverty were stuck in their hometown. In previous years, after the 15th day of the first lunar month, poor people would go out to work, but this year, their work time has been postponed. By the end of February, the number of poor people who left for work only accounted for 40% of last year's total. After two months of efforts in March and April, the ratio rose to 95%, basically reaching the same level as last year. However, the income lost over the past two months cannot be compensated. In addition, the production is damaged. Farmers who resumed production and prepared for spring plowing were faced with the shortage of production supplies. Now that we have addressed the issue, it can be said that throughout the country, the spring plowing among the poor is basically unaffected. What we need to prevent is a backlog of produce. Will it push people into poverty or make people return to poverty? We found that only a small number of people fell into poverty again. The reason is not entirely due to the epidemic; some of them were influenced by disasters and diseases. According to data, this year, the number of people who are prone to return to poverty and those who live on the edge of poverty has increased by 380,000. They have been included in the monitoring and assistance system along with millions of people who had been registered last year. Even if there was no COVID-19, there would still be people returning to poverty, and those on the edge of poverty would become poor. The epidemic becomes a driver for the increase of that number. For example, by the end of last year, 150,000 rural poor people had not met the goal of "free from worries over food and clothing and having access to compulsory education, basic medical services, and safe housing." This year, the number has increased to 340,000. Now, 250,000 people have achieved the goal, and there are still 90,000 people left across the country. We are clear of the number of people who are prone to return to poverty and those who are on the edge of poverty and their situation. Therefore, we will take measures accordingly. For example, if there is a reduction in the number of people leaving home for work, we will create jobs locally. We can make up for not being able to leave home for work by creating opportunities locally for them. The epidemic did exert influence, but we can take measures to counter the fallout. Thank you.

Farmers' Daily:

Concerning the epidemic's impact on the production and sales of products in impoverished areas, the State Council Leading Group Office of Poverty Alleviation and Development and relevant government bodies have made deployments and arrangements specifically to boost consumption as a way of poverty alleviation. What are these specific measures? How well do these measures work?

Liu Yongfu:

Over the years, some local industries have been developed to help poverty alleviation, such as the production of apples, walnuts, and Chinese dates, which have come onto the market this year. Of course, there will be products associated with poverty alleviation every season, and these products must be sold. Due to the impact of the COVID-19 pandemic, a series of works have been carried out under the joint efforts among the National Development and Reform Commission, the All China Federation of Supply and Marketing Cooperatives, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the Office of the Central Cyberspace Affairs Commission, as well as other government bodies concerning e-commerce and consumption to help poverty alleviation.

First, we have carried out the verification work of poverty alleviation products in Western China. What are poverty alleviation products? They refer to the products produced either by impoverished people, villages, and relevant cooperatives or by leading enterprises that help poverty alleviation. In short, poverty alleviation products are those which are associated with impoverished people and can also help lift people out of poverty. We've put effort into carrying out this verification. The verification is not a one-time thing. It will be constantly carried out all year round. So far, over 40,000 products have been verified, and the total value reached 390 billion yuan. We will continue to carry out the verification work in the future. As of now, the sales of these products reached 32.3 billion yuan.

As we all know, Hubei province is the worst-hit region of the epidemic this year. Our support for Hubei started in March with the improvement of the epidemic situation. Seven provinces in East China helped impoverished workers in Hubei go out for jobs. We've also helped Hubei sell its poverty alleviation products. According to the statistics from Hubei, the sales of well-known poverty alleviation products, such as crayfish, tea, and mushrooms, reached nearly 3 billion yuan. The working committee of the central and state organs has called on all units of the central and state organs to purchase the products overstocked in Hubei province. From mid-March, in less than two months, 99 government bodies have bought 186 million yuan of products. Each of them made a purchase of 1.87 million yuan on average. Therefore, first, we need to carry out verification of the poverty alleviation products. Second, we need to take various measures to consume these products.

Next, there are still several models regarding our work, such as government procurement and market trading. We can also encourage e-commerce companies to sell these products. Some social organizations are also working on public welfare projects in this field. In short, we will come up with various measures to help sell these high-quality products produced by impoverished people in impoverished areas.

The work in this field should be connected with the "rice bag" (i.e., grain supply) and "vegetable basket" (i.e., non-staple food supply) projects in cities of East China. These products from impoverished areas are of high quality, and sometimes people may find it difficult to buy these products. We need to step up our organizing efforts. Impoverished people are the producer, while people living in East China are the consumer. Thus, the sale and purchase of goods are not a burden, but a perfect match between them. We will continue our works in the next step. Of course, the quality must be ensured, and the price must stay reasonable. It is necessary to prevent seeking personal gain in the name of helping poverty alleviation. We've got a head start. Thank you.

Hong Kong Commercial Daily:

Since the beginning of this year, unemployment has reached relatively high levels as the number of job vacancies has been decreasing, and the manufacturing and catering industries - the two major employers of migrant labor - are still recovering. Therefore, my question is: What multipronged efforts are being taken to help migrant workers get employed? And, how are the funds designated for poverty alleviation being pooled?

Liu Yongfu:

I'll start by addressing the question about funding. The funds provided by the central government for poverty alleviation this year have increased 15.8%. Meanwhile, regions are required to increase rather than reduce their financing for the program, which can also receive support from the central government when necessary. In fact, we have pooled substantial funds that consist of agricultural funds, financial funds and aggregated social funds, in addition to the designated funds. When combined, these can remove the obstacles that impede the poverty alleviation work. Although it is true that there is never enough money, we still can evaluate the outcome using general standards. That is the situation with regards to funds.

Second, I will respond to your concern about employment. It is a fact that under the impact of the global pandemic and downward economic pressure, enterprises have received fewer purchase orders, which in turn has strained the operations of manufacturers and business entities. As a result, the unemployment rate has risen, with job markets around the world being affected - in this, China is no exception. However, whilst trying to avoid volatility in general, we have focused on the employment of migrant workers from poverty-stricken regions. With the goal of strengthening poverty alleviation through employment that I mentioned in the introduction , we have prioritized the impoverished labor force in the resumption of work and production. For instance, the number of rural workers on the move through chartered transportation since the outbreak of the pandemic, particularly across provinces, has reached 6.02 million. Of these, 1.52 million have been impoverished migrant workers, accounting for 25.2%, or over one quarter of the entire flow. You are aware that impoverished people accounted for 10.2% of the rural population as of 2012, however, now the exported labor force moving through "point-to-point" chartered transportation has reached 25.2%. This percentage shows the efforts of different localities in focusing on mobilizing impoverished populations.

Our efforts also focus on intra-provincial employment. Take the Xinjiang Uygur Autonomous Region for example. As a result of constant labor force demands from the northern and eastern parts of the region, more than 50,000 impoverished people from the south have been provided with job opportunities in these two areas. In addition, newly launched enterprises, poverty-alleviation workshops and leading enterprises have also provided jobs to the local labor force. So far, the autonomous region has created more than 3 million poverty-alleviation charitable posts, including, more than 1 million forest rangers, 850,000 photovoltaic workers - whose number is expected to reach 1 million by the first half of this year - and 250,000 road maintenance staff.

We have been overseeing these three efforts, namely, migrant labor force, charitable posts and localized employment. China has 290 million rural migrant workers, among which, about 26 million impoverished laborers have been mobilized. However, the rest, estimated at around 2.01 million, are still awaiting relocated job opportunities that have yet to be realized. The situation requires us to secure employment for these 26 million migrant workers before creating opportunities for the remaining approximately 2 million. Among the 290 million migrant workers, around 9% are classed as impoverished. These people will be given priority for employment with our preferential policies and solutions provided for employment issues. However, this does not mean that we will give every job opportunity to those classed as impoverished. But they will be given priority in the labor force market. Thank you.

Insight China:

Mr. Liu, what preferential policies and specific measures are the central government taking to help disadvantaged groups and poverty-stricken areas in Hubei province? Thank you.

Liu Yongfu:

Regarding supporting Hubei, the region hit hardest since the outbreak of COVID-19, General Secretary Xi Jinping visited the province to call for concerted efforts, not just within Hubei, but also in Eastern China and the central government bodies which are both supposed to help Hubei revive in terms of economic and social development in a timely fashion. In accordance with the instructions of the CPC Central Committee and the State Council, a full range of policies targeting economic recovery and poverty alleviation have been carried out headed by the National Development and Reform Commission (NDRC). In addition, the province will enjoy preferential policies in terms of designated poverty-alleviation funds distributed by central finance.

The Ministry of Human Resources and the State Council Leading Group Office of Poverty Alleviation and Development have initiated a labor force cooperation program entitled "Seven Plus One" between Hubei and seven eastern provinces with high numbers of impoverished migrant workers. In addition to poverty relief through consumption which has facilitated sales of commodities in poverty-stricken areas, financing and labor force coordination have also propped up the economy on the basis of the multipronged poverty alleviation scheme. The impoverished local labor force that has left home for work has approached to 90% of the same period last year. I predict that it will have reached the same level as last year by the end of this month and losses are likely to be restricted to the previous three months, from February to April. Thank you.

Hu Kaihong:

That concludes today's press conference. Thank you, Mr. Liu and thank you all.

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Read in Chinese

Speakers:

Zhong Shan, minister of commerce

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

Wang Bingnan, vice minister of commerce

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 18, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). From today, we will hold more press conferences and invite officials from relevant departments to brief you on China's economic and social development. This morning, we are delighted to have Mr. Zhong Shan, minister of commerce and secretary of the leading Party group of the Ministry of Commerce, Mr. Wang Shouwen, vice minister and deputy China international trade representative, and Mr. Wang Bingnan, vice minister of commerce. They will brief you on stabilizing the fundamentals of foreign trade and investment and promoting the quality development of commerce as well as take your questions.

First, I will give the floor to Mr. Zhong.

Zhong Shan:

Thank you. I notice that you are all wearing masks, showing that you are dedicated to working cautiously. 

On behalf of the Ministry of Commerce, I would like to extend gratitude to friends from the media, for your attention, concern, assistance and support.

Last year, against the backdrop of a complex and severe domestic and international situation, China achieved positive results in commerce reform and development, with consumption, foreign trade, and foreign investment all hitting record highs. This year, the COVID-19 epidemic exerts a great impact on China's economic and social development. The situation of commerce reform and development has become more severe and complex, and we are facing greater challenges.

Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, we have coordinated the work of epidemic prevention and control and commerce reform and development. Efforts have been made to expand domestic demand, promote consumption, and stabilize the fundamentals of foreign trade and investment. We have worked to promote the quality development of commerce, minimize the impact of the epidemic, and make new contributions to completing building a moderately prosperous society in all respects.

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

Hu Kaihong:

Thank you, Mr. Zhong, for your very brief introduction. We will leave more time for questions. Please.

CCTV:

We all know that during the epidemic, securing the residents' basic necessities is a big challenge. In many countries, there are cases of panic buying and items running out of stock. But China did well in ensuring necessary supplies earlier. What did the Ministry of Commerce do in this aspect? Thank you.

Zhong Shan:

Ensuring the supply of the country's basic necessities is a tough task concerning people's livelihood and an important part of winning the battle against the epidemic. Generally speaking, China's market is in abundant supply amid the outbreak. Basically, the supplies weren't stopped or out of stock and prices were stable. The work we have done under the leadership of the CPC Central Committee is mainly in the following three aspects:

First, we worked to ensure supplies in key areas, including Wuhan, Beijing, and the other cities in Hubei province. On January 23, the Ministry of Commerce established a "nine-province joint supply mechanism," aimed to keep track of the supply and demand situation, secure the supply of daily necessities in key areas, and better deploy resources in a timely manner. At the same time, in order to implement various tasks concerning ensuring supplies, the Ministry of Commerce sent three batches of working teams to Wuhan, mainly for coordination and supervision. During the epidemic, the "nine-province joint supply mechanism" came into play when Wuhan was in short supply or in need of certain items. For example, when the epidemic broke out, vegetables in Wuhan were in shortage. Within two days, Chongqing city sent 400 tons of vegetables to Wuhan. During that time, Wuhan's disposable lunch boxes were also inadequate, and Hunan province collected enough boxes for them within 10 hours. In addition, provinces, such as Guangxi, Shandong, and Yunnan, that produce a large amount of vegetables all sent vegetables and basic necessities to Wuhan, and there were even special trains running to transport these supplies. After the joint supply mechanism was put into operation, the supply of daily necessities in Wuhan city and Hubei province was basically sufficient amid the epidemic. Apart from Hubei Province, eight other provinces whose supplies were limited chose to provide supplies to Wuhan and Hubei first as long as they were in need. Wuhan's supply was more abundant than the country's average level during its lockdown. We stocked more than one week's worth of daily necessities, such as rice, noodles, oil, meat, eggs, milk, fruits and vegetables, and the longest could last over 30 days. These supplies were much ampler than the national average.

Second, we have strengthened market coordination across the country. We have established a nation-wide daily briefing system that monitors and displays inventory information on eight key daily necessities. At the same time, we also made a list of 500 major businesses, including every link of the supply chain (production, wholesale, online and offline retail, and transportation) to ensure adequate supplies. For example, there was a time when Beijing had a shortage of instant noodles and meat, but the demand was quickly met through coordination. Similar demands of certain necessities were also met in other parts of the country through market coordination. In general, we have managed to ensure market supply across China.

Third, we have introduced new business and delivery models. After the COVID-19 outbreak, especially when communities in Wuhan were locked down, there was a time when the residents had problems buying groceries. In response to this, the Ministry of Commerce, in collaboration with other ministries, as well as the Hubei and Wuhan authorities, organized group buying or mass buying to help local communities reduce unnecessary outings. Moreover, we also mobilized over 1,100 vehicles and more than 20,000 volunteers to send vegetables and other needed groceries to communities. 

All of this could not have happened without the firm leadership of the CPC Central Committee with Comrade Xi Jinping at its core, as well as the concerted efforts of the whole country. It also fully demonstrated the advantages of socialism with Chinese characteristics and its mass mobilization ability to combat the epidemic. Thank you.

Market News International:

The foreign trade sector employs 180 million people. But some businesses have been forced to suspend production due to sluggish foreign demand during the COVID-19 outbreak. What will the Ministry of Commerce do to reduce the number of bankruptcies and stabilize foreign trade？

Zhong Shan:

Thanks for your question. As the COVID-19 outbreak spreads across the globe, China's foreign trade faces unprecedented challenges due to a large reduction of international demand. Our ministry will do the utmost to stabilize foreign trade according to instructions from the central government.

First, we will help businesses navigate their challenges. As you just said, many Chinese businesses now face difficulties like lack of funds, reduced orders, and risks in the industry and supply chains. In the early period of the outbreak, many businesses had difficulties sending out overseas orders due to logistical problems. While they have resumed productions, they now face reduced orders. Some of them could solve their problems through their own efforts, while some need government assistance in terms of financing, taxation and insurance. After the COVID-19 outbreak, the CPC Central Committee and the State Council have been trying to solve the issues businesses face and help them navigate the challenges. We have now seen that some of the policy measures are working. For example, it used to take over 10 days to complete the tax rebate procedures but now it only takes around a week, which helps export-oriented businesses with capital turnover. Credit scale is also expanded to help businesses with financing difficulties. Credit insurance coverage have also been enlarged. China Export & Credit Insurance Corporation has now provided help to around 110,000 businesses. Meanwhile, some firms that used to only focus on exports are now shifting to the domestic market with the help of the government. We have seen some good results. Domestic sales of those formerly export-oriented businesses grew by 17% in April. This means that their products are also popular among domestic consumers.

Second, we will refine the layout of the international market. Falling demand in the international market due to the pandemic by no means indicates a void of demand and market. While attempting to reinforce traditional markets abroad, we have also explored new ones. As the Chinese saying goes, "when one door closes a window opens." Therefore, despite plummeting demand from major developed countries, we still have other markets to tap into. Although imports and exports dropped 4.9% during the first four months of the year, trade with countries along the Belt and Road soared with an increasing share. More to the point, the Association of Southeast Asian Nations (ASEAN) has become our top trade partner. In addition to expanding exports, we have taken proactive measures to promote imports. We will hold the third China International Import Expo (CIIE) to satisfy domestic demand and facilitate open global economic cooperation.

Third, we will foster new forms and models of business. In recent years, cross-border e-commerce and market purchase trade have developed rapidly. This year, we accelerate the pilot work, and the number of comprehensive cross-border e-commerce pilot zones, in particular, has increased from an initially planned 59 to 105. We will support the growth of those new forms of business, foster new driving forces for foreign trade, and develop them into new highlights in foreign trade development. Thank you.

China Daily:

You just mentioned the countries along the Belt and Road. Last year, General Secretary Xi Jinping called for joint efforts to promote the high-quality development of the Belt and Road while addressing the second Belt and Road Forum on International Cooperation. My questions are: Has the pandemic created challenges that stand in the way of economic cooperation along the Belt and Road, especially regarding major projects? How will the Ministry of Commerce continue to help build the Belt and Road? Thank you.

Zhong Shan:

Thank you for your questions. We invite Mr. Wang Bingnan to answer them. 

Wang Bingnan:

Thank you for your questions. Since the Belt and Road Initiative was proposed more than six years ago, China and involved countries have followed the principle of extensive consultation, joint contribution and shared benefits. Notable achievements have been made in deepening pragmatic cooperation and promoting the high-quality development of the Belt and Road. Statistics show that from 2013 to 2019, the trade of commodities between China and the countries along the Belt and Road hit $7.8 trillion, direct investments from China to those countries exceeded $110 billion, newly contracted projects reached nearly $800 billion, and a huge number of major projects and industrial zones were set in motion. These have greatly helped to promote win-win cooperation and common development among them. The influence and appeal of the Belt and Road Initiative have continued to grow.

Just as the reporter mentioned, the impact of coronavirus on the world economy has been massive, and it has exacerbated the sluggishness of international trade and investments. The economic and trade cooperation along the Belt and Road has also been affected to some extent. For example, some projects have been obstructed by the loss of personnel and the lack of logistic supplies. And at the same time, epidemic prevention and control efforts have also put much pressure on them. 

While confronting such complexities, China and the countries involved have provided mutual assistance to surmount the difficulties and mitigate the impact of the pandemic. Generally speaking, the economic and trade cooperation along the Belt and Road has so far secured sound momentum. From January to April, commodity trade between China and the countries involved has climbed up 0.9% year on year by RMB, and China's direct investment in the non-financial sector to those countries rose 13.4% by US dollars. In the next phase, the Ministry of Commerce will follow the major polices and plans made by the CPC Central Committee and the State Council to advance the work of both epidemic prevention and control and economic and trade cooperation along the Belt and Road, promote its high-quality development, and contribute to building a community with a shared future for mankind. Our work will be carried out in four aspects as follows:

First, we will make more efforts to cope with the pandemic. We will continue to keep a close eye on the overseas situation of the pandemic and promptly work out policies and solutions that are targeted at solving difficulties and problems faced by enterprises that invest abroad. At the same time, we will deepen our communication and cooperation with involved countries, jointly working to ensure the security and stability of global industrial and supply chains.

Second, we will further promote trade cooperation. We will make full use of open platforms such as the China International Import Expo (CIIE) and the online Canton Fair, and further develop Silk Road E-Commerce. We will also promote the construction of "commodity passageways", such as China-Europe freight train services and new land-sea transit routes, and establish high-standard free trade zones in cooperation with more countries, so as to further promote trade liberation and facilitation to a higher level.

Third, we will expand investment cooperation. In accordance with the requirements to jointly promote high-quality BRI cooperation, we will work to carry out a batch of projects with sound overall benefits welcomed by all parties. We will implement a batch of aid projects helpful in developing the local economy and improving local people's livelihood. We will further promote the development of overseas economic and trade cooperation zones, and establish third-market cooperation with more countries, in order to continuously improve our capacity of outward investment cooperation.

Fourth, we will work to do a better job of telling BRI stories. Last year, we looked in detail at typical BRI projects and organized foreign and domestic experts to write, edit and publish the book A Bright Shared Future, Stories Along the Belt and Road in six languages. Launched both online and offline, these books have found a wide audience in and outside China. This year, we will continue to publish a series of books, and present vivid stories of BRI and international cooperation in fighting the COVID-19 pandemic, so that people around the world can gain a better understanding of the overall significance of a community with a shared future for all humanity, as well as about the operation of the BRI. In this way, we will jointly push forward the implementation of BRI. Thank you.

Phoenix TV:

Mr. Zhong, as the consumer market is gradually picking up, what measures will the Ministry of Commerce take to boost consumption? Thank you.

Zhong Shan:

Thank you for your question. China is the second largest consumer market in the world. For six consecutive years, consumption has been the biggest driving force for economic growth. The CPC Central Committee has taken expansion of domestic demand as a major strategy. The Ministry of Commerce will work to further expand domestic demand and boost consumption in the following aspects:

First, we will work to establish the "15-minute convenient life circle". Although there are many convenience stores in China, the sector is not fully developed. The number of chain stores in China, for example, only reaches 130,000, and this is far from enough to meet people's everyday needs. Next, we will optimize the layout of convenience stores, promote the development of convenience store chains. This will also be applied to farmers markets, because their quality varies despite of their obvious size, and they remain under-developed. Next, we will work to promote the standardized renovation of farmers market, optimizing the environment, increasing the variety, and improving the quality.

Second, we will work to transform and upgrade pedestrian streets in cities because they have a huge impact on urban consumption and are of high demonstrative significance. The Ministry of Commerce launched 11 pilot projects at the end of 2018 concerning the transformation and upgrading of pedestrian streets, and achieved excellent results. The total pedestrian flow of these 11 streets exceeded 900 million last year, increasing by 22.6% from 2018. Total income reached 125 billion yuan, up 17%. Next, the Ministry of Commerce will launch a second batch of pilot pedestrian streets, and work to turn them into a platform of consumption upgrading, a carrier of high-quality development, and a window for opening-up.

Third, we will work to develop the life service industry. This sector has seen rapid growth in recent years. However, the COVID-19 has had huge impact on catering and housekeeping services. The income of the catering sector in the first four months of this year fell 41%, whilst that of the housekeeping services also decreased drastically. We need to help related enterprises to develop in this difficult time. The catering industry is both a traditional and a "sunrise" industry. As the saying goes, "Food matters." The catering industry in China still has huge potential of development. It accounts for 11% of total retail sales of consumer goods, creating 21 million jobs. We need to support its development across China, and make it greener, healthier and safer. Another point is the development of housekeeping services. This is an industry with the countryside and cities at each end. China has abundant resources in this regard. There is much spare labor in the countryside and also huge demand in the city. Last year, the income of China's housekeeping services exceeded 690 billion yuan. We need to continue work in this field. The Ministry of Commerce has established a credit platform of housekeeping services. The move aims to regulate the operation of housekeeping companies, better protect the rights and interests of labor in this sector, and provide better services to urban families. Thank you.

CGTN:

We know the spread of the COVID-19 pandemic has had a great impact on the global industrial and supply chains, which mainly benefited from the free trade and transnational investment under the framework of multilateral trading system under the WTO. However, some days ago, the director-general of WTO, Roberto Azevedo, announced he would step down in advance of his full term. What kind of influence will his resignation pose for the global multilateral trading system and the work of WTO? Will it have an impact on the safety of global industrial and supply chains? Thank you.

Wang Shouwen:

Thank you for your question. You are right. The pandemic has had a huge impact on the world economy and its trade, global industrial and supply chains. Since the outbreak of the virus, the WTO has taken active actions and implemented a series of measures, such as appealing to its members not to adopt protectionism, so as to guarantee unimpeded trade. If they decide to carry out trade restrictive measures in order to address the consequences of the pandemic, these should be reported to the WTO to ensure openness and transparency. The WTO also specifically established a response team and set up a topical website, playing important roles in the fight against the pandemic.

To address the crisis more effectively, the WTO primary members decided the organization should play a greater role. Last Thursday, the Second Extraordinary G20 Virtual Trade and Investment Ministerial Meeting was convened with the participation of Minister Zhong Shan. The meeting passed the "G20 Actions to Support World Trade and Investment in Response to COVID-19." Its announcement called for widespread support to promote the WTO in playing an even greater role in advancing international trade stability and predictability. It also requested the exploration of more WTO initiatives related to tackling the consequences of the COVID-19 outbreak, so as to ensure related supply chains became more open and resilient, especially in expanding production and trade of medicines, medical and health products.

You've just mentioned the WTO director-general proposed to resign before expiry of his tenure. China respects his decision and will endeavor to ensure the smooth operation and the role of WTO together with other members. Against the backdrop of the ongoing pandemic, we hold that jointly safeguarding the openness, safety and stability of international industrial chains serves the interests of all parties. We also appeal to WTO members to oppose unilateralism and protectionism, maintain open domestic markets and support the stability of international trade industrial and supply chains. We also called on all parties to enhance coordination in creating economic and trade policies so as to ensure smooth international transportation, normal operation of international logistics, and safe, stable, open and smooth trade, industrial and supply chains between nations. Thank you.

Hong Kong Commercial Daily:

Since the outbreak of the COVID-19 pandemic, the production and operation activities of some foreign-invested enterprises has been impacted. It is being suggested some will transfer outwards, raising some concerns about the prospects of China's utilization of foreign capital. What's your opinion on that, Minister Zhong Shan? What measures will the Ministry of Commerce take to stabilize foreign capital. Thank you. 

Zhong Shan:

Thank you for your question. The spread of the pandemic truly has had an impact on transnational investment and China's utilization of foreign capital also faces great challenges. Under the leadership of the CPC Central Committee, we will focus on three key tasks regarding stabilizing foreign capital.

First, we will expand opening-up to a greater extent. The more difficult the situation, the greater the needed openness. We will continuously relax restrictions on the market access, reduce negative lists and expand openness of the service sector. Some of these works are already underway and some will be conducted soon. We will enhance regional synergy openness and promote implementation of significant strategies like the integrated development of Beijing and Tianjin municipalities and Hebei province, the Yangtze Economic Belt, and the Guangdong-Hong Kong-Macao Greater Bay Area, so as to advance regional interaction and openness, and bring along all-round opening. We will step up opening of the central and western regions and old industrial bases, which now have better development conditions. What's more, many supportive polices have been issued by the central government targeting these regions. We encourage more foreign businessmen to invest in central and western China and the old industrial bases in Northeast China.

Second, building an open platform. The pilot FTAs and free trade ports are the new heights of reform and opening up in the new era. We must build these open platforms well so that they can play a demonstrative and leading role. The 18 pilot FTAs established since 2013 have produced a batch of replicable and transferable outcomes by using foreign investment that accounts for 15% of the country's total. Next, we will expand the pilot FTAs, give them greater freedom in reform, and promote new opening up measures. At the same time, we will further accelerate the construction of Hainan Free Trade Port.

Third, improving the business environment. China has seen an increasingly better business environment in recent years. The world ranking of the country's business environment increased from 46th to 31st in 2019, which is great progress. This year, we will focus on implementing the Foreign Investment Law, creating a market environment for fair competition, protecting the legitimate rights and interests of foreign investors as well as intellectual property rights, and enhancing the confidence of foreign investors in long-term investment in China, so that they are willing to come, stay, and develop here.

I would like to emphasize that China has obvious advantages in the use of foreign capital. The country has rich and high-quality labor resources, sound capabilities in offering industrial support, and a market of 1.4 billion people. I believe smart entrepreneurs will not give up the huge Chinese market. Thank you.

CNBC:

As the pandemic spreads around the world, countries are paying more attention to this year's China International Import Expo (CIIE). How is the preparation for the third CIIE going? Will it be affected by the pandemic? What differences do you think there will be between this year's expo and the previous ones? Thank you.

Wang Bingnan:

Thank you for your question. The CIIE was planned, arranged and promoted by President Xi Jinping. It is China's major initiative to pursue opening up and widen market access to the rest of the world. Successfully held for two sessions, the expo has seen its role as the platforms for international procurement, investment promotion, people-to-people exchanges and open cooperation increasingly highlighted. It brings along increasingly higher comprehensive benefits. It has a great impact and has been widely praised worldwide.

The third CIIE will be held in Shanghai, China, from Nov. 5 to 10 this year. Its overall framework will be roughly the same as the previous two, comprising three major sections – National Trade Investment Comprehensive Exhibition, Corporate Business Exhibition, and Hongqiao International Economic and Trade Forum.

All the preparations are underway in an orderly and smooth manner. Compared with the previous two sessions, it has the following characteristics in general:

First, a larger scale. Companies worldwide showed great enthusiasm for the expo, with many of them saying that the third CIIE is one of the most important exhibitions in the world this year. We plan to further expand the exhibition area based on the previous session. The current exhibition area under contracts signed so far already exceeds that of the same period last year.

Second, a higher quality. More first-class companies and products will participate in the third CIIE. The world's top 500 and leading companies in their industries will continue participating in the expo with new products, technologies and services. New exhibitors and "hidden champion" companies will also bring featured products to the expo this year.

Third, a better structure. Considering the new development and new requirements of the global economy, we have also set up exhibition areas for public health and epidemic prevention, energy conservation and environmental protection, as well as smart travel. More than 30 Fortune 500 companies and leading companies in the public health field have signed up for the expo, whose exhibition area has already surpassed 5,000 square meters. Work related to the National Trade Investment Comprehensive Exhibition, Hongqiao International Economic and Trade Forum, and urban service guarantee are all underway steadily as planned.

As the pandemic hits the economy and trade, we will hold the third CIIE this year to continue expanding imports and opening up the Chinese market. This move fully demonstrates China's role as a major responsible country and its importance in accelerating the recovery and growth of the global economy and building an open global economy.

We have formulated a thorough work plan and implemented stringent measures for epidemic prevention and control. By working with various parties, we are confident in making it a first-class international expo featuring a larger scale, better quality, stronger innovation, higher level, and greater achievements.

Friends from the media strongly supported the previous sessions. More than 4,000 Chinese and overseas journalists cover the events every year, making significant contributions to the expo's success. I would like to express my heartfelt thanks to you and send you an invitation to the third session. Thank you.

CRNTT:

We have seen that the pandemic has had a huge impact on the global economy as well as international trade and investment. Will this affect the scheduled signing of the RCEP agreement? How are RCEP negotiations progressing？And what is your opinion on India's pulling out of signing the pact? Thank you.

Wang Shouwen:

Thank you for your questions. At the third RCEP Leaders' Summit held last November, leaders of countries taking part announced a joint statement that 15 participating countries had concluded text-based negotiations, which substantially concluded all negotiations on market access and called for participating parties to begin a legal review of the text for signing in 2020. The statement also mentioned that India had some outstanding issues to be resolved and that all RCEP members would work together to resolve these issues in a mutually satisfactory manner.

The COVID-19 pandemic this year has indeed impacted negotiations and the organizing of conferences. However, RCEP members have improved their work plan by holding video conferences instead of face-to-face meetings, and increased the frequency of video conferences. Negotiations on the RCEP are still underway, with a few remaining issues in intensive negotiations by all participating countries. We have completed the legal review of approximately 80% of the text and plan to fully complete the review by the end of June.

During RCEP negotiations, the Association of Southeast Asian Nations (ASEAN) has played a central role, with the constant support of China. We continue to support such a role in promoting legal review of the text and signing of the agreement this year. We will work towards the agreement being signed at this year's RCEP Leaders' Summit. We believe the signing of the RCEP agreement this year in the context of the pandemic will be hugely significant to the region's efforts in dealing with the pandemic's negative impact on trade and investment. More importantly, the signing of the agreement will be of great importance to the rapid and robust recovery of the regional economy after the pandemic.

As for India, RCEP members have been working on India's concerns in a bid to find and promote a mutually satisfactory approach to these issues as required at the RCEP Leaders' Summit held last year. Not long ago, a letter sent by the 15 RCEP nations via the RCEP's trade negotiating committee chairperson included an offer for India to rejoin the RCEP talks. China welcomes India's return to the talks at an appropriate time. Thank you.

Hu Kaihong:

Now for the final question due to time constraints. If you have more questions, please contact the information office of the Ministry of Commerce.

Economic Daily:

As we all know, 2020 is the crucial year for completing the building of a moderately prosperous society in all respects and winning the final battle against poverty. During his inspection tour of Zhashui County in Shaanxi province, General Secretary Xi Jinping emphasized that e-commerce is an emerging business with great potential, which can promote sales of agricultural products. Mr. Zhong, what work has been done by the Ministry of Commerce to reduce the impact of the epidemic, win the final battle against poverty, and especially to promote targeted poverty alleviation through e-commerce? And what have been the achievements? Thank you.

Zhong Shan:

Thank you for your questions. Over the past three years, the Ministry of Commerce has carried out five measures to boost commerce in order to reduce poverty, and they are all making good progress.

The first is to alleviate poverty through e-commerce. Last year, we worked with related departments to achieve full coverage of all national-level poor counties in the development of e-commerce. That is to say, all poor counties now have e-commerce operations. Local governments have focused on this work and it has received positive reviews from people in the areas. Last year, the national e-commerce sales of impoverished counties reached 239.2 billion yuan, which marked a year-on-year increase of 33%. Introducing e-commerce to rural areas has indeed benefitted farmers. China has a large population and covers a vast area, so transportation can be inconvenient, particularly in many mountainous areas. These areas have high-quality agricultural products and local specialty products. However, limited transportation and promotion have made it difficult for people to sell their goods, while urban customers had no way to access these products. E-commerce provides a solution to these problems. For instance, fruits, vegetables and eggs from rural areas have huge markets in urban areas. 

You just mentioned that farmers in the area where General Secretary Xi Jinping went on an inspection tour have become prosperous by utilizing e-commerce. In fact, there have been many cases of this. For example, in one family from Huan County in Gansu province, a father had been raising sheep his whole lifetime, but he could only sell them to the sheep dealers. After his son graduated from university and returned home to start a business, he reached the market through e-commerce. Last year, the son sold all the sheep raised by his father through e-commerce, and helped to sell all those raised in neighboring villages. In total, they sold 13,000 sheep for 20 million yuan. This is a typical example. This year, we will scale up efforts to reduce poverty through e-commerce, promote the development of e-commerce in poor areas to increase the income for the 5 million farmers in poor areas.

The second is to alleviate poverty through household services. We carried out a series of poverty alleviation measures, encouraging city households in over 100 cities to employ people in the registered poverty-stricken families for housekeeping services. This has helped over 500,000 people in these villages and poor areas to find jobs. Last year, I travelled to Guang'an in Sichuan province to conduct inspection and research works. There, we visited one family which had got out of poverty. The hostess worked in the household service industry. She explained that the local government had helped her find a housekeeping job in the city, thereby increasing the family's income and allowing the whole family to get out of poverty. Having escaped poverty, she brought eight friends from her village to find housekeeping jobs in the city, all of whom were happy and satisfied. This year, the Ministry of Commerce will scale up efforts to reduce poverty through household services and strive to help 700,000 people in villages and poverty-stricken areas to find jobs. 

In addition, we are also alleviating poverty by providing labor services overseas, through industrial development as well as border trade. These works are currently being carried out in full swing. For example, in achieving poverty alleviation through foreign labor service cooperation, we had 9.92 million workers overseas last year, including over 50,000 people from poverty-stricken counties. For poverty alleviation through industrial development, we have launched programs connecting farm to supermarkets and wholesalers, thereby expanding sale channels of farm products. For poverty alleviation through border trade, last year, our border trade reached $51.5 billion. At the same time, we have also provided assistance to border economic cooperation zones and offered jobs to over 180,000 people. This has helped promote the vitality of border areas and enriched the people living there. 

Faced with huge task of poverty alleviation, we will continue to follow the important instructions made by General Secretary Xi Jinping. We will do our best to work on the five measures for poverty alleviation and make more contributions to the work in order to win the final battle against poverty and achieve a moderately prosperous society in all respects. Thank you.

Hu Kaihong:

On the topic of poverty alleviation, we will hold another press conference this afternoon. Mr. Liu Yongfu, director of the Office of State Council Leading Group of Poverty Alleviation and Development, will brief the media on it. We welcome your attention.

That concludes today's press conference. Thank you, Minister Zhong Shan. Thank you, Vice Minister Wang Shouwen and Wang Bingnan. Thank you all.

.

Read in Chinese

Speakers:

Zeng Yixin, vice minister of the National Health Commission (NHC)

Cui Gang, class-II counsel of the Bureau of Disease Prevention and Control of the NHC

Guo Yanhong, supervisor of the Bureau of Medical Administration of the NHC

Liu Dengfeng, supervisor of the Department of Health Science, Technology and Education of the NHC

Li Mingzhu, supervisor of the Department of International Cooperation of the NHC

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 15, 2020

Hu Kaihong:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Through arduous efforts, China's fight against COVID-19 has achieved major results with strategic significance. The prevention and control measures have also been normalized. Today, we have invited Mr. Zeng Yixin, vice minister of the National Health Commission (NHC), who will introduce China's regular prevention and control of COVID-19, and also answer some of your questions. Also present with us today are Mr. Cui Gang, class-II counsel of the Bureau of Disease Prevention and Control of the NHC; Ms. Guo Yanhong, supervisor of the Bureau of Medical Administration of the NHC; Mr. Liu Dengfeng, supervisor of the Department of Health Science, Technology and Education of the NHC; and Mr. Li Mingzhu, supervisor of the Department of International Cooperation of the NHC. First, let's give the floor to Mr. Zeng Yixin.

Zeng Yixin:

Friends from the media, good afternoon.

Since the outbreak of COVID-19, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, and through the nationwide arduous efforts, China's fight against the pandemic has achieved major results with strategic significance. Recently, General Secretary Xi Jinping has chaired a series of meetings of the Standing Committee of the Political Bureau of the CPC Central Committee, studying how best to deploy and improve the normalized prevention and control measures. Aiming at "forestalling imported infections and domestic resurgence," these meetings have strengthened guidance of the prevention and control efforts in key areas, consolidated current results and provided strong support for the comprehensive resumption of the social and economic order. On May 14, General Secretary Xi Jinping chaired another meeting of the Standing Committee of the Political Bureau of the CPC Central Committee, studying effective implementation of regular epidemic prevention and control measures. It was stressed that we must never allow our hard-earned previous achievements on epidemic control to be made in vain, and we must ensure the victory in the battle against extreme poverty and the completion of the building of a moderately prosperous society in all respects.

Recently, the Central Leading Group for COVID-19 Prevention and Control issued guidelines in regard to promoting orderly resumption of work and production whilst effectively preventing and controlling the epidemic. It requires coordination between epidemic prevention and control and social and economic development, accelerating restoration of normal daily life and carrying out orderly resumption of work and production with a normalized situation of epidemic prevention. The State Council Joint Prevention and Control Mechanism also issued guidelines on the work to implement regular epidemic prevention and control. Specific measures include focusing on precautions; implementing early detection, reporting, isolation and treatment; prioritizing key steps; ensuring support and supply, and strengthening leadership, to name a few. Notices have also been issued to further build the capacity of medical institutions in regard to reducing the risk of nosocomial infection. Efforts are being undertaken to inspect the resumption of work and production as well as epidemic prevention and control in enterprises and institutions. The Ministry of Education and the NHC also jointly issued a technical plan for epidemic prevention and control in primary and middle schools, as well as nurseries and kindergartens, to help ensure orderly reopening of educational institutions. In accordance with the requirement of the CPC Central Committee, regions across China have been working promptly to implement various epidemic prevention and control works.

The NHC has been actively carrying out international cooperation to tackle the COVID-19 pandemic, sharing "China's experience" and "Chinese methods" with the rest of the world, and providing as much assistance and technical support to countries and regions as possible. Over the past week alone, the NHC talked over the phone and via video links with health ministers from Central and Eastern Europe, Germany, the U.K., Japan, and South Korea. It also held technical communication with African countries, during which China introduced its experiences in dealing with the novel coronavirus. Many experts have been sent to a number of countries to support their work.

Currently, China's epidemic prevention and control work is being carried out in a steady and orderly manner, whilst the resumption of production and everyday life has been accelerated. However, we must still be aware that there are sporadic cases domestically, and there is still an arduous task in preventing any rebound. Clustered infections have been reported in parts of China's Heilongjiang and Jilin provinces, promoting further continuous spread of the virus. In addition, the epidemic situation outside China is still severe, imposing great pressure on efforts to prevent imported infections. The future trend of the COVID-19 pandemic contains many uncertainties. We need to raise awareness of the severe situation of "forestalling imported infections and domestic resurgence," as well as various potential risks. We also need to avoid carelessness, slackness and taking chances, and further secure the current achievement being made under the joint prevention and control mechanism. 

Next, the NHC will continue to implement the decisions and deployments of the CPC Central Committee and the State Council in regular epidemic prevention and control. The NHC will work hard to help establish a regular epidemic prevention and control mechanism in which cases are detected in a timely way, are promptly handled, precisely prevented and effectively treated. The prevention efforts in key regions and places will be prioritized. The NHC will continue to help enterprises, institutions and various types of public places to implement the prevention requirement, providing guidance to people regarding their personal protective measures. The NHC will also help schools to work out details of their reopening plans in order to ensure the safety and health of teachers and students. Although the epidemic prevention and control in Hubei province and Wuhan city has turned from an emergency plan to a normalized one, we exert every effort to strengthen and improve community-based prevention and control, and conduct nucleic acid tests and other works. The clustered infections in Heilongjiang and Jilin provinces need to be handled in a timely and prompt manner. The cause for the infection should be quickly investigated so as to curb any further spread. We need to strengthen the epidemic prevention and control efforts during the "Two Sessions." Border cities also need to build their capacity in epidemic prevention and control, improving their ability in monitoring, testing and treating, in order to effectively forestall the spread of imported cases. The implementation of all these measures will effectively protect people's safety and health, accelerate the restoration of production and everyday life, and provide strong support for the orderly resumption of work, production and schools.

Hu Kaihong:

Thank you, Mr. Zeng. Now the floor is open for questions.

CCTV:

Wuhan is conducting nucleic acid testing on all its residents. Why is the city doing this? The State Council joint prevention and control mechanism recently issued a guideline on regular prevention and control of COVID-19, stipulating that key groups will all be tested and other groups will all also gain access to testing. Can you please explain, in detail, how this will be implemented? Thank you.

Zeng Yixin:

The purpose of arranging nucleic acid tests for all residents in Wuhan is to better understand the range of the epidemic, proactively spot the infected, and strengthen the work of nucleic acid testing and infection screening. The massive testing aims to implement the principle of early detection, reporting, isolation and treatment. It also provides a vital guarantee for the coordinated resumption of work, production and schools and regular epidemic prevention and control. Based on a comprehensive and scientific evaluation of infection risk and testing capacity, the expanded nucleic acid testing will facilitate the work of targeted prevention and control of the pandemic, safeguard people's health, promote a reasonable flow of the population and accelerate restoration of social and economic activities and normal daily life in a comprehensive way. Other regions can also adjust and improve their epidemic prevention and control measures according to their own situations, just like Wuhan. The measures and ranges of nucleic acid testing can be dynamically differentiated in accordance with specific needs and testing capacity. It is a very arduous task to conduct nucleic acid testing for all residents in Wuhan. To guarantee the testing is effective, we have to make sure that the group of people tested earlier have no close contact with the following group of people tested. Technically, we also have to ensure a stable sensitivity if we adopt the sample-integrated solution in testing. It is indeed tough work, but we will make efforts to complete it. 

On May 7, the State Council joint prevention and control mechanism listed a range of targeted and practicable measures in its guideline on regular prevention and control of COVID-19. We have taken the following steps to implement the guideline.

First, we are expanding the testing range to lower the risk of the pandemic spreading. Various regions shall set and dynamically adjust their testing strategies and ranges while ensuring key groups are all tested and other groups also have access to testing.

Second, we are improving testing capacity to satisfy demand. We will enhance lab facilities in disease control institutions, medical establishments and customs; encourage social institutions to provide testing services; make more efforts in research, approval and marketization of testing equipment, solutions and detection reagents; and improve the production capacity of relevant equipment, testing kits and consumable materials. Quite a few approved testing kits have entered the market, but we still have lots of work to do to ensure they are constantly upgraded via unremitting research and development. 

Third, we are improving work mechanisms to improve testing efficiency. Relevant departments should shoulder their responsibilities and conduct testing in an orderly and organized manner. Residential communities should mobilize residents to assist in and cooperate with testing work and, in accordance with the law, observe prevention and control measures, such as sample collection, detection, isolation and treatment. The support and cooperation of the people are badly needed to ensure this work is properly carried out.

Fourth, we are reinforcing organization and management to further consolidate the work of testing. Governments at all levels should make strengthened testing an important part of their work for regular prevention and control of COVID-19, provide more policy and financial support and rapidly improve nucleic acid testing capacity, which will cement the achievements we have made in epidemic control and effectively prevent a rebound of the epidemic. 

That's it. Thank you.

TASS:

What do you think of China's cooperation with the WHO and relevant countries since the outbreak of the epidemic? I heard that China rejected the WHO's request to send a mission to visit the P4 lab in Wuhan. Is it true? Thank you.

Zeng Yixin:

Mr. Li Mingzhu will answer your questions.

Li Mingzhu:

Thank you for your questions. Amid the grave and complex global epidemic situation, China is faced with arduous tasks of preventing imported cases and guarding against domestic resurgence. While ensuring effective prevention and control of the disease at home, we have actively carried out international cooperation. At the multilateral level, we have worked closely with the WHO and the G20, implementing cooperation initiatives proposed by the two organizations. At the bilateral level, recently we held a video conference of health ministers from China and central and eastern European countries, a China-U.K. health ministers dialogue and a video conference for the health ministers of China, Japan and South Korea. These are all exchanges at the government level. In terms of technical issues, we have held video conferences with 12 African countries on the sharing of experience in fighting COVID-19. In addition, at the request of relevant countries, we have sent 21 teams of medical experts to 19 countries to help fight against the virus. Their work has been highly appreciated at the local governmental and public levels.

The WHO, as a specialized agency of the United Nations, plays an important leading role in coordinating global health issues. China attaches great importance to its cooperation with the WHO, and firmly supports the organization in organizing global anti-epidemic cooperation. Since the outbreak began, we have been sharing information with it, as well as the broader international community with an open, transparent and responsible attitude. We have established a mechanism for technical exchanges with WHO experts, and held many technical exchange meetings. We also invited WHO experts to conduct field visits in China. From Jan. 20 to 21, we received a team of its experts for a field visit in Wuhan. The team visited medical and health institutions, including laboratories. The members of the team had in-depth exchanges with local experts. From Feb. 16 to 24, we received the WHO-China Joint Mission on COVID-19. The mission conducted on-site visits in Beijing, Sichuan, Guangdong and Wuhan, and undertook comprehensive and in-depth investigations into the epidemic situation, prevention and control measures, medical treatment as well as scientific research. They also gave China and other countries valuable and constructive advice on the prevention and control of the outbreak. The WHO has never asked to visit a specific lab in China, so the allegation that China rejected WHO's request to visit a lab in Wuhan goes against the facts. Thank you.

The Straits Times:

I have two questions. The first question is: Can you please comment on two specific allegations made by U.S. State Secretary Mike Pompeo that the National Health Commission had ordered virus samples destroyed on Jan. 3 and that China had not shared virus samples with other countries? My second question is: Why does the NHC insist on not including asymptomatic cases in its official tally, when such cases are proven to be infectious and clearly a cause for concern? Thank you. 

Zeng Yixin:

Mr. Liu Dengfeng will answer the first question.

Liu Dengfeng:

The allegations disseminated by these U.S. officials are purely out of context and intentionally mislead people. In the face of the pneumonia outbreak of unknown cause, pathogen identification was the primary task, which was also the basic work for scientific prevention and control. We attached great importance to this, and we immediately organized national high-level professional institutions to conduct the parallel identification of the pathogen. They worked around the clock, day and night, to identify the pathogen as soon as possible. In this case, we also maintained a high degree of vigilance against the pathogenicity of the virus, and organized experts to conduct comprehensive research and evaluation. To prevent the leakage of biological pathogen samples and ensure biological safety — and based on the comprehensive research and opinions of experts — we determined to handle the pathogen causing unexplained cases of pneumonia temporarily as class II highly pathogenic, and we made clear biosafety requirements for collection, transportation, experimental activities and destruction, etc. According to the relevant requirements of the "Law of the People's Republic of China on Prevention and Treatment of Infectious Diseases" and "Regulation on the Bio-safety Management of Pathogenic Microbe Labs," we issued relevant documents on Jan. 3 with the major aim of guarding against the risks of laboratory biosafety and preventing secondary hazards caused by unknown pathogens.

At the same time, in order to further strengthen and regulate laboratory biosafety work, we issued laboratory biosafety guidelines for pandemic prevention and control, which also played an important role in preventing biosafety risks. In fact, China's laws and regulations have set clear requirements for the storage, destruction and experimental activities of highly pathogenic microorganism samples. If the laboratory conditions cannot meet the requirements for the safe preservation of samples, the samples should be destroyed on the spot or transferred to a professional institution for safekeeping. All of these measures are clearly stipulated. At the same time, these are also work requirements set by laws and regulations for laboratory biosafety supervision departments.

Regarding the sharing of pathogenic microbial strains, China has always maintained an active and open attitude. China has always been an active contributor in the sharing of pathogenic microbial strains. For example, in recent years, in order to prevent a global influenza pandemic and under the WHO framework, we have provided many highly pathogenic influenza virus strains to the U.S., Japan, the United Kingdom, Australia, Canada and Russia. Regarding the sharing of novel coronavirus strains, we also have an active and open attitude and are willing to share novel coronavirus strains in an orderly manner within the framework of the WHO, further strengthen international cooperation and scientific research and promote the development, production and equitable distribution of COVID-19-related vaccines, diagnostic tools and therapeutic drugs. Thank you.

Zeng Yixin:

Let me answer the question regarding the reporter's concern about asymptomatic cases. In fact, this issue has been specifically studied by the NHC, mainly based on three considerations.

First, the asymptomatic infected people we are talking about actually comprise two groups. The first group includes the so-called recessive infected people. After they are infected with the virus, they have no symptoms from beginning to end, or the symptoms are very mild. The other group of people includes those who are still in the incubation period after infection. Symptoms may appear later, but there may be no symptoms at the time of testing, which is considered part of the incubation period. As such, they are neither appropriately classified as confirmed cases nor recessive infections because they are undergoing changes. So we refer to all these people as "asymptomatic cases," and this is how we handle them from a managerial perspective.

Second, you may notice that we report asymptomatic cases who are detected every day, in addition to the confirmed cases and suspected cases. There is a particular part of our reports dedicated to reporting asymptomatic infected people, so our information is open. We are also reporting how many asymptomatic cases have turned into confirmed cases on a daily basis. Our information is open, intact and complete.

Third, we pay the same attention to asymptomatic cases as to suspected and confirmed cases, and we are also taking corresponding isolation measures and strict medical observation measures. Some individuals gradually develop symptoms and become confirmed cases, while some of them merely recover. We have been paying close attention and we are taking very strict measures to supervise these people.

This is why we still use the term "asymptomatic cases." We have studied this issue repeatedly, and this is why we do it this way. Thank you.

Bloomberg:

There have recently been media reports saying that on Jan 14 the NHC predicted an outbreak would occur. Six days later, on Jan 20, China publicly confirmed the existence of the human-to-human transmission of the novel coronavirus. What's your comment on this? Some American officials have claimed that China didn't share materials and data about the virus in a timely fashion. What's your response? Thanks.

Zeng Yixin:

I'd like to make an introduction first. The term "human-to-human transmission" you just mentioned is a simplified way of describing this phenomenon. The accurate and scientific way of saying this should be 'the abilities and means of the virus to spread among people.' Technically, bacteria and viruses both have the potential to spread among people, but they spread with different abilities and in different ways. Some of them indeed work in very different ways. For example, tuberculosis is a disease caused by bacteria that easily spreads through the respiratory system. Norovirus is highly contagious and commonly spreads through the fecal-oral route. Hepatitis B is an infectious disease caused by a virus that can be passed on through blood and from a mother to her child. AIDS is also caused by a virus, and it can be transmitted through sex and blood contact. The latter two diseases are not easily transmitted from one person to another. I want to first be clear about these distinctions.

At the earlier stage of the virus outbreak, it was hard to ascertain the causative agent, incubation period, spreading abilities, transmission ways and origin of the virus. The NHC immediately organized experts from multiple disciplines to study the etiology and epidemiology with limited clinically diagnosed cases to find out the manifestation of the disease and offer a scientific solution for outbreak control and prevention.

On the evening of Dec. 30, 2019, the NHC learned that there were patients with pneumonia of an unknown cause in Wuhan city. The leading Party members' group of the NHC attached great importance to this information. In the wee hours of the morning of Dec. 31, the NHC sent a working group and an expert team to Wuhan to conduct an investigation and guide the epidemic response.

On Jan. 1, 2020, the NHC set up a leading group to determine the emergency response strategy for the epidemic, carry out research and make arrangements. The NHC led experts and workers to provide guidance and urge Hubei province and Wuhan to carry out epidemic prevention and control along with relevant medical treatments.

On Jan. 3, the NHC organized scientific research institutions to carry out parallel laboratory testing of the samples for pathogen identification.

On Jan. 5, laboratory test results ruled out respiratory pathogens, such as the Severe Acute Respiratory Syndrome coronavirus (SARS-CoV), influenza, avian influenza and adenovirus. On Jan. 7, the Chinese Center for Disease Control and Prevention (China CDC) succeeded in isolating the first novel coronavirus strain. On Jan. 9, the expert team from the NHC made public research result of the pathogen, saying a new type of coronavirus was initially identified as the cause of the pneumonia of unknown cause.

On Jan. 10, testing kits were developed, which were then improved over almost seven days. Wuhan city organized tests of the relevant cases that had been admitted at hospitals in the city. On Jan. 12, the NHC shared with the WHO the genome sequence of the novel coronavirus in order to help other countries quickly diagnose patients and ring the alarm bell to the world.

On Jan. 13, Thailand reported the first imported case from Wuhan city. The NHC paid great attention to this development and requested that Wuhan city further intensified epidemic prevention and control. This firstly involved handling 'the entrance.' Wuhan strictly managed farmers markets and wildlife. Secondly it involved handling 'the exit.' Wuhan further strengthened body temperature monitoring of people at airports, train stations, bus stations and ports. Thirdly it involved reducing crowd gatherings. In addition, the NHC standardized local authorities' reporting and releasing of the information on the epidemic, meanwhile explaining to the public relevant policies and measures and providing them with knowledge on disease prevention.

We held a teleconference on Jan. 14 to deploy epidemic prevention and control efforts and stressed that there was huge uncertainty when it came to the emerging infectious disease caused by the novel coronavirus. Further in-depth research was needed to know the human-to-human transmission capacity of the virus and the way the virus passed between humans. The possibility of further outbreaks could not be ruled out. We also made clear requirements for Wuhan city and Hubei province. At that time, we were still in the process of further understanding the virus. There were many unsolved questions, and we were working hard to get answers.

We got a relatively accurate understanding of the human-to-human transmission capacity of the virus on Jan. 19 thanks to the unremitting efforts of expert groups and local medical workers. On Jan. 20, the executive meeting of the State Council classified COVID-19 as a Category-B infectious disease and took preventive measures against it on the level of a Category-A infectious disease. After that, the nationwide situation with respect to epidemic prevention and control became better known to all.

Now, when we look back, it was the first time in human history that we have faced COVID-19. In the early stages, under the strong leadership of the CPC Central Committee and the State Council, we accumulated evidences as fast as we could, deepened our understanding of the virus and explored methods of prevention and control. At the same time, by sticking to bottom-line thinking, we were highly aware of risks and focused on people's safety and health. We made prevention and control policies in accordance with the law and science and performed our duties to strictly implement them.

You mentioned the communication and exchanges with the United States. Mr. Li Mingzhu has offered some descriptions just now. I should say that we started communicating with the U.S. very early. We communicated in multiple ways and with high frequency. There were communications between health ministers, the ones between directors of the CDCs and those between experts and professors of the two countries. We had no reservation or hesitation in communicating. We did our best to share information and boost pandemic prevention and control efforts in the two countries and all over the world.

Beijing Youth Daily:

According to current data, the COVID-19 pandemic is still serious, but most countries in Europe and the United States have now gradually relaxed their control measures. Clustered infections have occurred successively in some parts of China, and this raises concerns about the possibility of a second outbreak. What is the Health and Safety Commission's stance on this? What countermeasures are being taken? Thank you.

Zeng Yixin:

For this question, I'll give the floor to Cui Gang.

Cui Gang:

Thank you for your question. At the beginning of the press conference, just now, Mr. Zeng has briefed us on the pandemic situation at home and abroad in recent times. You can also learn from various media outlets about the current pandemic situation. Generally, pandemic prevention and control efforts are still severely complex. Different countries have adopted varied prevention and control strategies and specific measures based on national willingness, social systems, economic development, public health resources and emergency response capabilities. You have just mentioned that some European and American countries, especially some countries where the pandemic situation is still serious, have loosened control measures for various reasons. At present, if the research on vaccines and specific drugs yields no results, the relaxed measures will increase the risk of a rebound in local cases and strengthen the complexity and duration of pandemic prevention and control. This will lead to greater challenges in prevention and control in our country.

Right now, our country has achieved periodic achievements and victories through prevention and control efforts. Our monitoring and early warning capabilities have been significantly improved, and our professional teams for disease prevention and control and medical treatment have been well-trained. We have accumulated effective experience in joint and group prevention and control, and the public's awareness and preventive capabilities have improved significantly. At the same time, with the implementation of regular pandemic prevention and control measures in China, we have determined that we will be able to manage the risks of a resurgence caused by imported cases.

Recently, secondary cases of imported cases have appeared in some parts of our country. This reminds us that, in the entire chain of enclosed management for prevention and control, if any link possesses weaknesses or blind areas, there will be a risk of disease transmission. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, all relevant departments are being integrated into the actual prevention and control work, carefully investigated hidden risks and further-improved prevention and control measures. We have implemented the enclosed management from the doorsteps of the country to the doorsteps of family homes. There are several primary measures that we have adopted. They are as follows:

First, we are strengthening joint prevention and control efforts. The National Health Commission and other departments, such as foreign affairs, customs, immigration inspection, civil aviation, and railways, have given full play to prevention and control efforts and further strengthened measures to prevent imported cases. For example, we have been insisting on a 14-day medical observation at quarantine sites for all people entering China, and we have been developing these measures.

Second, we are highlighting key links. We have implemented "four early measures," which are early detection, early reporting, early quarantine and early treatment. We have strengthened the monitoring of fever clinics and infectious disease reporting online, and we have implemented the enclosed management of "screening-diagnosis-reporting-quarantine". At the same time, we have further expanded the scale of testing. Just now, Mr. Zeng introduced the overall arrangement and measures for promotion.

Third, we are strengthening targeted control. According to laws and regulations, we have scientifically delimited the area of prevention and control. If instances of community spread or clustering cases occur, we will take the most effective measures as soon as possible, promptly deal with cases, identify the origin of infection and effectively cut off the transmission route.

Fourth, we are strictly implementing the responsibilities of local areas, departments, institutions, and individuals. We will strengthen the management and prevention in key regions, key institutions, key places, key populations, fully implement all measures and leave no stone unturned. At the same time, we also continue to widely promote scientific publicity and knowledge on prevention and control, actively guide the public in scientific prevention and control and jointly create a good environment for all members of society to participate in together. Thank you.

Hong Kong Economic Herald:

Since the outbreak of the pandemic, China has taken a series of effective medical treatment measures. Currently, as the pandemic continues to spread globally, are there any medical treatment experiences or achievements that can be shared? Thank you.

Zeng Yixin:

Ms. Guo will answer this question.

Guo Yanhong:

Thank you for the question. Regarding the medical treatment of COVID-19, we always stick to the goal of increasing hospital admission and recovery rates and lowering the rates of infections and fatalities. We also adhere to the principles of "early detection, reporting, isolation and treatment" and "pooling together patients, experts and resources for centralized treatment;" thereby improving the results of treatments. Our experience can be summarized in the following aspects:

First, we work to ensure early diagnosis and treatment. Pre-screening and separating patients are emphasized, and new fever clinics and observation wards have been set up to detect and isolate suspected cases in a timely manner. The diagnosis and treatment processes have been further standardized and optimized. We have also strengthened laboratory capacity and opened up qualified laboratories of medical institutions. At the same time, third-party testing institutions have been encouraged to provide testing services to maximize testing efficiency and ensure that cases can be detected, reported, isolated and treated at an early stage.

Second, medical resources have been expanded rapidly to ensure the admission and treatment of patients. Faced with a situation wherein cases increased rapidly, we expanded resources in the following three aspects in order to improve the admission and treatment of patients. First involved rapidly expanding hospital beds. Huoshenshan Hospital, Leishenshan Hospital and makeshift hospitals were built in a very short period of time. At the same time, some hospitals with a comprehensive capacity converted certain wards into intensive care units. In a short time, the number of beds in Wuhan, Hubei province, expanded to more than 41,000 beds, including more than 9,100 beds for critical cases. Second involved quickly bringing together health care workers. From the first batch of medical teams dispatched on New Year's Eve (January 24), the number of medical staff that went to support Wuhan mounted up to 42,000 in less than a month. Third involved quickly mobilizing medical materials and equipment, including protective supplies. By expanding resources in these three aspects, the patients were admitted and treated appropriately.

Third, diagnosis and treatment plans have been constantly optimized and improved. The diagnosis and treatment plans and guidelines are not only a summary of the new achievement of clinical research and practice, but also serve to guide medical treatment and improve the level of standardization of diagnosis and treatment. In this process, we have been constantly applying the results of clinical studies and technological innovations, selecting effective drugs and treatment methods and incorporating the diagnosis and treatment strategies of clinical practice into the protocols. We have updated the diagnosis and treatment plan to the 7th version, and this version has been translated into multiple languages to be shared across the world.

Fourth, we have pooled medical resources on treating critically ill patients. According to the principle of "pooling together patients, experts and resources for centralized treatment," we assigned the most professional medical staff to treat severe cases. In the treatment of these cases, we have combined preclinical medicine knowledge and clinical practice, frontline treatment experience and multidisciplinary studies, medical treatment and management as well as medical treatment and nursing — using a combination of traditional Chinese and Western medicine, in particular. When treating severe cases, we also emphasized admitting and treating mild cases to prevent their symptoms from progressing to severe. In this way, we increased the recovery rate and reduced the mortality rate.

Fifth, we strengthened management for the whole process of treatment. We set strict standards for discharging patients. After the discharge, a series of work procedures were also carried out, which included following up on the situation of patients, conducting psychological counseling and more; these procedures were performed in order to strengthen the overall management of patients and promote the full recovery of the patients both physically and mentally. Thank you.

Hu Kaihong:

Due to time constraints, we will only take two more questions.

Cover News:

With the normalization of pandemic prevention and control, the public is growing more concerned about the development of vaccine research. Can you give an overview of recent development? Thank you.

Zeng Yixin:

We are all very concerned about vaccines. Since the outbreak of the pandemic, under the joint prevention and control mechanism and led by the Ministry of Science and Technology, we have set up a scientific research team. Under this team, we have a special sub-team that is responsible for organizing, coordinating and serving all units to promote vaccine research and development. At present, overall development is going smoothly. We have made such progress largely thanks to our institutional advantages. We can fully integrate resources and coordinate advantages in all aspects. Medical institutions, for example, can obtain viral samples from infected cases, cooperation between medical institutions and scientific research institutions is enabled, and cooperation between scientific research institutions and enterprises is also possible. Government departments also play a vital role. The whole process of vaccine development must be strictly examined and approved by the National Medical Products Administration (NMPA), the National Institutes for Food and Drug Control, and the Center for Drug Evaluation under the NMPA. Therefore, it is very important to take joint actions with these government departments. The Ministry of Science and Technology has been supportive in project establishment and security of funding. With its timely help, we have made further progress in vaccine research. This fully reflects the institutional advantages of our country.

We now have one recombinant adenovirus vector vaccine and four inactivated vaccines, which have been approved successively by the NMPA. As the NMPA has innovated its emergency approval procedure, we have been able to carry out the clinical trials of phase I and phase II simultaneously. So far, 2,575 volunteers have been vaccinated. Phase I includes 539 volunteers, some of whom have provided preliminary safety and protective antibody data. The other 2,036 volunteers in phase II are participating in the whole process of vaccination and the evaluation of safety and effectiveness. Volunteers will take two or three injections during the entire process of vaccination. We have not received reports of major adverse reactions up to now, and if all goes well, we will complete the clinical trials of phase II in July as planned. 

In addition to the adenovirus vector, we have also pushed ahead with other technical routes of vaccine research and development in a smooth and orderly manner. Some of them have been adjusted quickly when they were found to have unsatisfactory effects, as the research on this vaccine is both a scientific exploration and a skilled technique. Those institutions that have made rapid progress have started to continually submit application materials, such as pharmaceutical research, preclinical research and clinical trial schemes to the Center for Drug Evaluation under the NMPA. It is expected that some projects will be approved by the NMPA from June and will then enter the clinical trial stage. This is the overall situation. Thank you.

Hu Kaihong:

The last question, please.

Economic Daily:

We know that the epidemic prevention and control steps have now become a regular practice, and the economic and social order is recovering. The public is very concerned about when hospitals could resume their normal diagnosis and treatment work. Can you share with us the details of this? Thank you.

Guo Yanhong:

Thank you for your question. Medical institutions undertake the dual tasks of epidemic prevention and control and providing normal medical services. As epidemic prevention and control has now become a regular practice, medical institutions should focus on the following aspects in order to provide normal services again:

The first is to fully implement the requirements of early detection, early reporting, early isolation, and early treatment, especially to ensure full promotion of the role of medical institutions in the detection of cases. Medical institutions should ensure they can provide timely detection, rapid treatment, accurate control and effective treatment. 

The second is to reinforce the infection prevention and control measures in a targeted manner. In particular, medical institutions must put in place adequate zoning management, environmental ventilation, disinfection and isolation, and make comprehensive investigation of infection risks. At the same time, it is necessary to improve escort and visit management, strengthen the scientific protection of medical personnel, and implement standard preventive measures.

The third is to innovate medical service methods. The medical institutions should fully implement appointment-based treatment, and treat patients in different time periods. They should provide one-stop services by optimizing processes to reduce staff gathering and infection risks. At the same time, we must also make full use of the Internet in medical treatment and promote integration of online and offline treatment.

People's demand for medical treatment is rigid. In order to meet their needs, consideration must be given to the regular practices required for epidemic prevention and control, and the service normalization. For now, all localities are working to resume the normal state of medical services in accordance with the deployment and requirements of the NHC. Our statistics have shown that the current overall situation of medical services nationwide has recovered to a level of 85% compared to the same period last year, and in some areas, the medical service has been completely restored. Thank you.

Hu Kaihong:

This concludes today's press conference. Thank you all.

.

Read in Chinese

Speaker:

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

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

May 15, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office. Today, we have invited Liu Aihua, director general of the Department of Comprehensive Statistics and spokesperson of the National Bureau of Statistics (NBS), to brief you on the national economic performance in April. She will also take your questions. Now, I give the floor to Ms. Liu. 

Liu Aihua:

The country's economic performance continued to improve with major indicators manifesting positive changes in April. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the whole nation coordinated efforts to advance the work both of epidemic prevention and control and economic and social development. The positive momentum of domestic epidemic prevention and control was further consolidated and the resumption of work, production and market activities advanced steadily. Production demand improved gradually, basic industries provided strong support, and market expectations were generally stable. New driving forces appeared among the trends, and the economy showed more vitality. Major economic indicators show a sustained improving situation from March.

First, industrial production shifted from decline to growth and the growth rate of manufacturing rebounded noticeably. 

The total added value of industrial enterprises above designated size, which dropped 1.1% in March, grew 3.9% year on year in April, or up 2.27% month on month. In the first four months of this year, the total added value of industrial enterprises above designated size fell 4.9% year on year, which was 3.5 percentage points lower than the decline seen in the first quarter. An analysis by types of ownership showed that, in April, the added value of state holding enterprises went up by 0.5%; share-holding enterprises by 4.0%; enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan by 3.9%; and private enterprises by 7.0%. In sectoral terms, the added value of mining enterprises increased 0.3% year on year; that of manufacturing, which declined 1.8% in March, grew 5.0%; the production and supply of electricity, thermal power, gas and water grew 0.2%. High-tech manufacturing and equipment manufacturing witnessed fast growth. In April, the added value of high-tech manufacturing and equipment manufacturing grew 10.5% and 9.3% respectively, 6.6 percentage points and 5.4 percentage points respectively higher than industrial enterprises above designated size. Specifically, the production of cables, excavators and shoveling machinery, integrated circuits, industrial robots and micro-computers grew 43.8%, 40.8%, 29.2%, 26.6% and 26.2% respectively. 

Second, the decline of the service sector narrowed and the modern service industry showed good growth.

In April, the Index of Services Production dropped 4.5% year on year, 4.6 percentage points lower than in March. In the first four months, the Index of Services Production declined 9.9% year on year, 1.8 percentage points less than in the first quarter. Specifically, in April, information transmission, software and information technology services, financial services and real estate grew 5.2%, 4.4% and 1.1% year on year respectively; transportation, storage and post, wholesale and retail trades, and accommodation, restaurant and food service declined 5.0%, 6.6% and 33.7% respectively, which was actually a narrowing decline of 9.7 percentage points, 8.1 percentage points and 15.4 percentage points compared with that in March respectively. In the first quarter, business revenue of service enterprises above designated size dropped 11.5% year on year, of which that of information transmission, software and information technology services grew 4.0%. In April, the Business Activity Index for services was 52.1%, 0.3 percentage point higher than in March. Business activities for the majority of sectors were restored steadily. Among 21 sectors surveyed, there were 14 registering on the Business Activity Index at above 50.0%. The New Orders Index for services reached 51.9%, 2.6 percentage points higher than in March; the Business Activity Expectation Index stood at 59.2%, 2.4 percentage points higher than in March.

Third, market sales picked up and the proportion of online retail sales of physical goods continued to grow.

In April, the total retail sales of consumer goods reached 2.8178 trillion yuan ($396.84 billion), a year-on-year decline of 7.5%, which was 8.3 percentage points less than in March, or a month-on-month growth of 0.32%. In the first four months, the total retail sales of consumer goods reached 10.6758 trillion yuan, down 16.2% year on year, a narrower decline of 2.8 percentage points compared with the first quarter. Analyzed by different areas, in April, the retail sales in urban areas reached 2.4558 trillion yuan, down 7.5% year on year, and that in rural areas stood at 362 billion yuan, down 7.7%. Grouped by consumption patterns, the revenue of restaurant and food service was 230.7 billion yuan, down 31.1%; and the retail sales of goods were 2.5871 trillion yuan, down 4.6%. The retail sales of goods for basic living grew fast. Among the retail sales by businesses above designated size, that of grain, oil and food and that of beverages grew 18.2% and 12.9% respectively. Sales of upgraded consumer goods improved in April. Telecommunications equipment and cultural and office appliances rose 12.2% and 6.5% respectively, 5.7 percentage points and 0.4 percentage point respectively higher than in March. Online retail sales were active. National online retail sales in the first four months reached 3.0698 trillion yuan, up 1.7% year on year, while that in the first quarter dropped 0.8%. Of the total, the online retail sales of physical goods grew 8.6%, 2.7 percentage points higher than in the first quarter. And it accounted for 24.1% of the total retail sales of consumer goods, which was 0.5 percentage point higher than in the first quarter.

Fourth, investment in fixed assets improved and the decline of investment in high-tech industries narrowed significantly.

In the first four months, investment in fixed assets nationwide (excluding rural households) was 13.6824 trillion yuan, a year-on-year decline of 10.3%, which was narrowed by 5.8 percentage points compared with that in the first quarter; the month-on-month growth in April was 6.19%. Specifically, investment in infrastructure was down by 11.8% year on year, that in manufacturing fell by 18.8% and that in real estate development was down by 3.3%; however, these declines were narrowed by 7.9 percentage points, 6.4 percentage points and 4.4 percentage points respectively compared to the first quarter. The floor space of commercial buildings sold reached 339.73 million square meters, down by 19.3%, and the total sales of commercial buildings reached 3.1863 trillion yuan, down by 18.6%; these figures were 7.0 percentage points and 6.1 percentage points slower than the decline in the first quarter. Investment in the primary industry went down by 5.4% year on year; that in the secondary industry down by 16.0%; that in the tertiary industry fell by 7.8%. The decline was narrowed by 8.4 percentage points, 5.9 percentage points and 5.7 percentage points respectively compared with the fall in the first quarter. Investment in high-tech industries went down by 3.0%, 7.3 percentage points slower than the decline of the total investment and 9.1 percentage points slower than the decline seen in the first quarter, of which investment in high-tech manufacturing industries and high-tech service industries went down by 3.6% and 1.7% respectively. In terms of high-tech manufacturing, investment in manufacturing of computers and office devices grew by 15.4%. In terms of high-tech services, investment in services for commercialization of scientific and technological research findings, e-commerce services and professional technical services grew by 28.0%, 25.6% and 12.5% respectively. Investment in social sectors fell by 3.1%, which was 5.7 percentage points less than the decrease in the first quarter. Specifically, the year-on-year growth of investment in health sector and education sector shifted from negative to positive, standing at 4.7% and 2.9% respectively.

Fifth, the rise of consumer prices continued to fall and the decline of producer prices for industrial products expanded. 

In April, consumer prices went up by 3.3% year on year, 1.0 percentage point lower than that in March, or down by 0.9% month on month. For the first four months, consumer prices rose by 4.5% year on year. Grouped by commodity categories, in April, prices for food, tobacco and alcohol went up by 11.3% year on year; clothing went down by 0.4%; housing fell by 0.3%; articles and services for daily use rose by 0.1%; transport and communications were down by 4.9%; education, culture and recreation up by 2.0%; medical services and health care up by 2.2%; other articles and services up by 4.8%. Among the prices for food, tobacco and alcohol, prices for grain went up by 1.2% year on year, fresh vegetables fell by 3.7%, pork up by 96.9% and fresh fruits dropped by 10.5%. Core CPI excluding the price of food and energy went up by 1.1%, 0.1 percentage point lower than in March.

In April, producer prices for industrial products went down by 3.1% year on year, a decline expanded by 1.6 percentage points compared with that in March, or down by 1.3% month on month. Purchasing prices for industrial producers went down by 3.8% year on year, or down by 2.3% month on month. For the first four months, producer prices for industrial products and purchasing prices for industrial producers went down by 1.2% and 1.5% respectively year on year.

Sixth, the urban surveyed unemployment rate rose slightly and the employment for major labor force was generally stable. 

In the first four months, newly-increased employed people in urban areas numbered 3.54 million, 1.05 million less than in the same period last year. In April, the urban surveyed unemployment rate was 6.0%, 0.1 percentage point higher than in March, among which, the surveyed unemployment rate for population aged from 16 to 24, and from 25 to 59 was 13.8% and 5.5% respectively, 0.5 percentage point and 0.1 percentage point higher than in the previous month. The urban surveyed unemployment rate in 31 major cities was 5.8%, 0.1 percentage point higher than that in March. In April, the employees of enterprises on average worked 44.3 hours per week, 0.5 hour less than in March. 

Seventh, exports of goods witnessed a year-on-year growth and the trade structure continued to be optimized. 

In April, the total value of imports and exports of goods was 2.4966 trillion yuan, down by 0.7% year on year, 0.1 percentage point slower than the decline in March. Specifically, the total value of exports was 1.4074 trillion yuan, up by 8.2%, while that in March had been down by 3.5%; the total value of imports was 1.0892 trillion yuan, down by 10.2%. The trade balance was 318.1 billion yuan in surplus. In the first four months, the total value of imports and exports was 9.0713 trillion yuan, down by 4.9% year on year. Specifically, the value of exports was 4.7435 trillion yuan, down by 6.4%; the value of imports was 4.3278 trillion yuan, down by 3.2%. The trade structure continued to be optimized. In the first four months, the imports and exports of general trade accounted for 59.8% of the total value of imports and exports, 0.2 percentage point higher than in the same period last year. The imports and exports by private enterprises accounted for 43.2% of the total, 2.3 percentage points higher than in the same period last year.

Generally speaking, with main economic indicators improving in April, the national economy is gradually returning to normal. However, we should be aware that given the continuous spread of the pandemic abroad, the steady recovery of the domestic economy still faces multiple challenges. Under the complicated circumstances, we must coordinate efforts to advance both the prevention and control of the epidemic and the economic and social development under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. In the context of regular epidemic prevention and control, we must follow the general working guideline of making progress while maintaining stability, adhere to the new development philosophy, focus on the supply-side structural reform, make solid efforts to stabilize employment, finance, foreign trade, foreign investment, domestic investment, and market expectations, and comprehensively implement the tasks to safeguard residential employment, people's basic livelihood, market entities, food and energy security, the stability of industrial and supply chains and the operation at grassroots level. We must expand domestic demand, address difficulties facing enterprises, ensure economic fundamentals remained stable, facilitate stable and sound economic development, so as to ensure the victory of the fight against poverty and to build a moderately prosperous society in all respects.

Hu Kaihong:

Thank you, Ms. Liu. Now the floor is open for questions.

CCTV:

Good morning, Ms. Speaker. From the data you released just now, we can see the major economic indicators continued to improve in April. Is the recovery as expected? What's your overall opinion? Thank you.

Liu Aihua:

Thank you for your question. As is seen from the key data and the circumstances I just introduced, overall, the economy in April sustained the recovery and improvement first noticed in March, with major indicators showing positive changes. The main characteristics can be summed up in the following four aspects:

First, solid progress was made in the resumption of normal work and production. According to a quick survey by the National Bureau of Statistics in late April, approximately 85% of industrial enterprises above designated size, and over 70% of service enterprises above designated size, as well as more than 60% of qualified construction enterprises, resumed more than half their normal production level. Market expectations also show a month-on-month improvement. In April, the manufacturing purchasing managers' index (PMI) stood at 50.8%, which is within the "booming" range. The non-manufacturing business activity index registered 53.2%. The construction business activity index reached 59.7% and the service business activity index was 52.1%, both a slight rebound from March. This indicates enterprises expectations have improved month-on-month to some extent.

Second, production demand gradually improved. . The total added value of industrial enterprises above designated size grew by 3.9% year-on-year, shifting from a decline of 1.1% in March to a growth trend. From a sectoral perspective, the total added value in 28 of the 41 sectors recorded year-on-year growth and this is expanding. Regarding products, the total added value of 60% of 612 goods surveyed achieved year-on-year growth, 20 percentage points higher than the previous month. As far as related indicators are concerned, the industrial consumption of electricity in April grew 1.6% year-on-year, compared with a 2.8% decline in March. The decline also narrowed in the service sector. The service production index in April went down 4.5%, narrowing by 4.6 percentage points from March. Specifically, the decline in wholesale and retail trade as well as the transportation is narrower than the overall figure for the service sector. Investment activity is recovering. In the first four months of this year, investment in fixed assets registered a year-on-year decline of 10.3%, 5.8 percentage points narrowing compared to the figure in the first quarter. Specifically, the decline of investment in manufacturing, infrastructure and real estate narrowed at a rate between 4 and 8 percentage points. Market sales are improving, too. In April, the total retail sales of consumer goods fell by 7.5%, a decline narrowing by 8.3 percentage points compared with March. Among them, sales of upgraded consumer goods grew fast, especially telecommunication appliances, up by 12.2%. The total value of exports grew more than expected - up by 8.2% year on year.

Third, transformation and upgrading have continued. In the first four months of this year, new forms and models of online business continued to emerge. Online sales of physical goods during the first four months grew by 8.6%, which is 2.7 percentage points higher than in the first quarter, accounting for 24.1% of the total retail sales of consumer goods and a year-on-year rise of 5.5 percentage points. In terms of industries, the added value from high-tech manufacturing in April grew 10.5%, which was 1.6 percentage points higher than in March. High-tech products continued to maintain robust growth, with the production of cables, excavators and shoveling machinery for example increasing by more than 40% and industrial robots rising by 26.6%.

Fourth, employment and the price of commodities remained generally steady. In April, the unemployment rate in surveyed urban areas was 6.0%, which was 0.1 percentage points higher than in March, marking a slight month on month rise. In terms of unemployment figures, the rate of unemployed amongst those surveyed aged from 25 to 59 stood at 5.5%, 0.5 percentage points below the average unemployment rate. Regarding the price of commodities, prices continued to fall steadily. In April, the price of commodities increased by 3.3% year on year, which was 1 percentage point lower than in March. Food price in April saw an increase of 14.8% year on year, down 3.5 percentage points from March. The rise in prices of major agricultural products and byproducts including pork, fruit and fresh vegetables began to fall, with the decline expanding.

From the four aspects above, we can see that the national economy in April continued the momentum of recovery and improvements from March. Meanwhile, we can also see that these indicators were improving as a compensatory recovery. In terms of the performance of major indicators in the first four months of the year, the major indicators were still in decline. In the first four months, the total added value of industrial enterprises above designated size decreased by 4.9% year on year; the index of services production (ISP) declined by 9.9%; the investment in fixed assets decreased by 10.3%; the total retail sales of consumer goods went down by 16.2%; and the total value of imports and exports decreased 4.9%. These cumulative rates showed that the overall economy continued to decline, indicating that the overall economy has not yet returned to normal levels of previous years. Now that the epidemic is spreading overseas, its huge impact on the global economy is still evolving, which poses new challenges for steady economic recovery at home. Faced with such a complex situation, we have to consider the bottom-line when dealing with difficulties. We will continue to deepen counter-cyclical adjustments and carry out solid work to achieve stability in six key areas: employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. We must also fully safeguard six key areas: jobs, people's basic livelihood, market entities, food and energy security, the stability of industrial and supply chains, as well as the smooth running of communities so as to accelerate the unleashing of potential in domestic demand and promote more bailouts for enterprises as well as maintain smooth circulation in industry, markets and the economy and bring economic development back to normal in all respects. This is my summary of the overall economic performance in April. Thank you.

China News Service:

Will the economic performance be stabilized in the current second quarter of this year despite continuation of the pandemic spreading in other countries, but with the prevention and control efforts expected to be normalized in China? Rebound in consumption and investment in April was modest, how would you forecast the economic trend in the ensuing phase? Thank you.

Liu Aihua:

Thank you for your questions. At present, the epidemic situation at home and abroad is relatively complex and grim, the future trend of the economy has concerned us a lot. Based on the data released over the past two months, I will explain my views on three points regarding the forthcoming economic performance.

First, we have shown we are capable of tiding over difficulties. The capability has come from our holistic industrial system developed over a long period, with a constantly-improving infrastructure and huge market. These advantages, which have not been seriously jeopardized or fundamentally changed, have played an essential role in supporting the economy. Over the past few months, when fighting against the pandemic, we have noted that all key industries critical to the national economy and people's livelihood have managed to maintain production which has ensured the rapid growth of medical supplies and the stable provision of daily necessities meeting the needs of 1.4 billion Chinese. More to the point, the trend of transformation and upgrading has been basically established. The major economic indices in April suggest that, despite the disruptions caused by the pandemic, industries that were emerging as new economic driving forces have kept on growing.  

Second, we are confident as we move forward. Our confidence develops from the coordinated prevention and control efforts as well as economic policies and measures that have proved effective. In March and April, the economy has shown signs of recovery, which itself shows the resilience of economic growth, giving us more confidence in hedging policies issued as macro-economic guidelines and expanding the resumption of normal work and production. From January to April, total planned investment in new projects have changed from negative to positive, rising 1.1% from a decline of 22% in the previous month, a turning point in terms of project reserves and capital support. Industrial electricity consumption achieved a positive rate in April. Based on the latest monitoring results in early May, growth in electricity consumption has continued to grow slightly. These indicators are evidence that there are conditions and a solid foundation for sustained economic recovery and improvement.

Third, we still face challenges. Because the pandemic has not been controlled effectively abroad, we remain uncertain of the impact of the epidemic on the global economy. Despite the strategic achievement made in preventing and controlling the virus at home, the momentum of recovery in the economic sector has yet to achieve a return to normalcy. Since the risks and challenges, such as the enormous employment pressure and the difficulties impeding the development of businesses and enterprises, remain huge, we should keep our bottom line thinking and enhance our awareness of risks. Therefore, we should promptly implement the existing macro-economic hedging policies, and on the other hand, make timely adjustments to our policies in response to changing situations and the demands of our enterprises, in order to help the economy return to normal. Thank you. 

New York Times:

The services number was not bad last month, but retail sales looked much weaker. If you take out groceries, they were quite weak. Are consumers in China becoming more cautious about making large value discretionary purchases? Thank you.

Liu Aihua:

Thanks for your question and for looking at the data carefully. Under current background of implementing regular epidemic prevention and control measures, we must view the economic situation under a bigger picture. The outbreak of COVID-19 has affected both production and consumption. At present, the recovery of production is slightly faster than that of consumption, which is related to the characteristics of the impact caused by the outbreak. Although the epidemic has now moved from a state of emergency to regular prevention and control, consumption and services based on gatherings and direct contact still need time to recover. The changes in the data also show that there is a gap between the recovery in the retail sales and that in the services sector. In April, the total retail sales of consumer goods declined 7.5% year on year, while the Index of Services Production dropped by 4.5% year on year. What's the difference between these two bits of data? The service industry is a multi-faceted industry, which includes not only direct contact and gatherings, but also services based on information technology. For example, some industries such as online education and telecommuting have benefited during the response to the outbreak of the epidemic. I think this can partly explain why the recovery in services sector is better than that in retail sales. That is the difference between the two indicators. Thank you.

CNR:

We noticed that in April, the total retail sales of consumer goods declined 7.5% year on year, down 8.3 percentage points from March, indicating that market sales are picking up. May I ask whether this recovery is sustainable? Given the continuous spread of the epidemic abroad, how will you further expand domestic demand in the next step? Thank you.

Liu Aihua:

Thanks for your question. In April, the total retail sales of consumer goods declined 7.5% year on year, a narrowing of 8.3 percentage points compared with March. Structurally speaking, the sale of goods for basic living grew fastest: grain, oil, food and beverages maintained double-digit growth. Second, sales of upgraded consumer goods maintained the momentum of accelerated growth. Meanwhile, sales of telecommunication equipment maintained double-digit growth, while the growth of cultural and office appliances also accelerated. Third, retail sales of some important items are actually recovering. For example, sales of automobiles were steady in April. The recovery of these goods with high proportion has helped the overall recovery of retail sales, and slowed down the decline.

For the next step, the momentum of current consumption upgrading will continue. The retail changes from month to month this year shows that the general trend has not changed. The retail sales of goods for basic living maintained steady growth, and that of upgraded consumer goods continued to grow rapidly. The industries and product sales once affected by the outbreak have shown momentum in their recovery under the current situation of epidemic prevention and control. Therefore, we think that the recovery of consumption still faces some challenges, and pressure still exists. However, in the short term, as the work and production gradually resume and the order of production and life gradually return to normal, the consumption environment will gradually improve. In the long run, there are conditions for the recovery of the consumption to be sustained. Thank you.

Economic Daily:

A continuous fall in the PPI shows although enterprises have now resumed work and production, there are still difficulties in restoring full capacity. Some have reported decreases in orders. Does this mean that China's industrial chains have not yet fully recovered from the impact of COVID-19? Also, how can our advantages in industrial chains be strengthened? Thank you.

Liu Aihua:

Thank you for your questions. In April, the PPI dropped 3.1% year on year, a larger decline than that in March. Structurally speaking, this decrease can largely be attributed to outside factors. Internationally, global crude oil prices fell sharply in April. The price of OPEC basket crude oil declined more than 70% in April compared to the high at the beginning of the year. As for other indicators, West Texas Intermediate crude oil futures dropped more than 40% in April compared with the previous month. The slump in the price of international crude oil has impacted prices in oil-related industries, thereby causing a drop in the PPI. At the same time, we should be aware of the decline in the demand in industrial markets. As I mentioned regarding restoring production capacity, nearly 85% of enterprises above designated size achieved 50% of their previous levels, which does indeed represent a certain gap from normal times. The construction and service sectors have shown similar features reaching even lower levels of production capacity. Changes in demand have influenced production to a certain extent. From the changing tendency of the PPI, on the one hand, we need to solidly promote the resumption of work, production and the markets, and release the huge potential in domestic demand. On the other hand, we must pay close attention to changes in the prices of major international commodities as well as the country's PPI. Generally, there is upward support for the PPI as order gradually returns to people's lives and production. 

Reuters:

Judging from the current trends, during which quarter do you expect the economy to come out of negative growth? Where should efforts be directed in expanding domestic demand? Investment or consumption? Thank you.

Liu Aihua:

Thank you for your questions. Your questions are focused on future trends. At present, on a monthly basis, industrial production achieved positive growth of 3.9% in April despite the gap from normal levels in former years and long-term trends. Other indicators such as investment, retail, exports and the service sector were all in a state of decline. In spite of the narrowed declines and positive growth in some indicators compared with the previous month, it is still a challenge to eliminate all the negative effects brought about by the epidemic during the early stages. It not only depends on the progress in domestic work resumption, but also the impact brought about by the international pandemic situation and external economic changes. Given the current situation, it remains to be seen how the economy will progress. However, as I said earlier, we have confidence, capacity and a solid base to maintain the momentum of restoration and improvement. 

Additionally, we will adhere to the strategy of expanding domestic demand amid the huge uncertainty of overseas demand. On one hand, we need to consolidate the basic function of consumption. On the other, we must strengthen the key role of investment. With regards to consumption, it is important to maintain growth in online consumption, whilst also recovering offline consumption. Key investment indicators have shown signs of recovery with many investment activities improving. Next, we will focus on strengthening public health governance capacity, upgrading industrial chains, consolidating the industrial development base, and fully allowing investment to play a key role. Thank you.

CNBC:

I have two questions. The first is about employment. What has the quality of employment been according to the current survey? The second question is about consumer spending. What is the current situation of consumer spending in first-tier cities?

Liu Aihua:

Let me answer your first question. As we mentioned, the surveyed urban unemployment rate shows small monthly changes, 6.2% in February, 5.9% in March, and 6.0% in April. The small fluctuations demonstrate overall stability. However, if we look at more indicators, there is still a large pressure on employment.

First, the scale of employment was lower compared with the same period last year. According to the statistics of the China's human resources and social security authorities, a total of 3.54 million new urban jobs were created in the first four months, a reduction of 1.05 million compared with the same period last year.

Second, the surveyed unemployment rate in urban areas was also higher compared with the same period last year. As mentioned, the figure for April was 6.0%, 1 percentage point higher than in the same period last year, indicating a large pressure on employment.

Third, there is a large pressure on employment for the major labor force. Take migrant workers as an example. We organized a quick survey at the end of April to determine the employment status of migrant workers. From what we learned, the employment of migrant workers improved to a certain extent after a series of measures to promote local employment. The number of migrant workers leaving home to work returned to about 90% of that in the previous year by the end of April, but there is still a gap from the normal level. As for college graduates, 8.74 million will enter the job market this year. So, there is a large pressure on employment for the major labor force.

This year, to show the great importance attached to employment, we put it at the top of the list of aspects to be stabilized and guaranteed. We adopted a series of targeted measures, under which some positive changes have taken place, although there is still a relatively high pressure on employment. Our quick survey showed that the rate of "unemployed on the job" in urban areas fell from 18.3% in March to 3.5%, reflecting an improvement in the quality and level of employment.

Your second question is about consumer spending in first-tier cities. I only have national data here. If you want to look at relevant data for a specific city, please contact the information department of the NBS, and we will provide you with an answer after the press conference. Thank you.

China Economic Information Service:

The turning point at the macro level during the second quarter is called the "second quarter phenomenon," but this year's situation may be slightly special. Judging from the trend so far, will there be a "second quarter phenomenon" this year? Thank you.

Liu Aihua:

Thanks for your question. It looks like everyone is concerned about the trend in the second quarter. I made some explanations based on the changes in indicators, the situation in China and overseas, and the overall context for next-stage development. I also introduced some of our views. On the one hand, we have the conditions, the foundation, and the confidence to achieve sustained economic recovery and growth under various policies and with market players' joint efforts; however, on the other hand, there are indeed large instabilities and uncertainties. Therefore, we must uphold bottom-line thinking, seize favorable conditions, use inherent strengths in economic operation, release the potential of domestic demand, and help companies overcome current difficulties. Eventually, the economy will return to normal.

Hu Kaihong:

The last question.

Hong Kong Economic Herald:

It is already May, and there is only one month left in the first half of this year. What do you think of the economic trend in the second half of this year? Exports account for a large proportion of China's GDP. Is there any hope for this year's GDP growth rate to maintain at least 6% as the pandemic continues spreading overseas? When will the global economy recover? Thank you.

Liu Aihua:

Thanks for your questions. The first question is about the future trend of the economy and the prospects for domestic economic growth, and you also touched upon changes in exports. There is indeed great instability and uncertainty in the prospects for exports. Many international agencies or organizations recently published forecasts for economic growth this year. The International Monetary Fund (IMF) forecasted that the world economy will decline by 3%, and the World Trade Organization (WTO) and the United Nations (UN) also made their predictions on global economic and trade activities. It is a large decrease. China's exports indeed face large risks and challenges as the risks of a global economic recession increase. Although the exports of goods increased by 8.2% in April, we cannot be overly optimistic about the prospects. Supported by a series of export stabilization policies, foreign trade companies have strengthened their adjustment capabilities, exerted their competitiveness, and diversified their arrangements, resulting in hard-won results. Despite this, it is difficult for China's exports to be spared from global economic contraction. Therefore, we should fully estimate the risks and challenges in this regard.

The second question is about predictions on economic growth for the whole year. I would like to highlight that we need to use our advantages, unleash our potential, actively respond to the current risks and challenges, help companies with current difficulties, and facilitate the Chinese economy to its normal track again. Thank you.

Hu Kaihong:

Today's press conference ends here. Thank you, Ms. Liu. Thank you all.

SCIO briefing on scientific research into COVID-19. [Photo by Jiao Fei/China SCIO]

Read in Chinese

Speakers:

Jin Qi, president of the Institute of Pathogen Biology, Chinese Academy of Medical Sciences;

Yan Jinghua, researcher at the Institute of Microbiology, the Chinese Academy of Sciences;

Wang Guiqiang, director of the Infectious Disease Department, Peking University First Hospital.

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office of China

Date:

April 27, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Since the COVID-19 outbreak, Chinese scientific researchers and experts have been going all out to make scientific breakthroughs in the prevention and control of COVID-19. Today, we invited three scientists to meet with you and brief you on the scientific research into COVID-19. They are: Jin Qi, president of the Institute of Pathogen Biology at Chinese Academy of Medical Sciences; Yan Jinghua, researcher at the Institute of Microbiology at the Chinese Academy of Sciences; and Wang Guiqiang, director of the infectious disease department of Peking University First Hospital. They will first introduce themselves before taking your questions. 

Jin Qi:

Friends from the media, good afternoon. I am from the Chinese Academy of Medical Sciences, and my specialty is research into the pathogenic biology of infectious diseases. I'm very happy to have the opportunity to be here today and to speak with you, from a scientific point of view, on the issues that currently concern us. Thank you.

Yan Jinghua:

Friends from the media, good afternoon. My name is Yan Jinghua, and I'm from the Institute of Microbiology at the Chinese Academy of Sciences. My focus is vaccine development and therapeutic antibodies. I'm very happy to be able to speak with you this afternoon. Thank you.

Wang Guiqiang:

Good afternoon, friends from the media. My name is Wang Guiqiang, and I'm from the infectious disease department of Peking University First Hospital. I have 36 years of experience working in diagnosing and treating infectious diseases. I've worked on the frontline to guide the treatment of critical and severe cases, and have engaged in scientific research into medication. Thank you.

Xi Yanchun:

Have two of you been to Wuhan?

Jin Qi:

Yes, I was working in Wuhan from early February to early April.

Wang Guiqiang:

No, I went to Anhui province at the request of the National Health Commission to guide the treatment of critical and severe cases there.

Xi Yanchun:

Thank you for your hard work. Now, let's open the floor to questions. Please identify yourself before asking your questions. 

Sputnik:

How is the vaccine research progressing? What kind of technologies are being used? Is there any need to conduct collaboration? If so, which countries will China collaborate with? Will China cooperate with Russia on inactivated vaccine development? Which aspects will the cooperation cover? Thank you.

Wang Guiqiang:

Let me answer first and Professor Yan can add something. First, vaccines have attracted a lot of attention from the public. In terms of epidemic control and prevention, vaccines are an important element, so everyone is greatly interested. The Chinese government launched the vaccine R&D plan at the very outset. Currently, China has supported vaccine research in five routes, including adenovirus vector vaccine, inactivated vaccine, nucleic acid vaccine and others. They are all making progress now. We have noticed that the fastest one is the adenovirus vector vaccine developed by Academician Chen Wei as it was the first to enter phase-I clinical trials and has now entered the second round of clinical trials. The vaccines being developed by the China National Biotec Group and Sinovac Biotech are also under clinical research.

As for your second question, I'm not clear about the situation regarding cooperation with Russia, but the R&D of a vaccine is a big project and a COVID-19 vaccine has no successful precedent to follow, therefore, it's a systematic project. We are currently cooperating with the U.S., Germany, U.K. and some other countries. As for cooperation with Russia, Professor Yan will fill you in on that.

Generally speaking, vaccine R&D is a systematic project. We all anticipate it will be successful and contribute to the epidemic control and prevention. Thank you.

Yan Jinghua:

Let me add something. As a researcher into vaccine R&D, I'm currently very eager to cooperate with international counterparts as different labs and enterprises each have their own advantages. If we can combine those advantages together, the process will be accelerated and we can acquire a safe and effective vaccine much sooner. Thank you.

Bloomberg:

I have two questions. The first is about the asymptomatic carriers. Is there any update concerning the way asymptomatic cases spread or about their causes? Also, there are patients in many places who have developed symptoms after 14 days of isolation. Does this indicate that the incubation period of the novel coronavirus is longer than 14 days? Thank you.

Wang Guiqiang:

This is also a problem concerning epidemiology. First of all, there are indeed asymptomatic carriers both in China and the rest of the world. Currently, many of the imported cases in China are asymptomatic carriers. Statistics from the U.S. also show that random testing in the street has found many asymptomatic carriers. There are two groups of people among asymptomatic carriers. The first group are those who tested positive in the nucleic acid tests whilst still in incubation period, thus haven't yet developed any COVID-19 symptoms. As time goes by, some of them will develop symptoms. Therefore, these people are actually typical cases in incubation period, rather than asymptomatic carriers in a true sense. However, currently we are still not able to distinguish them, thus they are categorized as asymptomatic carriers.

The second group are asymptomatic carriers in a true sense. This is a common feature of epidemics. While the epidemic rages, many patients get the virus but develop no symptoms, which is called a subclinical infection. Thus, these patients don't go to hospitals for medical treatment, but when we take a look back at the end, we may find that these patients were indeed infected. These two groups are similar in terms of the physical performance. 

The main problem of an asymptomatic infected person is actually the problem of contagion. We believe that asymptomatic carriers are clearly infectious, and they should be treated equally with other COVID-19 patients. The infectivity during the incubation period is relatively stronger, and the viral load of asymptomatic carriers is generally lower. Still, this is only a relative number, and it cannot represent the relationship between infectivity and non-infectivity. Therefore, a part of asymptomatic carriers may appear as a latent infection, meaning they will become patients later. Thus, isolated observation is very important.

So far as the asymptomatic carriers can only be detected by means of testing, China has made it very clear that the role of large-scale nucleic acid testing should be much strengthened with the hope that those asymptomatic infections can be discovered as soon as possible. At present, we do routine screening for those who come back to China from outside the country, and it is precisely this routine screening that has found so many asymptomatic carriers. We also conduct general screening of the general population and high-risk groups, with the aim of finding asymptomatic infected persons, and then isolating and observing them in time to avoid further transmission. Thank you.

Jin Qi:

Professor Wang has made some very marvelous remarks while answering those questions. I would like to add a few of words concerning the onset of the disease after the 14-day quarantine. My general point of views consists of two aspects. First, the cases are quite rare, and, second, they are normal. Why should I hold such views? Because people differ greatly in routes of transmission and degrees when they have been infected by the disease. More to the point, for each individual, the infection routes, immune systems and body reactions are different. All those factors combined lead to a variety of incubation periods, say, one, three or ten days. It also leads to different symptoms, such as diarrhea or fevers, tested at 37, 37.5, 38 or 39 degrees Celsius. I see nothing unusual from this point of view that an incubation period can still run over 14 days, though, in accordance with the statistics and dynamic layouts, the occurrence is extremely rare. Therefore, a quarantine for a given incubation period of 14 days is completely rational. Thank you.

Lianhe Zaobao:

The scientific community has yet to come to a definitive conclusion on the origin of SARS-CoV-2. There have been allegations that the virus may be man-made. What is the possibility of that? We also want to know if Chinese scientists are still tracing "patient zero" and if there is any progress? Lastly, the COVID-19 epidemic was first detected in Wuhan at the end of December 2019, and the Chinese authorities have taken very proactive anti-epidemic measures since Jan. 20, 2020. Looking back, could Chinese experts have done a better job, between the end of December and Jan. 20? Thanks.

Xi Yanchun:

We have invited Dr. Liu Peipei of the National Institute for Viral Disease Control and Prevention of China CDC. He will answer some questions related to virus research.

Liu Peipei:

Your first question is about whether SARS-CoV-2 is man-made, which is a hot topic of concern. In fact, as some of you may have noticed, there is a general consensus in the scientific community that the probability is very low. A Lancet paper co-signed by scientists from various countries illustrates this. In a word, the possibility that SARS-CoV-2 was engineered is extremely low. The most probable possibility is that the virus was transmitted from a natural host to an intermediate host and then to humans.

The second question is about the tracing of "patient zero", which many countries around the world are actively working on. Of course, we are also pressing ahead with this. Tracing "patient zero" is an arduous task, involving intricate data. In addition, as the epidemic lingers, a seropositive background is present in the population, but it is difficult to specify when people became infected.

Just as Director Wang mentioned, at the early stage of the epidemic, many people who were very likely asymptomatic have no medical records, which increases the difficulty of finding "patient zero". These two aspects have thus added to the difficulty. We hope scientists worldwide can press ahead with tracing "patient zero", and work together to fight the epidemic.

Xi Yanchun:

The last question remains unanswered. Experts sitting on the podium may add a few words to answer that question.

Jin Qi:

Just now, Professor Liu made a very good point that after every epidemic, the scientific and medical communities, as well as the people and society, will be concerned about one word, that is: "patient zero". It is a question that we can't evade in terms of epidemiological investigation. As Professor Liu said, it is a very difficult question for science to answer. For example, has the "patient zero" of the 1918 Spanish Flu ever been found? As for AIDS, "patient zero" contact with the disease was conjectured to have occurred in 1930, but later, new evidence emerged and the disease was suspected to have originated from a hunter in 1920 in a certain country. But that's just speculation.

One could say, this is the story from 100 years ago, and hasn't there been a breakthrough in science and technology since then? Let me give another example. In 2009, the H1N1 virus originated in the Americas and evolved into a worldwide pandemic. Has "patient zero" of the 2009 H1N1 pandemic ever been found? The answer is no. We can see that it is a really difficult task. The difficulty lies in the fact it requires a considerable amount of work and interdisciplinary collaboration.

I'll give you a hypothetical example to help you understand it. If "patient zero" was asymptomatic or had mild symptoms then he or she may not have seen a doctor at all. In that case, how could we identify him as "patient zero"? Even if we suspected he was the "patient zero" then he would be likely to deny it since there are no medical records to reference. Some may ask, will the serological epidemiologic investigation help as we have well-kept medical records. But if both A and B test positive for IGg, how can we determine which one contracted the virus earlier without additional information? We can't. The task is tricky. The medical and scientific circles are looking for an answer. Chinese scientists are also working on that. This is the first aspect. 

Second, as to what Chinese scientists did at the beginning of the outbreak, I can give you an example. My institute worked on the task of identifying the pathogen in the early days. For an infectious disease, that is the first priority in prevention and control. It is extremely important because only after finding the pathogen can we decide on treatment and other response measures. Since we got the samples on Jan. 2, our scientists slept for only three to four hours each day for a week. At an advanced age, I was burned out staying there. My colleagues did their utmost, and we identified the pathogen within a week. Was it fast? I think so. Thus, we can see from this example that Chinese scientists did play a big role in dealing with the outbreak at the early stage and made key contributions. 

Of course, if we are faced with similar problems in the future, we will be even more hardworking. And as science and technology advance, I believe it will take even less time to identify such a pathogen. This time it took us a week, but next time it might be only three or four days, or even less than that. 

Wang Guiqiang:

First of all, everybody pays a lot of attention to "patient zero", and that is certainly important for tracing the origin of the disease, containing the pandemic and preventing the next possible epidemic. But China is not the only country with a "patient zero" — each and every nation has its own "patient zero", and all of them need to be traced. This is important. 

Second, for any disease, people's understanding develops day by day. People say this new coronavirus is very cunning, and that's true. As we do more research on it, we find that it is different from other viral infections. Other infections may take one or two weeks to cure, and they are self-limited diseases. But this new coronavirus has a long clinical course, and that is obviously different from other coronaviruses. Also, the rate of asymptomatic cases is quite high, which indicates that the virus does indeed have a cunning side to it while interacting with our bodies. Etiology is an important part of the development of a disease, and so is the human body's reaction. If the immune system recovers, then the virus will be contained easily; if it does not, then one can remain infected for days, and the virus can be spreading for days on end. Thus, our understanding of the disease is a gradually developing process. Chinese experts did a great amount of work at the outbreak's early stages, and their research gradually progressed from etiology to epidemiology and clinical manifestation. Thank you. 

Reuters: 

How many new coronavirus tests have been done in China? Do you think the growth rate of testing in China is adequate or not? Should China carry out mandatory testing? Thank you. 

Jin Qi:

Testing technology, along with the implementation of testing, is an important part of the overall prevention and control of the pandemic, and it is also an important part of our pandemic containment strategy. How many people need to be tested, and what kind of people need to be tested? I think it depends on the prevention and control measures in place at the given time. Currently, new indigenous cases come in single digits, and the outbreak has been generally contained. What are our prevention and control measures now? We are guarding against imported cases from abroad and preventing a resurgence of the outbreak at home. Based on that, the testing strategy is currently "letting those who need to be tested get tested." This focuses on the key sections of the population. Who are they? They include, for instance, those who are infected, close contacts who are symptomatic and asymptomatic, people who come from hard-hit regions, and people who manifest similar symptoms like fever, etc. Also, we must consider people in nursery homes, schools that are recently reopened and hospitals. There are a lot of in-patients in the hospitals. If one virus carrier visits the hospitals and gets others infected, that causes hospital-acquired infection. This is why these people are the key populations that need to be tested. 

In addition, as the resumption of work and production continues, we will also try our best, for the sake of safety, to meet the needs of coronavirus testing in densely populated areas. The current testing strategy, including for those priority groups, aims to help guard against imported COVID-19 cases and a rebound in domestic cases. This is also scientific in my opinion. 

Regarding your question about how many people have undergone coronavirus testing in China, the statistics should come from relevant departments. I'm a scientist, so I have no idea about the accurate number. Overall, our current testing strategy matches that of pandemic control and suits China's national conditions. Thank you. 

ITAR-TASS:

China now has a good bit of experience facing the pandemic. Many Russians wonder whether we should wear face masks or stay at home, and which major methods do Chinese experts think can be adopted for COVID-19 treatment? Thanks. 

Wang Guiqiang:

Thanks. I will take your questions first. It's very important to wear face masks. At first, there was some misunderstanding that wearing masks did not reduce the incidence of respiratory infections. However, China's experience has proven that wearing them is definitely effective. We knew that those asymptomatic carriers would be a key source of infection and lead to transmission of the virus if they didn't wear masks. There were many such cases in China at the very beginning. It is therefore crucial to wear a mask. Currently, China is taking regular pandemic prevention and control measures. Just as Mr. Jin mentioned, we are now working against imported COVID-19 cases and a rebound in domestic cases. Under current conditions, China has effectively controlled the outbreak. However, we still emphasize that people need to wear masks in public places. Unless in large squares or parks, you may be allowed to take off the masks, but you still have to wear masks at small-space gatherings. As previously mentioned, there are still some imported cases in China, and a very small number of individuals have even shown a relatively long incubation period of the virus. Hence, China still attaches importance to wearing masks, and so do other pandemic-affected areas, in particular. In this way, patients will prevent the transmission of the virus, and healthy people will protect themselves from being infected. The Chinese University of Hong Kong has carried out research on this aspect, and the results show that wearing a mask can effectively curb viral spread via droplets. Therefore, it's one of the most effective measures to prevent the spread of COVID-19. Of course, we also emphasize hand hygiene and ventilation, among other preventive measures, which are very important too. 

Your second question concerns China's treatment experience. It's true that since the outbreak began, we have launched plans for diagnosis and treatment and continually revised them. Within around two months, we have come up with seven versions of treatment plans. This timeliness shows that we are continuing to adjust with real-time diagnostic and treatment strategies, especially treatment plans, according to our latest evidence and experience. At the very beginning, we didn't know which drugs worked, so we looked at the treatment of SARS and MERS for reference, and we recommended some medications that were already on the market, including Kaletra, interferon and others. With the increasing data, more drugs were later included, such as chloroquine phosphate. And then came the use of more technologies, including stem cell therapy, convalescent plasma therapy and blood purification treatment. All of these are based on our continuous understanding of COVID-19. The mortality rate of the disease is relatively high among the elderly and those who have underlying health conditions, so we also put emphasis on effective strategies, such as oxygen therapy, standard ventilation treatment and multi-disciplinary cooperation. Chloroquine phosphate is a distinctive treatment method. Objectively speaking, we are still recommending the use of chloroquine phosphate. Base on the initial data ranging from the experience at the cellular level to preliminary clinical studies, we have seen the certain efficacy of chloroquine phosphate. The drug has been sold on the market for many years, and we are relatively confident in its safety. Of course, we should also pay attention to its side effects and make risk evaluations on the elderly and those who have underlying health conditions. However, considering that there are no specific drugs yet, it can be recommended for use. 

In addition, convalescent plasma therapy has shown clinical efficacy against COVID-19. We have collected plasma from almost a thousand convalescent COVID-19 patients and offered the therapy for more than 800 patients. It has proved effective. What's more, for the first time Chinese researchers have conducted clinical studies on the use of stem cell technology in the treatment of COVID-19 cases. More than 200 critically ill patients in Wuhan have received stem cell treatment, which has shown apparent efficacy. Now we are summarizing the results. These preliminary studies can serve as a reference for other countries. We still need to accumulate more evidence and more carefully analyze our previous studies. We hope we can publish these studies so as to provide more experience and references that other countries can use when diagnosing and treating COVID-19.

Yan Jinghua:

Convalescent plasma therapy, which Mr. Wang explained, has proved effective in China. There is actually another therapy, which has not yet been put into clinical use. You might have noticed that many international companies, such as Pfizer, are developing COVID-19 monoclonal antibodies, which, compared to plasma, are easier to produce and have clearer targets. Researchers of the Chinese Academy of Sciences are also carrying out similar studies. The results of animal testing have been positive, and the treatment has proved safe from a toxicological perspective. As a result, large companies worldwide will probably work on monoclonal antibody therapy. It provides a good direction for treating COVID-19 before we have a vaccine. Thank you.

Associated Press:

You've mentioned that China is cooperating with the U.S. and Germany to develop a vaccine. I heard that a German company called BioNTech is working together with a Chinese company, and the vaccine candidate is ready for human testing. Could you elaborate on their cooperation? What role does the Chinese side play? Will China join the Solidarity Trial launched by the WHO?

Yan Jinghua:

Drug development involves huge projects. Vaccines are broadly defined as drugs. The development of drugs and vaccines takes a lot of time and requires a massive investment. So usually good products are derived from cooperation among large companies. As you said just now, more and more international companies are cooperating on vaccine development. The cooperation you just mentioned is between two companies, BioNTech and China's Fosun Pharma. The future of their cooperation and the point at which clinical trials will be held depends on BioNTech's R&D progress.

As to the Solidarity Trial launched by the WHO, I think it's a very good idea. If realized, the initiative will strengthen our communication with other countries and help us greatly accelerate vaccine development. As researchers working on vaccine development, we hope international organizations, including the WHO, can maintain close communication and cooperation with each other, thereby improving global access to vaccines. Thank you.

The Asahi Shimbun:

There are many papers on the mutation of the virus. According to a paper that was published by an expert Chinese team, there are two subtypes of the virus. One is an older S subtype, and the other is an L subtype that is more infectious. Which one do you think is mutating? Is there any new mutation of the virus? Do you think the virus has the same virulence and is equally contagious in other countries? Thank you.

Liu Peipei:

Different research teams around the world have suggested various methods for typing and subtyping viruses, and the method of subtyping S and L is just one of them. Regarding this method, you will understand after you finish reading the paper, as the author has attached an explanation that has clearly explained there is no evidence about any direct relation between the virulence of the virus and these two subtypes.  

Jin Qi:

I would like to add something more in terms of the aspect that Dr. Liu has mentioned. If my memory serves me right, this paper was published at the very early stages of the COVID-19 outbreak. From a scientific perspective, having enough strains available is a prerequisite for any evolutionary analysis of the virus. However, that paper was published very early on, and researchers had only obtained 100 or 200 strains for the analysis. But up to now, how many strains are there in the public database? I believe the media must know well of the number. Moreover, given the same data, different statistical methods and algorithms will lead to different results, and this has been widely recognized in the field of evolutionary analysis. Consequently, different papers, in terms of their results or assumptions, can be explained from different perspectives. I, personally, believe that this paper currently shows some limitations in terms of the number of virus strains and locations affected by the virus, as the virus had just occurred in some regions at that moment. But now the pandemic has swept the world, including Europe and America, so you can get more strains at different times and from various locations, and the results will accordingly be more accurate. When we look at the paper right now, we may interpret it in a different way. I think that with the large increase in the number of virus strains in the public database, the results of papers published in the future will be more accurate and precise. Thank you.  

Wang Guiqiang:

I agree with Mr. Jin. First, the mutation of pathogenic microorganisms is a very normal phenomenon. After mutations, you need a lot of data to prove whether a strain variation can be defined as a subtype. Hepatitis B has different genotypes, as well as different subtypes, and there are basic definitions for them. I'm also aware of this paper. As to whether the mutations mentioned in the paper can be defined as subtypes, the author later corrected his conclusion and called them lineages — not subtypes. This is because to define a mutation as a subtype, you need to have a large number of virus strains to make comparisons and find out those variation sequences; then you can determine whether to call it a subtype or not.  

Second, these two lineages are not directly related to the virulence or the contagion of the virus, which was also pointed out by the author of the paper. Of course, we cannot rule out the possibility that some variations may become more contagious, which is possible, but we need more samples to prove that. Thank you. 

Yan Jinghua:

The relations between mutations and pathogenicity rate and contagion, from a biological perspective, must go through sequence analysis and bioinformatics analysis, and the final results must be verified from a biological perspective. For example, a mutation of a virus, according to epidemiology or animal models, does have increased infection or virulence. This is my point of view. Thank you.

CRNTT:

We noticed some experts, including WHO Director-General Dr. Tedros Adhanom Ghebreyesus, have pointed out that the novel coronavirus might be with us for a long time. Many people fear that the epidemic may easily re-ignite. It may retreat in summer and return in winter. What's your opinion on it? Is it possible for this to happen? If this is the case, how can people protect themselves from the virus? The SARS outbreak in 2003 dissipated as the weather warmed up. Will COVID-19 transmission also change with fluctuations in daily temperature? Thank you.

Wang Guiqiang:

Thank you for your question. This is a question that many people are concerned about. As you mentioned, SARS disappeared in a relatively short time and hasn't returned so far. However, the novel coronavirus is quite different from SARS and MERS. It can remain active for longer and has a higher ratio of asymptomatic infection. More importantly, although the novel coronavirus is sensitive to heat (and can be inactivated) at 56 degrees Celsius for 30 minutes, it is impossible for the weather to be that hot. Therefore, it is unlikely to see a significant decline in COVID-19 cases in summer around the world. 

As for whether the COVID-19 might be with us for a long time, we can't exclude such a possibility. It is possible for it to re-ignite in crowded and stuffy places in fall or winter. That's why we think it is crucial to take globalized prevention and control measures. Having put COVID-19 under control domestically, China is facing a surge of imported cases. The world is not safe even if there is one country incapable of curbing the spread of the virus. China has made a phased achievement with a huge expense. Looking at the trend of the COVID-19 pandemic, I hope the whole world can band together, follow WHO advice, and confront the global fight together. This is very important.

Jin Qi:

I want to share my thoughts on this as well. I have met many people with a "SARS mentality," which means they take it for granted that the novel coronavirus came without casting a shadow and will disappear without leaving a trace, just like SARS in 2003. In fact, the two are totally different. We have been trying to find out whether a virus can be harbored in a human body and cause chronic diseases or seasonal epidemics. Once a person was infected with SARS, he or she developed a fever. That's why we could curb the spread of SARS after we put all patients with a fever under control. The precondition was that SARS-infected patients displayed an obvious symptom—fever.

Now, the situation with the novel coronavirus is far more complex. We have seen asymptomatic infection, also called subclinical infection or inapparent infection. It is challenging to spot asymptomatic patients when they show no symptom of infection at all. So, can you expect such a virus to easily disappear from human society? Unlike SARS, it is somewhat likely for COVID-19 to co-exist with us for a long time and cause seasonal epidemics, just like other coronaviruses do. Thank you.

Xi Yanchun:

I think we are still making progress into the scientific research of the disease, and constantly deepening our understanding of it. I believe that as time goes by, we will develop an increasingly clearer picture of the virus.

NHK:

With regards to the origin of the virus, scientists believe that the novel coronavirus most probably originated in bats from Yunnan province. However, it seems unlikely that the bats flew to Wuhan over such a long distance. Therefore, there are suspicions that the virus could have leaked from the Wuhan Institute of Virology during research. As specialists, what is your take on this? Thank you. 

Xi Yanchun:

Another question about the origin of the virus. Let's hear from Dr. Liu Peipei once again, and then our specialists here could add something.

Liu Peipei:

With regards to these conspiracy theories, the scientific community has reached a basic consensus, which is, the possibility of the virus being man-made is very low. Scientists from multiple countries co-signed a statement published in The Lancet elaborating on that. I also notice that a recent report by the WHO responded again to the conspiracy theories. It is generally believed that the possibility of the virus being engineered or leaked from the laboratory is very, very low. Thank you.

Wang Guiqiang:

Thank you for your question. You mentioned just now that bats are highly likely to be the host of the virus. And bats are found flying in every part of the world. Nowadays, infectious diseases know no borders because of such well-developed transportation. The momentum of the fast global spread of infectious diseases has been extremely obvious. People have often spoke of the concept of the world being a "global village." Infectious diseases used to spread locally within specific regions, from specific ecological reservoirs to specific human populations. Now, with such convenient transportation, any infectious disease can spread around the globe in 24 hours.

So why is the world concerned about the prevention and control of infectious diseases? Because its epidemic status has changed. At present, global transportation has become convenient and advanced, meaning any infectious disease can quickly spread worldwide. Thus, as COVID-19 spiraled into a pandemic, it has become difficult to say where the etiology is, which requires a thorough tracing back to the origin. Thank you.

Jin Qi:

Relating this question to previous ones, all of them are asking about tracing the origin of the virus. Here I would like to share my opinion on this topic. Why do we need to trace to the origin? Or, what is the purpose of tracing the virus? From my point of view, one of the main purposes is to find out the source of the pathogen of COVID-19. What will we do after finding the origin? We can formulate targeted strategies for epidemic prevention and control, so as to prevent similar epidemics from harming human society. I think that is one of the main purposes in tracing the origin. However, virus origin tracing is a very difficult scientific issue, as I mentioned previously when answering the question about "patient zero." Have we finished the virus origin tracing for the 1918 influenza pandemic, or AIDS, or the H1N1 flu that broke out in 2009? Scientists all over the world are working on it, but I think it's a difficult problem. Some scientists have suggested it could take decades, even a century. Just now I mentioned the 1918 influenza pandemic, which was a hundred years ago; sometimes we may never get the result. However, we are still working on it, which is important. Therefore, with regards to this issue, Chinese scientists are doing the same thing as scientists all over the world, which is making all efforts to discover the answer. By integrating multiple disciplines, including computational biology, bioinformatics, epidemiology and molecular epidemiology, we can get some clues to interweave into a mutual support network. On the basis of this network, we may finally find the result we're looking for. Thank you.

Xi Yanchun:

I would also like to add that there is a consensus that we need to respect and believe in science. And I don't think it is a responsible attitude for a media outlet or relevant individual to make hasty judgments without any facts. We need to give scientists enough time and respect. I believe that they will help us know more about the virus and prevent and control it more effectively. This will be the last question due to time constraints. 

CGTN: 

What has struck experts like you most in your research since the outbreak of COVID-19? Many topics were mentioned just now, including the origin of the virus and how its pathogenicity was identified quickly at the early stage. What's your task or target in the future? Could you give us a list of priorities?

Xi Yanchun:

Let's invite each expert to have some words. 

Jin Qi:

I certainly have a lot of feelings that I'd like to share with you. At the beginning of February, we drove 16 hours from Beijing to Wuhan with a mobile negative pressure lab in preparation for a Fangcang shelter hospital. I came across no more than 10 automobiles while making the nearly 750-mile journey. This was a big shock to me. What's even more shocking was that when I arrived at the Fangcang shelter hospital, which was then the biggest one in Wuhan, I walked straight into the lobby — where no partition had been set up yet — only to find that it was packed with rows of beds without a single patient. I stood there for 20 minutes. It reminded me of a faded photo taken during the 1918 flu pandemic. Many of you may have seen it. I was deeply touched standing there. What moved me most was that we as human beings need to unite against the sudden outbreak of infectious diseases, and we have a lot to do. Thank you.

Yan Jinghua:

I have no experience like Mr. Jin's in Wuhan. I'd like to talk about my experience as a vaccine developer. We, as vaccine developers, have in fact been stressed and nervous since the outbreak of the new coronavirus. As you know, there are many infectious diseases, including HIV, Ebola and Zika. But we seldom find vaccines for them. No vaccine is available for MERS, and the same is true for HIV and Zika. No vaccine candidates for these diseases are available on the market. Since the outbreak of COVID-19, none of the new coronavirus vaccine candidates have gone to the market. So what's the effect of a vaccine? Will it protect people and eventually become available on the market? That's the biggest concern of every vaccine developer. Even now, it is unknown if the vaccine for COVID-19 will succeed. Hence, we have a lot of work to do. We need verification during the process. We want it to succeed. But science is science, and the pathogen has its own characteristics. We look forward to our success. Thank you.

Wang Guiqiang:

I have been involved from the start in the control and prevention of the COVID-19 pandemic, and I genuinely feel its impact on humans. At the time of the SARS outbreak, Beijing's streets were also empty. I believe the success of China's anti-epidemic work lies in top-down unity and concerted efforts. We should cherish our achievements. During the outbreak, the Chinese people have played important roles and made tremendous sacrifices, including our medical workers who braved the risk of infection to provide relief in Wuhan; our scientific and technological workers who worked round the clock on diagnostic reagents, pathogen screening and vaccine development; as well as ordinary people who stayed at home to contribute to the fight against the disease. It's safe to say that everyone is working together. Therefore, I think it is not easy for China to achieve such results. I also hope that the whole world can come together as one to fight the pandemic. It is far from being enough for a single country to work hard because COVID-19 is a global challenge, and we are a global family. All countries should unite to fight the disease so we can achieve victory together. Thank you.

Xi Yanchun:

OK, it is precisely one hour into the press conference. Three experts and Dr. Liu Peipei have responded to questions from ten reporters, and the exchanges were sufficient. In the future, we will create more opportunities to communicate with you. I want to say that in the face of the sudden outbreak, Chinese scientists and researchers have worked hard. They are dedicated, rigorous, and realistic. They have played a vital role in the prevention and control of the epidemic. I want to take this opportunity to salute and thank all scientists and researchers who are working hard on the frontlines in the field of scientific research on the epidemic prevention and control.

I also want to stress that the virus knows no borders. Solidarity and cooperation are the most powerful weapon for the international community to overcome the pandemic. China is willing to continue to work with the international community and provide Chinese wisdom and strength. Thanks again to the experts, and thank you all. Today's briefing ends now. Thank you.

Translated and edited by Wu Jin, Zhu Bochen, Li Huiru, Zhang Liying, Wang Yanfang, Gong Yingchun, Zhou Jing, Fan Junmei, Huang Shan, Li Xiao, Lin Liyao, Zhang Rui, Zhang Junmian, He Shan, Liu Qiang, Wang Qian, Wang Wei, Duan Yaying, Yang Xi, Zhang Lulu, Guo Xiaohong, Wang Yiming, Mi Xingang, Jay Birbeck, Laura Zheng, David Ball, Scott Rainen. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Huang Libin, spokesperson of the Ministry of Industry and Information Technology (MIIT) and director general of MIIT's Performance Inspection and Coordination Bureau;

Wen Ku, MIIT spokesperson and director general of MIIT's Department of Information and Communications Technology Development.

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office

Date:

April 23, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to invite Mr. Huang Libin, spokesperson of the Ministry of Industry and Information Technology (MIIT) and director general of MIIT's Performance Inspection and Coordination Bureau; and Mr. Wen Ku, MIIT spokesperson and director general of MIIT's Department of Information and Communications Technology Development. They will introduce China's industrial and communications development in the first quarter of 2020, and also answer some of your questions.

First, I'll give the floor to Mr. Huang.

Huang Libin:

Ladies and gentlemen, friends from the media, good afternoon. First of all, thank you for your interest and support in the development of industry and communications. Next, I will brief you on the basic situation during the first quarter of 2020, and then my colleague Mr. Wen and I will answer some of your questions.

Since the beginning of this year, the unexpected outbreak of the COVID-19 epidemic has severely affected China's economic and social development. All sectors of society have been earnestly implementing the overall deployments made by the Central Committee of the Communist Party of China (CPC) and the State Council to coordinate the epidemic prevention and control work with economic and social development. Through hard work, China has achieved sustained improvements regarding the epidemic situation, and accelerated the restoration of economic and social orders. In the fields of industry and information technology, work and production have been resumed at an accelerated pace. The information and communications industrial sector has maintained overall stability.

First, the MIIT has ensured the supply of key materials in an orderly and vigorous manner. Since the start of the COVID-19 outbreak, the MIIT has been leading the State Council medical supplies group, and strengthening collaboration with other member units. Multiple measures have been taken to increase production and expand capacity concerning the efficient production and effective supply of key medical materials. During the peak period, the daily output of medical protective clothing exceeded 700,000 pieces, which was more than 50 times that during the early stage of the epidemic. The production of masks, medicine, infrared thermometers, ventilators and negative pressure ambulances has quickly increased, which has been indispensable in the domestic fight against the epidemic. Whilst working to meet domestic demand, the MIIT has also provided assistance within our capabilities to countries suffering from COVID-19. More efforts have been made to increase the supply of active pharmaceutical ingredients and anti-epidemic materials to the international market, so as to help prevent and control the pandemic globally.

Second, the MIIT has accelerated and further expanded work and production resumption. With a correct understanding of the relationship between epidemic control and production resumption, the MIIT has worked to promote the orderly resumption of work and production of the manufacturing industry through differentiated strategies and whole-industrial-chain coordination on the premise of strictly implementing COVID-19 control measures. Based on the concept of coordinated development between large and small companies, upper- and lower-stream enterprises, as well as domestic and foreign trade sectors, the MIIT has focused on key sectors, major industries and leading enterprises, highlighting the bottlenecks, difficulties and pains they have encountered in resuming work and production. More efforts have been made to conduct supervision and provide guidance accordingly. The MIIT has also introduced a series of policies and measures to further support medium, small, and micro enterprises (MSMEs). Through targeted coordination and assistance, the MIIT has been working to comprehensively help the manufacturing industry resume work and production. To date, industrial enterprises above designated size have basically resumed work and production. As of April 21, the average operating rate of enterprises and reinstatement rate of employees reached 99.1% and 95.1%, respectively, while the figures in Hubei province stood at 98.2% and 92.2%.

Third, economic performance has seen some positive changes. In order to cope with the economic impact of COVID-19, the CPC Central Committee and the State Council quickly proposed a series of counter-cyclical macro-policy adjustments, in order to ensure that economic fundamentals have remained steady. As these policies have gradually taken effect, major industrial indicators have improved significantly. In the first quarter of 2020, the added value of industrial enterprises above designated size dropped by 8.4% year-on-year. The figure in March dropped by 1.1%, the decrease of which narrowed by 12.4 percentage points compared with that of the previous two months. Investment in the manufacturing sector fell 25.2% year-on-year, the decrease of which narrowed by 6.3 percentage points compared with that of the previous two months. In March, the purchasing managers' index (PMI) for the manufacturing sector rose to 52% from 35.7% in February.

Fourth, the new economy and new momentum are growing against the trend. We strongly support 5G, artificial intelligence, Industrial Internet, Internet of Things, Internet of Vehicles, big data, blockchain, and other technological innovations and industrial applications; we accelerate the progress of 4G and 5G base stations construction. During the prevention and control of the epidemic, emerging demands, such as remote education, online medical service, and online video, have expanded rapidly, and internet applications have played an essential role in meeting people's everyday needs. In the first quarter, the added value from information transmission, software, and information technology services industries grew by 13.2% year-on-year; mobile internet traffic increased by another 39.3% on the basis of an increase of 129.1% in the same period last year. The national online retail sales of physical goods increased by 5.9%. In terms of industrial development, the output of integrated circuits, vending machines and ticketing machines, and electronic components increased by 16%, 35.3%, and 16.2%, respectively, in the first quarter. The value added from high-tech manufacturing in March increased by 8.9% year-on-year.

At present, China's domestic epidemic situation has been effectively controlled, and the orders of production and livelihood have been resumed in an accelerated way. However, the international epidemic is still expanding, the risk of a downturn of the world economy is increasing, unstable and uncertain factors have increased significantly, and the industrial economy is facing new difficulties and challenges. The situation is still not optimistic. From the perspective of long-term trends, we can see the impact and influence of the epidemic are staged and generally controllable and will not change the fundamentals of China's long-term economic growth. In the next step, in accordance with the overall arrangement of the CPC Central Committee and the State Council to coordinate epidemic prevention and control and economic and social development, our ministry will strengthen the "six stabilities," implement the "six guarantees", and comprehensively promote the manufacturing industry to resume work and production and reach its production goals, ensuring the stability of the supply chain and the industrial chain and promoting the stable and orderly development of the industrial economy in the normalized epidemic prevention and control.

I have finished my introduction. Now, Mr. Wen Ku and I will answer your questions.

Xi Yanchun:

Thank you, Mr. Huang Libin. Next, please ask your questions, and please identify your media outlet before asking questions.

CNR: 

I have two questions. First, we have noticed that the value added of industries above designated size in the first quarter fell by 8.4% year-on-year, and this was a significant decline. Will this trend continue? How do you view the trend of the industrial economy in the first half of this year and the whole year? Second, at a meeting yesterday, the Central Leading Group of COVID-19 Prevention and Control proposed a large-scale nucleic acid and antibody testing. Key populations will be tested, and large companies and organizations will be tested if they are willing. Can you tell us about the production and supply situations of our nucleic acid test kits? Thank you.

Huang Libin:

Thank you for your question. I will answer your first question first. I want to explore it from four aspects: the first is objective analysis, the second is a dialectical view, the third is to turn crises into opportunities, and the fourth is to maintain composure.

First of all, it is necessary to objectively analyze the impact and influence of the epidemic on economic operations, accurately assess its trends, and lay a good foundation for macro-control. Looking at the industrial economy in the first quarter, the added value of the nation's industries above designated size fell by 8.4% year-on-year, and for the first two months, it dropped by 13.5% year-on-year; the utilization rate of industrial capacity was only 67.3%, down 8.6 percentage points year-on-year; and the percentage of loss incurring China's enterprises reached 36.4%. The sudden outbreak of COVID-19 has had a huge impact on the operation of China's industrial economy. In accordance with the unified deployment of the CPC Central Committee and the State Council, on the premise of strict prevention and control of the epidemic, we orderly promote the coordinated resumption of work and production nationwide by region and by scale. The value added of industrial enterprises above designated size in March narrowed its decline to 1.1% year-on-year. PMI rebounded 16.3 percentage points from February. The flash report indicated that in the early and middle of April, the growth rate of electricity generation and consumption has changed from negative to positive, and the industrial economic operation is developing in a positive direction. The current global pandemic is spreading rapidly. Since mid-March, there are more and more canceled orders as well as cargo jettisons and rejections in foreign trade. As the order problems emerged, pressures on enterprise production and management have increased. Industrial economic operations still face significant challenges.

Second, by taking advantage of our industries, markets and institutions, we will respond precisely to the proactive changes in economic performance, securing stable expectations and boosting confidence. Generally, the impact of the epidemic, which is short-term and basically controllable, will not change the upward trend of our economy in the long run. However, its impact, resulting in a drop in supply and demand, and causing unsmooth internal and external business cycles, has affected our economy in the first quarter of this year. The driving force of consumption slackened as the national per capita consumption expenditure declined by 12.5% compared with last year after deducting price factors and the consumption of traditional bulk commodities, such as, vehicles and housing, dived. The launch of investments, with those in fixed assets sliding by 16.1% year on year, including a drop of 25.2% in the manufacturing industry, made it difficult to secure growth. Overseas demand dwindled greatly with export delivery value from industrial enterprises above designated size showing a year-on-year fall of 10.3%. The three demands, which slowed simultaneously, led the manufacturing industry to slump in the first three months. Nevertheless, with the successful containment of the epidemic and the resumption of economic and social normalcy in an orderly manner, proactive changes have emerged in the market. In March, investments into fixed assets and retail sales of consumer goods dropped by 8.8% and 15.8%, respectively, registering declines narrowed by 15.7 and 4.7 percentage points compared to the previous two months. Moreover, the decrease of added values of industrial enterprises above designated size narrowed by 12.4 percentage points. These changes mirror the resilience of our economy. With the implementation of a raft of policies and arrangements adopted by the CPC Central Committee in an effort to expand domestic demand, an increasing number of positive factors with consolidated market expectations and confidence will work together to improve the complete resumption of production, helping it fulfill the target output.

Third, while perceiving the opportunities and challenges brought forth by the pandemic in an objective and dialectical way, we should seize the opportunities of the crisis to develop and sustain the upward trend of the economy in the long run. With the global economy still being affected by the pandemic, the negative repercussions should be examined in terms of their extensiveness, sustainability and complexity in order to minimize the losses and impact that continue to affect China's economy. Therefore, we need to seize the window of opportunity by changing passive reactions into proactive ones, strengthening our areas of weakness, smoothing business cycles, and promoting industrial upgrading. Our holistic industrial chains should continue to play an increasingly important role in unclogging global supply chains, addressing underlying problems, undertaking productions of transferred overseas bills, and supplementing global supply scarcities. Considering the weaknesses exposed amid the pandemic, we should accelerate progress in core technologies from key industries, continue to upgrade fundamental industry capacities, promote industrial chains to pursue modernization and advancement, and ensure the safety of supply chains. With new forms of industry booming amid the pandemic, such as remote online diagnoses, office management, education and shopping, we will step up our efforts to support and direct them, awaiting full-fledged development, to become new backbones and driving forces that stimulate the economy to make further progress.

Fourth, with a resolution to defend the bottom line and maintain strategic focus, we should be capable of coping with the impact of the pandemic, preventing the short-term hit from developing into an unpredictable situation and maintaining stable fundamentals to confront challenges caused by external uncertainties. The Political Bureau of the CPC Central Committee convened on April 17, 2020, for a meeting on regular COVID-19 epidemic prevention and control measures and deployment of the current economic work. At the conference it was stressed that the country will "offset the impact of the pandemic with stronger macro policies" and "resolutely implement strategies to expand domestic demand." The Ministry of Industry and Information Technology (MIIT) will adhere to the deployment made by the CPC Central Committee and the State Council to strengthen our efforts to ensure stable performance in six key areas, namely, stability in employment, finance, foreign trade, foreign investment, domestic investment, and market expectations, and implement concrete measures to ensure employment for residents, basic wellbeing of the people, development of market entities, food and energy security, stable industrial and supply chains, and operation at the grassroots level. In doing so, we will continue with the complete resumption of work and production, fulfilling target output, and ensuring stable industrial and supply chains that allow the industrial economy to develop in an orderly manner. First, we will use all means to create an environment that is conducive to the resumption of work and production and the fulfillment of target output, and support economic recovery by ensuring smooth cycles of industrial and supply chains. Second, we will strengthen our areas of weakness, foster new driving forces to create high-quality supplies to lead and create new demands, and boost the high-quality development of the manufacturing industry. Third, we will ensure the implementation of policies and measures adopted consecutively to offset the pandemic's impact, precisely addressing the difficulties of micro, small and medium-sized enterprises to guarantee the stable fundamentals of economic development. Fourth, we will continue to deepen market-oriented reforms to improve the business environment, pursue high-level opening-up, lessen burdens on enterprises, and stimulate market vitality.

As for the second question, some 29 types of COVID-19 test kits produced by 25 companies have been approved to come to market. The daily production capacity is now 5 million. The Ministry of Industry and Information Technology (MIIT) is monitoring its production and supply every day. Based on current conditions, production is normal and inventory is sufficient. Thank you.

Phoenix TV:

During the pandemic, people have all stayed at home in quarantine and handled official business and classes online, which has contributed to the surge in network demand. What has the MIIT done to guarantee normal network operation under the high load? Thank you. 

Wen Ku:

Thank you for your question. For a long time, China's network infrastructure lagged far behind that of some developed countries. But during the pandemic, we've witnessed that China's network has undergone drastic changes. There are several signs. First, we have moved from the back of the pack to a leading position. By now, China has established the optical broadband network and 4G network with the largest scale in the world. Optical broadband users have accounted for more than 93% of broadband users, and the ratio of 4G users has reached 80%. Second, network use was formerly a luxury, but now it's a common commodity. As the quality and service level of telecommunication products continue to improve and charges decline, ordinary families now have access to the internet. During the pandemic, quarantine measures brought about the skyrocketing growth of network flow. The statistics showed that network flow during the pandemic increased by 50% compared with the end of last year. We did some statistical analysis in certain areas, and the growth rate in Wuhan during the same period reached 60-70%. Reports on some media outlets mentioned that some countries were not adapted to the high load and that skyrocketing household network use caused high-definition videos to degrade in quality. However, our online videos are all high-definition and can be broadcasted smoothly. I think the reporters here have experienced the quality. Yesterday, the China Academy of Information and Communications Technology released the "Suspending classes without stopping learning" network experience monitoring report. According to the report, the download speed of the national online education platform reached 97.7 Mbps, and that of the provincial platform reached 89.2 Mbps. Right now, 85% of online users have accesses to speeds of more than 100 Mbps on average. We are gradually promoting the piloting of 1,000 MB broadband, and there have been 1.61 million users. Rome was not built in one day. The information and communications industry has made long and painstaking efforts. Especially since the 18th CPC National Congress, we have accelerated our pace of catching up with advanced technology and made plans in advance, thus achieving our current accomplishments in dealing with the pandemic.

In summary, the achievement today is attributed to four aspects. First is the support of national policies. We've given full play to the guiding role of national development plans. We set goals based on policies, plans and standards, and we drove effective investment through policy guidance, creating a favorable policy environment. For example, we started the Broadband China Strategy in 2013 that for the first time listed broadband as a kind of new-era strategic public infrastructure along with traditional elements, including water, electricity and roads. Since 2015, we've increased network speed and lowered charges continuously, advanced the high-speed broadband construction represented by optical fibers and 4G, encouraged telecommunication corporations to cancel mobile phone domestic toll call roaming fees and internet usage roaming fees and lowered international toll call fees, offering cheap and effective network services for the general public.

At the same time, the 13th Five-Year Plan put forward the index of the internet availability rate. It was the first time for a national plan to utilize this as a clear index. Under this guidance, all the market entities gave full play to their roles and developed the industry rapidly. Right now, China has constructed high-quality integrated urban-rural network infrastructure, which has helped accelerate industrial development, technology innovation and service improvement. 

Secondly, we have made moderately advanced developments in network construction. Telecommunications technology follows its own law of evolution. We have experienced the changes of 2G, 3G to the present 5G, and from copper wire to optical fiber. We have also seen the development of more advanced network construction, and have established a principle of maintaining moderately advanced development in the process. Our motivation can be interpreted as: "we would rather build roads first, than vehicles first." Due to this, we shifted from copper wire to optical fiber in advance and issued national mandatory standards for the "Fiber to the Home" network. Developers of residential communities have been required to complete the construction of optical fiber connectivity. Full coverage of optical fiber-based broadband network has been realized in urban areas. The optical fiber network access ports accounted for 91%, all with access capability of 100 megabits per second and above. We have also launched a program to upgrade the speeds of both fixed and mobile networks to one gigabit per second, and published goals for the construction of cities with full optical fiber coverage and one gigabit per second access speed. Local governments were encouraged to participate proactively. Amid the epidemic, the development of the 5G network and the one gigabit per second network has enabled 5G network-based remote medical treatment and infrared temperature measurement, working online, and learning online. 

Thirdly, we have realized universal service of telecommunications, seeing the weakness of broadband network in remote areas. We have made great strides in telecommunications across the entire country. In the meantime, even though the operation of telecom industry observes market rules, remote rural areas are places where the market rules don't apply because the construction costs of telecom projects there can't be recovered as the profits are comparatively low. As of the end of 2014, a total of 50,000 administrative villages in China had no access to the broadband network, while 150,000 administrative villages had to endure network access capability of less than four megabits per second. The digital gap between urban and rural areas was obvious. Since then, we have launched six projects to pilot universal service of telecommunications. The general approach has been for the central government to channel funds, while local authorities provide coordination and support, and enterprises playing the major role of advancing development. The projects began at places where they were easier to carry out and then tapped into places with difficulties to make advancement. For example, expanding from administrative villages to human settlements with larger populations than others, and expanding from inland areas to border areas and islands. At present, 98% of administrative villages have been covered with optical fiber and 4G networks. Full coverage of 4G network has been realized across all inhabited islands and reefs in Sansha, the youngest city of our country, and 5G signals are now available at Yongxing Island and Yongshu Reef.

Fourthly, we have pushed forward with co-construction and sharing. As we encouraged telecom enterprises to compete with each other, we also pushed for China Telecom, China Mobile and China Unicom to cooperate in setting up a new company by integrating their communications towers. The result was China Tower. This move accelerated cost reduction and efficiency in the industry, and offered support for the fast and massive layout of the mobile network in the country. As of the end of 2019, the sharing rate of newly-built communications towers had increased to 80%, in comparison to 14% before the establishment of China Tower. This effectively made the competition in the industry more balanced, so now vast numbers of telecom users can fully enjoy the benefits of market competition. 

If not for the leapfrog development of network construction in recent years, people wouldn't have been able to live such rich lives during the epidemic; tens of millions of enterprises and government-affiliated institutions wouldn't have been able to handle businesses online with convenience; people wouldn't have been able to work at home via the internet without difficulty; and hundreds of millions of students wouldn't have been able to continue to attend classes online without encountering problems. 

Next, we will accelerate the construction of new infrastructure projects including the 5G network, a 1-gigabit per second optical fiber network and data centers, according to the arrangement of the central government. In particular, we will speed up the coverage of 5G in major cities and gradually extend the coverage to important counties and towns, with the aim of building an independent 5G network. Through these efforts, we will continue to improve the level of network construction in the country and provide a driving force to step up high-quality development. Thank you. 

Xi Yanchun: 

I would also like to echo Mr. Wen's words. Relying on the strong support of the highly stable 5G network, we successfully hosted press conferences in Wuhan via video links and hosted press conferences simultaneously held in Beijing and Wuhan, so we extend our gratitude to the Ministry of Industry and Information Technology. Please continue with questions. 

CNBC:

How did the new energy vehicles (NEVs) industry perform in the first quarter? And what are your expectations for the second quarter? Thank you!

Huang Libin:

Representing a significant pillar industry in China's national economy, the auto sector connects upstream and downstream industry chains and involves a wide range of sectors. The outbreak of COVID-19 has hit it severely. In the first quarter of this year, the output and sales volume stand at 3.474 million and 3.672 million, down 45.2% and 42.4% compared with a year earlier, respectively. Among them, sales of NEVs are hit heavier because the sector is still in the initial development stage. The output and sales volume of NEVs are 105,000 and 114,000, dropping 60.2% and 56.4% year-on-year respectively in the first quarter. Meanwhile, we should note that the output and sales volume dropped by 56.9% and 53.2% in March, respectively. The decline is narrowing compared with that in February, thanks to the effective pandemic prevention and control measures and the well-planned resumption of work and production.

Motivating consumer demand to spur auto sales is a fundamental policy in combating the impacts of the epidemic. In the early stage, the MIIT actively coordinated with relevant departments to develop policy proposals for stabilizing and expanding auto consumption, which were approved by the State Council executive meeting on March 31. These measures include: firstly, NEV purchase subsidy and vehicle purchase tax exemption policies will be extended for two years; secondly, the central government will replace subsidies with monetary rewards to support Beijing, Tianjin, Hebei and other key regions to phase out diesel trucks that only satisfy emission standards of China III and below; thirdly, the value-added tax on the sales of second-hand cars sold by second-hand car dealers is to be reduced to 0.5% of sales volume from May 1 this year to the end of 2023. Meanwhile, the MIIT encourages all localities to introduce measures to promote auto consumption market. Guangdong, Shandong, Jilin, Hainan, and Zhejiang provinces and Beijing, Shenzhen, Hangzhou, Ningbo, Nanchang, Guangzhou, Foshan, and other cities have officially issued specific measures. We believe more provinces and cities will follow suit. Auto output and sales volume will be restored and improved with the gradual release of consumption demand as well as the implementation of policies on expanding car spending.

In the next step, the MIIT will follow the arrangements made by the CPC Central Committee and the State Council in implementing related policies and measures and keeping a sustainable development of the automobile industry while ensuring powerful epidemic prevention and control, maintaining market order, and supporting work resumption. First, we will put into practice the requirements made at the State Council executive meeting to draft and issue specific policies and work to publicize notice and management of NEVs types and their subsidy and liquidation in coordination with the Ministry of Finance and other relevant ministries. Second, we will expedite the release of the New Energy Vehicle Industry Development Plan（2021-2035）and consolidate our efforts to achieve goals; meanwhile, we will work out a action plan on electrification of vehicles in public areas and give a boost to electrification level in buses, public sanitation patrol, post-delivery, taxies, commuting, light logistics distribution, and so on. Third, we will encourage the implementation of specific policies and measures to spur car sales in the related regions by offering electricity subsidies and convenient usage, as well as forming a complete vehicle set and expanding its application. Thank you!

National Business Daily:

We noticed that 5G has played an important role both in the epidemic prevention and control work and in the resumption of work and production. Can you explain the progress in promoting the 5G network?

Wen Ku:

Thank you for your question. We really value the development of 5G technology, and have been issuing 5G licenses since June 6, 2019. Three enterprises officially launched 5G networks on Oct. 31, 2019. Since then, 5G in China has grown rapidly. Generally speaking, although we have been impacted by the COVID-19 pandemic this year, the development of 5G has so far gone fairly smooth, and we have been making clear achievements for a while. As a matter of fact, 5G has now gradually permeated into people's everyday lives. 

First, we are "close to the network." Construction of the 5G network has been progressing rapidly. By the end of March, 198,000 5G base stations had been set-up across the country, and the number of 5G package users exceeded 50 million. We have observed from the network that currently over 20 million 5G devices have actually been connected to the 5G network. 

Second, we are "close to the products." The development of devices has entered a boom period, which is very good news for the people. By April 22, a total of 96 models of 5G cellphones have received the network permits. Compared to the number at the end of December last year, which was 39 models, this is a significant development. The price of 5G cellphones has also dropped quickly. Some 5G cellphones currently available on the market are priced at under 2,000 yuan. 5G business-use professional modules, telecommunication modules in cellphones, and modules on devices installed in industrial productions have also been introduced. They support various apps used on 5G 8K televisions, 5K industrial production lines, intelligent transportation systems and more. 

Third, we are "close to apps." Multiple applications have started to be launched. The apps installed in consumer spending areas, such as ultra high definition (UHD) videos, cloud games, AR and VR, are being implemented much more widely. 5G technologies have also been embedding deeper in key areas like car-networking, industrial internet and medical health areas on a trial basis. In particular, since the COVID-19 outbreak, the implantation of apps in 5G plus remote medical cares, intelligent medical treatment robots, sterilizing drones, online education, and home working has been accelerated. They have brought more visual 5G experiences for a vast number of customers.

At present, faced with the huge impact of the COVID-19 pandemic, 5G technologies, which have served as a key engine for the digital economy, are providing significant new infrastructures and assuring everything can be connected. They have played an important role in the aspects of stabilizing investment, stimulating consumer spending and helping in updating. Next, we will continue to speed up the construction and promotion of the 5G network, optimize the environment for innovation, and inject new energy into economic growth. We will conduct our work in the following aspects:

First, we will strengthen the basis and build a high quality network. To promote the development of the 5G network, the MIIT implemented the Notice for Accelerating 5G Network Development. According to this document, while assuring basic telecommunication enterprises market entities play their part and are secured by local governmental policies, we will push telecommunication enterprises to make use of these local policies. Many local governments have established special policies to speed up the development of 5G-related economies. We hope that enterprises will prioritize their construction in these areas with maximum support. In the meantime, these enterprises should launch the outbreak prevention and control work smoothly as a basis, and their resumption of work and production must be well conducted. During construction of the 5G network, a series of procedures will be carried out, such as designing, investigating and bidding. This requires enterprises to further optimize their working procedures, push working schedules and pool resources in order to accelerate the construction of the 5G network. We expect to accomplish this year's goals and hope that 500,000 new 5G base stations will be constructed. We also encourage both upstream and downstream businesses in the industrial chain to enhance cooperation, perfect their R&D and testing of 5G, and ensure the quality of 5G network constructions. We will also continue to perfect the equipment of independent networking modules and speed up the transition from dependent networking to independent networking.

Second, we will focus on innovation to unleash the potential of consumption. Manufacturers are encouraged to strengthen research, development and innovation, which will allow them to provide a variety of cost-effective 5G-supported smartphones to a huge number of costumers. Meanwhile, the telecommunication operators will take certain measures, such as gradually reducing internet charges and allowing purchases of handouts with credits, to boost consumption of 5G-based technologies. Additionally, we will bolster the integrated research and development of 5G modules and industrial terminals to promote the innovation and large-scale applications of ambient intelligence supported by 5G. We will stimulate the rapid growth of information consumption, seizing emerging opportunities with 5G applications such as online education, online medical care, and remote work, and enhancing the development of virtual and augmented realities plus 5G, livestreaming contests, games and entertainment, and virtual shopping. 

Third, we will address underlying problems, especially those of a general scope. 5G technologies are being applied not only to households but also to businesses and industries. For the use of 5G technologies in various industries, we will launch pilot programs to create virtual private networks through engineering-based approaches. Simultaneously, 5G network structure and its technological solutions will be made available and adaptable to the various demands of users from vertical industries, responding particularly to enterprises' concerns over localized data and independent network access control. The expansion and exploration of 5G technologies, from being applied to pure individual clients to covering both personal and corporate customers, will accelerate, and a consensus will be reached on standards, construction and business models concerning the application of 5G technologies across industries. Therefore, this development can be advanced from a nascent stage and put into real use. Thank you.

CCTV:

At the conference of the Standing Committee of the Political Bureau of the CPC Central Committee held on April 8, General Secretary Xi Jinping pointed out that we should take every possible opportunity to create conditions that support the resumption of work and production and seize every opportunity to enable smooth industrial, market, economic and social cycles. Then, what kind of work has the MIIT done to help resume the work and production of the holistic industrial chain?

Huang Libin:

General Secretary Xi Jinping has reiterated that industries should be coordinated in resuming work and production. The State Council's executive meetings on March 10 and 24 also focused on the resumption of work and production. Following the decisions and deployments made by the CPC Central Committee and the State Council, we promoted the industries' resumption of work and production under principles that included big enterprises taking a leading role in helping smaller ones, the coordination between upstream and downstream industries, and the cooperation between domestic and foreign trade firms. Our efforts can be elaborated in four aspects, as follows:

First, leadership is strengthened to cover all the horizontal and vertical industrial layouts. Led by Minister Miao Wei, a steering group consisting of 18 department directors has been established to focus on the resumption. Meanwhile, we have cooperated with 15 other ministries and commissions, including the National Development and Reform Commission, as a designated team to foster cross-departmental and cross-regional coordination. We have also sent teams to seven provinces, including Guangdong, Jiangsu, Shandong, Zhejiang, Fujian, Sichuan and Hunan to ensure that the resumption proceeds in an orderly fashion. Officials at provincial, autonomous regional and municipal levels have been sent to enterprises to help with their operation and assist employees to return to position, addressing the problems related to the labor force, logistics, funds, raw materials and parts supply.

Second, the leading enterprises take a leading role in the resumption, and the smaller ones follow suit. At the very beginning, we made a list of 51 leading conglomerates and more than 7,300 core supporting enterprises to address the blockages, difficulties and underlying problems encountered during the resumption of work and production. Local governments, departments and industrial guilds were also called on to provide targeted services. On such a basis, we then sorted out 41 other leading enterprises and 379 more core supporting partners and helped them to coordinate precisely with the resumption. The production of those enterprises has now been much restored when compared to the same period last year. The 92 leading enterprises combined have led more than 400,000 small and medium-sized companies from both upstream and downstream industries in making solid achievements during the resumption of work and production.

Third, we have made great efforts to aid, help and benefit enterprises by offering targeted services to small and medium-sized enterprises (SMEs) for their return to work and production. SMEs, with a large number of establishments covering a wide range of sectors, are an indispensable part of the manufacturing industry chain. The Ministry has given full play to the coordinating mechanism of the Leading Group Office for Promoting the Development of Small and Medium-sized Enterprises under the State Council, and has promoted the promulgation and implementation of a series of fiscal, tax and financial policies to support the production resumption of SMEs and to help them withstand difficulties. Through an online platform, online training and other ways, we have provided support for more than 200,000 SMEs and allowed them to enjoy these preferential policies. We have organized local governments to provide targeted docking services for SMEs in resuming their work and production through the opening of platforms that allow enterprises to connect supply and demand, as well as the launching of cloud services and resource matching meetings. We have also stepped up efforts to clean up the arrears that government departments and large state-owned enterprises owe to private enterprises and SMEs in order to prevent new arrears caused by the pandemic. In the first three months of this year, we have cleared up 28.8 billion yuan in arrears to private enterprises and SMEs.

Fourth, we have implemented policies and measures to help the manufacturing sector resume production, increase efficiency and achieve full capacity. In order to promote automobile consumption, an executive meeting of the State Council recently announced a two-year extension of the new energy vehicle purchase subsidy and purchase tax exemption policies, which were set to expire at the end of this year. The Ministry is working with relevant departments on detailed implementation plans. In light of the problem of poor offline sales in textiles and clothing, light industrial products, toys, furniture and other industries, we, along with several industry associations and e-commerce platforms, have held special online sales activities to promote consumption. To boost new drivers of the new economy, we have accelerated the construction of infrastructure, such as 5G networks, the Internet of Things, big data, artificial intelligence and smart cities, so as to promote the coordinated development of related industries in the upstream and downstream sectors. Thank you. 

Guangming Daily: 

Media reports say that the COVID-19 pandemic will accelerate the migration of China's manufacturing industry chain. How does the Ministry of Industry and Information Technology view this issue? A meeting of the Political Bureau of the CPC Central Committee mentioned the "six safeguards" (safeguarding jobs, livelihood, market entities, food and energy security, the stability of industrial and supply chains, and the smooth running of communities) for the first time. How do you plan to ensure the stability of industrial and supply chains? Thank you. 

Huang Libin: 

The outbreak of COVID-19, alongside the Lunar New Year holiday factor, has had serious impacts on people's lives and jobs, as well as on various sectors and industries. The manufacturing industry chain has been severely affected, the circulation of people and logistics are not smooth, and the upstream and downstream enterprises in the industrial chains are out of sync in production resumption. Apart from these prominent problems, factors such as stagnation in production of some important industrial products and obstruction of exports have also affected the international supply chain to some extent. In China, we see the continuous improvement of the pandemic prevention and control situation and the accelerated recovery of production and daily order. But the overseas pandemic situation has been accelerating and spreading. The manufacturing industries in countries and regions with serious pandemic conditions, such as the United States and European countries, have been shut down on large scales and production has been suspended, leading to serious breakups of the global supply chain. These situations force people to think about the safety of the industrial chain, and the globalization of labor division may face a new pattern adjustment.

At present, the global industrial chain layout and supply chain structure, formed as a result of the free flow of production factors in the most efficient way, in addition to the optimal allocation of resources over the decades, are rather stable and interdependent. For a long time, multinational companies have paid more attention to efficiency and costs when allocating production factors globally. Future adjustment is the choice of enterprises — not the will of the government. China is an indispensable and important pillar of the global industrial chain, and being "made in China" has its unique advantages. The super large market size is a decisive factor in ensuring the global industrial chain stays in China. The complete industrial system and well-developed infrastructure give us great confidence to further integrate into the global industrial chain. The pandemic could lead to a more diversified and resilient global industrial or supply chain, and we will retain foreign businesses in China with greater efficiency, higher-quality services and a better business environment.

China's economy is still growing on strong fundamentals and with unchanged overall competitiveness. Multinational companies still have confidence in the Chinese market, and their investment strategies remain unchanged. According to a survey released by the American Chamber of Commerce in China (AmCham) on March 25, 40% of AmCham members will maintain previously planned levels of investment, up by 17 percentage points from February. Tesla's gigafactory in Shanghai was built and started mass production in just under a year. In March, Tesla sold more than 10,000 vehicles in China, hitting a record high. An integrated global supply chain has proved to be more resilient and flexible than a fragmented one. Integration is more conducive to maintaining international security and stability, as well as ensuring and improving well-being for people around the world.

A meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee held on April 17 emphasized efforts to maintain stability and the competitiveness of China's industrial and supply chains, as well as to promote coordinated work and the resumption of production across the industrial chain. In accordance with the decisions and plans made by the CPC Central Committee and the State Council, the MIIT will focus on the following priorities to ensure stability in industrial and supply chains.

First, we will keep connected with global industrial and supply chains, and contribute to international cooperation in fighting COVID-19. We will increase the supply of active pharmaceutical ingredients, life necessities and medical equipment, and ensure the production and exportation of key products and firms with major influence in the global industrial chain in an effort to keep the global supply chain stable.

Second, we will smooth domestic industrial and supply chains to stimulate the vitality of the domestic market. We will advance Internet Plus initiatives to boost traditional consumption and vigorously support the development of new forms and models. We will accelerate the construction of new infrastructure, speeding up the commencement of key projects in the industry and communications sectors and strictly ensuring the implementation of key foreign-funded projects.

Third, we will smooth out blocks in industrial and supply chains and promote the resumption of work and production in key sectors and areas. We will strengthen coordinated efforts and improve follow-up services. We will leverage the role of leading enterprises in driving the development of businesses in the upstream and downstream of industrial and supply chains. We will help large, medium-sized and small enterprises achieve integrated development, and we will work to stabilize the fundamentals of industrial operations.

Fourth, we will enhance capacity-building for the security of industrial and supply chains. We will make efforts to establish mechanisms operating across regions, departments and sectors in the aspects of information sharing, infrastructure connection, unimpeded logistics, financial integration, people-to-people ties and coordinated administration. We will also strengthen the risk-warning management of core sectors and key regions. Thank you.

Xi Yanchun:

I noticed that some reporters didn't get a chance to raise questions. For any inquiries, please feel free to contact the information office of the MIIT. Thanks again to the speakers and everyone else. Today's press conference is hereby concluded.

Translated and edited by Zhu Bochen, Li Xiao, Zhang Rui, Guo Xiaohong, Wu Jin, Wang Yanfang, Mi Xingang, Fan Junmei, Liu Sitong, Zhou Jing, Zhang Tingting, Li Huiru, Yan Xiaoqing, Wang Zhiyong, Zhang Junmian, Zhang Liying, Wang Wei, Jay Birbeck, Laura Zheng, David Ball, Scott Rainen. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese 

Speakers:

Shen Changyu, director of the National Intellectual Property Administration

He Zhimin, vice director of the National Intellectual Property Administration

Yu Cike, director of the Copyright Administration under the Publicity Department of the CPC Central Committee

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office

Date:

April 23, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good morning. Welcome to this press conference. This week marks China's 2020 National Intellectual Property Publicity Week. Today, we are delighted to invite Mr. Shen Changyu, director of the National Intellectual Property Administration (NIPA) to brief you on the development of China's intellectual property rights (IPR) in 2019. He will also answer some of your questions.

Also present at the press conference today are Mr. He Zhimin, vice director of the NIPA, and Mr. Yu Cike, director of the Copyright Administration under the Publicity Department of the Communist Party of China (CPC) Central Committee.

Now, Mr. Shen will give us a brief introduction.

Shen Changyu:

Thank you, Ms. Xi. Friends from the media, good morning. Let me begin by thanking all of you for your concern and support of IPR-related work over the years. I would now like to brief you on China's IPR development in 2019.

IPR played a more prominent role in China's system for governance in 2019. General Secretary Xi Jinping gave a series of important new instructions on IPR-related work on several occasions, including at the 2nd Belt and Road Forum for International Cooperation and the 2nd China International Import Expo. He presided over the ninth meeting of the CPC Central Committee for deepening overall reform, which reviewed and approved "The Guideline on Strengthening Intellectual Property Rights Protection." The document was jointly issued by the General Offices of the CPC Central Committee and the State Council.

The fourth plenary session of the 19th CPC Central Committee made important new plans for appropriately strengthening the power of the CPC Central Committee in IPR protection, setting up a punitive damage compensation system for IP infringement and enhancing the protection of enterprise trade secrets. 

Premier Li Keqiang presided over a State Council executive meeting, making arrangements to improve IPR protection, promote intellectual property pledge financing and boost innovation and development of the real economy.

IPR is playing a more important role in modernizing China's system and capacity for governance. Fresh progress has been made in IPR-related work on various fronts.

First, efforts have been stepped up to transform China into a country that is strong on IPR. In accordance with the plans made by the CPC Central Committee and the State Council, we comprehensively started formulating an outline for building China into a country that is strong on IPR for the 2021 to 2035 period, and we have finished the first draft. We developed and implemented last year's plan on advancing national IPR strategy, and we acted on the plan for IPR protection and utilization in the 13th Five-year Plan Period (2016-2020). 

We continue to improve the quality and efficiency of patent and trademark examination. The period for examination of high-value patents has been reduced to 17.3 months, and the average time for trademark registration is 4.5 months. These numbers exceed the annual target set by the State Council. The cuts and exemptions in fees related to patents and trademarks amounted to 7.93 billion yuan. 

We accelerated the building of provinces, cities and enterprises that are strong on IPR. We selected another 18 demonstration cities, 88 pilot demonstration counties, 35 pilot demonstration parks and 2,239 demonstration enterprises. We have made steady progress in national copyright demonstration work and selected another two demonstration cities, eight demonstration parks (bases) and 69 demonstration work units.

Second, laws and regulations for IPR protection have been improved. An amendment to the Trademark Law was completed that increased the amount of statutory compensation for malicious infringements from less than three times the damage to less than five times. The compensation upper limit was raised from 3 million yuan to 5 million yuan. Revisions to the Law Against Unfair Competition was also completed, further strengthening the protection of trade secrets. 

Continued efforts were made to promote amendments to patent law and guidelines were provided for implementation of the Copyright Law as well as the Protection of New Varieties of Plants. The Regulation on the Management of Human Genetic Resources was also published. Multiple regulations and rules were formulated or revised regarding patent commissioning, patent agent examination, trademark application and registration and management of China offices of authentication institutions for foreign copyrights. The Guidelines on Anti-Monopoly Law Enforcement in the Field of Intellectual Property Rights was introduced, and research on the fundamental legal system for IPR protection was deepened.

Third, the protection of intellectual property rights (IPR) has been comprehensively strengthened. The General Office of the CPC Central Committee and the General Office of the State Council issued "Opinions on Strengthening the Protection of Intellectual Property Rights" and have put forth a series of notable policies and measures. The 2020-2021 Implementation Plan has been issued recently. The number of IPR protection centers and IPR rapid response centers has reached 46. We have launched targeted campaigns, such as "Iron Fist," "Sword Net," "Net Sword" and "Dragon Fly." A total of 32,000 trademark infringement cases and 7,000 cases of trademark counterfeiting were handled worth a total of 510 million yuan. 39,000 administrative cases for patent infringement disputes were handled. 10,000 cases of unfair competition were handled, with a value of 3.16 billion yuan. Public security authorities in China registered 24,000 criminal cases of IPR infringement as well as production and sale of counterfeit goods, with 16,000 cases solved and 29,000 criminal suspects arrested, involving 8.67 billion yuan. China's customs seized 51,000 batches of infringing goods. The people's courts in China registered 480,000 new IPR cases and closed 475,000 cases. The people's procuratorates in China approved the arrest of 7,430 people in 4,346 criminal cases of IPR infringement and charged 11,000 people involved in 5,433 cases. The level of social satisfaction with IPR protection in China increased to 78.98 points.

Fourth, the quality of intellectual property rights has improved steadily. There were 1.862 million invention patents from the Chinese mainland, 13.3 patents for every 10,000 people, achieving the goal set in the nation's 13th Five-Year Plan ahead of schedule. China's total number of effective registered trademarks reached 25.219 million, with every 4.9 market entities owning one registered trademark. A total of 2,385 products of geographical indication were approved, 5,324 geographical indication trademarks registered, and 8,484 enterprises with special marks of geographical indication products approved. Additionally, 8,319 layout designs of integrated circuit were registered. 2,288 new species of agricultural plants and 439 new species of forest plants were approved. Copyrights for 2.702 million pieces of works and 1.484 million pieces of computer software were registered. According to the World Intellectual Property Organization, China ranked 14th in the 2019 Global Innovation Index, moving up three spots from 2018 and ranking first among middle-income economies. In 2019, China filed 59,000 international patent applications via the Patent Cooperation Treaty (PCT), becoming the world's top patent filer. In 2019, China also filed 6,339 international trademark registration applications via the Madrid System, ranking third globally. 

Fifth, the effectiveness of IPR application has improved remarkably. A set of statistical categories for IPR (patent)-intensive industries has been released. According to the statistics, the added value of China's patent-intensive industries topped 10.7 trillion yuan in 2018, accounting for 11.6% of the country's GDP, becoming a key pillar of high-quality economic development. The added value of China's copyright industry reached 6.6 trillion yuan in 2018, accounting for 7.37% of the country's GDP. In 2019, with the implementation of the trademark and brand strategy, the shift from "Made in China" to "Brand in China" was accelerated and the application of geographical indications boosted targeted poverty alleviation and rural vitalization. The patent and trademark pledge financing reached 151.5 billion yuan, an increase of 23.8% from 2018. Copyrights worth 7.3 billion yuan were used as collaterals for financing, which helped nearly 10,000 enterprises solve financing problems. Technical contracts concerning IPR with a total value of 928.69 billion yuan were signed, up 137.7% year on year. The total trade of China's intellectual property royalties in 2019 reached $41 billion. The export volume of intellectual property royalties, in particular, stood at $6.6billion, up 18.8% year on year. 

Sixth, international cooperation on IPR protection has been strengthened. A number of IPR cooperation documents have been signed, such as the joint statement on the conclusion of the negotiations of an agreement between China and the European Union on cooperation on, and protection of, geographical indications and the agreement between China and France on cooperation on geographical indications. We have made solid progress in IPR cooperation under the Belt and Road Initiative, with eight cooperation programs yielding outstanding results. We have strengthened cooperation with the World Intellectual Property Organization and the World Trade Organization and actively participated in the global governance of IPR. We have made preparations for China's entry into the Hague Agreement Concerning the International Deposit of Industrial Designs. The Beijing Treaty on Audiovisual Performances will enter into force on April 28, 2020, as 31 eligible parties have deposited their instruments of ratification or accession. The Treaty is the first international agreement on IPR named after a Chinese city.

These are China's IPR developments in 2019. We would like to answer your questions. Thanks.

Xi Yanchun:

Thank you for Mr. Shen's introduction. Now it is time for questions. Please indicate the media organization you work for before raising a question.

CCTV:

We learned from General Secretary Xi Jinping's speech at the Belt and Road Forum for International Cooperation held last year that China would make more efforts to step up international cooperation in IP protection. What progress has the NIPA made in these aspects, especially in the Belt and Road cooperation on IP? Thank you.

Shen Changyu:

Thank you for your question. To implement the important instruction made by General Secretary Xi Jinping, the NIPA is actively advancing related work around the following aspects:

First, we are working to enhance multilateral cooperation and deepen ties with the World Intellectual Property Organization (WIPO) to take an active part in the global governance of IPR. We will steadily advance China's preparations for joining the Hague Agreement Concerning the International Deposit of Industrial Designs and work to bring into force the Beijing Treaty on Audiovisual Performances (BTAP), the first international treaty on IPR named after a Chinese city. Second, we will boost cooperation with our neighbors. We will actively participate in negotiations on the Regional Comprehensive Economic Partnership (RCEP) and the China-Japan-South Korea Free Trade Agreement, and we will promote mutual recognition and protection of geographical indication between China and Thailand. Third, we will strengthen small-scale multilateral cooperation. We will play an active role in IPR cooperation among China, the United States, Europe, Japan and South Korea, as well as among BRICS countries and among China, Mongolia and Russia. We will hold the Meeting of China-ASEAN Heads of Intellectual Property Offices. Fourth, we will enhance bilateral cooperation to complete the negotiations on the agreement of China-Europe geographical indications protection, concerning a mutual recognition and protection of 275 total products of geographical indications from each side, respectively. We will promote bilateral cooperation with the European Patent Office and the European Union Intellectual Property Office, as well as the IP authorities of Britain, France and Germany. Generally speaking, we will accelerate building a new pattern of linked and coordinated international cooperation on IPR.

In terms of international IP cooperation, the cooperation among the Belt and Road countries is a top priority. We have worked with relevant parties to map out eight practical cooperation projects covering IP protection, review services, development of foundational capabilities and the improvement of public awareness of IPR. These projects have now come through with significant achievements. The number of patent and trademark applications between the Belt and Road cooperation partners and China has maintained rapid growth. Last year, the number of patent applications from those countries increased by 9.7% in China, while that of patent applications China filed in those countries went up 8.5%. The deepening cooperation has been a forceful driver of the Belt and Road's development.

Next, the NIPA will make greater efforts to step up international cooperation on IP protection to promote common development. Thank you.

Beijing Daily: 

The BTAP is an international treaty on IP named after a Chinese city. There were reports that the treaty would take effect by April 28. Could you share with us some details about the treaty? What has the National Copyright Administration of China (NCAC) done? Thank you.

Yu Cike:

Thanks for your question. The BTAP is an international copyright treaty administered by the WIPO. It aims to protect the spiritual and economic rights to their recorded or unrecorded performances that performers enjoy.

From June 20-26, 2012, the WIPO held a diplomatic conference on the protection of audiovisual performances, which ended with them entering into the BTAP. On Jan. 28, 2020, Indonesia submitted its instrument of ratification to the WIPO, becoming the 30th key member of the treaty. According to the BTAP's operative clauses, the treaty will take effect three months after the date on which 30 eligible parties have deposited its instrument of ratification or accession. Hence, the BTAP is scheduled to take effect going forward from April 28, 2020. 

The conclusion and entry into force of the Beijing Treaty on Audiovisual Performances will comprehensively improve the level of protection offered to performers by the international community, and promote the development of the audiovisual industry. The positive effects of the Beijing Treaty are as follows: First, it will fully protect the rights of audiovisual performers, further improve their industrial status and stimulate their enthusiasm for creativity; second, it will enrich spiritual and cultural products, and promote the healthy development of the audiovisual industry; third, it is conducive to the protection of traditional culture, and folk literature and art, and will promote the development of cultural diversity.

Mr. Francis Gurry, director general of the WIPO, explained that the Beijing Treaty strengthens the rights of audiovisual performers, which can be translated into income growth, and will promote the economic sustainability of the audiovisual industry that brings pleasure to all of us.

The Beijing Treaty is the first international intellectual property treaty concluded in China and named after a Chinese city since the founding of New China. The National Copyright Administration has carried out a series of fruitful tasks in promoting the conclusion and entry into force of the Beijing Treaty.

In 2012, the National Copyright Administration and the Beijing Municipal People's Government jointly organized the "Diplomatic Conference on the Protection of Audiovisual Performances," with the approval of the CPC Central Committee. During the meeting, the Chinese government pushed for the successful conclusion of the Beijing Treaty through mediation, negotiation and coordination, which was highly appreciated by Mr. Francis Gurry. He believes that this diplomatic conference embodies the "Beijing Spirit" featuring understanding, support, inclusiveness and cooperation, which will continue to promote international intellectual property cooperation.

On April 24, 2014, the eighth meeting of the Standing Committee of the 12th National People's Congress approved the Beijing Treaty. On July 10 of the same year, Mr. Cai Fuchao, then-director of the National Copyright Administration, submitted a government statement on ratification of the Beijing Treaty to the WIPO on behalf of the Chinese government.

After the conclusion of the Beijing Treaty, the National Copyright Administration actively promoted its early entry into force. The National Copyright Administration and the WIPO have hosted multiple international copyright forums to discuss the protection of performers' rights and reach a consensus. The National Copyright Administration has also actively engaged in bilateral cooperation on copyright, and carried out exchanges into strengthening the protection of performers' rights. In addition, the National Copyright Administration, alongside WIPO officials, met with ambassadors of relevant countries in China to accelerate the process of the treaty's ratification; and worked with agencies of the Beijing municipal government to hold commemorative activities or seminars on the conclusion of the treaty and the copyright protection of audiovisual performances.

The Beijing Treaty is a milestone in China's copyright cause and a new starting point for benefitting global performers. China will continue to cooperate with the WIPO, actively promote more countries to ratify and join the Beijing Treaty, and solidly implement the protection of performers' rights. China will also take the treaty's entry into force as an opportunity to continuously improve the copyright protection system, further enhance the protection of performers, and promote the high-quality development of the copyright industry, including audiovisual performances. Thank you.

Economic Daily:

We have noticed that China recently published data on the added-value of patent-intensive industries. What are the main areas covered by these industries? As for the development of related industries, in what areas is China lagging behind developed economies such as Europe and the U.S.? Thank you.

Shen Changyu:

Thank you for your question and interest. As I just mentioned, not long ago, the National Intellectual Property Administration and the National Bureau of Statistics jointly released data on the added-value of national patent-intensive industries. The data showed that the added-value of China's patent-intensive industries was 10.7 trillion yuan in 2018, accounting for 11.6% of GDP. These industries contributed 15.7% to GDP growth, thereby bolstering high-quality economic development.

The term "patent-intensive industries" refers to a collection of sectors in which the intensity and scale of invention patents meet prescribed standards, rely a lot on intellectual property rights in market competition, and pursue innovation development. Examples include information and communications, new equipment manufacturing, new materials, medicine and medical care and environmental protection sectors, which all reflect the new progress in improving economic structure and transforming growth drivers, as well as the new outcomes in innovation-driven development.

In recent years, developed economies, such as Europe and the U.S., have also paid increasingly more attention to patent-intensive industries and have carried out regular statistical research and published the data. For example, according to the latest report released by the EU in 2019, the share of its patent-intensive industries in GDP already reached 16.1%, 4.5 percentage points higher than China's 11.6%.

However, China is expected to see its patent-intensive industries maintaining stable growth while playing a greater role in transforming the pattern of economic growth and developing the real economy in the future. Thank you.

CRI:

In recent years, reforms to streamline administration, delegate powers, improve regulation, and upgrade services continued in the field of intellectual property rights, and reforms to facilitate trademark registration also intensified, delivering continuous benefits. How effective are the trademark registration facilitation reforms in promoting innovation and entrepreneurship? What are the future steps? Thank you.

Shen Changyu:

Let's invite Mr. He to answer your question.

He Zhimin:

Thanks for your questions. In recent years, the National Intellectual Property Administration has been prioritizing the reforms to streamline administration, delegate powers, improve regulation and upgrade services, and it has also been facilitating intellectual property services. We released implementation opinions on deepening the reforms in the field of intellectual property and creating a good business environment, with 78 specific measures proposed in 14 aspects to realize more convenient applications, more efficient review, fuller use, stronger protection and better service. At present, we are actively building an intellectual property big data center and public service platform to offer multiple services at one stop. As for the reforms to facilitate trademark registration, we have done a lot for a better and quicker trademark review, and we have made great progress.

First, we shortened the average review period of trademark registration to four and a half months, a level that is close to the world's fastest under the same system. The review period of trademark change, transfer, and international registration under the Madrid System has also been reduced. The review period for dismissed cases is now reduced from 12 months to seven months, and for complex cases, it has been reduced to 10 months.

Second, we are facilitating trademark services. Applicants can handle major trademark-related business that includes registration, change, transfer and international registration under the Madrid System both online and offline. Last year, the online application rate reached 94.5%; among the 212 trademark service windows nationwide, 103 can handle trademark pledge financing. We helped companies raise about 41.1 billion yuan last year, effectively addressing their financing difficulties.

Third, we made trademark review procedures more open and transparent, published trademark review and adjudication documents, conducted review hearings orally and on circuit and disclosed information on all of the more than 40 million trademarks. We have actively accepted societal supervision while offering better services.

Fourth, we carried out vigorous actions in the Trademark Review Quality Improvement Year, and strictly combated trademark hoarding and malicious registration. From April 2019 to the end of the year, 39,000 applications for abnormal trademarks were rejected during the review stage alone.

In addition, we also improved the quality and efficiency of patent review. By the end of March this year, the average review period for invention patents had been cut to 20.5 months, and the review period for high-value patents had been reduced to 16.6 months.

This year, we will further promote reforms to facilitate trademark registration and streamline procedures by improving online trademark services. At the same time, we will further improve review and adjudication standards, continue to curb the hoarding and malicious registration of trademarks that are not for use purposes, regulate trademark agency and promote high-quality trademark review and adjudication. Thank you.

Macau Monthly:

The World Intellectual Property Organization (WIPO) held another video conference on April 20 to discuss interim policies and remedies on intellectual property rights (IPR) for the international community during the outbreak of the pandemic. As the director of China National Intellectual Property Administration (CNIPA), Mr. Shen attended and spoke at the meeting. Could you give us a brief introduction about how China plans to handle problems related to the delay and extension of application time limits for the Patent Cooperation Treaty (PCT)? Thank you.

Shen Changyu:

Thanks for this good question. As COVID-19 has spread across the world, it has brought challenges to the operation of the WIPO, intellectual property authorities across the world, and the WIPO's PCT and other global IPR service systems. On April 6 and April 20, WIPO Director General Francis Gurry called together the heads of intellectual property authorities in 16 countries and regions to discuss how to deal with the impact of the pandemic. On April 9, WIPO issued the Interpretative statement and Recommended Patent Cooperation Treaty (PCT) Practice Changes in light of the COVID-19 Pandemic. The statement wrote that "the current global pandemic should be considered to be a 'natural calamity'" and it "will treat favorably any PCT Rule 82quater request made citing COVID-19 related issues and not require evidence to be provided that the virus affected the locality in which the interested party resides."

As you just mentioned, I attended the two conferences on behalf of the CNIPA, and I expressed China's support for the WIPO to play an active coordinating role during the pandemic so as to unite intellectual property authorities in the world to fight the crisis together and effectively protect the rights and interests of all applicants and rights holders.

Next, the CNIPA will follow the WIPO's interpretative statement and recommended practice changes to properly cope with problems related to the delay and extension of application time limits of the PCT. In the meantime, we will continue to support the WIPO to play an active role by strengthening information communication with intellectual property authorities in various countries and regions so as to jointly respond to the challenges COVID-19 poses to the international IPR system. Thank you.

China Daily:

We all know that the Outline of National Intellectual Property Strategy, which was released in 2008, will expire this year. Have the major goals set for 2020 been realized as scheduled? You just mentioned that you are working hard to formulate the Outline of National Intellectual Property Strategy for 2035. Is there any progress in this work? And what are your next steps? Thank you.

Shen Changyu:

Thanks for your questions. Since the Outline of the National Intellectual Property Strategy was issued in 2008, especially after the 18th CPC National Congress, under the strong leadership of the CPC Central Committee and the State Council, China's IPR work has achieved great results. The goal of "building China into a country with a comparatively high level in terms of the creation, utilization, protection and management of IPRs by 2020," which was set out in the 2008 Outline, has been basically achieved, as is shown in the following aspects:

First, the quantity of IPR creation has increased substantially, making China a major IPR country. From 2007 to 2019, the number of valid invention patents in the Chinese mainland increased from 84,000 to 1.862 million, and the number of valid registered trademarks increased from 2.353 million to 25.219 million. The number of IPR types concerning copyrights, new plant varieties, geographical indications and layout designs of integrated circuits has also increased notably. The number of core patents, famous brands, copyrights of high-quality IP contents and fine new plant varieties has continued to increase.

Second, remarkable results have been achieved in IPR application, effectively promoting economic and social development. As I just mentioned, in 2018, the added value of the patent intensive industry in China reached 10.7 trillion yuan (US$1.51 trillion), accounting for 11.6% of the national GDP. In 2019, China's box office sales reached 64.3 billion yuan (US$9.09 billion), nearly 20 times that of 2007. The total import and export volume of IPR royalties increased nearly fivefold from US$8.5 billion in 2007 to US$41 billion in 2019.

Third, the protection of intellectual property rights (IPR) has been strengthened, and the business environment has been improved. We have established fully-fledged intellectual property laws that are consistent with international norms, and administrative and judicial protections has been improved. The overall score of social satisfaction with intellectual property protection in China reached 78.98 points.

Fourth, public awareness of intellectual property rights has been significantly improved. Public awareness of IPR strategy has seen a remarkably improved rate increase from 3.7% in 2008 to 86.3% in 2017. More and more people are getting used to innovative development, brand consumption, and paying for knowledge. Moreover, the public has realized that it is important to show respect to knowledge and innovation, practice honesty and abide by the law.

Fifth, we have expanded and deepened international cooperation on intellectual property rights, and our international influence in terms of IP protection has been improved significantly. Currently, China has been working with more than 80 countries, regions and international organizations around the globe to protect IPR. It has become an important participant in international rule-making and global governance of intellectual property rights. More and more Chinese enterprises have improved their intellectual property applications overseas. China's number of Patent Cooperation Treaty (PCT) international patent applications topped the world list last year. As I've mentioned just now, the number of applications for international trademarks via the Madrid system ranked third in the world last year.

All these achievements have laid a solid foundation for us to build China into an intellectual property rights powerhouse. To ensure the continuity of the implementation of the Outline of National Intellectual Property Strategy issued in 2008, and following the deployment of the State Council, we are working hard to formulate another outline designed to help China grow into an IP powerhouse by 2035. This is of great significance to better promote the implementation of the two-step approach adopted at the 19th National Congress of the CPC to build China into a strong and modern socialist country by the middle of the century. The National Intellectual Property Administration has been engaging in this assignment since last year. The first draft of the outline has been finished after going through a series of research, study, expert consultation and international comparison and opinions have been preliminarily solicited within a certain scope. Next, we will improve and modify the draft, which is scheduled to be submitted for further review in the second half of this year. Thank you. 

Xinhua News Agency:

The theme of this year's National IP Publicity Week is "IP and a healthy China." What measures can be adopted to build a healthy China in the area of intellectual property rights? Thank you.

Shen Changyu:

Thanks for your question, and also thanks for your attention and support for the campaign. The theme of this year's campaign is "IP and a healthy China," a theme with special significance that was decided based on the current situation of pandemic prevention and control, as well as the theme of the World IP Day 2020 — "Innovate for a Green Future." The theme also shows the important impacts that the protection of IP has on public health. Our work will be carried out in the following aspects: First, we will strengthen IP protection to boost innovative development in the medical sector, develop more new drugs and sophisticated medical devices  and improve the ability and level of treatment. In this regard, we are accelerating amendments to the patent law, and we are establishing a compensation system for the duration of drug patent protection. Second, we will better protect Traditional Chinese Medicine (TCM) to leverage its unique role in medical treatment and disease prevention and control. We have been enhancing the protection of TCM patents and also cooperating with relevant authorities to roll out regulations to protect TCM knowledge. Third, we will boost the geographical indications industry, cultivate more plant species and create more famous brands to ensure food safety. Fourth, we will step up efforts to protect trademarks, copyrights and special symbols to boost cultural and sports industries and enrich people's spiritual and cultural lives. Regarding the IP of the Beijing 2022 Winter Olympics and Paralympic Winter Games, we have achieved all-around, comprehensive protection for the relevant patents, trademarks and special symbols. Fifth, we will protect human genetic resources to build a special shield for people's health. The State Council issued a regulation last year on the management of human genetic resources that went into great detail on the protection of said resources. We will step up efforts to protect IP in terms of the above-mentioned aspects to ensure the development of a healthy China. Thank you. 

Insight China magazine, Chinaxiaokang.com:

The IP operation system is an important guarantee supporting IP utilization. What new progress was made in building China's IP operation system in 2019? The year 2020 will see the completion of the building of a moderately prosperous society in all respects. Does the NIPA have any plans for the next step? Thank you.

Shen Changyu:

Thank you for your questions. As you just said, IP operation is an important part of our IP-related work, which includes IP creation, protection, utilization, management and services. We often say that creation is the source, utilization is the goal, protection is the core, and management is the key. IP utilization mainly aims to realize the value of IP and promote innovative economic development. Statistics show that China's comprehensive IP development index continues to improve, and IP utilization has achieved remarkable progress. 

In 2019, patents were transferred, granted and pledged all over China a combined 307,000 times, up 21.3% compared with the previous year. The pledge financing of patents and trademarks amounted to 151.5 billion yuan, up 23.8% year on year. The turnover of all technology contracts involving IP reached 928.69 billion yuan, up 137.7% year on year. We also accelerated the construction of a group of projects and platforms for IP operation. By the end of 2019, a total of 26 cities had been given priority to building a service system for IP operation. The nine national-level platforms for IP operation housed 121,000 IP registrations, and the number of registered users reached 284,000. Therefore, we have achieved new progress in building the IP operation system.

Next, we will continue to focus on these major cities and promote the common development of operation platforms and pilot projects. We will improve the IP operation system, and promote the realization of the IP value so that it can better support economic and social development. Thank you.

China News Service: 

Mr. Shen mentioned several times just now that China ranked first globally for PCT international patent applications in 2019. My questions are: How will the NIPA consolidate and maintain the No.1 position in the future? And how will we strengthen IP protection overseas? Thank you.

Shen Changyu:

Thank you for your interest. Last year, China filed the highest number of PCT international patent applications, which also aroused worldwide attention. This was the first time that China ranked first. According to the WIPO's annual report released on April 7, China filed a total of 58,990 international patent applications under the PCT System in 2019, ranking top in the world. We attribute this achievement to the country's guidelines on implementing its innovation-driven development strategy and IP strategy. The whole society's innovation capacity and awareness of IP protection continue to improve, and enterprises are also attaching more importance to their IPRs overseas.

China has been a member state of the PCT since 1994, and is also a major participant in the PCT. In the future, China will continue to promote innovative development, expand its opening-up, and further implement relevant programs to improve the quality of patents. 

You also asked how we will help enterprises with IP protection overseas. To this end, we will encourage them to develop global patents portfolio, make further improvements in their PCT international patent applications in terms of both quantity and quality, and promote worldwide innovative development. In order to help enterprises safeguard their rights, we have also established the National Guidance Center for Handling Overseas Intellectual Property Disputes. The center offers guidance to Chinese enterprises on resolving overseas IP disputes. Of course, it also helps them to better understand local IP laws and regulations, and carry out relevant overseas work involving IP.

Xi Yanchun:

Today's press conference is hereby concluded. Thanks again to the speakers, and thank you all. 

Translated and edited by Liu Qiang, Zhou Jing, Duan Yaying, Li Huiru, He Shan, Huang Shan, Wang Wei, Zhang Jiaqi, Wang Qian, Yang Xi, Gong Yingchun, Lin Liyao, Zhang Junmian, Laura Zheng, David Ball, Scott Rainen. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Huang Hong, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC);

Cao Yu, vice chairman of the CBIRC;

Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC.

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office of China

Date:

April 22, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Huang Hong, vice chairman of the CBIRC, Cao Yu, vice chairman of the CBIRC and Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC. They will brief you about the operations and performance of the banking and insurance sectors in the first quarter. They will also answer your questions. 

First, I will give the floor to Mr. Huang.

Huang Hong:

Friends from the media, good morning. First, I will brief you on the prevention and control of the pandemic situation within banking and insurance institutions. As of yesterday, a total of 1,065 people in banking and insurance institutions nationwide had a confirmed COVID-19 infection, including 933 people in Hubei province, and a total of 1016 people have recovered, including 887 in Hubei. 42 people have died, including 41 in Hubei. Some family members of employees of banking and insurance institutions have died from COVID-19. We mourn the loss of them and we will work harder and provide better service to the public to commemorate their death. Currently, seven employees of the banking and insurance institutions are still being treated in the hospital and 8 people are asymptomatic cases, including six in Hubei. One of them has recovered. Up to now, except for Hubei, the resumption rate of banking and insurance institutions across the country is at about 97%, and the resumption rate of banking and insurance branches has reached 99%. More than 60% of banking and insurance institutions, and 90% of banking and insurance branches in Hubei, have resumed work. The resumption rate of banking and insurance institutions and branches in Wuhan have steadily increased, and basic financial services are guaranteed.

Currently, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the progress in prevention and control of the COVID-19 epidemic in China has been further enhanced, and economic and social operations have gradually returned to normal. The CBIRC has resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council. In accordance with the requirements of "maintaining stability in six key areas, namely with respect to employment, finance, foreign trade, foreign investment, domestic investment and expectation" and "ensuring the employment of residents, the basic livelihood of the people, the support for market entities, the security of food and energy, the stability of the supply chain and industrial chain and the operation at grassroots level," we have successively issued many policies and measures to increase financial support for pandemic prevention and control as well as economic and social development. We have been working to facilitate the resumption of work, production, business and the market. We have focused on preventing and defusing financial risks while also ensuring the stable operation of the banking and insurance sector.

First, all-out efforts have been made to provide financial services for pandemic prevention and control. By reducing the deposit reserve ratio, relending and rediscounting, banking institutions have effectively reached out to enterprises that manufacture and transport important medical supplies and daily necessities, providing preferential interest rates and special credit quotas for them. Insurance institutions have set up fast tracks for customers who have been affected by the epidemic to settle claims, appropriately expand the scope of insurance compensation liability and strive to provide insurance for all the insurable and settle the claims that should be settled.

Second, we will provide liquidity support for enterprises in a timely manner and help small and medium-sized enterprises (SMEs) surmount their difficulties. We have increased support for SMEs in terms of credit: inclusive loans for SMEs have increased by 25.93% year-on-year at the end of the first quarter; the interest rates of the inclusive loans issued by the five large banks is 4.3%, 0.3% down the level of 2019. We have also increased credit loans. In the first quarter, credit loans issued to enterprises and individual business owners increased by 2.5 trillion yuan, with the increment almost twice the level of the same period last year. We have optimized loan renewal arrangements, expanded the scale of renewal and helped ease pressure on cash flow among enterprises. In the first quarter, a total of 576.8 billion-yuan loans were renewed, of which nearly 90% went to micro, small and medium-sized enterprises and individual business owners. Business are allowed to defer principal and interest payments, and we have deferred the payments on about 880 billion yuan worth of loans. There are also flexible arrangements for paying mortgage loans and consumption loans, which effectively reduce the pressure on enterprises and residents. 

Third, we are looking to maintain the stability of industrial chains and supply chains, as well as support all links in industrial chains to help them resume work and production in a coordinated way. We are taking significant steps to develop supply chain finance, and we have taken the initiative to connect with core enterprises of the industrial chain. Financing support is also being provided for upstream and downstream enterprises of the industrial chain to ensure the smooth flow of funds by means of receivables, orders and warehouse receipt pledges. By the end of the first quarter, banks provided capital turnover to 218,000 core enterprises of the industrial chain, with a balance of 21.4 trillion yuan. Banks also provided financing support to 297,000 upstream enterprises, with a balance of 5.8 trillion yuan. And banks provided financing support to 353,000 downstream enterprises, with a balance of 9.3 trillion yuan.

Fourth, we want to increase financial support for the real economy and promote the expansion of domestic demand. In the first quarter, new yuan-denominated loans hit 7.1 trillion yuan, an increase of 1.3 trillion yuan year-on-year. The new loans were mainly invested in the manufacturing, wholesale and retail and infrastructure sectors, with increased lending in these sectors of 1.1 trillion yuan, 0.9 trillion yuan, 1.5 trillion yuan, respectively, which has effectively supported the development of high-tech manufacturing, the upgrading of traditional industries, household and public consumption and investment in infrastructure. We support direct financing, such as bonds and equity, and provide comprehensive financing services for enterprises. In the first quarter, banks and insurance institutions increased bond investment by 2 trillion yuan, of which more than 360 billion yuan was invested in corporate credit bonds. An additional 126.3 billion yuan of equity investments was invested in insurance.

Fifth, we are seeking to guarantee the functions of the insurance sector. We will actively expand the scope of claims, increase speed and improve the efficiency of claim settlement. Insurance claims in the first quarter totaled 301.9 billion yuan. We will actively deal with social risk protection needs during the pandemic and develop and promote security insurance products, such as health insurance. The health insurance business grew by 21.5% year-on-year. We gave full play to the role of credit guarantee insurance in sharing credit losses. In the first quarter, the payment of credit guarantee insurance was 16.1 billion yuan, which was up 50% year-on-year.

The outbreak of COVID-19 has had an unprecedented impact on China's economic and social development. Loan delinquencies and defaults increased, and non-performing loans increased as a result of the pandemic. The banking industry still maintains a strong ability to withstand risks, and various regulatory indicators are operating at a high level.

Next, CBIRC will earnestly implement requirements for handling trade frictions and keeping employment, the financial sector, foreign trade, foreign and domestic investments and expectations stable, as well as ensuring the employment of residents, the basic livelihood of the people, the support for market entities, the security of food and energy, the stability of the supply chain and industrial chain, and the operation at grassroots level. We will work in a coordinated manner to provide financial support for the prevention and control of the pandemic and to serve the real economy and stave off risks. We will work hard to maintain economic development and social stability, and we will provide strong financial support to win the battle against poverty and for building a moderately prosperous society in all respects. 

Thank you！

Xi Yanchun:

Thank you, Mr. Huang. Let's move on to the question and answer section. Please inform us of your news organization before asking questions.

CCTV: 

A series of financial support policies for the resumption of production have been issued by CBIRC and other related departments since the outbreak of COVID-19. However, some enterprises said they have not yet felt or seen the effects of these policies. How about the implementation of these policies? What are the concrete plans to accelerate the implementation of the policies in the near future? Thank you. 

Huang Hong:

Thank you for your questions. Since the outbreak of COVID-19, the CBIRC has earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council, and it has also made overall plans for the prevention and control of the pandemic and the financial services related to economic and social development. A series of measures to support the resumption of work and production has been issued by CBIRC or other related ministries, which can be summarized as follows: 

First, we will optimize financial services in the field of pandemic prevention and control. Financial institutions are required to actively meet reasonable financing needs of health and pandemic prevention, pharmaceutical product manufacturing and procurement, public health infrastructure construction, and scientific research. We encourage financial institutions to help enterprises overcome the impact of the pandemic by appropriately lowering loan interest rates, improving policies on loan renewal, and increasing credit loans, along with medium- and long-term loans. According to statistics from the China Banking Association, bank institutions alone have provided more than 2.5 trillion yuan in credit to help fight the pandemic.

Second, a provisional deferment policy for both principal repayment and interest payment has been implemented for micro, small and medium-sized enterprises. In accordance with market principles and law, loan principal repayments that have matured since January 25, as well as interest payments, have been deferred provisionally for virus-stricken micro, small and medium-sized enterprises, with penalty payments exempted; their loan risk classification and credit records will not be affected. As of the end of March, banking institutions had deferred principle and interest payments on nearly 880 billion yuan (US$125.7 billion) of loans to micro, small and medium-sized enterprises.

Third, all links in the industrial chains have been pushed to resume work and production in a coordinated way. Banks have been encouraged to follow up and meet upstream and downstream enterprises' needs for work and production resumption and support them to raise funds through approaches including receivables, warehouse receipts and inventory pledges. The core businesses, after getting financing, have been encouraged to promote cash transactions between upstream and downstream companies as a way to reduce capital pressure and financial costs of micro, small and medium-sized enterprises.

Fourth, we have continuously improved quality and efficiency of inclusive financial services for small and micro enterprises. In the light of the overall goal of "increasing quantity, expanding coverage, improving quality and reducing costs," we have strengthened supervision of classified assessment, and urged banking institutions to stabilize credit supply and enhance the financial support to small and micro enterprises. By the end of March, the inclusive small and minor businesses loans stood at 12.55 trillion yuan (US$1.79 trillion), with a 25.93% jump year-on-year, which is much higher than the increases for other types of loans. 

Generally speaking, these policies have been implemented quite smoothly, and produced initial effects. However, we still found some problems in the following four aspects. First, some enterprises are not eligible to apply for loans; second, some cannot enjoy the policy support due to factors such as a third party's guaranteed renewal; third, there are some firms that did not apply because they were not aware of the specifics of these policies; fourth, some banking and insurance institutions have been negligent and failed to offer desirable services — responsibility for this final factor lies squarely on our shoulder. As a result of the above-mentioned problems, some enterprises felt they didn't enjoy the policy support, as you just mentioned.

The China Banking and Insurance Regulatory Commission (CBIRC) has attached great importance to these problems and taken actions to address them. Today, let me take this opportunity to invite our media friends to help by publicizing the financial supportive policies to more enterprises. Next, we will continue efforts to implement our policies and take such measures as window guidance, policy guidance, monitoring and statistical analysis, and summary and assessment to guide banking and insurance institutions to ensure flexible and efficient use of these policies. Efforts will also be exerted to promote coordination between banks and enterprises. By so doing, we will ensure that the policies are well-implemented and highly-effective, increasing enterprises' sense of gain. Thank you.

China News Service:

We know that the governance of small- and medium-sized banks and institutions is one of the key tasks of the supervision work. So, what are the specific measures being taken for this year's supervision? For those non-compliant shareholders, how is the work clearing their equities progressing?

Huang Hong:

Thank you for your question. I'll let Mr. Cao Yu take this one.

Cao Yu:

Thank you for interest in small- and medium-sized banks. The Central Committee of the CPC and the State Council have attached great importance to the supervision of small- and medium-sized banks and institutions. At the 2017 National Financial Work Conference, General Secretary Xi Jinping explicitly stated that we must improve the governing work of financial institutions' legal persons. In November 2019, the Financial Stability and Development Committee held its 9th conference and conducted a special study on deepening the reform of small- and medium-sized banks and resolving financial risk. The committee also emphasized the practice of sound corporate governance. Accordingly, the CBIRC cooperated with relevant departments to establish specific work plans and refine the governance requirements in detail.

Our current priorities for the governance of small- and medium-sized banks and institutions are: deeply integrating the Party's leadership and the governance of these banks and institutions, developing an evaluation system for their governance, and strengthening the "three boards and one management" system of supervision and accountability. The shareholders' structure must be optimized, the qualification of shareholders must be strictly checked, and their behavior must be regulated. A series of policies and regulations has been issued by the CBIRC, such as equity management measures, corporate governance supervision and evaluation measures. These documents have been laid as the regulation foundations for carrying out relevant works.

So far, initial progress has been achieved in the governance of small- and medium-sized banks and institutions. First, we have scaled up efforts to restrict irregularities and illegal equity-related actions, and constrain non-compliant shareholders. Last year, the CBIRC launched a campaign focused on regulating non-compliant shareholders and their affiliate transactions. Over 3,000 violations were found, and punishments were meted out. Over 1,400 non-compliant shareholders acting as natural persons or legal persons were cleared out. Since 2018, we have launched special investigations into small- and medium-sized banks and institutions within rural areas. So far, we have ordered non-compliant shareholders to transfer 3.3 billion equities, and we have punished 74 institutions to the value of 51.65 million yuan. Second, we have steadily conducted governance work to remove non-compliant shareholders and transfer their equities in high risk institutions. During the process of dissolving the risks in Baoshang Bank, the CBIRC prioritized governing non-compliant shareholders' equities and launching market oriented mergers and restructures. So far, progress has been made both in tackling risks for Baoshang Bank and in its reformations and reorganization work. For other institutions which have problems and have gained the attention of society, equity restructure plans have been enacted, and non-compliant shareholders have been removed and asked to withdraw their equities.

Although we have made some progress, we still face challenging tasks in enhancing the governance of small- and medium-sized banks and institutions. Next, the CBIRC will continue to act in accordance with market- and law-oriented policies to strengthen the regulation work and step up the centralized custody of equities. We will also further strictly check the qualifications of shareholders and reinforce pass-through management. Thank you.

The New York Times:

Many commodity exporting nations are running into difficulties now with low prices for oil and other raw materials. How would you handle impaired loans by Chinese banks to developing countries? And you are already saying there are impaired loans. Thank you.

Huang Hong:

Thanks for your question. We will have Mr. Xiao Yuanqi, chief risk officer of the CBIRC, take the question.

Xiao Yuanqi:

Thanks for your question. Both in China and overseas, Chinese banks have various business dealings, including loans. Affected by the COVID-19 outbreak and other factors, the global market has seen some turbulence, including in the financial sectors and the world economy as a whole. This has inevitably had an impact on the banks' overseas loans. This is not an issue limited to Chinese banks, as foreign banks are facing it too.

On the one hand, our banks should act in line with the market principles and laws in order to continue their normal operations in other developing countries and developed countries. On the other hand, we must bolster the risk assessment. Risk management in various sectors will be improved based on customer segmentation for banks. More importantly, these banks should strictly abide by Chinese laws and regulations, as well as those laws and regulations enforced in host countries and regions. Meanwhile, Chinese banks must carry out normal commercial activities in foreign countries in strict accordance with international rules. Thanks.

CRI:

How will the pandemic affect China's property and life insurance sectors? What roles will they play in boosting economic development? Thanks.

Huang Hong:

Thanks for your questions. I will take this one. As the pandemic continues to spread across the world, the global economy is facing mounting downward pressure. In China, the outbreak has posed new challenges and difficulties to the resumption of work and production , as well as domestic economic and social development. Economic fallout from COVID-19 has also weighed heavily on China's insurance industry with increasing uncertainties and instabilities. The impacts can be summarized as follows:

First, the growth of the insurance industry was under pressure. The epidemic caused a negative impact on production and people's life, as well as mounting downward pressure on the economy. As a result, the operation of insurance services was restrained and the growth of the industry faced great pressure. In the first quarter of 2020, the original insurance premium income grew just 2.3% year on year to 1.67 trillion yuan. Growth in original premium income plunged 13.6 percentage points in the quarter. The growth of property and life insurances decreased by 7.7 and 15.22 percentage points, respectively, from the same period last year.

Second, the income of some companies and individuals was hampered by increased volatility in business operations, causing them to have a hard time repaying funds and leading to a higher default rate. As mentioned above, credit guarantee insurance compensation expenses jumped about 50% — a significant rise in the first quarter. Other types of insurances, such as accident, health, agriculture and business interruption insurances, as well as insurances protecting people from contract delay or cancellation, have also seen their compensation expenses go up significantly. Additionally, there are increasing instabilities in the investment returns of insurance companies, as their business was hampered by the turbulence in global capital markets.

Third, expenditures of insurance companies have also gone up amid the outbreak, further increasing amortized costs.

Despite being challenged by the pandemic, the insurance industry can also benefit from a number of upsides that have resulted from it. Looking at the environment from a macro-economic perspective, the pandemic's downsides to economic and social development will be gradually lessened with the implementation of policies and measures adopted to prop up the resumption of work and production, increases in domestic demand and consumption, accelerated poverty alleviation work and sustained financial stability. Stable and long-term positive economic performance trends have not changed. At the same time, demand for insurance guarantees will ride the tide to secure consecutive growth when social risk awareness and individual insurance awareness become notably increased by a deepened understanding of the industry. Considering business cycles, as of mid-April, 99% of enterprises across the country that are above a designated size have resumed work, major nation-level projects and infrastructure constructions have made stable progress, public hygiene and suppliers of emergency products have received increasing investments and new-tech infrastructures, such as 5G and data centers that have been constructed in an expedited fashion. The insurance industry has received greater space for development as a result of the demand derived from new consumption models. The insurance industry has guaranteed sufficient reserves for reimbursements and ensured stable fluidities. Here, I would like to stress, in particular, that despite the recent, narrowing year-on-year growth rates, our business restructuring has made great headway in increasing the net cash flow at a substantial rate, which proves my mentioning that the fluidities are stable enough to cope with the brunt of adversities. The industry has reformed its management styles, reinforced scientific and technological innovation, transformed business models, improved management efficiencies, ensured scientific, technological and digitalized advancements and strengthened competitiveness to better meet the personal and social demands for insurance coverage.

In the next phase, the CBIRC will direct and boost the insurance industry's role in helping fulfill the "six guarantees" that can be fleshed out as follows. First, the industry is supposed to increase its supply to prepare for the resumption of work and production. In its active response to the growing demand for social insurance, the industry will increase the supply of healthcare insurances, especially medical insurance. The innovative products, exemplified by the "Hainan Comprehensive Insurance on Resumption of Work and Production in Line with Epidemic Prevention and Control Efforts," are supposed to coordinate efforts among industrial chains involved in work resumption. Second, guarantee insurance should play its role in ensuring financing and credit enhancement in a bid to bolster micro- and small-sized businesses, emancipating them from financial stresses and reducing their fundraising costs by offering more credit loans. Third, support to agriculture production should be guaranteed. Agricultural insurance should be given a boost, standards should be improved, spectrums expanded and services enhanced. Insurance mechanism devised to insure the three major staple foods during disasters and policy-led insurance regulations for hog supplies should be improved. In addition, the industry will also support agricultural production and work to avoid big price fluctuations on non-staple foods. Fourth, investments and exports should be buttressed to proactively guarantee a stable economic performance. The industry should enhance its risk-control capability to guarantee the smooth operations of the country's major projects, supporting traditional and modern infrastructural constructions. It should also develop export credit insurance to safeguard export enterprises and promote provisions for products to countries and overseas subsidiaries of Chinese companies that are involved in the Belt and Road Initiative. Fifth, the insurance funds, because of its diverse utilities, should be given full play to invest more in the country's key industries and core areas, allowing them to financially support domestic economic development. Sixth, insurance agent team should be expanded and more jobs should be added.

China National Radio (CNR):

Faced with the impact of the COVID-19 pandemic, will the banks' non-performing loan ratio continue to rise, or even rise sharply, in the second quarter and bring great risks? And how will the regulatory authorities respond to this? Thank you.

Huang Hong:

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

Xiao Yuanqi:

Thanks for your question. We are all concerned about the non-performing loan ratio. The data shows that the non-performing loan ratio rose in the first quarter, and the current ratio is 2.04%, 0.06 percentage points up from the beginning of this year. The ratio concerning small and micro enterprises and industries like catering and hospitality that have been severely affected by the pandemic has increased relatively fast, which is within our estimation range. We have paid close attention and conducted an analysis of the non-performing loan ratio in the second quarter, and we will continue to do so for some time to come. We think that the ratio will further increase in the near future but won't climb high. We are resuming work and production in an orderly manner, and we have implemented a series of hedge policies to mitigate risks. The policies and measures have begun to show their effectiveness.

In terms of supervision, we have recently been conducting analysis and close monitoring. First, we have conducted stress tests, including differentiated tests set by different steps and circumstances, as well as comprehensive tests. Second, we have intensified efforts to dispose of non-performing loans. In the first quarter, we disposed of non-performing loans worth more than 450 billion yuan ($63.53 billion), increasing by 81 billion yuan ($11.43 billion) over the same period of last year. Additionally, we have expanded our channels and methods of disposal, which not only reduced the non-performing loans of the banks but also provided them with conditions to create more new loans to support enterprises. Third, we have asked all banks to make more efforts to support enterprises, especially medium, small and micro enterprises, in their resumption of work and production. The support given to the enterprises is a measure of the banks to prevent risks because as long as the enterprises can develop well, the non-performing loans of the banks will decrease. The difficulties encountered by the enterprises are temporary, and they are caused by external factors. Before the COVID-19 outbreak, the fundamentals of most enterprises were good. However, since the pandemic, lots of enterprises have had to face temporary difficulties in operation and cash flow, which have made them fail to repay their loans on time. In addition to hedge measures, the banks should also strengthen their capabilities in risk management and segmentation of customers to separate enterprises affected by the pandemic from those that previously had operating problems. Most of the enterprises in difficulty belong to the former group.

We have sufficient provisions and capital to fend off risks. At present, we have provisions worth more than 6 trillion yuan ($840 billion), which give us strength in facing the challenge. In short, there will be a small increase in the non-performing loans of the banks. However, thanks to all these measures, we believe that risks can be controlled completely, and our ability to fend off risks is sufficient. Thank you.

China Review News:

The Luckin Coffee fraud has garnered a great deal of attention recently. What is the supervision department's take from this? How many loans has Luckin taken from the banks? What are the risks? Will the directors liability insurance cover this? Thank you.

Huang Hong:

I'd like to invite Mr. Cao Yu to answer this question.

Cao Yu:

Thanks for the question. Many people here are consumers. A market economy is governed by law. Observing disciplines, obeying laws and being honest is a basic requirement of Chinese law for the main body of a market economy. It is the legal obligation of all enterprises to truly, comprehensively and truthfully reflect the financial and accounting situation of enterprises.

The Luckin fraud is a flagrant offense, and it will offer profound lessons. The CBIRC will firmly support and actively cooperate with the department in charge to impose severe punishment according to law. A zero-tolerance attitude will be taken toward financial fraud to maintain a sound market environment. 

As far as we are concerned, Luckin Coffee has a small loan standing with the banks and an even smaller loan balance. We have already urged relevant banks to enhance capital risk monitoring and post-loan management. Regarding the directors liability insurance, Luckin Coffee bought the directors liability insurance before listing. There are four levels of insurance policy with a total limit of $25 million, and a dozen insurance companies from home and abroad have been involved. Some of them issued reinsurance to this business. We understand that the insurance companies have received Luckin's claims. Considering that the case is complicated, the investigation is still ongoing and uncertainty exists. We will urge relevant insurance companies to properly handle it according to laws and regulations and in accordance with the contract provisions of insurance policy. Thank you.

Phoenix TV:

We have seen major fluctuations in Shenzhen's real estate industry. Many analysts have attributed this to subsidized loans that have flowed into the real estate market. What is the opinion of the CBIRC on this matter?

Huang Hong:

Thanks for your question. Mr. Xiao Yuanqi, the chief risk officer, will answer it. 

Xiao Yuanqi:

Thank you. This has been a matter of concern recently. Our Shenzhen Office and the Shenzhen Central Sub-branch of the People's Bank of China have taken appropriate supervision measures. We hold that loans should be used in strict accordance with the application, and no diversions should be allowed. For mortgage lending businesses, both operation and mortgage loan usage should correspond with the intended use of the funds as written on the applications. We require the banks to monitor the money flow and make sure that funds are used for the right purposes; as for loans that have been illegally moved into the real estate industry, we have asked them to diligently make corrections. Thanks.

Financial Times:

How does the pandemic impact the solvency of small and medium-sized commercial banks? Do you anticipate more monitoring and reform measures to emerge this year?

Huang Hong:

Thanks for your question. Mr. Cao Yu, vice chairman of the CBIRC, will answer it. 

Cao Yu:

Thanks for your question. In China, there are more than 4,000 legal entities that are small and medium-sized banks, with total assets of around 77 trillion yuan. Small and medium-sized banks are the main force to provide financing services for the agriculture sector and small and medium-sized enterprises. Since the management ability and business capacity of these banks is limited, and especially since their customers are special to some extent, the impact of the pandemic on these banks is quite noticeable. 

To this end, according to the requirements of the Financial Stability and Development Committee under the State Council, the CBIRC has gone all out to deepen the reform of small and medium-sized banks and dissolve risks. Several departments in our sector have produced relevant work programs, which have thus far gone smoothly. This year, a string of great and significant reforms to small and medium-sized banks will occur, particularly in regard to market restructuring. Here, I would like to inform you that relevant sectors have provided favorable conditions for small and medium-sized banks, particularly with respect to the policies regarding renewal loans and targeted cuts to required reserve ratios. The CBIRC will also implement differential policies for the banks. All of these will create favorable conditions for their reform.

We believe that with our joint efforts the small and medium-sized banks will get onto a path that allows for sound development. In particular, they will provide more financing services for the agriculture sector and small and medium-sized enterprises, and fully realize their roles. We would like to call on every aspect of society to pay attention to the development of small and medium-sized banks and provide an excellent internal and external environment to allow for their sound development. Thank you. 

Hong Kong Economic Herald:

What measures will be taken to deal with small and micro businesses that lack credit records but want to get a loan for the first time?

Huang Hong:

Thank you. Mr. Xiao will answer your question.

Xiao Yuanqi: 

We attach great importance to this matter. The China Banking and Insurance Regulatory Commission (CBIRC) has done a great deal to provide inclusive financial support to small and micro-enterprises. Currently, there are indeed still some small and micro businesses, especially micro-enterprises and individually-owned businesses, who have not obtained credit support or bank loans. The reasons for this are multifaceted. Some enterprises don't meet the loan requirements and some don't have access to the service. We have been stepping up measures to ensure that small and micro enterprises get loans. In particular, we will strengthen services for small and micro enterprises that haven't obtained their first loans yet to fulfill loan demand and raise the first loan ratio.

China Daily:

It has been reported that some banks and insurance institutions sold millions of pieces of their client's information. Is this true? What will the China Banking and Insurance Regulatory Commission (CBIRC) do to ensure the information security of clients? Thank you.

Huang Hong:

Thank you. I will take your question. The CBIRC has adopted a zero-tolerance attitude towards acts that infringe on the rights and interests of financial consumers and damage the information security of clients. Once discovered, such acts will be investigated in accordance with the law and punished severely. We have taken note of the media reports. In fact, we had already begun monitoring the illegal sale information outside of China two days before the reports came out, and we immediately asked relevant institutions to carry out a sweeping investigation. The institutions have subsequently released responses. Most of the information was fabricated and patched up by hackers.

The CBIRC attaches great attention to the cybersecurity of banks and insurance institutions, and the protection of client information, in particular, is a top priority. Over the years, we have issued a lot of regulatory policies requiring banks and insurance institutions to implement individual information protection laws and regulations, enhance the protection of clients' private information and strictly carry out institutionalized management of client information from collection, to storage to destruction.

The CBIRC established long-term working mechanisms that involve cybersecurity risk monitoring, risk warning, off-site supervision, on-site inspection and supervision rating, and incorporated the protection of client information in the banking and insurance sector into daily information technology risk monitoring. The CBIRC has also held special campaigns for client information protection and cybersecurity of the banking and insurance sectors at irregular intervals, thereby guiding and supervising banks and insurance institutions to strengthen the investigation and rectification of cybersecurity risks.

Next, the CBIRC will uphold the principle of "supervision for the people," further enhancing the cybersecurity supervision of the banking and insurance sectors and urging banks and insurance institutions to keep intensifying relevant work. We will further create a safe and reliable internet financial environment and protect the rights and interests of financial customers.

Xi Yanchun:

Thanks again to the speakers and everyone else. Today's press conference is hereby concluded.

.

Read in Chinese

Speaker:

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

Xia Qingfeng, head of the SASAC Department of Publicity and spokesperson of SASAC 

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office

Date:

April 20, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good morning. Welcome to this press conference. Today, I am delighted to welcome Mr. Peng Huagang, member of the CPC Committee of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, secretary general and spokesperson of SASAC; and Mr. Xia Qingfeng, head of the SASAC Department of Publicity and spokesperson of SASAC. They will introduce the performance of state-owned enterprises managed by the central government (centrally administered SOEs) in the first quarter of this year. They will also answer some of your questions.

First, I'll give the floor to Mr. Peng.

Peng Huagang:

Friends from the media, good morning. First, please allow me to extend my appreciation to you for your long-term attention and support for SASAC and centrally administered SOEs. Before answering your questions, I'd like to make a brief introduction to the performance of centrally administered SOEs in the first quarter of this year.

The first quarter of this year was extremely unusual, as the sudden COVID-19 outbreak caused an unprecedented impact on China's economic and social development. The SASAC and centrally administered SOEs firmly acted on the guiding principles embodied in General Secretary Xi Jinping's important speeches as well as policies and plans made by the CPC Central Committee and the State Council. We went all out to fight against the pandemic, establishing strong leadership and an efficient working mechanism. We mobilized all staff members and developed comprehensive plans to improve our work in all aspects. In this way, we've made a positive contribution to coordinating epidemic prevention and control with economic and social development.

In the first quarter, the outbreak visibly increased instability and uncertainty on China's economic development and blocked the economic cycle, thus creating downward pressure far greater than expected. Centrally administered SOEs faced multiple challenges in their production and business operations, leading to a decline in major indicators.

Peng Huagang:

Compared with the first quarter of last year, the total operating revenue of centrally administered SOEs fell by 11.8% to 6 trillion yuan this time round, and more than 80% of those enterprises saw their revenues decline. The total net profit reached 130.4 billion yuan, down 58.8% year-on-year. 57 centrally administered SOEs saw a decrease in their net profits, and 26 made losses. In terms of monthly data, although the total net profit in March showed a sharp recovery from that in February, they were much lower compared with the same period last year. 

As the virus is raging across the world, the domestic and global demand for commodities, such as crude oil, has shrunk, forcing sharp falls in oil prices. Some centrally administered SOEs in the energy industry implemented national policies by lowering prices to benefit customers. Under the combined influence of market developments and relevant policies, centrally administered SOEs in petroleum and petrochemicals, aviation, automobile, and electrical grid sectors saw a massive drop in both revenues and profits.

On the whole, most centrally administered SOEs have encountered unprecedented difficulties in their production and business operations and come under intense pressure to increase profits. However, all enterprises are taking various measures to overcome difficulties and recoup their losses, thus maintaining a stable overall performance.

First, centrally administered SOEs are accelerating the resumption of work and production, with business operations back on track. Enterprises in petroleum and petrochemicals, power and grid, steel, machinery manufacturing, and air transportation sectors didn't suspend production during the Spring Festival and the outbreak. Instead, they made an all-out effort to stabilize operation. By the end of February, more than 90% of centrally administered SOEs had resumed production, and now the figure has reached 99.4%. Despite difficulties, centrally administered SOEs in construction, automobile, tourism, and other sectors hit hard by the outbreak returned to work earlier than other enterprises in the same sector. Centrally administered SOEs responsible for crucial projects did their utmost to ensure the progress of key projects.

Second, most centrally administered SOEs reported better profitability. With the work of COVID-19 prevention and control being conducted steadily and positively across China, the operating revenues of centrally administered SOEs reached 2.2 trillion yuan, returning to the same level as January. A total of 11 central SOEs saw year-on-year growth in the first quarter. In March, the profitability of 43 central SOEs returned to the average growth level in 2019, while 37 central SOEs saw the rate of profit decline by more than 10 percentage points from the first two months of 2020.

Peng Huagang:

Third, investment in key industries grew steadily. As a result of work suspension amid outbreak, the fixed asset investment of centrally administered SOEs in the first quarter amounted to 364.76 billion yuan, falling 4.5% year-on-year. However, such investment grew 4.1% on a yearly basis in March, and the monthly investment had returned to a normal level. 

In terms of key industries, the fixed-asset investment of central SOEs in petroleum and petrochemical, power, and telecommunications sectors surged 12.4%, 2%, and 12.3% on a yearly basis respectively in the first quarter of this year.

Fourth, the financial structure of centrally administered SOEs remained stable. By the end of March, the average asset-liability ratio of centrally administered SOEs stood at 65.6%, down 0.1 percentage points from the same period last year. The asset-liability ratio of 56 centrally administered SOEs declined yearly, and 37 companies saw a fall by at least 1 percentage point. The average ratio of interest-bearing liability was 40.3%, flat with the same period last year. The current ratio and quick ratio increased slightly year-on-year. The overall solvency of centrally administered SOEs remained stable in the first three months.

Due to the impacts of COVID-19 outbreak, slumping oil prices and interest concession policies, China's central SOEs have seen a major decline in their profits for the first quarter. But despite this, it was still not easy for central SOEs to deliver such economic performance, as they have made far more efforts than usual to fight the epidemic while resuming production and promoting development.

This year will witness the last step of China's efforts to build a moderately prosperous society in all respects and win victory over the battle against poverty. As we were hit by the spread of the pandemic, our tasks will be much more challenging and we still have a long way to go before achieving our social-economic development goals. The State-owned Assets Supervision and Administration Commission (SASAC) of the State Council will join hands with central SOEs to comprehensively analyze the impacts of the epidemic, withstand the pressures and further focus on our objectives and tasks. We will also implement precise policies to overcome the adverse effects of the epidemic. On the basis of implementing regular epidemic prevention and control measures, priority will be given to "three stabilities,""four guarantees" and "one strengthening."

"Three stabilities" means that we will firstly stabilize the smooth operation of central SOEs, coordinate domestic and international markets, and ensure well-organized production, transportation, sales and storage. Secondly, we will stabilize the industrial chain and give full play to the leading role of central SOEs to maintain the stability and competitiveness of China's industrial chain and supply chain through coordinating their upstream and downstream companies. Thirdly, we must stabilize enterprises. We need to guard against any risks to ensure that the state-invested enterprises, except those "zombie enterprises", do not go bankrupt, significantly cut pay or lay off employees, and do not add destabilizing factors to our society.

Peng Huagang:

"Four guarantees" refers to work in the following four respects: First, we must guarantee the country's economy and people's livelihood. Efforts will be made to fully ensure supplies of primary products and services, including coal, electricity, petroleum, gas, communications, and grain, so as to provide powerful support for maintaining normal economic and social order. Second, we are guaranteeing the implementation of major projects. We will make all-out efforts to ensure that major science and technology programs, major projects set out in the 13th Five-Year Plan, and major projects under the Belt and Road Initiative (BRI) can be steadily advanced and implemented as scheduled. Third, we will guarantee workplace safety. We will require enterprises to strictly assume primary responsibility for safety, and launch a three-year full-scale special campaign to ensure workplace safety as the epidemic prevention and control will probably become a long-term new normal. Fourth, we will guarantee high-quality development. We will follow the new development philosophy, put quality first and give priority to performance. We will work hard for better quality, higher efficiency, and more robust drivers of economic growth through reforms. We will strive to achieve economic growth with quality and efficiency to better serve the work of the Party and the country. 

"One strengthening" means that we will uphold the leadership of the Communist Party of China (CPC) and strengthen Party building. In this respect, we will bring into full play the leadership role of the Party committees or leading Party members' groups at central SOEs, the pivotal role of the Party organizations at all levels, and the vanguard and exemplary role of the Party members and officials. By so doing, we will be able to provide a strong guarantee for coordinating the epidemic prevention and control work with the reform and development of our enterprises. 

Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the SASAC and central SOEs will strengthen consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. They must also increase confidence in the path, theory, system, and culture of socialism with Chinese characteristics; and resolutely uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee's authority and its centralized, unified leadership. We will conscientiously implement the policy decisions and plans of the CPC Central Committee and the State Council, face up to difficulties, and work hard to regain the lost time caused by the outbreak and reduce economic losses. We will ramp up efforts to secure our annual growth targets, and make more contributions to achieving the goal of securing a decisive victory in building a moderately prosperous society in all respects and winning victory over the battle against poverty.

Next, Mr. Xia Qingfeng and I will take your questions. 

Xi Yanchun: 

Thanks to Mr. Peng Huagang for his introduction. Now, the floor is open to questions. Please identify your media organization before asking questions.

CCTV:

Mr. Peng, you just mentioned that China's centrally administered state-owned enterprises (SOEs) saw profits and revenues dive during the first quarter. Would you like to explain the reasons for us? Thanks.

Peng Huagang:

Thanks for your question. I just mentioned that the production and operation of centrally administered SOEs have been hit hard by the outbreak and slumping oil prices. In the meantime, centrally administered SOEs have taken measures in response to the outbreak, and this has led to the plunge in revenues. The major reasons are as follows:

First, direct-to-consumer industries like the aviation, automobile and tourism industries have been hit hard by the pandemic. In the first quarter, there was a plunge in air traffic passenger demand, with decreasing passenger trips and seat occupancy rates. Some companies have incurred losses, and the aviation industry has generally operated at a loss. As vendors and suppliers are unable to resume production and operation in time, the sales of automobiles have decreased by 30% from the previous year, shaving revenues by 10 billion yuan in the first quarter compared to the same period last year. Dongfeng Motor, which is located in the former epicenter of the outbreak, has faced more serious repercussions. As almost all travels and business trips were postponed due to the outbreak, numbers of visiting tourists and hotel occupancy rates fell greatly, resulting in huge losses in revenues.

Second, the plunge in international crude oil prices has led to a significant reduction in profits by centrally administered oil and petrochemical enterprises. The price of Brent crude oil fell from $68 per barrel in early January to $23 per barrel at the end of March, which showed a drop of more than $40. Though the plunge in oil prices lowered the costs of overall national economic operation, it also had impacts on the operation and production of the centrally administered oil and petrochemical enterprises. As the market demand decreased in the first quarter, the sales of refined oil fell by more than 20%. Companies in petroleum exploration and refining industries reported that their revenues cannot cover costs. Oil and petrochemical enterprises are losing money. All of these factors led to a 30-point reduction in the growth of profits for the centrally administered SOEs.

Third, centrally administered SOEs implemented policies to give up profits amid the outbreak. SOEs firmly carried out policies to ease consumers' costs by 45 billion yuan, including reducing the price of electricity, gas and rent, and they also waived road and expressway toll fees. For example, the grid companies have taken measures to reduce the price of power used in large industries and common commerce by subtracting 3.3 cents per kilowatt-hour from the price of electricity, reducing the operational costs of more than 50 million companies by 20 billion yuan. The price of gas for non-residential use has been cut by 0.3 yuan per cubic meter, saving all non-residential natural gas users 7.5 billion yuan. And telecommunication companies have postponed the suspension of mobile services for 1.6 billion users and canceled the suspension of mobile services for 2.9 million medical health workers, as well as others working on the frontline of the fight against the pandemic. They also reduced charges of broadband services for micro, small and medium companies, saving those users 15 billion yuan.

Fourth, the costs of pandemic prevention and control efforts have an impact on revenue growth. Centrally administered SOEs in sectors that include coal, power, oil, transportation, grain and telecommunications have spared no effort to guarantee the supply of basic products and services and to expand and switch production to medical supplies. Airline and logistics companies work to guarantee transportation regardless of the costs. Companies in building sectors have taken on the mission of building specialized and makeshift hospitals. Many centrally administered SOEs have also sent out medical teams to Hubei. Since the outbreak, costs of labor, materials and logistics have increased greatly. In the first quarter, for every 100 yuan of business income, the cost that centrally administered SOEs had to pay increased by 2.4 yuan over the previous year.

The operation of centrally administered SOEs during the first quarter was influenced by multiple factors. The plunge in revenues is the price we have to pay for the COVID-19 prevention and control work. Compared to people's lives and health, it is worth paying the price. And the loss is temporary, and it can be mitigated through effective measures.

I need to point out that economic development is coming back to the track of sound development, and centrally administered SOEs have fared better as they are revving up work resumption. For example, during the first quarter, the output of crude oil and coal in centrally administered SOEs maintained positive growth. The value of newly signed contracts by construction enterprises increased by 3.7% over the previous year, with the value of contracts signed overseas growing by 18%. In March, the total power output of thermal power plants and the volume of goods transported by water transportation companies have recovered to the level seen in the same period of last year. Since April, in particular, the average daily sales of crude oil and steel are basically at last year's levels. And electricity consumption is above the level seen in the same period of last year. SASAC and centrally administered SOEs will work together and take effective measures to overcome difficulties, and they will make a big push to recover losses.

CRI:

We have learned that central enterprises have made notable progress with respect to adopting scientific and technological approaches that help in the fight against the virus. Would you please elaborate on how that happens and what achievements have been made? Thank you.

Peng Huagang:

Thank you for your question. We will give the floor to Mr. Xia Qingfeng to answer your question.

Xia Qingfeng:

Notable progress has been made by central enterprises to help with anti-virus efforts. These enterprises have used scientific and technological advantages, such as big data, artificial intelligence, cloud computing and 5G, for anti-virus efforts since the outbreak of the pandemic.

First and foremost, big data has been adopted to bolster joint epidemic control and prevention efforts. Giving full play to big data, characterized by multiple sources, substantial resources and great inclusiveness, the central enterprises have rolled out a multitude of services that buttress decisions made directly in line with epidemic control and prevention efforts as well as on resumption of work and production efforts. For instance, "Smooth Mobility Online", a big data service developed by China Electronics Technology Group Corporation (CETC), has been working on prevention and resumption. As of April 17, the service for this program that detects when people make close contact with confirmed cases had been used over 446 million times. More than 160,000 people were detected as close contacts after consulting the program. In addition, China Unicom has also launched several big data products, such as a forecast of potential risks among communities and a health U code that provides free access to the entire society for making inquiries about epidemic prevention, risk warning, outdoor safety and resumption of work.

Second, major breakthroughs have been made since we increased our efforts to beef up the development of medical sciences. The central medical and pharmaceutical enterprises have made numerous breakthroughs, regarding nucleic acid tests, vaccine development, research and production of medical equipment. These breakthroughs, which from the start have responded to pressing situations, occurred over a short period. For example, the inactivated vaccine developed by the China National Biotech Group Co Ltd (CNBG), which is affiliated with China National Pharmaceutical Group Co Ltd (SINOPHARM), has already entered the clinical experiment phase. In addition, some enterprises have expedited research and production of medical equipment. Take China Aerospace Science and Industry Corporation (CASIC) for example, besides developing high-performance ventilators for severe cases that are used in Intensive Care Units, it has also worked on negative pressure modules that are applied in shelter hospitals. 

Third, the development of new industries should accelerate with digital support. The central enterprises have made full use of internet connections around-the-clock to assist remote education, home-based work and business performances. The telecommunication enterprises have, therefore, enabled online education to reach over 100 million users. They also provide office services, such as video conferences and wireless communication, to more than 7.7 million administrative bodies and market entities. These services can be used free of charge for more than 4,000 minutes. The virtual platform established at China Petrochemical Corporation (Sinopec) has ensured smooth operation and production during the epidemic by providing expert support, online management and dynamic monitoring for fieldwork, which includes petroleum exploration, refining and transporting.

Xia Qingfeng:

Fourth, advanced technology products have been adopted to support anti-epidemic efforts. Sterilization with radiation exposure provided by China National Nuclear Corporation and China General Nuclear Power Group has substantially prolonged effective periods of sterilizers. The chip developed by China Electronics Corporation has enabled the full production of body temperature test kits. The highly-efficient glass fiber filter paper produced by China National Building Material Company Ltd has been involved in the construction of Huoshenshan and Leishenshan Hospitals in Wuhan, which is the capital of Hubei province; this paper, which is able to filter out 99.97% of the granules estimated a t 0.3 micrometers, can help ward off airborne coronavirus aerosol particles.

Fifth, production with artificial intelligence should be applied to support automatic manufacturing and remote medical treatments. Central enterprises, which have made full use of 5G, the Internet of Things, the Industrial Internet and artificial intelligence technologies, have undertaken the construction of automatic workshops and smart factories to upgrade intelligent production and reduce the size of the on-site labor force. The 5G-based intelligent equipment, including robots for medical services, emergency ambulances, driverless cargo vans and epidemic control vehicles, developed by China Mobile have reached 3,900 medical institutes and supported more than 30,000 remote group diagnoses.

As we always say, opportunities often arise amid challenges. Therefore, the State-owned Assets Supervision and Administration Commission of the State Council will direct central enterprises to effectively make use of experiences, research and development progress and industrial advancements that arose during this epidemic. We will step up our efforts to work on a well-designed layout of emerging industries that includes the Internet of Things, the Industrial Internet, cloud computing, big data and artificial intelligence. Our involvement in life sciences, remote medical treatments, medicines and healthcare services should be much expanded. The integration of modern information technologies, including the internet and big data, into traditional manufacturing industries should be enhanced in an effort to help manufacturers transform and upgrade. Thank you.

Xinhua Daily:

What measures will the SASAC and enterprises directly under the central government take to cope with the impact of the COVID-19 pandemic? Also, for Mr. Peng, how do you think enterprises directly under the central government will perform in 2020? Will these annual indicators be adjusted? Thank you.

Peng Huagang:

Thank you for your question. Regarding the difficulties and challenges brought about by the COVID-19 pandemic, both the SASAC and enterprises directly under the central government are actively conducting relevant research in order to mitigate the loss accordingly. The CPC Central Committee has made some important deployments in this regard. Earlier on April 16, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation and make arrangements for economic works. In order to implement the decisions and requirements being made by the CPC Central Committee, the SASAC held a video conference on April 17 based on our existing investigation, which systematically made arrangements for our work in the next step. In general, we have put forward three major requirements: First, we need to face the challenges and mitigate the losses brought about by the COVID-19 pandemic to the greatest extent possible. Second, we need to proceed with confidence and work diligently. Third, we need to shoulder our responsibilities and work to bring about the continuous and healthy growth of the national economy.

The SASAC and enterprises directly under the central government will continue to remain "battle ready." While dynamically optimizing measures for pandemic prevention and control as well as improving the effectiveness of our work, we will also be fully committed to preventing a slowdown and achieving steady growth. The specific measures are as follows:

First, we will spare no effort to expand the market. We will develop and further expand the domestic market while also speeding up the construction and production of existing projects and orders. This will help to avoid late deliveries, loss of customers, and breaches of contracts. We need to seize the growth opportunity presented by the recovery period that will follow the pandemic subsides, and work in accordance with the national strategy for boosting domestic demand. We should work to meet local demands concerning investment and construction in order to effectively mitigate losses resulting from the COVID-19 pandemic. We will also pay attention to world-wide business operations and work to implement major BRI projects through specific and targeted measures for each company in different countries. This will ensure normal business operations for the overseas project as well as the timely delivery of orders. We will support enterprises directly under the central government to further cooperate with enterprises of other ownership and learn from each other in terms of investment and shareholding, product cooperation, R&D collaboration and experience sharing. Enterprises directly under the central government should also lead SMEs so as to achieve mutual development. 

Peng Huagang:

Second, we need to adopt the multi-layered measures and explore the potential of development in relevant sectors. We will step up efforts to reduce costs and improve efficiency, applying cost management to all staff, factor and business procedures. The cost of business operation will be greatly reduced, especially in terms of management and techniques. We will make more efforts to deal with inefficient and invalid assets. We will quickly divest in businesses that lack competitive advantages and development potential. We will speed up the liquidation of inefficient and invalid stock equity. We will also step up efforts to manage unprofitable companies. Based on our concluding work of helping "zombie companies and troubled businesses," we should further work on the management of unprofitable listed companies as well as relevant major branch companies, sparing no effort to reduce losses.

Third, we will speed up industrial upgrades and shore up weaknesses. Regarding problems emerging amid pandemic, we need to speed up industrial transformation and upgrades while also optimizing product services in order to build up strengths and shore up weaknesses. In terms of the development of core technologies, we need to focus on cutting-edge fields, such as biosciences and healthcare, stepping up the R&D efforts accordingly. As for the optimization of the industrial structure, industries involved with healthcare, public epidemic prevention and control and emergency management should be further developed. Emerging industries, such as cloud computing, big data and AI, should also be supported so as to develop a new engine. Regarding smart transformations and upgrades, we should make full use of the advantages of enterprises directly under the central government and let them become the main driving force for new infrastructure. New forms of business, such as the digital economy, will be supported, and traditional industries will be transformed at an accelerated pace. 

Fourth, we will step up reform efforts. In accordance with the requirements of the upcoming three-year action plan on the reform of state-owned enterprises, we will carry out proactive, bold and pragmatic reform, introducing relevant measures to improve the vitality and efficiency of enterprises, which will help us to cope with the effects of the pandemic.

Fifth, we need to prevent the risks and stick to the bottom line. We need to stay conscious about the bottom line and strengthen risk management. We need to pay close attention to capital risks and properly prevent and control debt risks. In the meantime, risks associated with financial businesses should be kept under control, and risks associated with investment should always be prevented. Compliance risks should be controlled strictly, and we need to stick to the bottom line and prevent the occurrence of major risks.

The SASAC and enterprises directly under the central government will stick to these targets, making full use of all the resources available and overcoming difficulties in order to make up for losses to the greatest extent while also achieve the best possible results. Thank you.

China Business Network:

When will the three-year action plan on the reform of state-owned enterprises (SOEs) be launched? Could you share the general guidelines and key tasks of the reform? What breakthroughs will be made in the reforms of mixed SOE ownership, SOE restructuring and the supervision mechanism of state-owned assets in the year 2020, the first year of the action plan? Thank you. 

Peng Huagang: 

Thank you for your question. This is also a matter of public concern. The action plan has preliminarily taken shape over a period of time that has included plenty of research, repeated evaluation and improvement. It now comes into the approval process. It is highly valued by the CPC Central Committee and the State Council as a pressing issue of high urgency. When it is launched, we will give a systematic and comprehensive introduction to the plan. 

As for your question, the overall consideration of the plan is to better implementing General Secretary Xi Jinping's major expositions on SOE reform and, development of state-owned assets and enterprises, as well as a Party building. This involves three important issues: First, the requirements of the 19th National Congress of the Communist Party of China on SOE reform will be further specified and carried out in the three-year actions. Second, a number of SOE reform policies, namely the "1+N" policies, have been implemented in recent years. For those not put in place, we have made a schedule and a roadmap to accelerate the implementation. Third, we have gained some experience at the grassroots level in recent years from pilot and demonstration projects, including "Ten Pilot Reforms" and "Double Hundred Actions." The experience will be promoted in the next step of SOE reform.

In fact, these considerations and requirements will be fully reflected in the action plan, even though it has not yet been released. Nevertheless, the actions have started this year, which is the first year to implement the three-year action plan. We have laid out some of our priorities for reform this year, and we have advanced them actively, which embodies the requirements of the three-year action plan. This year's reform will focus on the following aspects:

First, we will improve the modern enterprise system with Chinese characteristics. We will implement the "two policies of consistency" to encourage the establishment of a board of directors, as needed. We will further clarify the boundaries of rights and responsibilities of Party committees (leading Party groups), boards of directors, managers and other governance bodies to implement the functions and powers of the board of directors and accelerate the establishment of a corporate governance mechanism in which one will do their part while cooperating with others to have effective checks and balances. 

Peng Huagang:

Second, we will accelerate the establishment and improvement of a market-based operation mechanism. We will advance the contract management of management members' tenures and the establishment of a professional managers system, and we will encourage SOEs to actively coordinate the use of medium- and long-term incentive policies to increase their vitality and efficiency. 

Third, we will actively, yet prudently, deepen the reform of introducing mixed ownership to SOEs of different levels and categories. In particular, we will promote an in-depth transformation of operating mechanisms in mixed-ownership enterprises and give full play to the positive role of the shareholders of non-state-owned enterprises.

Fourth, we will improve the distribution of state-owned assets and promote strategic restructuring and specialized integration to guide enterprises in further focusing on the real economy and strengthening their core business. The SOEs, in particular, will be given their guiding role in structural improvement, free circulation and stable growth in a bid to offset the negative impacts of the pandemic.

Fifth, we will improve the state-owned assets supervision system, with a focus on the management of capital. We will delegate more powers in order to have state-owned assets play an effective role in investment and company operation.

Sixth, we will push forward special projects, including the "Double Hundred Actions" and "Comprehensive Regional Reform Tests," as well as "Demonstrative Actions on Reforms of Technology-Based Enterprises," to give full play to their demonstrative and leading roles.

Seventh, we will further strengthen the Party's overall leadership with respect to SOEs. We will boost the Party building in SOEs and give a leading role to entrepreneurs so they may lead the development of SOEs with high-quality Party building. Thank you. 

Macao Daily News:

Recently, there have been more discussions about China's manufacturing industry, and some countries said they would spare no expense to subsidize costs, encouraging their enterprises to move manufacturing back to their countries and calling for the return of the industrial chain. At the same time, due to the shutdown of foreign factories, some enterprises lack production components. Are central SOEs prepared to respond to new situations in the industrial chain and supply chain? Thank you.

Peng Huagang:

Thank you for your question. Mr. Xia will answer it.

Xia Qingfeng:

Indeed, as the reporter just said, there are increasing discussions on the manufacturing industry happening in society, and there are also many voices being heard in the international community. We believe that the global economy is a whole entity. The industrial chains and supply chains of various countries are interlinked, and after more than 40 years of reform and opening-up, China's economy has been deeply integrated into the global industrial chain and supply chain. Due to the impact of COVID-19, all countries in the world are tightening their prevention and control measures, and the smooth and orderly operation of the global industrial chain and supply chain has been affected to varying degrees. Central SOEs have also encountered the delay of existing contracts, decrease of new orders and risks in the supply of some required raw materials and spare parts. As for the question of how to deal with the impact of the pandemic on the industrial chain and supply chain, our opinions are as follows: 

On the one hand, we must continue to give full play to the role of the global industrial chain. At present, the overall pattern of the global industrial chain and supply chain is the result of years of joint efforts and common choice made by the enterprises of various countries. It is the result of the function of comprehensive factors, such as factor costs, industrial support and the infrastructures of various economies. It is not formed overnight, nor can it be changed by any individuals or countries at will. We believe that short-term subsidies cannot stop the long-term market trend. There is an old Chinese saying that "it is important to take a long-term perspective," and we will encourage central SOEs to continue strengthening cooperation in the global industrial chain. On the other hand, we must make full use of the advantages of the domestic industrial chain. Central SOEs have a relatively complete industrial system, and they have certain development resilience, potential and room to maneuver. Since the outbreak, central SOEs have spared no effort to ensure stable production and supplies, protect people's livelihoods and stabilize the market, and they have taken the lead in resuming work and production. Now, 99.4% of central SOEs have resumed work and production. In doing so, they have driven medium, small and micro-sized enterprises in the upstream and downstream of the industrial chain to reboot engines. We also took the lead in implementing the national policy requirements for tax and fee reductions, along with rent exemption or reduction. In the first quarter, costs of various market entities were reduced by 45 billion yuan. It should be said that through this concession, a healthy industrial chain ecology and a sound economic ecology have been created.

Xia Qingfeng:

Manufacturing is considered the backbone of our national economy. Central SOEs will strive to play the leading role in their respective industries and continue to work in the following three aspects, centered around the goal of ensuring every link of the industrial chain and the supply chain are in place, coordinating upstream and downstream sectors and stabilizing the industrial chain.

First, we will deepen the cooperation between upstream and downstream sectors of the industrial chain. We encourage and support central SOEs, working on market-oriented and commerce-oriented principles, to build a batch of supply and demand sharing platforms or industry resources sharing platforms that deepen cooperation among central SOEs in fields such as logistics, freight, coal and electricity price linkage. Combining national strategies and major regional development strategies, the SOEs will deeply participate in major local projects, major sectors in the distribution of productive forces and the construction of key industrial clusters so as to strengthen central and local coordination. Central SOEs will also increase cooperation with other enterprises that have ownership in the industrial chain and supply chain, and they will learn from each other in investment and equity participation, product cooperation and research and development. In these ways, we can jointly improve the stability of the industrial chain and the supply chain, rendering the industrial system more complete in range.

Second, we will speed up upgrading the industrial chain so as to make up for shortcomings. To address some of the problems exposed in the supply chain and industrial chain during the pandemic, central SOEs will accelerate transforming and upgrading these structures so as to compensate for shortcomings, close up loopholes and shore up points of weakness. In particular, the enterprises will utilize their strengths to carry out scientific and technological research and make new breakthroughs in weak fields and key areas of the industry chain. We encourage the SOEs to make good use of policies, such as the Guidelines on Promoting the Demonstration and Application of Newly-Developed Major Technological Equipment, to advance the development of locally-built key equipment. We will steadily complete mergers and acquisitions that are conducive to industrial collaboration, technology introduction, talent sharing, increasing brand value, etc., and we will strive to enhance the competitiveness and resilience of the industrial chain.

Third, we will deepen international cooperation in a more open attitude. According to statistics, over the past three years, central SOEs have invested more than 300 billion yuan overseas each year for such projects as infrastructure construction, energy resource cooperative development, capacity cooperation, technological research and development, engineering and equity investments. Central SOEs are said to have been deeply integrated into international cooperation. Upholding the concept of jointly building a community with a shared future for mankind, as proposed by General Secretary Xi Jinping, and guiding by the principle of consultation, collaboration and benefits for all, we will continue to promote business going global, keep broadening the "circle of friends," and strengthen long-term and stable cooperative relations. We will deepen international production capacity cooperation with companies from all over the world and jointly contribute to the recovery and development of the global industrial chain and supply chain. Thank you.

Xi Yanchun:

We know that central SOEs have made important contributions to epidemic prevention and control efforts. Some of the work they've done has been covered by the media, but most of their work is still unknown to the public. Therefore, I would like to take this opportunity to thank all the central SOEs that have made important contributions to the prevention and control of the pandemic. We believe that central SOEs will continue to play an important role in China's economic development. Thanks again to the two speakers, and thank you all. Today's press conference is concluded.

.

Read in Chinese

Speaker:

Wang Chunying, spokesperson and chief economist of the State Administration of Foreign Exchange (SAFE) and director general of the Balance of Payments Department at the SAFE

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office

Date:

April 17, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to invite Ms. Wang Chunying, spokesperson and chief economist of the State Administration of Foreign Exchange (SAFE), as well as director general of the administration's Balance of Payments Department. She will introduce China's foreign exchange receipts and payments in the first quarter of 2020 and also answer some of your questions.

Now, I'll give the floor to Ms. Wang.

Wang Chunying:

Good afternoon. Welcome to this press conference. I'll first introduce China's foreign exchange receipts and payments in the first quarter of 2020, and then I will answer some of your questions.

In the first quarter of 2020, the outbreak and spread of COVID-19 presented a major uncertainty for economic and financial performance at home and abroad. As the pandemic continues to rage around the world, downward pressure on the global economy is rising, and international financial markets have shown dramatic turbulence. 

Currently, the situation in China is continuously improving, with resumption of work and production on the fast track and economic and social activities in steady progress. Since the beginning of this year, the RMB exchange rate remained basically stable amid two-way fluctuations, and market expectations were relatively stable. China's cross-border financial flows remained generally stable, and overall balance was achieved between demand and supply in the foreign exchange market.

In the first quarter of 2020, foreign currency bought and sold by Chinese banks totaled 3.43 trillion yuan ($491.5 billion) and 3.16 trillion yuan, respectively, creating a surplus of 273 billion yuan. 

Foreign-related receipts and payments by banks on behalf of clients were worth 6.39 trillion yuan and 6.61 trillion yuan, respectively, with a deficit of 216.5 billion yuan.

China's foreign exchange receipts and payments showed the following characteristics in the first quarter of 2020:

First, overall balance was achieved between demand and supply in the foreign exchange market. In the first quarter, the surplus of foreign exchange settlement and sales by banks was $39.1 billion. If comprehensive consideration is given to factors that include forward transactions and options, the supply and demand of foreign exchange in China have reached a state of basic balance. Over the same period, foreign-related receipts and payments of foreign exchange by banks on behalf of clients produced a surplus of $1.7 billion.

Second, although foreign-related receipts and payments by banks on behalf of clients showed a deficit in March, foreign exchange settlement and sales by banks remained in surplus. Since April, overall balance has been achieved in foreign-related receipts and payments by banks on behalf of clients, as well as in foreign exchange settlement and sales. In March, the virus spread around the world, sparking more violent fluctuations in the international financial market and a plunge in major stock indexes. As a result, risk aversion was on the rise and external liquidity tightened. In this context, foreign-related receipts and payments by banks on behalf of clients showed a deficit, mainly because RMB cross-border net outflow under security investment increased. Meanwhile, the domestic foreign exchange market remained basically stable; foreign exchange settlement and sales by banks stayed in surplus; and overall balance was achieved between demand and supply in the foreign exchange market. In terms of daily data, since the beginning of April, foreign-related receipts and payments by banks on behalf of clients struck a basic balance, and foreign exchange settlement and sales by banks continued to be in minor surplus.

Third, the rate of foreign exchange buying dropped, and the forex financing of enterprises stayed generally stable. In the first quarter, the rate of foreign exchange buying, which means the ratio of clients buying foreign exchange from banks to the overseas expenditure of foreign exchange, stood at 63%, down two percentage points compared to the same period of last year. Meanwhile, the forex financing of enterprises remained stable. At the end of March, Chinese banks' forex loans at home rose by $27.7 billion. Import foreign currency and cross-border financing, such as refinancing and forward letters of credit, fell by $8 billion compared to the end of 2019, corresponding with fluctuations in the import volume of the same period.

Fourth, the rate of foreign exchange selling grew steadily, and market players showed a steady willingness to hold foreign currency. In the first quarter, the rate of foreign exchange selling, which means the ratio of clients selling foreign exchange to banks to clients receiving foreign exchange from overseas, stood at 66%, up five percentage points compared to the same period of last year. At the end of March, forex deposits of enterprises and individuals at home dropped by $6.7 billion compared to the end of 2019, remaining basically stable.

Fifth, Chinese banks maintained a forward forex settlement surplus. In the first quarter, Chinese banks reported a forward forex settlement surplus of $41.4 billion, including a surplus of $16.6 billion in March.

Sixth, China's foreign exchange reserves remained generally stable. By the end of the first quarter in 2020, the foreign exchange reserves stood at $3.06 trillion, down 1.5% compared to the beginning of this year, affected mainly by factors that include exchange rate conversion and assets price fluctuations.

These are the main Q1 forex data that I want to share with you. Now, I would like to answer questions about China's foreign exchange reserves.

Xi Yanchun:

Thanks for Mrs. Wang's introduction. Now it's time for questions. Please indicate the news organization you work for before raising your questions.

CCTV:

What do you think of the performance of the country's forex market amid the COVID-19 pandemic？What do you make of the development trend? Thanks!

Wang Chunying:

This year, the whole world faces a new situation: the COVID-19 pandemic. Both the global economic and trade activities and the international monetary market have recently been hit hard by the pandemic. Under these extreme circumstances, China's forex market has maintained overall stability, which I think is incredible. This attests to the increasing maturity of China's forex market and the growing rationality of market entities. This also attests to the market entities' confidence in China's pandemic prevention and control and the fundamentals of the Chinese economy.

In 2020, China's forex market has achieved "three keeps." First, we have kept supply and demand in balance in the forex market. Second, we have kept the yuan exchange rate relatively stable against a basket of major currencies in the world. Third, we have maintained cross-border investment and financing and forex trading in a basically sound and orderly manner. On top of that, China's foreign exchange reserves have stayed stable overall.

Let's look at the first "keep": we have kept forex supply and demand in balance. The above-mentioned data show that Chinese banks reported a relatively large forex settlement surplus of $39.1 billion, laying the basis for the balanced supply and demand in the forex market. A data breakdown shows that there is a cross-border forex surplus of $1.7 billion, and there is a net forex settlement surplus of $20.5 billion. In a word, either from the overall perspective or from the perspective of the clients, we have kept in balance the Q1 supply and demand in the forex market. The second "keep" is that we have kept the yuan exchange rate relatively stable against an array of major currencies in the world. In the first quarter, the U.S. Dollar Index rose by 2.8%. Under such a circumstance, the spot exchange rate of RMB/USD dropped slightly by 1.8%. In terms of other currencies, the currency index of the emerging markets dropped by 12.9% during the same period. The pound dropped by 6.3% against the dollar; the EUR/USD dropped by 1.6%. In the first quarter, the CFETS RMB Index rose by 2.9%. Therefore, we can conclude from the data that we have kept the yuan exchange rate relatively stable against the major currencies of the world.

Third, the behavior of market entities has remained rational and orderly, which can be seen from two perspectives. First, foreign investors' enthusiasm remains high when it comes to investing in China. According to statistics from the Ministry of Commerce, China's actual use of foreign capital in the first quarter was $31.2 billion, with a 15.5% increase in the high-tech service sector. According to statistics from the SAFE, the net increase of foreign investors' holdings of domestic bonds in the first quarter increased by 48% year-on-year, reaching $16.7 billion. Second, Chinese enterprises' outbound direct investment has been stable. According to data provided by the Ministry of Commerce, the outbound direct investment of non-financial sectors between January and February was $15.5 billion, which shows stability. Moreover, according to the SAFE data, net purchases of foreign exchange from individuals in the first quarter dropped by 25% year-on-year, reflecting individuals' rational willingness to purchase foreign exchange. Therefore, foreign exchange reserves have remained basically stable. 

The fundamentals of China's sound economic growth in the long term will ensure the stable operation of the foreign exchange market. First, the positive development of China's pandemic prevention and control measures will continue to leverage the role of stabilizing expectations and boosting market confidence. The pandemic and its implications for economic growth and societal development have been the major uncertainties for the world economy and financial markets. China is consolidating its progress in pandemic prevention and control, and resumption of production and work is ongoing. The restoration of economic and social orders has been accelerating as well, which will not only shore up confidence in the domestic market but also boost world economic development. Second, the fundamental trends of China's sound economic growth in the long term and deepened opening-up remain unchanged, which will continue to attract foreign mediums and long-term capital to invest in the domestic market. Third, the foreign exchange market is becoming more mature, and foreign exchange rates are getting more flexible. More and more "two-way volatility" of foreign exchange rates have been seen, and the performance of foreign exchange rates in regulating the macro economy and serving as an automatic stabilizer for the balance of international payments is becoming better and better. Consequently, China's foreign exchange market is mature enough to absorb and address short-term impacts, and it is capable of maintaining stable operation in the future.

Of course, in this process, we will continue to strengthen monitoring and analysis to prepare for different scenarios. We always take preventive measures, which is actually a guarantee for the smooth operation of the market. This is my response to your question. Thank you.

Economic Daily:

The SAFE has always stressed the importance of the current account. What impacts will the COVID-19 pandemic have on the current account in the balance of international payments? Is it possible to see a sustained current account deficit? Thank you. 

Wang Chunying:

The pandemic does have some impacts on China's current account of the balance of payments, and we have been conducting the following analysis on this issue. Based on the current situation, we have made some preliminary estimates of impacts that the pandemic will have on China's balance of international payments.  

First, China's current account development has been affected by the pandemic, but it will remain basically balanced in the first quarter. According to data from Customs, exports dropped by 13% in the first quarter, and imports declined by 3%. However, the decline of exports in March has slowed down, so the trade surplus in the first quarter has narrowed. In terms of services trade, according to SAFE statistics, China's deficit narrowed by 25% in January and February with a sharp dip in tourism expenditure. According to preliminary statistics, tourism expenditure remained low in March, which indicates that the services trade deficit has narrowed. China's balance of international payments is mainly composed of cargoes trade and services trade. Due to its low income and current transfers, we must analyze the development of the current account, with the analysis of cargoes trade and services trade being our priorities. China's cargoes trade surplus and services trade deficit narrowed simultaneously in the first quarter; therefore, the current account will most likely remain stable within a reasonable range.  

The second fundamental judgment is that the outbreak will not affect China's current account in the medium to long term. The pandemic develops and changes according to its own underlying rules. As scientists, biologists and pharmacologists make knowledge gains, R&D progresses, methods grow and we accrue experience, the pandemic will be effectively curbed, and the global economy and trade will gradually recover, thus easing external demand difficulties. Domestically, coordination between epidemic prevention and control and economic and social development is proceeding in an active way. According to statistics by the Ministry of Industry and Information Technology (MIIT), the work resumption rate of industrial enterprises above the designated scale had exceeded 99% by mid-April, with a 94% rate of personnel returning to their posts. With the resumption of work and production gearing up, domestic supply and demand have been secured on the one hand, and supplies for the foreign market have been secured on the other hand. Therefore, we think the outbreak will not affect the current account in the medium to long term.

The third judgment, which I mention each time, is that the defining factor affecting the current account is the domestic economic structure and other underlying and long-term factors that cannot be altered easily. First, China's manufacturing is hefty and has complete sectors, so it has a strong resilience and an ability to cope with pressure. In recent years, China has insisted on the supply-side structural reform, its industrial chains keep upgrading and manufacturing has been more competitive. Second, the domestic economic structure has constantly improved, and investment has been more efficient. Despite a drop in recent years, China's savings rate is still relatively high compared with the international level. In theory, the gap between savings and investment dictates the current account, and in this perspective, China's international current account positions can be kept basically balanced.

The current account has been kept within a balanced range. Affected by some short-term uncertain factors, it sometimes may run a small deficit or a small surplus, but it is still within a basic balance. For example, the current account surplus in 2018 fell to $25.5 billion, during which it ran a deficit for the first two quarters and then reversed to a surplus in the third quarter. The surplus later widened to $141.3 billion in 2019. However, this did not change the fact that China's current account is basically been kept balanced. Thank you.

Bloomberg News:

In March, bank foreign-related receipts and payments for customers recorded their largest deficit since January 2016. What are the main reasons causing this? How about the balance of international payments in the first quarter?

Wang Chunying:

I see you are concerned about the cross-border balance of payments in March. I have a set of data to share with you. In March, the surplus of bank foreign exchange settlements stood at $18.6 billion. The deficit of cross-border payments was $47.7 billion, which was mainly due to the net outflow of RMB. We have conducted comparative analysis and concluded that capital outflow from securities investment is the main cause of this. In March, there were net outflows of cross-border funds under the category of equities and continued net inflows under the category of bonds. However, despite the net outflow of capital in the stock market during March, capital involved in northbound trading and money invested from Hong Kong into the Chinese mainland returned to a state of net inflow, and net outflow of capital through southbound trading has also gradually stabilized. There was no sustained, one-way outflow of capital from the stock market. In fact, fluctuations of cross-border capital in the stock market under external shocks are normal reactions of the market, and changes in relative size are also within a reasonable range.

For the current account structure of the balance of international payments in the first quarter that you are concerned about, the relevant data is yet to be released and some data sources are not yet available. The data just reported are estimates based on large projects. Overall, trade in goods will still present a certain surplus, but the size of the surplus will shrink; the size of the deficit of service trade has also narrowed. The final situation will be determined once the data is compiled. The probability is that the current account balance will continue to run within a reasonable equilibrium range. Even if there is a deficit, it will not be large. There was a deficit of $40.3 billion of current account in the first quarter of 2018 and $900 million in the second quarter. Compared with the scale of international payments, the deficits will not trigger directional changes and large-scale cross-border capital outflows. The ratio of current account surplus to GDP has been basically within 2% in recent years and is now stable at around 1%, which is more balanced. Thank you. 

People's Daily Overseas Edition:

Foreign-related businesses have been greatly impacted due to the outbreak of the pandemic. What kind of measures has SAFE taken to support the resumption of work and production for enterprises? What is the current effect of such measures? Thank you. 

Wang Chunying:

Thank you for the questions. These are questions that enterprises care about. SAFE has implemented the decisions and arrangements of the CPC Central Committee and the State Council, and it took effective measures that provided great support for pandemic prevention and control as well as the resumption of work and production at enterprises. Those measures can be summarized in the following aspects:

First, it opened a "green channel" for foreign exchange business to provide support for the resumption of work and production. For example, the procedures of import payment and collection of export proceeds related to pandemic prevention materials have been simplified, and financing business related to pandemic prevention and control has been further streamlined. Meanwhile, for enterprises that are in need, quotas for borrowing foreign debts can be abolished and they can apply for registration of foreign debts online. We are also ensuring the normal use of foreign exchange by individuals and enterprises while also encouraging online foreign exchange transactions. We provide support and guidance to China Foreign Exchange Trade System and Shanghai Clearing House in reducing or exempting fees for foreign exchange transactions and clearing procedures of relevant institutions in Hubei province. From Jan. 27 to March 31, the proportion of foreign debt handled online nationwide reached 93%, compared with 61% in 2019. 

Second, we will continuously strengthen the reform and opening up of the foreign exchange sector and facilitate cross-border trade and investment. The SAFE launched 12 facilitation measures in October 2019 and raised the macro-prudential adjustment parameters for full-caliber cross-border financing in March 2020 so that companies have more freedom in acquiring foreign debts and using overseas funds. On April 14, it introduced eight other facilitation measures to streamline the foreign exchange business. In general, these facilitation measures focus on three aspects. One is to help stabilize foreign trade. The measures mainly include expanding the pilot program of facilitating foreign exchange receipts and payments in trade, facilitating foreign exchange settlement in cross-border e-commerce, and improving the reporting methods of foreign exchange business in the trading of goods. The second is to help facilitate cross-border financing. The moves include popularizing the reform to facilitate the payments of capital account income nationwide, expanding the pilot program of facilitating foreign debts to support cross-border financing of high-tech companies, and reforming the registration and administration of foreign debts of companies. The third is to improve services for the foreign exchange business. The measures mainly include facilitating the use of electronic documents in the foreign exchange business. These measures can significantly reduce the time and labor costs of companies. For example, the pilot measures for facilitating foreign exchange receipts and payments in trade saved over 50% of the time of related enterprises.

Third, we will actively use the cross-border financial blockchain service platform and other technological means to facilitate the financing of small and medium-sized enterprises (SMEs) for trade. As of April 7, nearly 3,000 companies had obtained $22.7 billion of loans through accounts receivable financing over the platform, over 75% of which were SMEs.

In the next step, we will further sort out the facilitation measures that can be introduced to help companies resume work and production as well as carry out cross-border trade, investment, and financing activities. At the same time, we will adhere to active, gradual, and controllable opening up, which means that relevant policies will not go backward. In addition, we will also actively prevent risks as we always do.

CNBC:

First, what are the trends and prospects of foreign capital inflows into China? Second, foreign investors often worry about money withdrawal when considering an increasing investment in China. Does the SAFE provide specific guarantees for that? Thank you.

Wang Chunying:

I see that one of your questions is about the recent changes and prospects of foreign investments in China, and the other is about concerns over investment withdrawal.

How has foreign investment in China changed amid the outbreak? First, medium- and long-term foreign investment, such as foreign direct investment and bond investment for the purpose of allocating medium- and long-term RMB assets, kept flowing in. On the one hand, foreign direct investment remained generally stable and well structured. According to the statistics of the Ministry of Commerce, the actual use of foreign investment by the non-financial sector in the first quarter of 2020 was $31.2 billion. Though on a year-on-year decrease, the use of foreign investment in the high-tech service sector grew rapidly, indicating that foreign investors saw the opportunities along with the transformation of the Chinese economic structure. On the other hand, bond investment for the purpose of allocating medium- and long-term RMB assets increased. Foreign investors held $16.7 billion more Chinese bonds in the first quarter in the net figure, an increase of 48%. Second, foreign investment in the stock market fluctuated slightly within a short period and a reasonable range under external shocks. There was a fall in global stock markets in general and a rise of risk-aversion emotions in the first quarter. Therefore, it is normal for some foreign investors to have reduced their investment in the stock market under the tight liquidity of the U.S. dollar. Foreign investors held around $10 billion less Chinese stocks in the first quarter in net figure, with a relatively more decrease in March compared with the other two months. The market value of the Chinese stock market ranks second in the world and registers around $7-8 trillion, among which the 10 billion accounts for a very small proportion and has had minimal influence. At the same time, the capital flow in the stock market fluctuated in both directions, which showed that the decrease did not last. The northbound investment to Chinese mainland through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect showed net outflows in mid-March and turned into net inflows in late March, so in our view, the investment has changed within a reasonable range.

Where the prospect of investment is concerned, we believe that in the future, Chinese market and RMB assets will still be rather attractive to foreign capital. This is because China's economic fundamentals for long-term growth remain unchanged, and China also has huge potential in its domestic market. Additionally, China has made positive progress in domestic pandemic prevention and control, which greatly contributes to global economic development. Considering direct investment, in the past four years, foreign direct investment (FDI) across the world has seen a continuous decline. Against this backdrop, the scale of foreign investment in China keeps rising, and China remains the world's second-largest country in attracting foreign investment. It shows the long-term strong interest of foreign investors in doing business in China. In terms of investment in bonds, the yields of bonds in China are very high. This is very attractive to investors who allocate RMB assets in the medium and long term. From the perspective of the stock market, the actual valuation of China's stock market is relatively low, and the prospect of value investing is quite promising in China. For example, compared with the rest of the world, the stock market in China is less volatile. In the first quarter, the Dow Jones industrial average was down 23%, whereas the volatility of the Shanghai Composite stayed within 10%. Therefore, China's market remains attractive to foreign investors from the three aspects of direct investment, bond investment, and stock investment. We always welcome foreign investors to invest in China and share in the dividends of China's economic development.

I'd also like to talk about the security of funds, as you mentioned earlier. As a matter of fact, since 1996, China has already realized the convertibility of current accounts. This means that all the incomes and expenses under the current accounts, as long as they are real and compliant, will be processed at banks with the legitimate documents. As for capital accounts, according to the 40 standards of the International Monetary Fund in seven major categories, China already keeps a high level of openness. Also, we have been making efforts on the reform of investment facilitation. As I said just now, our reform efforts are always proactive, progressive and controllable. This means that we will not "go backward." This is why we say that windows will not be closed once opened. Therefore, investors should no longer be worried about this issue.

Hong Kong Economic Herald:

The COVID-19 pandemic has caused liquidity tension of the U.S. dollar, and this problem hasn't been completely solved to this point. As China's balance of foreign debt has exceeded $2 trillion, will there be deleveraging on foreign debt? Thank you.

Wang Chunying:

Based on the current situation, the risk of significant deleveraging on China's foreign debt is relatively small. First, the growth of China's foreign debt has been comparatively stable in recent years. Here are some statistics for your reference. By the end of 2019, the balance of foreign debt reached $2.06 trillion, which was $277.4 billion more than the historical peak figure at the end of 2014. Although the absolute amount has increased, the relative increase of foreign debt is not high when compared to the economic growth in recent years. At the end of 2019, the balance of foreign debt stood at 14.3% of the GDP that year, whereas the ratio at the end of 2014 was 17%. Therefore, this ratio was down by more than two percentage points. In addition, as the foreign debt increased in recent years, China's external assets also rose. Therefore, we have made comparisons regarding the scale of foreign debt and external assets. By the end of 2019, this ratio was 26.7%, which is a decrease of 0.1 percentage point from the end of 2018 and a decrease of one percentage point by the end of 2014. This means that since deleveraging in 2015 and early 2016, the growth of China's foreign debt has been fairly stable. It is consistent with our economic growth, and it also matches China's openness to the rest of the world. In the meantime, during this period, the exchange rate of RMB has remained basically stable and fluctuated in both directions. There is no procyclical leveraging on China's foreign debt; thus, the risk of significant deleveraging in this field is relatively small.

Second, our external debt structure has been further optimized. For example, at the end of 2019, the external debt in domestic currency accounted for 35% of total external debt. This was two percentage points higher than in 2018, and the proportion of medium-and long-term external debt had steadily increased from 35% to 41%. Benefitting from China's interbank bond market, foreign investors purchased more domestic bonds than before, accounting for 26% of the total external debt in late 2019, which was up from 8% in late 2014. The investors have been mainly foreign central banks. These institutions and sovereign wealth funds chose to invest in Chinese bonds out of demand for medium-and long-term allocation of RMB assets. They are inherently stable and are not angling for short-term gains. In addition, China's debt ratio, foreign debt ratio and debt service ratio are all within the internationally recognized safety margins and are much lower than the overall level of developed countries and emerging markets.

We saw external debt deleveraging in 2015 and 2016 when the dollar interest rates and foreign exchange rate rose due to the Federal Reserve's hike of interest rates. Now, with the Fed adopting an easy monetary policy, the short- and long-term interest rates of the U.S. dollar continuing their downwards movement, and the RMB exchange rate remaining generally stable, it is unlikely that a large-scale deleveraging of external debt will reoccur.

Preliminary data from the first quarter shows that our registered external debt steadily increased, foreign investors increased their holding of China's domestic bonds, and there was no evidence of deleveraging. Thank you.

Xi Yanchun:

Thank you again Ms. Wang, Thank you all. Today's press conference is hereby concluded. 

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Read in Chinese

Speaker:

Mao Shengyong, director general of the Department of Comprehensive Statistics at the National Bureau of Statistics (NBS) and NBS spokesperson

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office of China

Date:

April 17, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media: Welcome to this press conference held by the State Council Information Office (SCIO). Today, we will brief you on the national economic performance in the first quarter of 2020. As known to all, the first quarter of this year is a relatively special one, because this is a quarter in which we faced the severe challenge of the COVID-19 pandemic, and it is also a quarter in which we coordinated efforts for pandemic prevention and control and economic and social development. We have invited Mr. Mao Shengyong, a spokesman for the National Bureau of Statistics (NBS), to brief you and take questions from media friends.

I will now give the floor to Mr. Mao.

Mao Shengyong:

Thank you. Ladies and gentlemen, friends from the media, good morning. As usual, I will first share with you the basic information on national economic performance in the first quarter, and then I will answer your questions.

Coordinative efforts for pandemic prevention and control and economic and social development have delivered notable results, and the decline of major economic indicators has been significantly narrowed down in March.

In the first quarter, faced with the severe test of the COVID-19 outbreak, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council, and the whole nation coordinated efforts to advance both the prevention and control of the disease and the economic and social development of the country. As a result, the situation of pandemic control and prevention continued to improve with a basic interruption in virus transmission at home. The resumption of work and production accelerated, with fundamental industries and major products vital to the national economy and people's livelihoods growing steadily. People's basic livelihood was well guaranteed, and national economic and social development reached overall stability. 

According to the preliminary estimates, the gross domestic product (GDP) of China was 20.65 trillion yuan in the first quarter of 2020 — a year-on-year decrease of 6.8% at comparable prices. By industry, the value-added of the primary industry was 1.02 trillion yuan, down by 3.2%; that of the secondary industry was 7.36 trillion yuan, down by 9.6%; and that of the tertiary industry was 12.27 trillion yuan, down by 5.2%. 

First, overall agricultural production was steady and the grain grew well. 

In the first quarter, the value-added of agriculture (crop farming) grew by 3.5% year-on-year. With currently favorable climate conditions in major farming areas, spring plowing and sowing went smoothly, and winter wheat grew better than last year and average years. By the end of March, the sown area of gradeⅠand gradeⅡseedlings of winter wheat accounted for 87.2% of the total, 3.5 percentage points higher than that of the same period last year. In the first quarter, the output of eggs grew by 4.3%, and that of milk grew by 4.6%. The output of pork, beef, mutton and poultry was 18.13 million tons. The pig production capacity continued to recover. By the end of the first quarter, 321.2 million pigs were registered in stock — up by 3.5% over the end of the fourth quarter of 2019 — among which 33.81 million were breeding sows, up by 9.8%. 

Second, industrial production fell while the industry of basic raw materials and high-tech manufacturing continued to increase. 

In the first quarter, the total value-added of the industrial enterprises above the designated size went down by 8.4% year-on-year. Specifically, in March, the total value-added of the industrial enterprises above the designated size went down by 1.1% year-on-year, or 12.4 percentage points slower than the decline of the first two months, while the month-on-month growth was 32.13%, with the industrial output approaching the level of the same period last year. An analysis by types of ownership showed that the value-added of the state holding enterprises dropped by 6% year-on-year; that of share-holding enterprises fell by 8.4%; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was down by 14.5%; and that of private enterprises was down by 11.3%. In terms of sectors, the value-added of mining went down by 1.7%, manufacturing fell by 10.2% and the production and supply of electricity, thermal power, gas and water was down by 5.2%. The production of basic raw materials and new products maintained growth. The output of natural gas, non-woven fabrics, chemical medicine materials, crude oil, 10 kinds of nonferrous metal, ethylene and crude steel went up by 9.1%, 6.1%, 4.5%, 2.4%, 2.1%, 1.3% and 1.2%, respectively. The output of automatic vending and ticket machines, electronic components, integrated circuits, urban rail vehicles and solar cells went up by 35.3%, 16.2%, 16.0%, 13.1% and 3.4%, respectively. In March, high-tech manufacturing went up by 8.9% year-on-year, and this includes the manufacturing of computers, communication equipment and other electronic equipment, which collectively went up by 9.9%. The output of industrial robots and power generation equipment went up by 12.9% and 20.0%, respectively. 

Third, service production dropped while the emerging service industry grew.

In the first quarter, the total value-added of the tertiary industry dropped year-on-year, while that of the information transmission, software and information technology services and that of financial intermediation went up by 13.2% and 6.0%, respectively. In March, the Index of Services Production dropped by 9.1%, 3.9 percentage points slower than the decline of the first two months. In the first two months, the business revenue of service enterprises above the designated size dropped by 12.2%; this includes that of internet and related services and that of software and information technology services, which went up by 10.1% and 0.7%, respectively. In March, the Business Activity Index for services was 51.8%, 21.7 percentage points higher than last month. Specifically, the Business Activity Index for transportation, storage and post, retail trades and monetary and financial services was relatively high, reaching 59.3%, 60.6% and 62.9%, respectively. In terms of market expectation, the Business Activities Expectation Index for services was 56.8%, which is 17.1 percentage points higher than last month, showing greater confidence of enterprises in market development.

Fourth, market sales decreased while sales of daily necessities and online retail sales of physical goods grew fast.

In the first quarter, the total retail sales of consumer goods reached 7,858 billion yuan, down by 19.0% year-on-year. In March, the total retail sales of consumer goods reached 2,645 billion yuan, down by 15.8%, a decline narrowed by 4.7 percentage points compared to that of the first two months of the year. The retail sales of goods went down by 12.0%, a decline that has narrowed by 5.6 percentage points compared to that of the first two months of the year. Analyzed by different areas, the retail sales in urban areas in the first quarter reached 6,785.5 billion yuan, down by 19.1%, and the retail sales in rural areas stood at 1,072.5 billion yuan, down by 17.7%. Grouped by consumption patterns, the income of catering was 602.6 billion yuan, down by 44.3%; and the retail sales of goods amounted to 7,255.3 billion yuan, down by 15.8%. Commodities closely related to people's lives witnessed growth. The grain, oil and food, beverages and traditional Chinese and Western medicines produced by businesses above the designated size grew by 12.6%, 4.1% and 2.9%, respectively, or 2.9 percentage points, 1.0 percentage point and 2.7 percentage points higher than the growth in the first two months. Online retail sales reached 2,216.9 billion yuan, down by 0.8% year-on-year. Specifically, the online retail sales of physical goods were 1,853.6 billion yuan, up by 5.9% and 2.9 percentage points higher than that of the first two months of 2020, accounting for 23.6% of the total retail sales of consumer goods, which is 2.1 percentage points higher than that of the first two months.

Fifth, investment growth slowed down while e-commerce, professional technical services and anti-epidemic related industries saw growth.

In the first quarter, the investment in fixed assets (excluding rural households) reached 8,414.5 billion yuan, down by 16.1% year-on-year and 8.4 percentage points slower than the decline of the first two months of 2020. Specifically, the investment in infrastructure, manufacturing and real estate development declined by 19.7%, 25.2% and 7.7%, respectively, which amounts to 10.6 percentage points, 6.3 percentage points and 8.6 percentage points slower than the decline of the first two months of the year. The floor space of commercial buildings sold reached 219.78 million square meters, down by 26.3%, and the total sales of commercial buildings were 2,036.5 billion yuan, down by 24.7%, the decline of which was narrowed by 13.6 percentage points and 11.2 percentage points compared to that of the first two months of the year, respectively. By industry, the investment in the primary industry went down by 13.8%; the secondary industry went down by 21.9%; the tertiary industry fell by 13.5%; and the private investment sector reached 4,780.4 billion yuan, down by 18.8%. The decline was narrowed by 11.8 percentage points, 6.3 percentage points, 9.5 percentage points and 7.6 percentage points, respectively, compared to that of the first two months. Investment in high-tech industry declined by 12.1%, which is 4.0 percentage points slower than that of the total investment. Of the total, the investment in high-tech manufacturing and high-tech services went down by 13.5% and 9.0%, respectively. In terms of high-tech manufacturing, investment in the manufacturing of computers and office equipment grew by 3.2%. In terms of high-tech services, investment in e-commerce services went up by 39.6%, investment in professional technical services went up by 36.7 %, and investment in services for commercialization of research findings rose by 17.4%. Investment in social sectors went down by 8.8%, and investment in the health sector dropped by 0.9%, or 15.2 percentage points slower than the decline of the total investment. Investment in manufacturing of biological medicines, products and other anti-epidemic related industries maintained growth, and construction of key projects for epidemic prevention accelerated. In March, investment in fixed assets (excluding rural households) grew by 6.05% month-on-month.

Sixth, imports and exports of goods slowed down and trade structure continued to optimize.

In the first quarter, the total value of imports and exports of goods was 6,574.2 billion yuan, which is down by 6.4% year-on-year. In March, the total value of imports and exports was 2,445.9 billion yuan, down by 0.8% year-on-year, which is a decline that slowed by 8.7 percentage points compared to that of the first two months of the year. Of the total, the value of exports was 1,292.7 billion yuan, down by 3.5%, and the value of imports was 1,153.2 billion yuan, up by 2.4%, with imports of general trade growing by 4%. In the first quarter, the total value of exports was 3,336.3 billion yuan, down by 11.4%; the total value of imports was 3,238.0 billion yuan, down by 0.7%. The trade balance was 98.3 billion yuan in surplus. The trade structure continued to optimize. The import and export of general trade accounted for 60% of the total value of imports and exports, an increase of 0.4 percentage points compared to the same period last year. In the first quarter, the export delivery value of industrial enterprises above the designated size reached 2,408.2 billion yuan, down by 10.3% year-on-year and 8.8 percentage points slower than the decline of the first two months of 2020. In March, the export delivery value of industrial enterprises above the designated size reached 1,030.7 billion yuan, which is up by 3.1%.

Seventh, the rising of consumer prices declined and producer prices for industrial products saw a larger drop.

In the first quarter, consumer prices went up by 4.9% year-on-year. In March, consumer prices went up by 4.3% year-on-year, 0.9 percentage points lower than in February, or down by 1.2% month-on-month. In the first quarter, prices went up by 4.6% in urban areas and by 5.9% in rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 14.9% year-on-year; clothing went up by 0.2%; housing went up by 0.2%; articles and services for daily use went up by 0.2%; transportation and communication went down by 1.5%; education, culture and recreation went up by 1.9 %; medical services and health care went up by 2.2%; and other articles and services went up by 4.9%. In terms of food, tobacco and alcohol prices, prices for grain went up by 0.6%; fresh vegetables went up by 9.0% — specifically, their prices went up by 10.9% in February and down by 0.1% in March; pork went up by 122.5% — specifically, its prices went up by 116.4% in March, which is 18.8 percentage points lower than in February. Core CPI, excluding the price of food and energy, went up by 1.3%.

In the first quarter, producer prices for industrial products went down by 0.6% year-on-year. Specifically, prices in March dropped by 1.5% year-on-year, which is 1.1 percentage points faster than the year-on-year decline in February this year, or down by 1.0% month-on-month. In the first quarter, purchasing prices for industrial products went down by 0.8% year-on-year. In March, prices dropped by 1.6% year-on-year, or by 1.1% month-on-month.

Eighth, the surveyed unemployment rate in urban areas dropped slightly while employment was generally stable.

In the first quarter, the newly increased number of employed people in urban areas totaled 2.29 million. In March, the surveyed unemployment rate in urban areas was 5.9%, 0.3 percentage points lower than that of February. Specifically, the surveyed unemployment rate of members of the population aged from 25 to 59 was 5.4%, 0.5 percentage points lower than the surveyed unemployment rate in urban areas and 0.2 percentage points lower than that of last month. The urban surveyed unemployment rate in 31 major cities was 5.7%, which is the same as last month. In March, the employees of enterprises worked an average of 44.8 hours per week, which is 4.6 hours more than last month. By the end of February, the number of rural migrant workers reached 122.51 million.

Ninth, residents' nominal income increased while real income decreased and the per capita disposable income ratio between urban and rural households dropped slightly.

In the first quarter, the nationwide per capita disposable income of residents was 8,561 yuan, a nominal increase of 0.8% year-on-year, or a real decrease of 3.9% after deducting price factors. In terms of permanent residences, the per capita disposable income of urban households was 11,691 yuan, a nominal increase of 0.5%, or a real decrease of 3.9%. The per capita disposable income of rural households was 4,641 yuan, a nominal increase of 0.9%, or a real decrease of 4.7%. By sources of income, the nationwide per capita wage income went up by 1.2% year-on-year in nominal terms, net operating income went down by 7.3%, net property income went up by 2.7%, and net transfer income went up by 6.8%. The per capita disposable income of urban households was 2.52 times that of the rural households, a reduction of 0.01 than that of the same period last year. The median of the nationwide per capita disposable income was 7,109 yuan, down by 0.7%.

Generally speaking, the overall national economic and social development in the first quarter remained stable despite the outbreak of COVID-19. However, we should also be aware that given the continuous spread of the pandemic, the mounting downward pressure of the world economy, and remarkably increasing instabilities and uncertainties, we are now facing increasing pressure related to the prevention of imported infections and new difficulties and challenges for resuming work and production while continuing to promote economic and social development.

For the next step, we must fully implement the decisions and arrangements made by the CPC Central Committee and the State Council, further coordinate efforts to advance both epidemic prevention and control and economic and social development and enhance policy implementation to resume work, production, market function and business. We must guarantee and improve people's livelihoods and accelerate the full restoration of productivity and living order under the normalization of epidemic prevention and control measures, thereby ensuring a decisive victory in building a moderately prosperous society and achieving poverty alleviation goals. Thank you.

Xi Yanchun:

Thank you, Mr. Mao. Now the floor is open for questions. Please identify your news outlets before asking questions.

CCTV:

According to statistics you've just released, economic growth apparently slumped in the first quarter of this year, and the decline of most indicators narrowed to a great extent in March. Under the complex economic circumstances both at home and abroad, what are your comments on the economic situation in the first quarter and its trend in the next phase? Thank you.

Mao Shengyong:

Thank you for your question. Based on the newly released statistics and my introduction, the outbreak of COVID-19 had a great impact on China's economic operation. In the first quarter of 2020, all economic indicators slumped, but we also noted that the main indicators showed recovery momentum in March, and the decline narrowed sharply. At the same time, we must take into account that, despite the impact of the pandemic, basic industry has maintained a normal level of increase; the supply of pandemic prevention commodities and daily necessities has been guaranteed; the livelihoods of 1.4 billion people have been guaranteed, and the overall social situation has been stable.

The statistics had the following prominent characteristics:

First, primary economic indicators improved in March. As pandemic prevention and control measures have continuously taken effect and the resumption of work and production has been accelerated, the decline of main economic indicators — including industries, services, investments, total retail sales of consumer goods, imports and exports — narrowed sharply in March, showing signs of improvement. For example, the value-added of industrial enterprises above the designated size grew by 8.5% year-on-year in March last year, the highest growth speed among 12 months of last year. In March of this year, the value-added of industrial enterprises above the designated size decreased by 1.1%, which is 12.4 percentage points slower than the decline of the first two months. The output of industrial enterprises above the designated size in March returned to the level of the same period last year. In March, as for 41 industries, 90% of the value-added increased faster than that of the first two months and 40% realized year-on-year growth. As for the output of statistically more than 600 main industrial products, 40% of them realized year-on-year growth. Therefore, statistics showed that the restoration of industrial production has taken effect, and the other related indicators displayed similar characteristics. 

Second, employment and commodity prices were generally stable. With the restoration of production and normal life, the overall employment situation was stable. In March, the surveyed unemployment rate in urban areas was 5.9%, 0.3 percentage points lower than that of February. The surveyed unemployment rate of members of the population aged from 25 to 59 was 5.4%, 0.2 percentage points lower than that of last month. We can see that, despite the impact of the pandemic, there was no large-scale unemployment across China, and the employment situation was generally stable. As for commodity prices, the growth of the CPI declined in March. The CPI went up by 4.3% year-on-year in the month, 0.9 percentage points lower than February, and down by 1.2% month-on-month. It grew by 0.8% in February month-on-month. In the first quarter, the consumer price index went up by 4.9% year-on-year, which is 0.4 percentage points lower than that of January and February. What does this mean? The main reason behind the decline of CPI growth was the decline of food price growth, especially the year-on-year decline of pork price growth and its month-to-month decline. The results showed that the food supply was sufficient, and the logistics chain was smooth.

Third, industrial upgrading developed continuously. During the period of pandemic prevention and control, overall production capacity, including the matching capacity of the whole industry, was fully developed. Against the backdrop of a severe pandemic, the industry was not seriously impacted, and the new drivers represented by new industry, products and business models grew against the trend. In March, high-tech industry went up by 8.9% year-on-year, which is 20 percentage points higher than that of January and February. 3D printing equipment, mono-crystal silicon, polycrystalline silicon and smart watch kept developing rapidly. The economic performance related to the internet, e-commerce, online learning and long-distance inquiry was energetic and realized speedy development. The value of online physical commodity retail sales increased by 5.9% in March, accounting for 23.6% of the total retail sales of consumer goods, or 5.4 percentage points higher than that of last year. From the perspective of added value, the value-added of information transmission, software and IT services increased by 13.2% in the first quarter, contributing to the growth of GDP by 0.6 percentage points. The financial industry grew by 6%. Therefore, though the pandemic was daunting, the rapid growth of new drivers was not changed.

Fourth, stable progress has been made in terms of poverty-alleviation tasks. The CPC Central Committee has attached supreme importance to the poverty-alleviation work and funded 139.6 billion yuan during the first quarter of this year that will trickle down to the needy population. So far, construction has begun on more than 260,000 poverty reduction projects in 22 provincial-level regions in central and western parts of the country. Meanwhile, average personal disposable incomes in Sichuan, Guangxi, Tibet, Guizhou and Qinghai, where the size of the destitute population is larger than in other parts of the country, grew nominally by 5.3%, 4.6%, 9.5%, 4.8% and 3.1%, respectively, with each registering a rate above the national average.

Fifth, the momentum of rebound is expected to continue. Electricity consumption, considered one of the most important indicators, registered a decline in March that was far narrower than in the prior month. Nationwide electricity consumption and generation rebounded, and have kept rising since the end of March. Moreover, China's total electricity generation in early April was observed with positive growth. According to the National Bureau of Statistics, the first quarter of 2020 saw 11,477 investment projects -- estimated above 50 million yuan each -- in its database, an increase of 144 in number year on year. Sales of excavators grew by 11.6% year on year in March. Meanwhile, imports and exports have significantly improved compared to the first two months, and in March alone, the performance has been constantly refined. More to the point, based on our investigations and researches, imports and exports kept on ameliorating in early April, following a slew of policies devised to assist enterprises to surmount financial woes and help resume work and production, and these efforts continue to pay off

In our next phase, stronger policies will be rolled out in response to changing situations. It is foreseeable that the economy will continue to rebound, to improve and to secure sound momentum. Thank you.

South China Morning Post:

Based on your prediction, given that the data released on the first quarter reflected a considerable impact caused by the coronavirus pandemic, will the second quarter mark the tipping point of China's economy? Moreover, will China abrogate setting a specific GDP growth target this year? How will you respond to the International Monetary Fund (IMF)'s latest forecast in which the economic growth in China is estimated to plummet to 1.2% this year? Thank you.  

Mao Shengyong:

I would like to answer the third question first. Recently, with the spread of the pandemic and the performance of the global economy, the IMF has substantially lowered its growth forecast, indicating that the world economy may contract by 3% on average. However, China, estimated to maintain a 1.2% growth, is among the few major economies to continue developing with positive growth. Meanwhile, I have also noted that the IMF forecasts China's economy to grow by 9.2% in 2021. The growth, from my point of view, will still average out at above 5% for the two years combined. We can also consider that next year, the Chinese economy will better unleash its activities and compensate losses incurred by the pandemic.

Regarding whether the tipping point will emerge in the second quarter, economic operations greatly improved in March compared to the prior two months, providing a fundamental judgment. The momentum of sound economic recovery in March can be continued, as the basic trend in the economy can play a much better role in the second quarter with the adoption of more influential policies as well as the efficient and orderly resumption of work and production. In addition, if the pandemic can be effectively controlled around the world, the economy in the next half-year should be better than it was in the first half. Our goal is to secure smooth economic operations and social stability throughout the year.

Regarding your concern about the annual growth target, this is always released by the government work report that is delivered during the two sessions (the annual meetings of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference). To better control the pandemic, the sessions have been postponed this year. As a result, we know nothing specific about the rate right now. Thank you. 

Bloomberg:

I also have two questions. First, manufacturers that resume work after the outbreak may be forced to halt production again due to weak demand, rising costs and difficulty in funding and logistics, according to an industry ministry official who was speaking yesterday. Considering that, companies are having to shut down again because of clearly weak export demand and also the dire picture of retail sales and consumption that we saw in the data today. Can growth actually rebound in this quarter? And what will be the driver for that growth? My second question is regarding consumption vouchers, which are being discussed. Their use in places like Taiwan and Japan in the past has had some impact, but the multiplier hasn't really been that high. What is your hope for the multiplier of consumption vouchers? And do you think that will be a strong driver for retail sales and consumption? Thank you.

Mao Shengyong:

Thank you for your question. These two questions are very good. Regarding the first one, in the process of resuming work and production, enterprises may still face difficulties, such as rising logistics costs and reduced orders. Objectively speaking, the current progress of resuming work and production is relatively smooth. The resumption of work and the production of enterprises above the designated size is getting close to 100%, which means essentially all large enterprises have resumed work. At the same time, the resumption of work and production of small and medium-sized enterprises (SMEs) is better than expected, generally speaking, as more than 80% have resumed work. Therefore, the progress of enterprises resuming work and production is generally going well.

The logistics cost you mentioned is actually declining compared to that of previous periods, because production and overall livelihood are gradually being restored. And logistics are smoother in general. However, we must also see that, since the current external situation is more complicated and domestic demand is generally weak, enterprises do still face difficulties in insufficient demands and declined orders. In response to such difficulties, we introduced a series of policies in the earlier stages of the outbreak to help enterprises overcome difficulties, including further tax and fees reduction, and to reduce all aspects of costs for enterprises, including reductions and deferrals, as well as the reduction of social insurance premiums, etc., to increase capital support for enterprises, in turn helping them resume production.

However, we must add that because the current market environment is still relatively complex, enterprises are still facing many difficulties. In the next stage, policy will be further strengthened, and the accuracy of that policy will also be improved.

Regarding the growth of total retail sales volume of social consumer goods you mentioned, in fact, looking at the first quarter, we can see that total retail sales of social consumer goods declined, and the decline was relatively significant. However, looking at what happened in March, we see the resumption of work and production, and the resumption of businesses, and the markets are all progressing. The decline of market sales in March has narrowed significantly compared to the declines in January through February. But the whole first quarter showed a downward trend. In the next stage, as the orders of production and people's lives gradually return to normal, some consumption behaviors suppressed in the previous months will be compensated to some extent in the later periods, and consumption will gradually stabilize and rebound. This is the answer to your first question.

Your second question concerns the consumer vouchers you mentioned. Some countries and regions have introduced these policies, and some local governments in our country have also tried such policies. From the perspective of Zhejiang, Jiangsu and other places, we can see that after the introduction of consumer voucher policies, they have played a relatively good role in expanding the consumption of local residents and promoting market vitality. Thank you.

CNBC: 

Was the negative economic growth in the first quarter of 2020 affected by the spread of the COVID-19 pandemic? In terms of consumption, has internet influencer marketing been impacted? Finally, what are the challenges to employment? What is the current situation in March and April? Thank you.

Mao Shengyong:

Thank you for your questions.

To the first question, the impact of the pandemic is indeed obvious, and it is hard to get a quantitative calculation. This is because some of the impacts are direct, some may be indirect, some are short-term and some may be long-term. A hard hit now may get recovered later, as China's economy is relatively resilient, so any specific quantitative calculation is still difficult. 

My second answer relates to consumption and internet influencer marketing. In the next step, we need to boost domestic demand to promote the smooth running of China's economy, which is based on stable foreign trade and investment at the same time. We should invest more and unleash consumer potential to promote domestic demand. China has huge consumer potential, but with the current spread of COVID-19, people cut their spending. Furthermore, consumer potential will be gradually tapped; for example, we will see new consumption patterns growing quickly and an effort to target online shopping. On the whole, the curb on consumption seen in early stages will be lifted in later stages, with new consumption types functioning actively.

To the third question, I'll address employment challenges. Statistics show China's overall employment situation is stable, with an unemployment rate in March that decreased by 0.3% and the main labor force group (aged 25-59) showing a 0.2% drop compared to last month. However, we still face relatively great pressure, especially in the stages with the increasing downward pressure of the economy, decreased orders from enterprises and lessened demand. In this case, rural migrant workers and college students are the key groups who are under relatively big pressure. In response to this situation, China has introduced employment priority policies, which have been implemented with concerted effort. On the one hand, our country is doing everything possible to help enterprises weather difficulties and maintain a balanced employment rate. On the other hand, we should assist key groups; for example, we should increase training for migrant workers and help them return home to start their own businesses. Next, we should continue to promote innovation in employment and business startups in a flexible way. Generally speaking, greater efforts should be made to advance the overall employment balance. The situation in March and April stands as such: In March, the employment situation was obviously rising and improving, and this trend should continue in April. Thank you.

China National Radio (CNR):

We have noticed that the added value of the primary industry dropped 3.2%. What is the cause of this? And does it have negative implications for the agriculture sector? Many people have begun stockpiling grain. Is this necessary? Thanks.

Mao Shengyong:

Thanks for your questions. The decrease in the added value of the primary industry is mainly attributed to the slow course of animal husbandry. As we all know, due to the African swine fever, hog production has seen a year-on-year decrease despite monthly increases. Hence, the pork production in Q1 decreased 29.1% compared to the same period last year. The epidemic has also affected livestock and poultry production, causing a decrease of 10.6% on animal husbandry's total output value. In Q1, the output of animal husbandry accounted for 45% of the entire primary industry, so its slowing drove down the growth of the added value of the primary industry. 

Second, agriculture production now goes well. As it stands, spring plowing and planting has proceeded in an orderly fashion, essentially unaffected by the epidemic. Winter wheat, which accounts for more than 90% of the total summer crops, is growing well. According to a survey, the sown areas in many granary provinces maintain continuous growth, reversing a multi-year trend of decline. In addition, the advantageous conditions and situation for agriculture production provide favorable conditions for this year's grain harvest. 

Third, the current grain price is generally stable. As we all know, the yearly grain output has surpassed 650 billion kilograms in the past five years, reaching a record high in 2019. Currently, the self-sufficiency rate of grain in China is quite high, and we have an abundant stockpile. Therefore, from the perspective of supply and demand, the grain price remained stable in the first quarter despite the large impact of the epidemic. Even in hard-hit places, including Wuhan, there was no major fluctuation in prices. The grain price in Q1 increased 0.6% year on year, and the price in March grew 0.7% compared to the same period last year. Both are modest increases, and the monthly increases are even. It indicates that China has strong grain supply capacity and the supply-demand relationship is generally stable. Therefore, the country is fully capable of feeding its people. 

Fourth, in terms of animal husbandry, livestock production is improving, especially hog production. Along with the further resumption of work and production and the implementation of supportive policies, hog production is being resumed and greatly improving. By the end of Q1, pig stocks grew 3.5% compared to the end of last year, and the number of breeding sows increased 9.8%, maintaining growth for two consecutive quarters. Therefore, the entire animal husbandry sector is speeding up resumption and improvement. Thank you. 

Financial Times: 

I have two questions. First, will the economic downturn in the first quarter of 2020 have an impact on achieving this year's goal of building a moderately prosperous society in all respects? And will the gross domestic product (GDP) of 2020 double that of 2010? The second question is about the economic growth criteria. Some experts have mentioned the concept of relative economic growth before. Do you think we should abandon the current economic growth target? Thank you.

Mao Shengyong:

Thank you for your questions. The growth rate in the first quarter of this year needs to be viewed objectively. We cannot simply compare this year's economic growth with that of a conventional year due to the outbreak of COVID-19 and the considerable impact it will produce this year. We need to look at the Q1 economic growth with a calm mind.

First, we need to take into account the severe impact of the pandemic. The novel coronavirus disease epidemic is a major public health emergency that has spread the fastest, caused the most extensive infections and been the hardest to contain since the founding of the People's Republic of China in 1949. Facing such a severe epidemic, the CPC Central Committee has been putting people's safety and health as the top priority. A variety of forceful prevention measures have been put in place. The epidemic transmission was contained in a relatively short period, which prevented millions more from being infected and saved the lives of many Chinese people. Nevertheless, the price of achieving this was short-term economic loss.

Second, we need to consider the backdrop wherein the global economy and trade have declined sharply. As the pandemic has spread to more than 200 countries and regions worldwide, global cross-border investment, trade in goods and personnel exchange has fallen sharply. Some countries and institutes have lowered their growth forecast. China can hardly stand aloof against such a backdrop.

Third, we need to look at the advantages of China's entire industrial system. China's strong industrial production capacity, as well as its supporting facilities that are in an advantageous place, played a unique role in epidemic prevention and control. Meanwhile, such capacity has been further consolidated and enhanced over the course of the epidemic rather than being damaged by it. Despite a slowdown in growth, the industrial system as a whole was not impacted and neither was the entire production capacity. China has a sound social production system and ample production capacity. When the economy recovers, the capacity will release gradually.

Fourth, we need to see that the long-term upward trend of China's economy has not changed. The epidemic is a public emergency. The basic conditions and factors supporting China's long-term economic growth have not changed. The Chinese market is large and growing rapidly with great potential. Such fundamental characteristics will not change. In light of supporting factors, China has a sound industrial foundation with a strong supporting capacity and an ample labor force of constantly accumulating human capital as well as efficient logistics and transportation facilities, which will effectively support its medium- and long-term economic growth. Meanwhile, China will continue to deepen reforms and opening up and promote innovation to unleash the driving force, the potential and vitality of the economy. Therefore, the fundamentals of China's economy that is on a long-term upward trend will not change over the course of the short-term impact incurred from the epidemic. China's GDP in Q1 dropped 6.8 percent year on year. We need to consider this information with a calm mind, taking into account fundamental factors, including the impact of the epidemic, changes to the external environment and the advantages of China's own industrial system that is on a long-term upward trend. 

With regard to the goal of building a moderately prosperous society in all respects, one of the two centenary goals set out at the 18th CPC National Congress, China has basically achieved the goal on the whole after years of sustained economic and social development. Of course, there are still some shortcomings, the biggest of which is poverty alleviation. So, the focus of the entire Party and the whole country is to set itself on a course that will lead to winning the battle against poverty. As we make progress and win battles, the goal of building a moderately prosperous society in all respects will be better achieved. Such a society will be of better quality, more amenable to the test of history and more satisfying to the people.

Speaking globally, the Chinese economy fared slightly better in the IMF's forecasts. But the world has been affected and impacted by the COVID-19 pandemic on the whole. This shows that the world is indeed a global village and a community with a shared future for humanity, and the virus is the common enemy of all humanity. In this instance, the world needs to step up international cooperation to contain the epidemic as soon as possible by improving development and research in order to find solutions. In this way, we can get the world economy back on track at an early date. Thank you.

BBC:

I noticed the headline of today's press conference is about notable progress in coordinating epidemic prevention and control and economic and social development. You mentioned just now that falls in many economic indicators has been narrowing, and the effect of resuming production and work is obvious. We know that all governments are willing to emphasize what has been achieved. However, looking at the worst data released on this report, how big of an effect do you think these numbers will have?

Mao Shengyong:

Thank you. This is a very challenging question. We just introduced lots of data. Generally speaking, economic indicators have dropped a lot in the first quarter due to the epidemic outbreak. But at the same time, this trend has improved remarkably in March thanks to a series of policies. This is a conclusion drawn from key data.

The biggest domestic challenge, as you mentioned, is working hard to help enterprises. We will enhance targeted support to main market players, including small and medium-sized enterprises, to help them get through this difficult time. We will support them in terms of taxation, fees, costs and financial support. Employment and the economy can only be secured if enterprises are stable. This is one aspect.

Second, from a global point of view, countries around the world should enhance cooperation during this difficult time, especially in the field of epidemic prevention and control, so as to make the epidemic prevention and control more effective and reduce the impact of the outbreak. Work resumption and the order of life will then get back on the right track, and the world economy will be more likely to return to normal, only if the epidemic is under control. Thanks.

Yicai TV:

Although consumption has declined markedly in the first quarter of this year, online retail has remained resilient throughout the process. Will online retail and the related economy contain further and greater growth potential in the future? Thank you.

Mao Shengyong:

Regarding consumption, we can look at this from two aspects.

First, consumption did experience some restraint in the first quarter, especially in terms of outdoor activities and service consumption. Next, as the order of production and life returns to normal gradually, consumption previously depressed will receive some compensation, and the consumption will gradually return to normal. In addition, although consumption has been affected by the epidemic, we must firmly recognize that consumption in our country still possesses huge potential. The steady and sound development of the Chinese economy in the future depends largely on the expansion of consumption. So how can we expand consumption? The core answer consists of two parts: consumption ability and consumption intention. Some people may wonder if consumption still contains such potential given that the national average income was not very good in the first quarter. But consumption is not determined solely by current income, it also involves expected income and the status of property, including savings. Thus, household income is only one of the factors affecting short-term consumption. In the next stage, with the gradual recovery of the economy, the residents' income will gradually increase. Regarding consumption intention, the desire for a better life among our people is quite strong, and the overall trend of upgrading the consumption structure is irreversible. In particular, at present, the degree of social security is constantly improving, its coverage is expanding, and its level is increasing year by year. Under such circumstances, the consumption in our country still possesses huge potential. Next, we will strengthen the intensity of policy implementation and unleash the potential of consumption. Recently, we have introduced a number of policies to expand consumption, including a policy jointly released by 23 ministries and commissions.

Second, new forms of consumption related to the internet have shown strong performance. As the use of the internet becomes increasingly widespread, it has deeply influenced people's production and life. The growth of online consumption is relatively faster, and its proportion of the total consumption will gradually increase. This is a basic development trend. Thank you.

Xi Yanchun:

I just returned to Beijing from Wuhan. During the prevention and control of the epidemic, the Chinese people were presented with a very tough situation. However, after the fight against the outbreak, China has gained the confidence, courage and strength to overcome any difficulty and any challenge. Just as Mr. Mao said, the Chinese economy is presently facing a number of challenges. However, we should view China's economic development from a comprehensive, dialectical and long-term perspective, because the Chinese economy has the condition, the ability and the confidence to turn crisis into opportunity and gain initiative in development. If you have any questions about China's economic development, please feel free to let us know. We are more than willing to provide you with better information services. Thanks again to Mr. Mao, and thank you all. Today's press conference is hereby concluded.

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Read in Chinese

Speakers:

Xu Hongcai, vice minister of finance

Liu Guoqiang, vice governor of the People's Bank of China 

Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission 

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office of China

Date:

April 3, 2020

Hu Kaihong:

Good morning, ladies and gentlemen. Welcome to the Joint Prevention and Control Mechanism of the State Council press conference. Today we have invited Xu Hongcai, vice minister of finance, Liu Guoqiang, vice governor of the People's Bank of China (PBC), China's central bank, and Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC). They will introduce the measures taken by the Chinese Government to increase the scale of special local government bonds and provide inclusive financial support to micro, small and medium-sized enterprises and will also answer your questions.

Let's first give the floor to Mr. Xu. 

Xu Hongcai:

Good morning, ladies and gentlemen and media friends. 

Increasing the special local government bond quota allocated in advance can help accelerate bond issuance and use, which is of great importance in stepping up macroeconomic control and striking a balance between epidemic prevention and social and economic development. The Central Committee of the Communist Party of China (CPC) and the State Council have attached great importance to this. Xi Jinping, general secretary of the CPC Central Committee, stressed that proactive fiscal policy should be strengthened, the fiscal deficit ratio be raised as appropriate, special treasury bonds be issued and special local government bonds be increased at a meeting of the Political Bureau of the CPC Central Committee, a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee, and a meeting for coordinating COVID-19 prevention and control and social and economic development. 

Premier Li Keqiang has presided over meetings of the Central Leading Group for Epidemic Control and State Council executive meetings where he has called for accelerating the issuance and proper use of special local government bonds, and paving the way for projects to start or resume construction as soon as possible to bolster and expand effective investment. Vice Premier Han Zheng and other State Council leaders have also made clear their requirements. The State Council executive meeting held on March 31 decided to release some special local government bond quota in advance to promote and expand effective investment. The Ministry of Finance (MOF) has implemented the decisions and plans of the CPC Central Committee and the State Council.

This year, in line with the decisions of the CPC Central Committee and the State Council and the authorization of the Standing Committee of the National People's Congress, China's top legislature, the MOF released 1.29 trillion yuan of newly added special local government bond quota. As of March 31, various areas across China issued 1.08 trillion yuan of newly added special bonds, accounting for 84 percent of the quota and increasing 63 percent year on year. It is estimated that China will accomplish the bond issuance task two and a half months in advance. The amount of newly added special bonds spent on projects was 825.5 billion yuan, accounting for 77 percent of the total. According to the requirements of the State Council executive meetings, the newly added special bonds issued by local governments should all be used for building transportation infrastructure such as railways and major infrastructure projects in environmental protection, agriculture, forestry, water resources, municipal utility projects and industrial parks. 

The amount of special bonds used as capital fund for major projects was about 130 billion yuan, which will help promote private capital and expand effective investment. The duration of the newly added special bonds is 14.5 years on average. Of these, 933.1 billion yuan will have a duration of over 10 years, accounting for 86 percent of the total, up 52 percentage points from 2019. The duration is more reasonable compared to previous years and better suits the duration of relevant projects. On the whole, the issuance and use of newly added special local government bonds are going smoothly.

The State Council executive meeting held on March 31 decided to allocate another batch of special local government bond quota in advance in accordance with procedures while ensuring the issuance and use of the quota that had already been released. This arrangement has been made based on factors such as the 2020 fiscal budget, local project construction requirements and the progress of the issuance and use of special local government bonds. The MOF will move to implement the recent decision. The bonds will continue to be used for major infrastructure projects decided upon at State Council executive meetings, including transportation, energy, agriculture, forestry, water resources, environmental protection, people's livelihood, cold-chain logistics, urban utility projects and industrial parks. 

In the meantime, we have optimized the use of bonds based on epidemic control and changes in funding needs. Major national strategic projects have been prioritized and will get key support. Old compound renovation has been added to the list of areas where special bonds can be used. The special bonds can also be used for emergency medical care, public health, vocational education and urban utility facilities such as heating and gas supply. Construction of new infrastructure such as 5G networks, data centers, artificial intelligence, logistics and the Internet of Things will be accelerated. Quota allocation will be tilted in favor of places with a large number of major projects and low epidemic risks. Meanwhile, a larger proportion of this year's newly added special bonds will be used as capital fund for major projects to mobilize more private investment.

In line with the decisions of the CPC Central Committee and the State Council, the MOF and other departments have guided and urged local governments to make preparations and carry out review, approval and selection of projects in advance. The newly added special bonds will be used to finance projects on the ground and will effectively drive the economy.

In addition, the MOF has also placed great importance in supporting the financing and development of micro and small enterprises. Since the start of the epidemic, the MOF has worked with the PBC and the CBIRC to implement a series of measures to encourage the state financing guarantee fund and local government financing guarantee and re-guarantee institutions to reduce fees, exempt counter guarantee requirements, improve service efficiency and provide credit enhancement services for micro and small enterprises. Repayment of guaranteed loans for startups that meet certain requirements can be postponed and micro and small enterprises will have priority in getting loans and interest discounts. The MOF will continue to work with the PBC and the CBIRC to guide financial institutions to increase support for micro and small enterprises to tide them over through the difficulties. Thank you.

Hu Kaihong: 

Thank you, Mr. Xu. Next, let's give the floor to Mr. Liu. 

Liu Guoqiang:

Good morning, media friends. In the face of the impact of the novel coronavirus outbreak on micro, small and medium-sized enterprises, the PBC has taken swift action to confront the new challenges to expand domestic demand, help the resumption of production and stabilize employment under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the decisions and plans of the CPC Central Committee and the State Council.

We have launched a series of measures to provide targeted financial services for epidemic prevention and control, resumption of production, and the development of the real economy. 

First, we have maintained reasonable and ample liquidity. The central bank injected 1.7 trillion yuan into the market to provide short-term liquidity after financial markets reopened. After reducing the reserve requirement ratio by 0.5 percentage point at the beginning of the year in order to release 800 billion yuan, we cut the banks' reserve requirement ratio in a targeted approach to release 550 billion yuan in long-term funding for issuing inclusive loans. 

Second, we have provided targeted relending and rediscount support by establishing a 300-billion-yuan relending program for epidemic control, with over half diverted to micro, small and medium-sized enterprises. The discounted interest has helped reduce micro and small enterprises' interest cost to less than 1.3 percent. In addition, we have granted another relending and rediscount quota of 500 billion yuan and reduced the interest rate of relending for agriculture and small enterprises by 0.25 percentage point to 2.5 percent. We have also used low-cost inclusive funding to support micro, small and medium-sized enterprises in critical sectors to resume production. 

Third, we have guided the interest rate lower. After the central bank cut the reverse repo rate by 20 basis points on March 30, cumulatively the rate had been cut by 30 basis points so far this year. 

Fourth, we have mobilized the whole financial system to work together. We have urged large state-owned banks to step up inclusive support for micro and small enterprise, offered special-purpose credit support through policy banks, guided local banks to provide better services and strengthened counter-cyclical adjustment. 

All these measures are now showing remarkable results. M2 and non-governmental financing growth rates are largely consistent with and a little higher than that of nominal GDP. Against the backdrop that the real economy is not yet fully resumed, the growth of newly increased loans has hit a record high. Micro, small and medium-sized enterprises are getting more credit at lower financing costs. The money market interest rate level is falling. Meanwhile, the renminbi exchange rate remains stable, while external financial risks are being effectively controlled.

The 88th State Council executive meeting decided to further strengthen inclusive financial support to micro, small and medium-sized enterprises. First, 1 trillion yuan of relending and rediscount quota will be provided to small and medium-sized banks, in addition to the 300 billion yuan and 500 billion yuan previously mentioned. This will be a continuing process that will help a large number of micro, small and medium-sized enterprises suffering high financing costs to obtain relending and rediscount. 

Second, further targeted cuts to the reserve requirement ratio will be carried out for small and medium-sized banks. With a large number of widespread outlets that mainly serve grassroots clients, these banks are inclusive by nature. In other words, unable to meet the needs of large clients, they have to serve small businesses. Implementing a lower reserve requirement ratio at these banks will be an important measure to continue financial supply-side reform. Through reform, the financial supply structure and credit fund allocation will be optimized, so that small and medium-sized banks can better focus on micro, small and medium-sized enterprises, increase credit supply, lower financing costs and contribute more to the real economy. 

Third, bond financing will be further enhanced. The authorities will support financial institutions to issue 300 billion yuan in financial bonds to specifically support micro and small businesses, and guide net financing in corporate credit bonds to increase by 1 trillion yuan over last year. These will be conducive to increasing financial institutions' funding sources, expanding the channels of diversified low-cost financing for businesses and improving financial services.

In the future the prudent monetary policy will be more flexible and moderate. Sticking to the worst-case-scenario thinking and considering changes in epidemic control and economic conditions, we will control the focus and pace of our policies, and give greater prominence to supporting the recovery of the real economy. We will strengthen the aggregate adjustment of monetary policy and counter-cyclical adjustment, balance the relationship among stabilizing growth, preventing risks and controlling inflation, and ensure that M2 and non-governmental financing growth rates are largely consistent with and a little higher than that of nominal GDP. Taking into consideration the characteristics of micro, small and medium-sized enterprises and current constraints, we will work to implement the existing measures to help enterprises out of difficulties. In addition, we will enhance international cooperation and guide market expectations through multiple channels. Thank you.

Hu Kaihong:

Thank you, Mr. Liu. Next, the floor goes to Mr. Zhou.

Zhou Liang:

Good morning. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core, the whole nation is united. Epidemic control in China is continuing to improve and consolidate, production is resuming in an orderly manner and the recovery of economic and social order is accelerating. But the global spread of the virus is now growing, increasing the risk of a global economic recession. China's economic and social development is facing external risks.

General Secretary Xi Jinping urged the intensification of macro control and the implementation of macro policies to provide more targeted financial services for epidemic control, the resumption of production and the development of the real economy. Under the decisions and plans of the CPC Central Committee and the State Council, and the leadership of the Financial Stability and Development Committee of the State Council, the CBIRC has implemented a series of measures to guide banking and insurance institutions to support enterprises in resuming production and maintaining financial security and stability, which have borne abundant fruit. Figures showed that in the first quarter of 2020, the banking sector granted nearly 7 trillion yuan in new loans, up by 1.18 trillion yuan year on year, giving powerful support to the development of the real economy. Insurance institutions have also played their safeguarding and stabilizing role in society. Meanwhile, banking and insurance institutions have fulfilled their social responsibilities, donating about 2.7 billion yuan to the fight against the virus. In cooperation with Chinese embassies in foreign countries, they have provided facemasks, disinfectants and other anti-epidemic materials free of charge to overseas Chinese students and staff members of Chinese-funded enterprises and institutions overseas. In addition, they have made donations within available resources to 59 countries and regions seriously hit by the epidemic. 

By carrying out the decisions and plans of the CPC Central Committee and the State Council, the CBIRC will implement various policies, comprehensively improve the quality and results of serving the real economy, control financial risks and deepen financial reform in the future, with the aim of contributing to winning the battle against the epidemic and ensuring steady and sound economic and social development. Thank you.

Hu Kaihong:

Thank you, Mr. Zhou. Now we will take questions.

CCTV:

Compared to previous years, what are the new characteristics of and changes in this year's special bonds? Thank you.

Xu Hongcai:

Thank you for your question. In accordance with the decisions and plans of the CPC Central Committee and the State Council, this year's special bonds will focus more on supporting economic and social development as well as epidemic control. Compared to previous years, the highlights and changes will be in the following aspects:

First, the scale will be expanded prudently. In the past two years, with the authorization of the National People's Congress and the approval of the State Council, some quotas for newly increased special bonds have been allocated in advance. In 2019, the quota was 810 billion yuan, while this year, the work has been done even earlier. The MOF has already allocated a quota of 1.29 trillion yuan in new special bonds. In addition, a decision has been made to grant another quota. This year's total volume has surpassed that of last year.

Second, issuance and utilization are being expedited. As was just explained, by March 31, local governments had issued 1.08 trillion yuan in special bonds, surging by 63 percent year on year. Moreover, an additional quota will be granted. The expedited issuance of bonds and fund utilization will help intensify macroeconomic policy regulation to offset the impact of the epidemic as soon as possible.

Third, the funds raised will be earmarked for designated projects. The additional quota for local government special bonds will be skewed in favor of regions with a large number of major projects and low epidemic risks where investment can effectively stimulate economic growth. Increased funds will help accelerate construction of key projects, including those that will improve people's wellbeing.

Fourth, utilization of funds will be optimized to meet the demand of epidemic control and demand changes in the investment sector. Today, the funds raised by special bonds are mainly used in seven sectors--transport infrastructure; energy; agriculture, forestry and water resources; environmental protection; services essential to people's livelihood; cold-chain logistics; as well as urban utility projects and infrastructure in industry parks. In the future, utilization of such funds will be properly expanded, with national key strategic projects prioritized for major support. Meanwhile, funds will go toward the renovation of old urban communities, while local governments will be allowed to invest these funds in emergency medical care, public health, vocational education and urban facilities such as heating and gas supply, especially in accelerating the construction of new infrastructure, including 5G networks, data centers, artificial intelligence and the Internet of Things.

Fifth, the proportion of funds raised by special bonds in the capital fund of key projects will be raised in order to mobilize more private investment. As for the newly issued special bonds this year, local governments are allowed to appropriately raise this proportion, while keeping in line with policies and risk control requirements, so as to better use the special bonds to attract more private investment. Thank you.

Nihon Keizai Shimbun:

Since last August, China's loan prime rate (LPR) has dropped by 26 basis points, which has led to a decreased bank spread. Some banks are calling for a lower benchmark deposit interest rate. What is your opinion?

Liu Guoqiang:

It's true that the decline in LPR results in a decreasing bank spread. But we will take measures, such as providing low-cost funds from the central bank and maintaining reasonably sufficient liquidity in the financial market, to greatly reduce banks' financing costs in the market. At the same time, we are also considering increasing support for banks, especially small and medium-sized banks. The deposit interest rate is a tool that can be used, but many things have to be taken into account before we use it, since it plays a special role as an anchor in the interest rate system. For example, we need to consider price. The Consumer Price Index (CPI) is now 5.3 percent, significantly higher than the one-year deposit interest rate, which is 1.5 percent. Other considerations include economic growth, as well as the exchange rate. With a lower interest rate, we may face greater pressure from currency devaluation. In particular, the deposit interest rate has a more direct impact on ordinary people. To apply a negative deposit interest rate, sufficient evaluation, including ordinary people's opinions, is required. To sum up, it is a tool that can be used, given that its use is fully evaluated.

China Financial and Economic News:

I have two questions. First, what is the current level of government debt in China? Second, what measures is the CBIRC considering to deepen reform and prevent risks for small and medium-sized banks, which are vulnerable in the face of a volatile international market and increasing downward pressure from the domestic economy? Thank you.

Xu Hongcai:

Thank you for your questions. In general, the size of China's government debt has increased over the years, but at a manageable rate. As of the end of 2019, China's local government debt was 21.31 trillion yuan. If measured by the debt ratio (debt balance/comprehensive financial strength), the local government debt in 2019 was lower than the internationally accepted alert standard, at a rate of 82.9 percent. Along with the 16.8 trillion yuan of Central Government debt at the end of 2019, the total national government debt rate (debt balance/GDP) was 38.5 percent, based on the GDP data released by the National Bureau of Statistics, which is lower than the EU's 60 percent warning line and of major market economies and emerging economies. At present, the risk of China's government debt is generally at a controllable level. Thank you.

Zhou Liang:

You also asked the question about deepening reform and preventing risks for small and medium-sized banks. At present, there are more than 4,000 small and medium-sized banks in China, and their total assets account for about a quarter of our entire banking system. They are an important part of our banking system. For a long time, small and medium-sized banks have played an irreplaceable role in supporting local economic development, serving the private sector and small businesses, and facilitating issues related to agriculture, rural areas and rural residents. On the whole, small and medium-sized banks are operating steadily. Although the amount of non-performing assets has risen slightly, the risks are manageable, and the main operating indicators and regulatory indicators are at a reasonable range.

Let me review the measures introduced by the CBIRC in the past three years, especially after the CPC Committee introduced the prevention and mitigation of financial risks as a key mission. The CBIRC has adopted a series of measures to promote the reform of small and medium-sized banks and prevent and mitigate risks.

The first measure focused on the banks' main obligations and operations. We resolved to reverse any deviation from their main businesses and a blind pursuit of speed and scale, so that these banks can return to the businesses they were intended to do and focus on providing local services. In particular, they are expected to strengthen financial services within the community and county where they are located, with strict regulations on operation in other places.

The second measure improved corporate governance. We have sought an approach to integrating CPC leadership into the entire process of corporate governance and strengthening performance evaluation and accountability of the general meeting of shareholders, board of directors, board of supervisors and senior management, as well as directors, supervisors and senior executives. Those who fail to perform their duties will be held accountable and improper performances must be corrected. Deferred payment of remuneration and recourse were implemented as part of an effort to strengthen the incentive and restraint mechanisms.

The third measure optimized the shareholding structure. This included strictly reviewing shareholder qualifications, strengthening the "penetrating" management of shareholders, especially actual controllers, and regulating shareholder behavior, as well as rectifying illegal use of bank funds, illegal acquisition of bank equity, nominal holding of shares and manipulation of bank management via improper means. Recently, we investigated and dealt with the problem of inadequate equity management of some small and medium-sized institutions, removed ill-performing shareholders and adopted regulatory measures in strict accordance with the law. In addition, we carried out centralized custody of equity and applied strict regulations on equity pledge and change, as well as capital increase, in an effort to prevent insiders or major shareholders from illegally using banks and financial institutions as cash dispensers.

The fourth measure clarified the responsibilities of all parties. First of all, we clarified the primary responsibilities of small and medium-sized banks in deepening reform and risk control, because whether a bank operates well mostly depends on its efforts. It is necessary to use strict supervision to force banks to meet their responsibilities, improve their management system and risk control system, and operate in accordance with the law. Secondly, we promoted the fulfillment of responsibilities by local Party committees and governments. Small and medium-sized banks are basically operated locally, and therefore shareholders funded by local state-owned capital must fulfill their responsibilities. Once a risk occurs, the local government must fulfill their responsibility to handle it locally. As a financial administration, the CBIRC must fulfill its supervising responsibilities. As a supervisor, it must not be afraid to offend people and cannot be a "scarecrow." Instead, they must dare to supervise and be good at supervision, and rectify illegal acts.

The fifth measure enhanced capital strength. By accelerating the disposal of non-performing assets, classifying assets, increasing provisioning and profit retention, banks can have better endogenous capacity for replenishing capital. By issuing common shares, preferred shares, non-fixed-term capital bonds and second-tier capital bonds, banks can have more channels and methods for supplementing capital. Local governments are encouraged to inject funds or realizable assets to some small and medium-sized banks under high risks, or replenish capital for small and medium-sized banks through capital injection by state-owned enterprises. At the same time, we welcome qualified and competitive private enterprises and foreign-funded institutions to participate in the reform and reorganization of small and medium-sized banks.

The sixth measure applied policies based on specific situations. Instead of developing any universally applicable policy, we applied policies specific to an area or industry, taking into account of its priorities. For a few institutions under high risks, we used precise measures to remove the danger.

The seventh measure increased anti-corruption efforts in the financial sector. Those who engage in illegal and criminal activities, such as abusing power for money and tunneling, will be severely punished.

To sum up, as a result of regulation and governance in recent years, great improvements have been made in small and medium-sized banks regarding a development model, corporate governance, operation and management, and resistance to risks. We are very confident in their ability to deal with risks.

I will give you a successful example. Hengfeng Bank is a bank with assets close to 1 trillion yuan. Due to the suspected crimes committed by the bank's previous two chairpersons, it had a large number of bad assets. The regulatory authorities took decisive measures to deal with the issue. First of all, along with relevant parties, they replaced the chairperson, president and other senior executives, and reshuffled its leadership. Those that illegally possessed the bank's shared were expelled according to law, and all violators were investigated and held accountable. At the same time, the CBIRC, in close cooperation with the PBC, the MOF and local governments, introduced new strategic investors after the bank was stripped of non-performing assets and injected with capital by local governments. Under the premise of marketization and the rule of law, they successfully mitigated risks and completed the reform and reorganization of the bank. The market remained stable and there were no big fluctuations. Thus, we can say that we achieved the Central Government's goal of defusing risks precisely and maintaining overall stability.

Next, the CBIRC will continue and deepen the reform of small and medium-sized banks by mitigating risks and helping them to embark on the road of high-quality development. Affected by the epidemic and the economic downturn, a small number of these banks have accumulated problems, such as inadequate internal control and corporate governance, and are threatened by some risks and challenges. We will take bank-specific measures based on their actual situation, in line with the principles of marketization and rule of law. These will include reorganization with direct capital injection, horizontal mergers, the establishment of disposal funds and bridge banks, and the introduction of new strategic investment to accelerate reform and reorganization. We will also fully assess the risks that may arise in the process, make various plans and firmly adhere to the bottom line that no systemic financial risks can occur. Problems may pop up in certain banks, but we are confident that things are largely under control, and there will be no regional and systemic risks. Thank you.

Economic Daily:

At present, the epidemic is spreading all over the world. Will its impact exceed that of the financial crisis of 2008? In addition, if the Q1 economic data is not what is expected, does the central bank have a new way to deal with it?

Liu Guoqiang:

This is a very important issue. Many people are now probably concerned about the current state of the economy and how to handle it. They each have their own opinion, some of which may be quite different. As for the world economy, the impact will be great. But how serious will it be and when will it get better? This is still full of uncertainties. My answer may not be enough, but I can only speak to this extent. I cannot provide anymore certainty.

The impact is currently obvious in three aspects. The first is in the industrial chain. Some enterprises, and even industries, can't produce without raw materials. The second is in trade channels. There are no orders even if enterprises do produce items. These two impacts are very significant. The third one is in the fluctuations of market expectations as everyone tries to lower risks. 

What will happen next? And will the impact exceed that of the 2008 financial crisis? The answer is no for now. Let's look at the stock market for example. Since February 24, the stock markets around the world have fallen about 25 percent. During the 2008 financial crisis, they dropped by about 50 percent, which is seen as a sign of a crisis. So far, they have plummeted by 25 percent. Will they drop another 25 percent? No one knows. The International Monetary Fund recently said that the global economy may have negative growth in 2020, and the recession may exceed the financial crisis of 2008. This statement is relatively clear, but it's only a possible scenario. So it is very uncertain. However, at the same time, we should not ignore that at present, each country has introduced a great deal of hedging policies, while also putting more efforts into epidemic prevention and control. International cooperation is also being enhanced, so we need to follow up and pay close attention to developments.

What will the impact on China be? The Q1 data hasn't come out yet. Taking the epidemic situation into account, I think the data will certainly not look good, but we should also see marginal changes. A comparison between February and March will show a significant improvement in March. Therefore, I think the impact of the epidemic on China's economy will be temporary. China's economy will continue to show strong resilience. In addition, we have a variety of tools and sufficient policies to stabilize economic growth.

What to do next? The central bank has issued a prudent monetary policy which pays more attention to flexibility and moderation, and puts support for the recovery and development of the real economy in a more prominent position. This is also required by the CPC Central Committee. Specifically, there are several aspects. 

First, we should implement policies in stages with due consideration for their extent, key points and timing. In the early stage, epidemic prevention and control was the core, which gradually turned into resuming production. Now, we need to recover whole industrial chains to make the whole economy move. Therefore, it is necessary to keep liquidity reasonably adequate to fully meet market demand. That is to say, we should not let the market run short of money or cause inflation. We should make sure M2 and non-governmental financing growth rates are largely consistent with and a little higher than that of nominal GDP. 

Second, we will continue to make good use of the 300 billion yuan in special relending fund and the 500-billion-yuan relending and rediscount program, both of which have been issued. Presently, the two quotas have not been used up and they of course should be utilized in a more targeted way.

Third, the new 1 trillion yuan in inclusive refinancing, which is also a relending and rediscount fund, should be implemented. This covers a wider scope than the previous 500 billion yuan, and should be implemented as soon as possible to achieve a seamless connection with the previous policy without interruption. 

Fourth, we should implement targeted cuts to the reserve requirement ratio and give full play to the positive incentive and guiding role of reserve tools. 

Fifth, we should promote LPR reform, strengthen pricing self-regulatory mechanisms, guide banks to cut their profits to a certain extent in favor of the real economy, and facilitate a significant drop in enterprises' comprehensive financing costs. 

Sixth, we need to strengthen global cooperation, create a good international environment and work with the international community to fight the epidemic and stabilize the global economy. At the same time, we should further our active communication with the market and the media, and make our policy intentions clear in a timely manner. Thank you. 

CNBC:

First question is about the afore-mentioned 300 billion yuan and 500 billion yuan loans. Are there any figures for the current situation of its implementation? The second question is: What are the specific MOF measures or policies being taken to support micro, small, medium-sized enterprises and are there any new measures to effectively stimulate consumption? Thank you.

Liu Guoqiang:

Yes, there are a few figures. The first is about the 300-billion-yuan specific relending fund, which is mainly used for major companies to fight against the epidemic and ensure supplies such as medical materials. As of March 30, the 300 billion yuan had been disbursed to nine national banks and some corporate banks in 10 key provinces and municipalities. A total of 228.9 billion yuan preferential loans had been given to 5,881 major companies, each getting no more than 40-million-yuan loans. The weighted average interest rate was 2.51 percent and after an MOF 50-percent interest subsidy, the companies' actual financing interest rate was about 1.26 percent. That's it for the 300 billion yuan. There is another 500 billion yuan relending and rediscount quota for banks focusing on supporting the orderly resumption of work and production. By March 30, local corporate banks had accumulatively issued 276.8 billion yuan in preferential interest rate loans, including subsidies, which have supported 351,400 enterprises (including rural households). Specifically, the agriculture-related loans were 55.2 billion yuan, with a 4.38-percent weighted average interest rate; inclusive financing for micro and small enterprises stood at 155.6 billion yuan, with a weighted average interest rate of 4.41 percent; and subsidies reached 66.1 billion yuan, with an interest rate of 3.08 percent. These interest rates are in line with the State Council's requirement of no higher than 4.55 percent.

There was an additional 1 trillion yuan of relending and rediscount proposed a few days ago at the 88th meeting of the State Council. It's supposed to go along with the recovery of the real economy and the previous 300 billion yuan and 500 billion yuan policies in case there is a gap between policies. It aims to provide low-cost financing support for small and medium-sized banks through the PBC's relending and rediscount tool. The cost is the same as the previous 500 billion yuan at 2.5 percent. The move can lower the cost of debt for small and medium-sized banks, which accordingly will improve their capacity to deliver profits to micro, small and medium-sized enterprises. For the 1 trillion yuan of relending and rediscount, we will require small and medium-sized banks to issue loans to micro, small and medium-sized enterprises at preferential interest rates, but have not stipulated the interest rate. The maximum rate for the relending of the 500 billion yuan is 4.55 percent. We have other methods such as setting reward assessments to guide the banks to lower their lending rates to these enterprises. There will be no financial subsidies from the Central Government, but according to the utilization of the 500 billion yuan , although the Central Government did not offer subsidies, many local governments did. Thus, we hope local governments can provide interest rate subsidies for the 1 trillion yuan, so that enterprises can enjoy a practical preferential rate. In terms of the timing, we are making plans right now, and we will be able to implement it after the 500 billion yuan runs out. Specific measures will soon be introduced. Thank you.

Xu Hongcai:

Since the outbreak of the epidemic, the MOF has attached great importance to the financing of micro and small enterprises, fully supporting them to keep their cash flow intact, and assisting them in overcoming difficulties. From the perspective of fiscal policy, a series of policies have been introduced, including tax cuts and subsidies. According to the plans from the State Council executive meeting on March 31, concentrating on issues such as improving the risk sharing mechanism for loans, encouraging micro,small and medium-sized enterprises to gain trust in commercial insurance products, reducing guarantee rates for government financing and reducing comprehensive financing costs for micro, small and medium-sized enterprises, the MOF will do the job from the three following aspects:

First, the scale of newly added reguarantee business by the national financing guarantee fund should be no less than 400 billion yuan in 2020 and will be required to be invested in 10 prefecture-level financial guarantee institutions that have made notable achievements in supporting agriculture-related and small companies. For loans under one million yuan, the reguarantee fee should be exempted, while for those over 1 million yuan, the fee should be halved.

Second, the government financing guarantee industry is required to halve the fees and reduce the comprehensive financing guarantee rate to less than 1 percent. Meanwhile, newly added business to support agricultural and small companies in 2020 should account for no less than 80 percent of the total.

Third, qualified entrepreneur guaranteed loans will be extended. We will further increase support for more startups and micro and small enterprises, lower the entry threshold and include key sufferers of the epidemic into the scope of support. It is estimated that in 2020, we will increase the list by 1 million individual entrepreneurs and 10,000 micro and small enterprises, with the growth rate increasing by 50 percent over 2019.

Next, the MOF will accelerate the optimization of the discounting policy for entrepreneur guaranteed loans through which more micro and small enterprises will have money to start businesses and easily run their businesses. We will improve guarantee policies and motivate institutions to support small businesses, pool financial resources to support micro and small enterprises, and achieve targeted assistant so that we can work together to help them tide over current difficulties. Thank you.

Bloomberg:

Hello, I'm a reporter with Bloomberg and my question is for Mr. Liu. You just mentioned the stability of the banking system. According to the Financial Stability Report released by the PBC in 2019, a stress test was conducted where 17 major banks failed and more than 180 large banks failed the liquidity test under the condition that the growth rate of the GDP was less than 4.1 percent. This year, the rate is estimated to be 3.1 percent, far less than the worst case scenario of 4.1 percent last year, how do you evaluate the banks' performance and will there be a new stress test? Thank you.

Liu Guoqiang:

The banking industry stress test in 2019 was based on macroeconomic econometric models, historical scenarios and expert judgment, and was mostly based on assumptions. This situation is "extreme but possible," with the possibility relatively small and is a hypothetical requirement. Since the outbreak, we have closely monitored the risk to the banking system, systematically assessed the impact of the outbreak on the banking industry and conducted stress tests. Some new test results will be disclosed in a timely manner through the Financial Stability Report and the report will be updated.

The epidemic has caused a large short-term impact on the economy. Some industries have suffered greatly and the risk will inevitably increase. There is also a downward pressure on banks' credit assets. But overall, China's banking industry has shown a strong loss-absorbing and anti-risk capacity. By the end of 2019, the non-performing loan ratio of China's commercial banks was 1.86 percent, far below the 5-percent regulatory standard. The provision coverage ratio was 186.08 percent and the reserve for loan loss was 4.5 trillion yuan. This is sufficient to cushion rising non-performing loans. In 2019, the banking industry disposed of 2.3 trillion yuan of non-performing assets, and there are diverse measures to monitor banks' asset quality. Although it is difficult for some banks, they have the ability to ease the pressure.

Zhou Liang:

Mr. Liu has given us a comprehensive introduction. The stress tests conducted by the PBC under the macro-prudential policy framework took into consideration extreme difficulties, which may not actually happen. Meanwhile, the CBIRC's supervision has shown a capital adequacy ratio of 14.6 percent. We will step up efforts to handle non-performing assets. Since the beginning of the year, a plan has already been put on the agenda. In terms of capital replenishment, we will continue to broaden the channels, such as issuing capital supplementation bonds, preference shares and common shares, so as to increase banks' endogenous capital supplement. If these plans are carried out step by step, there won't be major problems. Market performance will prove this. Recently, the “northbound” investment begins to flow into the Chinese stock market, as both the country's capital market and stock price of banks have remained relatively stable. In other words, our banking sector is sound in terms of policy, market and institutional performance. Thank you.

China News Service:

Affected by the pandemic, many micro, small and medium-sized enterprises are facing difficulties in operation and limited sources of capital chain. What measures will the CBIRC take to support them? Thank you.

Zhou Liang:

Since the outbreak, many micro, small and medium-sized enterprises have undergone difficult times. One of the prominent problems is the limited sources of capital chain. We have taken a series of timely measures to ease their financial pressure. According to statistics, by the end of February, the balance of inclusive loans to micro and small enterprises was 5.55 trillion yuan, up 31.8 percent year on year, for a considerable growth. The average interest rate on loans was 5.22 percent, down 0.22 percentage point from the previous year. Among them, the average interest rate of five major banks' inclusive loans to micro and small businesses was 4.4 percent, down 0.3 percentage point from the previous year. We have focused mainly on the following areas:

First, we have worked to increase credit to micro and small enterprises, weigh loans toward first-time borrowers, improve the quality of financial services and reduce their borrowing costs. We want to ensure that the growth of loans for micro and small enterprises with a credit quota of under 10 million yuan per company is not lower than the growth rate of any other loans, and that the number of accounts with a loan balance is not lower than the level at the beginning of 2020. Five major banks will strive for a year-on-year increase of 30 percent for inclusive loans to micro and small enterprises in the first half of the year. We will focus on increasing the proportion of first loans made to new clients of these enterprises and we will appropriately increase the proportion of credit loans and loan renewals to further reduce their financing costs.

Second, we have implemented the provisional deferment policy for both principal repayment and interest payment. The introduction of this policy was welcomed by the vast number of micro, small and medium-sized enterprises. The provisional deferred policy for principal repayment and interest payment will exempt default interest without adjusting clients' loan category or credit record. All of this has created conditions for enterprises to tide over difficulties. According to incomplete statistics, the principal and interest of micro, small and medium-sized enterprises' loans that are now subject to deferment policy amount to 700 billion yuan, and the majority of these enterprises and self-employed business owners are enjoying this preferential policy.

Third, we have increased credit support to micro, small and medium-sized enterprises in industries and regions severely hit by the pandemic. For industries such as wholesale and retail, hospitality and catering, logistics and transportation, and cultural tourism, which have been severely hit by the COVID-19 outbreak, we urged banks to not rashly withdraw, cut off or defer lending. Financial institutions were encouraged to reduce the loan interest rates so as to benefit enterprises. At the same time, by providing more credit loans and medium- and long-term loans, we wanted to support enterprises to resume work and production as soon as possible. We have also made targeted arrangements for Hubei Province. We will strive to lower the comprehensive financing cost in 2020 by over 1 percentage point from last year for small and micro enterprises in Hubei.

Fourth, we have given full play to the role of non-commercial banks in counter-cyclical adjustment and support the development of private, micro and small enterprises. Non-commercial banks are encouraged to provide low-cost funds to small and medium-sized banks, allowing them to extend relending funds to private, micro and small enterprises at favorable interest rates no higher than the interest rates of local inclusive loans. At present, the balance of relending funds has reached 180 billion yuan, up 17 percent from the beginning of the year. We will step up our efforts in the future.

Fifth, we have strengthened the utilization of Fintech (financial technology) to provide precise and convenient services for micro, small and medium-sized enterprises. We have encouraged the use of technologies such as big data and cloud computing to provide both online and offline services to enable these enterprises to obtain financial services without leaving their homes through the Internet, mobile phones and telephones.

Sixth, we have effectively reduced the financing costs of enterprises. We will further clear bank fees, crack down on irregularities, such as the practice of taking deposit as the premise condition for the approval and issuing of loans, and encourage insurance institutions to provide financing and credit to micro, small and medium-sized enterprises. In addition, Mr. Xu has just talked about lowering the fees on financial guarantees and intermediary services, while the PBC has put forward requirements to ensure that the dividends of the policies go to small and micro businesses and are not withheld.

In short, sound economic growth will ensure the stability of finance, and good performance by enterprises will boost the financial development of China. Micro, small and medium-sized enterprises are the main force for stabilizing employment. This concerns the vital interests of the people and was greatly affected by the pandemic. All parties should work together to help them tide over the difficulties. We urge banks and insurance institutions to put themselves in these enterprises' shoes and provide timely assistance to them, as well as honestly implement the policies of the CPC Central Committee and the State Council. Thank you.

Economic Herald:

A State Council executive meeting recently decided to increase the issuance of local government special bonds ahead of schedule. Is this a measure adopted to tackle the impact of the COVID-19 outbreak? How will risks be prevented while promoting the issuance of special bonds?

Xu Hongcai:

Assigning some of the local government special bond quota ahead of schedule is a measure to cope with the economic downturn as well as the COVID-19 outbreak. While giving better play to the role of special bonds, we should also prevent risks, which is an important part of our work. To play our role and prevent risks, we mainly take four aspects into consideration:

First, quick results are expected. Local governments are required to issue special bonds according to the quota decided by the Central Government. Local authorities should strive to issue the bonds by the end of the second quarter and allocate them to projects for substantive use with quick results. This is the most urgent work to do in order to deal with the economic impact of the outbreak.

Second, good projects are required. We have made some adjustments and expanded some areas on the basis of the seven fields that I mentioned before. Local governments are required to select projects in accordance with the fields designated by the Central Government. Key projects, must-do projects and projects that can play a major role in stimulating economic growth should be chosen. In particular, local governments and relevant departments are required to work closely, and local authorities must undertake their responsibilities. Financial departments, development and reform departments and others should all play their roles and cooperate with each other. After the local governments select projects, they should report to the National Development and Reform Commission and the MOF for examination and verification.

Third, the projects should be qualified and in compliance with regulations and laws. After local governments choose projects and central authorities check and verify them, all projects are required to be qualified and in compliance with the requirements of special bond management. That is to say, they should be public welfare projects with certain benefits. And the projects should have a scheme for financing and income balance, so as to ensure that they are truly effective while preventing risks.

Fourth, supervision should be conducted throughout the whole process of special bond issuance. In accordance with the requirements of special bond penetration supervision, we will track and manage the whole process of special bond issuance. If there are any problems, we will urge timely rectification and implementation. Thank you.

China Daily:

The COVID-19 epidemic has severely affected industrial chains. What measures has the CBIRC taken to support the coordinated resumption of work and production of industrial chains? Thank you.

Zhou Liang:

Thank you for your question. China is a manufacturing powerhouse occupying an important role in the international industrial chain. Along with the development of the modern economy, the structure and functions of many finished products have become increasingly complicated, making it impossible for one or even several enterprises to complete product design, research and development, production, processing, transportation and sales independently. Products have many parts and their divisions of labor have become more well-defined, which has generated these industrial chains. Analyses show that a leading enterprise in the manufacturing industry is usually supported by 200-300 micro, small and medium-sized enterprises or supporting companies, which have developed into an ecosystem of leading enterprises and other firms on industry chains. The epidemic has dealt a severe blow to China's industrial chains. Since the insufficient supply of certain parts may hold up the production of finished products, China's financial authorities have taken swift moves to improve services related to industrial chains and support enterprises' resumption of production and work.

First, the CBIRC has encouraged banking institutions to provide all-around financial services covering the whole industrial chains of leading enterprises and upstream and downstream small and micro firms based on analyses of information and capital flow as well as logistics.

Second, it has improved support for leading enterprises in industry chains, increased liquidity loans and medium- and long-term loans, encouraged leading enterprises to resort to loans and pay funds in a timely manner to upstream and downstream firms, and allow downstream enterprises to defer loan payments. The CBIRC has asked banks to improve the monitoring of credit funds and enhance the efficiency of payment for upstream enterprises to avoid delayed payment or the default in payment of large enterprises.

Third, it has followed the financing demands of leading enterprises as well as upstream and downstream micro, small and medium-sized enterprises, innovating financial products and services by developing financing through accounts receivable, orders, warehouse receipts and inventory. It is expected to provide 800 billion yuan in accounts receivable financing for micro, small and medium-sized enterprises on industry chains this year. 

Fourth, banks and insurance institutions are encouraged to further stabilize foreign trade through financial services, improve the cross-border financial service chains, cooperate with international financial institutions and provide credit support and financing services to help stabilize the global industrial chain.

Fifth, it has improved the technological level of financial services for industrial chains, mainly by encouraging banks to develop credit software and information systems, and further cooperation with leading enterprises on system matching, information sharing and fund monitoring.

Research findings show that the Industrial and Commercial Bank of China and China Construction Bank have provided all-around financial services for several thousand industrial chains. The CBIRC will continue to provide more targeted and effective financial services for industrial chains, prevent and control risks while ensuring steady growth, and promote a virtuous cycle of financial support and the real economy. Thank you.

Market News International:

Some media reports suggest that no special local government bonds can be directed to the real estate sector or land development. Is that true? If so, how will the shanty town renovation projects get funds this year? Will funds for shantytown renovation projects be significantly cut? Could you also elaborate on the specific use of special treasury bonds?

Xu Hongcai:

Thank you for your questions. The renovation of shantytowns is a major project related to people's livelihood and China's development. In line with the decision of the CPC Central Committee and the State Council, local governments have promoted renovation in recent years with great efforts and have made remarkable progress. Many residents in rundown areas have moved into apartment buildings. Some qualified projects have been completed across the board through years of efforts, while some are still face difficulties.

In 2020, local governments are supposed to follow the central requirements of reigning in the property sector, control the scope and standards of shantytown renovation, strictly evaluate the financial bearing capacity and settle the annual tasks of renovation in a scientific way. Local authorities need to avoid making one-size-fits-all renovations, setting impractical targets and blindly resorting to loans. It is necessary to focus on shantytowns in poor environments in old urban areas, as well as in state-owned industrial, mining, forest and reclamation areas. The Central Government has clarified that special local government bonds should not be used for land acquisition or stock and real estate-related projects in line with the requirements proposed at the 2019 Central Economic Work Conference on renovation of existing residential projects and old urban communities. With coverage adjusted, special local government bonds will support the renovation of old urban communities. Amid the current macroeconomic situation, the government will promote the construction of projects that can be started soon and produce tangible results to ensure the steady completion of work and effective investment. 

You also mentioned the issuance of special treasury bonds. Since the beginning of the year, the COVID-19 epidemic has exerted phased impacts on China's economy and added to downward pressure. As the pandemic spreads across the world, global economic and trade growth has been severely impacted, forcing China's economic development to face new challenges. To effectively cope with the impact of the epidemic and improve the adjustment and implementation of macroeconomic policies, the government has pledged to moderately increase the fiscal deficit rate and issue special treasury bonds this year, along with the CPC decision, to deliver positive and clear signals to society, boost market confidence and ensure the realization of annual economic and social development targets. A deficit rate increase and the issuance of special treasury bonds need to go through legal procedures. The State Council will submit them to the National People's Congress for review and approval. The specific plans will be settled based on the domestic and international economic situation, the demands for national macroeconomic adjustment and control, and fiscal revenue and expenditure. Thank you.

Hu Kaihong:

That is the end of today's press conference. Thank you.

.

Read in Chinese

Speakers:

Ma Zhaoxu, vice minister of foreign affairs;

Tian Xuejun, vice minister of education;

Lyu Erxue, deputy head of the Civil Aviation Administration of China (CAAC);

Zhang Yang, head for the Department of International Cooperation of the National Health Commission.

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office of China

Date:

April 2, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Ma Zhaoxu, vice minister of foreign affairs; Tian Xuejun, vice minister of education; Lyu Erxue, deputy head of the Civil Aviation Administration of China (CAAC); and Zhang Yang, head for the Department of International Cooperation of the National Health Commission. They will brief you on the health and security of Chinese students living overseas during the COVID-19 outbreak and take questions.

First, I will give the floor to Mr. Ma. 

Ma Zhaoxu:

Ladies and gentlemen, good morning. I'm very glad to attend the press conference held by the State Council Information Office again and communicate with you on the health and security of Chinese students overseas during the COVID-19 outbreak. 

Students studying abroad are children of the motherland and an important force to build China's future. The Party and the country have always attached great importance to Chinese students living abroad. At the early stage of the COVID-19 outbreak in China, concerned about the motherland, the Chinese students overseas donated money and supplies in support of the fight against the epidemic to the homeland, which showed their precious patriotism. Currently, the pandemic is spreading at multiple hotspots around the world. The CPC Central Committee has always cared about the health and safety of Chinese students overseas and has adopted a series of major measures.

General Secretary Xi Jinping has given important instructions and made arrangements regarding this issue on many occasions. He ordered more guidance and support to Chinese nationals overseas and the protection of their lives and health. According to the meeting of the Political Bureau of the CPC Central Committee, it is necessary to strengthen the care for Chinese nationals overseas, and the embassies and consulates abroad must provide consular protection, guidance on protection and secure material supplies to protect their lives and health. General Secretary Xi Jinping personally emphasized during calls with leaders from Britain, the United States, France, Germany and other countries that the Chinese government attaches great importance to the lives and health of Chinese citizens overseas. He also urged the host countries to safeguard the health, safety and legitimate rights of Chinese citizens, especially students. These requests were met with positive responses.

The Ministry of Foreign Affairs, together with the Ministry of Education and other relevant departments, resolutely implemented the important instructions of General Secretary Xi Jinping and the arrangements of the CPC Central Committee. Wang Yi, state councilor and foreign minister, and the Party Committee of the Ministry of Foreign Affairs required more than 280 embassies and consulates abroad to prioritize the relevant work of safeguarding Chinese students' health and lives. Acting on the principles of "putting people first" and "diplomacy for the people," the embassies and consulates are required to take all-out efforts to safeguard the health and safety of Chinese students living overseas as though they were taking care of their own children.

According to the deployments, we have issued multiple measures in this regard within a short period of time. Chinese embassies and consulates overseas have been in close contact with Chinese students in those countries, learned of their appeals and difficulties, and helped them solve all kinds of problems. The consular helpline 12308, operated by the foreign ministry, stands ready to provide consular protection and assistance. The Chinese embassies and consulates abroad have set up 24-hour hotlines to respond to the needs of students overseas. Meanwhile, through various channels that include embassy websites, WeChat and Chinese language media, we have introduced an online medical service platform to overseas Chinese nationals and forwarded a prevention and control guideline on COVID-19, as well as host countries' regulations on the pandemic control. We have strengthened communication with Chinese nationals overseas, especially students, in various ways. Chinese embassies and consulates abroad have mobilized the local Chinese community to establish pairing assistance systems with overseas students and set up platforms for Chinese citizens to help each other, providing services to buy supplies and giving a helping hand to those in quarantine. For example, with the promotion of the embassy in Germany, 85 Chinese student unions in Germany have set up 101 WeChat groups for the prevention and control of the pandemic, keeping contact with 35,000 Chinese students.

The Chinese Embassy in the U.S. invited experts to talk with overseas students and representatives of overseas Chinese via video link. Chinese ambassadors to the U.S., the UK, Germany, Italy, South Korea and other countries communicated with overseas students and overseas Chinese representatives directly via video link in the CCTV news studio. More than 100 million people watched the live broadcast online when Mr. Cui Tiankai, Chinese ambassador to the U.S., appeared on the CCTV news program.

Our embassies and consulates have actively performed their duties, and urged host countries to safeguard the health, safety and legitimate rights and interests of overseas Chinese students. Our ambassadors and consul-generals wrote letters to the presidents of local universities, asking them to take good care of Chinese students and solve their difficulties regarding accommodation and their studies. Recently, nearly 100 Chinese students studying in Russia were unable to obtain visas on arrival due to medical isolation or other reasons. The Chinese Embassy in Russia actively communicated with the Russian government and helped them solve their problems promptly. Some countries asked all students to move out of their dormitories because of the outbreak, so Chinese embassies immediately communicated with relevant departments to grant the students permission to stay and helped them solve this pressing problem. After learning that four Chinese students had been diagnosed with the novel coronavirus in Spain, the Chinese embassy and consulate in Spain urged local departments and hospitals to give them prompt and proper treatment, and invited Chinese doctors to provide them with online professional consultation from China. When words and deeds of discrimination against Chinese citizens appeared in some countries, Chinese embassies and consulates spoke out and took action at the earliest possible time. We expressed our condemnation, lodged solemn representations, and safeguarded the legitimate rights and interests of all Chinese citizens abroad.

Since the outbreak of the epidemic overseas, protective equipment including face masks have been in short supply worldwide. Chinese embassies and consulates have immediately responded to the needs of overseas Chinese students. In accordance with the general deployment of the Chinese government, we have made every effort to collect face masks, disinfectant, sanitizing wipes and other urgently needed materials through various channels, and distributed "health packages" to overseas Chinese students. Many diplomats from Chinese embassies and consulates even donated their own masks and stockpiled materials to our overseas students. The Chinese Embassy in the UK has prepared 200,000 "health packages", trying its best to ensure that every overseas student can get one. At present, Sri Lanka is running extremely short of epidemic prevention equipment and has imposed martial law. Seeing that many Chinese staying outside the capital of Sri Lanka need masks urgently, the Chinese embassy there immediately communicated with local governments and coordinated with local police to deliver masks and other emergency supplies by relay to Chinese compatriots including overseas students.

At present, the Ministry of Foreign Affairs has prioritized work regarding the "health packages," allocating 500,000 to countries with more Chinese students, including more than 11 million masks, 500,000 disinfection materials, and epidemic prevention guidelines. Since many countries have implemented national lockdown or lockdown on cities, the foreign ministry and the Civil Aviation Administration of China (CAAC) have been racing against time to prioritize deliveries of the "health packages" by civil aviation planes, so as to ensure overseas students can receive them in a timely manner. The picture here shows a "health package" prepared by the Chinese Embassy in Iceland, which includes masks, hand sanitizer, and epidemic prevention guidelines. Although the "health package" is small, it conveys the care and love of the motherland, the Party and our people, making overseas students feel a sense of warmth. Many overseas students have stated that the "health packages" let them truly feel the care of the motherland and have strengthened their confidence in fighting the epidemic. They said they would protect themselves well while completing their studies, and serve the motherland as soon as possible. One overseas student said on WeChat Moments, "I will never forget that there are students from all over the world on campus. But so far, I have only seen the Chinese embassy distribute epidemic prevention equipment to each dormitory door. Thank you, my motherland!" Another student wrote, "I will deal with the epidemic in a rational and scientific way, and enhance self-protection without neglecting my studies. This way I will let the people of the motherland and my family at home feel at ease."

We have also dispatched medical experts and working groups to provide scientific and professional guidance on epidemic prevention and control for overseas Chinese, especially overseas students. A total of 10 medical expert teams have been dispatched to eight countries. They are working with local governments to fight COVID-19, and have held face-to-face or online lectures to introduce knowledge on epidemic prevention to overseas Chinese students, companies and citizens. With the support of the Chinese Consulate-General in Milan, overseas Chinese in Italy have worked with the medical experts to establish an "online makeshift hospital." A few days ago, a joint team of medical experts from Shandong province arrived in the UK, including disease control and medical personnel. So far, they have held three online exchange events to provide guidance on epidemic prevention to overseas Chinese and help them lessen stress and anxiety. Overseas Chinese students have expressed their appreciation for the support and kindness from the CPC and the motherland.

When our overseas Chinese students encounter emergencies and are lost in deep trouble, the CPC and Chinese government will always be there to help them. Since the COVID-19 outbreak, China has returned overseas nationals facing difficulties to China by chartered airplanes and temporary flights. Since March, when the epidemic was spreading rapidly across the world, China has sent nine chartered planes to bring back 1,457 Chinese nationals, including overseas students from Iran, Italy and other hard-hit countries. Recently, many countries have made changes to their entry and exit policies for foreigners and adjusted flights, leaving overseas Chinses students stranded at airports in Ethiopia, Cambodia and Bangladesh. I remember that there were around 300 people stranded in Ethiopia, over 100 in Bangladesh and more than 140 in Cambodia. Most of these were overseas Chinese students. After learning about the situation, the Ministry of Foreign Affairs asked local embassies to act immediately and provide consular protection and assistance to the Chinese nationals, including providing necessary hospitality, accommodation, face masks and other health supplies. With the joint efforts at home and overseas, the problems have been properly resolved. All the Chinses nationals stranded overseas have already been brought back home by additional flights.

China now still faces the risk of epidemic rebounding at home. The spread of the epidemic outside of China has also posed new challenges to our domestic epidemic prevention and control work. Chinese embassies and consulates have paid close attention to the overall situation of the epidemic, as well as the demands and plans of overseas Chinse students. As far as I know, most overseas students have chosen to stay in their host countries. Experts have also suggested, based on the WHO's advice, reducing cross-border movement of people under the current situation. China's civil aviation authorities also reduced the volume of international passenger flights due to the pandemic. However, we have noticed that there are still some overseas Chinese students who need to return to China because of practical difficulties that cannot be resolved. The CAAC has stated that the major air transportation guarantee mechanism will be activated to arrange additional flights and charter flights to cities where a large number of people in need are concentrated together, if their destinations have the ability to prevent and control the epidemic. In fact, with our earlier efforts, many overseas Chinese students have already returned home. China is also taking measures to help Chinese students who run into difficulties in hard-hit countries to come back home in an orderly manner. Today, we have already arranged a temporary chartered flight to bring overseas students in London back home. The plane took off at 9:30 a.m. In light of the needs for domestic prevention and control, those returning to China should comply with the relevant regulations, including strict testing, isolation and observation. This is for the sake of their health and public health security.

Also, I would like to say, in face of the pandemic, our personnel working in Chinese embassies and consulates overseas have always kept in mind their aspirations and missions. They have devoted themselves in the fight against COVID-19 and provided services to overseas Chinese nationals, including students. In addition, our students studying abroad have also made their own efforts. Chinese students in Germany, the UK, Japan and other countries have set up online platforms and groups for epidemic prevention and control. They are supporting and caring for one another, as well as volunteering to help distribute health kits, playing an irreplaceable role in the fight against COVID-19. The Chinese embassies and consulates will always stand with our students and together we will secure the final victory.

The prevention and control of the epidemic is a people's war against COVID-19. Every Chinese national, including those studying overseas, are playing their part in combating the epidemic to eventually winning this war. I want to stress, again, that the Party and the government consider the health and well-being of Chinese nationals living overseas a priority. The motherland will always actively back overseas Chinese citizens. Conducting "diplomacy for the people" has always been the aim of our diplomatic work. We will take practical actions to embody the care and love for overseas students of General Secretary Xi Jinping and the Party and state by safeguarding overseas students' lives and physical well-being. We will work with the broad masses of overseas students to win this war. Thank you.

Hu Kaihong:

Thank you, Mr. Ma. Now, I will give the floor to Mr. Tian. 

Tian Xuejun:

Good morning, everyone. People are concerned about the safety of overseas students while the epidemic is still spreading outside the country. Overseas students are treasured assets to the Party and the people. Their health and safety is always a concern of the Party and state. Strengthening the love and care for overseas students is a major part of the epidemic prevention and control work targeting Chinese nationals living overseas. 

The Ministry of Education has been earnestly implementing General Secretary Xi Jinping's important instructions and CPC Central Committee's decisions and arrangements. It has been working with the Ministry of Foreign Affairs and embassies and consulates stationed abroad to push forward with various works. The Ministry of Education has demanded higher education facilities across the country to fulfill their job responsibilities and make efforts domestically and abroad at the same time. We have taken practical actions to demonstrate the Party and state's love and care towards overseas students in all areas, from offering anti-epidemic reminders and consultation, distributing anti-epidemic supplies, and assisting in accessing healthcare services, to helping handle issues regarding academic work and living, encouraging educational circles to help each other, encouraging overseas Chinese circles to make contributions and show kindness, and strengthening consular protection to safeguard the legitimate interests of overseas students. Our only goal is to do our best to safeguard the health and safety of overseas students.

Specifically, the measures taken by the Ministry of Education can be summarized as six "strengthenings": strengthening guidance for anti-epidemic works, strengthening the guarantee of material supplies, strengthening treatment of patients, strengthening psychological support, strengthening help and support for people in need, and strengthening consular protection. 

To strengthen the guidance for anti-epidemic works, the Ministry of Education organized specialists to compile a guide on the prevention of the novel coronavirus for overseas students. Professor Zhang Wenhong and other known experts in China were invited to give lectures to overseas students, and they have proven popular. 

To strengthen the guarantee of material supplies, embassies and consulates stationed overseas have collected anti-epidemic materials, including masks, from multiple resources, rushing to produce health packages and love packages overnight out of these materials and then distributing them to overseas students in no time. This work is still ongoing. 

To strengthen the treatment of patients, the Ministry of Education and embassies and consulates stationed overseas have established a system to carry out COVID-19 tests for overseas students and created daily reports. Once a confirmed case or a suspected case is discovered, the emergency response mechanism will be activated immediately. Judging from the data we have obtained, the number and proportion of confirmed cases are relatively small among overseas students in general. 

To strengthen psychological support, we have consolidated the resources of higher education facilities in the country to offer counseling services for overseas students around the clock. We have also set up consulting hotlines to clear doubts and offer help to overseas students and their parents at home. 

To strengthen help and support for those in need, embassies and consulates stationed overseas and the Ministry of Education have gathered overseas students together via the All-China Students' Federation and WeChat groups. Some embassies and consulates have widely mobilized Chinese-funded organizations and overseas Chinese associations in local areas to offer help to overseas students in need. A small portion of overseas students has encountered practical problems, such as visa expiration and being forced to move out of the dormitory. Our diplomats have resolved these situations in a timely manner. 

To strengthen consular protection, we have demanded embassies and consulates stationed overseas to pay close attention to incidents of overseas students being discriminated against or being assaulted and to make strong representations accordingly in a timely manner. The WeChat account “教育部平安留学” (Ministry of Education, Study Abroad Safely) has been continuously compiling and publishing safety notifications for typical cases of overseas Chinese students being under threat and offering targeted safety advice.

Next, we will enhance analysis and assessment of the epidemic, continue to improve and refine our plans, and go all out to do a better job of conducting epidemic prevention and control work among overseas students by working with the Ministry of Foreign Affairs and embassies and consulates stationed overseas. Thank you.

Hu Kaihong:

Thank you, Mr. Tian. Next, the floor is given to Mr. Lyu Erxue.

Lyu Erxue:

Good morning, everyone. As the situation of the COVID-19 epidemic changes, the focus of China's efforts has shifted from guarding against domestic transmission and spreading outside China , to instead guarding against imported cases and a possible domestic epidemic rebound. Following the work requirements of the State Council's Joint Prevention and Control Mechanism to contain the continuously rising imported cases from overseas, the CAAC has adopted a policy to further cut international passenger flights, stipulating that each airline operate only one flight a week per country. Now, a total of 47 domestic and international airlines maintain regular flights with 61 destinations in 40 foreign countries. The total number of international flights stands at no more than 134 per week. Nevertheless, the weekly flight schedule is subject to adjustment in light of the actual operation of airlines. For instance, there are 108 flights scheduled this week. Such a significant decline in international flights is expected to effectively block the epidemic from being imported into China through air travel. The move to maintain the minimum level of flights is supposed to aid homeward bound Chinese citizens abroad, especially overseas Chinese students. 

Meanwhile, in order to reduce passengers' risk of infection and guarantee the safety of flights, as well as epidemic prevention and control, the CAAC has taken several measures. First, it has released its fourth cumulative update of a guide regarding epidemic prevention and control technology for passenger airlines and airports. With the ongoing development of the COVID-19 outbreak, especially the evolving international epidemic, the CAAC has been continuously improving its epidemic prevention and control measures for passenger airlines and airports, following the requirements of adopting differentiated strategies subject to regions and levels. Second, it requires all airlines to properly control the load factor of international flights and make reasonable adjustments to the cabin layout to disperse seating as far as possible. Third, it requires health checks on all passengers. This includes body temperature scanning before boarding, as well as an extra body temperature inspection of passengers once onboard. Fourth, airlines are instructed to set up a temporary quarantine zones on their planes. Any passengers found with fever, fatigue, dry cough and other symptoms must be isolated in time to avoid cross-infection. Fifth, it requires all airlines to conduct disinfection on their aircraft.

In short, adoption of the above-mentioned measures can effectively prevent the virus from spreading throughout aircraft and ensure the health and safety of returnees flying from overseas. Thank you.

Hu Kaihong:

Thank you, Mr. Lyu. Next, the floor is given to Mr. Zhang Yang.

Zhang Yang:

Greetings, friends from the media. The NHC attaches great importance to the health and safety of overseas Chinese students. Since the COVID-19 outbreak, we have held news briefings and organized experts for media interviews to answer questions regarding the general concern of overseas students, including the transmission route of the disease and personal protection means. We have also promoted popular science. We have launched a special Q&A column about protecting against the epidemic on our official website and started a column about the COVID-19 on our official Health China accounts on Wechat, Weibo and TikTok. We have also published a series of popular science articles on the NHC's official website and Weibo account, including how overseas Chinese can protect themselves during the epidemic, psychological counseling, and a guide for the public on how to wear face masks. Promoted by Chinese embassies and consulates, these articles have provided technical support for overseas Chinese students to protect themselves from getting infected during the epidemic. The public can easily get access to relevant knowledge and information when browsing NHC's official website and its account on Weibo and Wechat. 

Recently, we dispatched a group of Chinese medical experts to several countries in the fight against the epidemic. During their work overseas, the experts cooperated with local academic institutions and student unions to promote health education for overseas Chinese students through symposium and video-streaming and answer their questions in details. This has been welcomed by overseas Chinese students. Meanwhile, the NHC has instructed the aiding medical teams to play to their strengths and guide local Chinese students on personal protection from the virus. This has played a positive role in protecting overseas Chinese people.

In addition, the NHC has cooperated with the Foreign Ministry to prepare a manual on epidemic prevention included in a charity bag of protective supplies provided for overseas Chinese students. We will do our best to care for overseas Chinese students during the epidemic. Earlier, the Chinese government arranged charter flights and temporary flights to bring back Chinese citizens, including students studying abroad. We have worked with the departments of foreign affairs and civil aviation to equip flights with medical workers and to give emergency medical support on the way home.

Next, the NHC will resolutely implement the decisions and deployments of the CPC Central Committee and the State Council, continue to cooperate with the diplomatic, education and aviation sectors to provide health security for overseas students, assist in the arrangements for returning students and safeguard the safety of their lives and their health. Thank you.

Hu Kaihong:

Thank you, Mr. Zhang Yang. We will now take questions.

CCTV:

Could you please give us more details about the health packs that Chinese diplomatic missions have sent to overseas students? In addition, some of the packs were sent from China using international logistics companies. Could you tell us how logistics transportation will be guaranteed as the international outbreak intensifies?

Ma Zhaoxu:

As I mentioned earlier, many countries are facing a shortage of medical supplies as the epidemic continues to spread, in particular masks, disinfectant and sanitizers which have sold out. In this situation, overseas students and their parents have become worried. The CPC Central Committee and the State Council have paid close attention to the situation, instructing the Ministry of Foreign Affairs, overseas embassies and consulates to provide help to these students. Under the joint support of the finance, education, aviation and national health sectors, each embassy and consulate immediately acted, fully mobilizing all resources to collect and send health packs to students overseas, sparing no effort to solve the practical difficulties they are facing. 

I would like to list some examples. The Chinese Embassy in the United Kingdom held a ceremony for sending health packs. Here is a group photo of Liu Xiaoming, the ambassador to the United Kingdom, alongside student representatives. Ambassador Liu told the representatives that in the face of the fierce outbreak, they are not alone, and that the motherland will always be with them, whilst the embassies and consulates will support them. The health packs have delivered love to every student in the U.K., bringing warmth, health, strength and confidence. The Chinese Embassy in Japan sent out a survey through public platforms to identify needs, sending the first batch of 30,000 masks to over 4,000 students lacking protective equipment. Before the arrival of the health packs from China, the Chinese Consulate General in San Francisco actively collected over 20,000 masks and sent them to students stranded in hard-hit areas. The Chinese Consulate General in Penang, Malaysia, donated masks purchased for their private use, bought some protective supplies locally and prepared the first batch of health packs before the arrival of the ordered supplies, also writing letters of sympathy to the overseas students. The students said that the health packs made them feel the care and love of the Party and government as well as the support and help from their motherland and family. They could truly feel that the embassies and consulates are standing with them, providing a strong backing. 

Next, the Ministry of Foreign Affairs and overseas embassies and consulates will consider the current situation in the students' host countries, continuously sending out health packs to those students stranded by the epidemic in a timely manner, sparing no effort to assist them in the fight against the epidemic, jointly safeguarding their health and safety and overcoming the current crisis.

Lyu Erxue:

At present, Chinese citizens who remain abroad, with overseas students in particular, may have their health and safety exposed to the threat posed by the rapid spread of the pandemic in foreign countries and regions. On March 25, the CAAC embarked on a mission to transport health packs containing hygiene products to Chinese students overseas. This task was assigned in accordance with the requirements made by the Leading Group of the CPC Central Committee on Novel Coronavirus Prevention and Control, the concrete deployments of the joint prevention and control mechanism of the State Council and the general demands provided by the Ministry of Foreign Affairs. The first batch of more than 300,000 packs, weighing 300 tons, will be delivered to 46 Chinese embassies and consulates in 12 countries, namely, Italy, South Korea, France, Germany, the United States, the United Kingdom, the Netherlands, Sweden, Japan, Australia, Canada and Malaysia, before reaching the students. While coordinating with China Airlines and China Eastern Airlines, the CAAC has drawn up a plan with multiple approaches, such as, transporting the health packs in the holds of passenger planes, making full use of cargo aircrafts and refurbishing passenger airliners for cargo services. The delivery of the packs will be prioritized under the joint efforts between the CAAC and the airlines involved to ensure that the necessities can reach our embassies and consulates overseas as soon as possible, as a substantial number of international passenger flights have been suspended. In terms of our latest plan, we will finish delivering the more-than-300,000 packs with an estimated weight of around 300tons, by April 10. By yesterday, we had already flown to the seven countries of Italy, the U.S., France, the UK, Germany, South Korea and Canada, delivering an estimated 116 tons. The CAAC has supported passenger airliners from both home and abroad for use in cargo transportation, opened green access channels and streamlined approval procedures to help the cargo flights complete check-in in a timely manner. That is how we are managing to meet the cargo demand for international aviation.

At the same time, abiding by the concrete deployments of the joint prevention and control mechanism of the State Council, the CAAC has organized and provided help with several humanitarian missions and commercial export cargo deliveries of medical necessities. By April 1, it had conducted 178 chartered flights, sending 100 experts and healthcare personnel and over 2,635 tons of anti-virus supplies to 40 countries, including, the United States, the United Kingdom, Iran, Iraq, Pakistan, Italy, Serbia, Japan and South Korea. Thank you.

CRI:

My question is for Mr. Tian. What measures will the Ministry of Education take to safeguard the legitimate rights of Chinese students overseas, whose studies and lives have been affected by the shutdowns of campuses in some hard-hit countries during the spread of the epidemic?

Tian Xuejun:

The Ministry of Education launched plans as soon as we learned some governments and universities abroad had closed campuses and suspended classes as part of their local anti-virus measures. We asked our embassies and consulates to maintain close contact with our students overseas who study or live within their jurisdictions, to keep informed of relevant arrangements concerning the students and to persuade schools to schedule appropriate academic lives for our students who remain there. In addition, our diplomats have urged these localities to ensure the health, safety and legitimate rights of our overseas students and to help address their difficulties in learning and everyday life. 

Over the past few days, the education departments of embassies and consulates acted immediately by entering negotiations when they learnt that some overseas students had been coerced into moving out of their dormitories. However, most cases have now been solved in appropriate ways. To lend a helping hand to those students in need, some embassies and consulates have prepared temporary quarantined accommodation at the most popular localities for overseas Chinese in pursuit of academic achievement. Meanwhile, full play should be given to the Chinese Student Association whose vital roles can be exemplified by its 95 subsidiaries across the United Kingdom. Organized by the educational department of the Chinese Embassy to the UK, these associations have extended a mutual help network to 71,000 Chinese students via 208 contact points in 56 British cities. Their work has been similar to what Mr. Ma told us has been done in Germany. In addition, we are leveraging the influence of local overseas Chinese societies and Chinese-funded institutes to ensure the overseas students have places to live, sufficient food as well as the necessities and care that they need in their daily lives. Thank you.

Phoenix TV:

My question is to Mr. Ma. We have noticed that many overseas students are struggling with the question of whether they should return or stay. On one hand, they want to continue their studies; on the other hand, they have concerns over the quick spreading of the virus. What advice will the Ministry of Foreign Affairs give to those students, especially for those in the hard-hit countries?

Ma Zhaoxu:

Regarding China's overseas students, first, the number of students studying overseas is quite large. According to the statistics of education authorities, the total number of China's overseas students reaches 1.6 million. Among these, 1.4 million remain abroad now. Second, our overseas students are located in different countries and regions. There are about 410,000 in the U.S., about 230,000 in Canada, about 220,000 in the U.K., about 110,000 in Germany and France, and 280,000 in Australia and New Zealand. There are also 180,000 in Japan and South Korea. These students are widespread. Third, these countries where our students are living are in different phases of the COVID-19 outbreak, and the measures implemented in these countries are also different. Fourth, overseas students are in different situations, so they have varied needs.

Faced with the circumstances described above, we must take them into consideration and implement measures steadily and accurately. The goal is to try everything to ensure that our overseas students are healthy and safe. The Ministry of Foreign Affairs, the Ministry of Education and China's overseas institutions give precise guidelines for overseas students based on different countries' situations. Based on our knowledge, most overseas students have taken the words of advice given by the WHO and China CDC. Following the suggestion of avoiding unessential travel, these students choose to stay where they currently are. This helps to prevent cross-infection caused by their hasty travels. It avoids being stalled in transit countries due to border control restrictions, and it could also avoid possible impact on overseas students' study and visas.

For those students in hard hit countries who do urgently need to return home, the CPC and the Chinese government will take necessary measures in time to help them get home in an orderly fashion. These students should cooperate with civil aviation, ports and local epidemic prevention departments before boarding flights, as well as during time spent on the planes and after crossing the border. And they need to strictly follow the epidemic prevention regulations while being responsible for public safety and their own health. We will continue to follow the requirements and arrangements of the CPC Central Committee and the State Council, take care of and serve overseas students and solve their problems properly. Thank you.

China Daily:

How do overseas students in heavily hit regions, such as European countries and the United States, protect themselves to reduce the risk of infection? For example, many of them are living in rented collective apartments; how can these students avoid cross infection? How can they protect themselves when they go out to shop or perform an essential activity?

Zhang Yang:

No matter what the occasion, overseas students should maintain good personal health habits. They should not spit everywhere, they should cover their mouth and nose with a tissue or their elbow when sneezing or coughing and they should improve hand hygiene and abide by the laws and regulations of the country where they are living. In daily life, they should eat a balanced diet, exercise more, get enough sleep and keep a good state of mind. All these things help to improve their immunity. Meanwhile, they must wear a mask when staying in a crowded or relatively closed environment, such as public transportation, elevators or indoor public places. 

Students who live in a collective apartment should keep their living environment clean and ventilate their rooms often. Experts recommend rooms be ventilated two to three times a day for 20 to 30 minutes on each occasion. They should pay attention to whether their roommates exhibit such symptoms as a fever, cough or other abnormal conditions, and they should take active protective measures. Students should reduce close contact with others who live in the same apartment. If close contact is necessary, wear a mask and keep a distance of at least one meter.

If they go out to shop or perform an essential activity, they should wear a mask when taking public transportation and staying in a crowded or closed environment. They should keep a distance and avoid direct contact when communicating with staff members and carry quick-drying hand disinfectant to keep their hands clean. Thank you. 

Global Times:

At present, due to a massive reduction of international flights, many overseas Chinese students are faced with a situation where it is difficult to purchase a flight ticket back to China. You also introduced that the civil aviation department will start relevant work for overseas charter flights for cities that have concentrated needs and destinations that have the capability of handling charter flights. Has this work started, and how is it going? Thank you.

Lyu Erxue:

I have just mentioned that due to the spread of the COVID-19 pandemic and the requirements of the joint prevention and control mechanism of the State Council, the Civil Aviation Administration of China (CAAC) has issued the "Five Ones" policy, which allows one airline to maintain one air route in one country flying up to one flight per week. Under the policy, the number of international flights has significantly reduced, but at the same time retaining no more than 134 scheduled international flights per week between China and 61 cities in 40 countries outside China. In addition, in accordance with the CPC Central Committee's general requirements for enhancing the care of Chinese citizens abroad and in strict compliance with the specific deployment of the joint epidemic prevention and control mechanism of the State Council, the CAAC has launched a vital air transportation support mechanism in a timely manner for cities that have concentrated needs and the capability of handling travelers and arranged temporary flights to assist overseas citizens in returning home. From March 4 to 26, the CAAC organized a total of 9 temporary flights to assist 1,466 Chinese citizens in returning home from Iran and Italy. Among them, 6 temporary flights were executed in Iran, and 976 passengers were transported home. The majority of them are overseas Chinese students. Three temporary flights have been carried out in Italy, and the fourth one is currently underway, which will transport 180 Chinese citizens back home. The specific route of the fourth flight is from Milan to Wenzhou.

At the same time, according to the unified deployment of the joint epidemic prevention and control mechanism of the State Council, the CAAC officially launched the temporary flight mission to the United Kingdom today. Mr. Ma also just revealed that the first flight has taken off from Shanghai Pudong Airport at 9:30 a.m. this morning and will arrive in London tonight. It is expected to pick up about 180 overseas students. To ensure the prevention of the epidemic and control during the flight, the CAAC adopted a series of targeted prevention and control measures. First, we formulated prevention and control measures for temporary flight missions to countries with a severe pandemic, which provides practical guidance for the protection of people on board. Second, we are working closely with embassy staff and accompanying medical staff of the National Health Commission (NHC) to carry out body temperature screenings and testing before boarding. Third, we will provide special protection and disinfectant supplies for each flight, and medical N95 masks will be distributed to each passenger to minimize the spread of the virus on the aircraft. Fourth, we will take adequate anti-epidemic measures on board, such as ventilation and disinfection. Passengers are seated in separate seats, and the cabins are partitioned to reduce the mobility of people on board. Fifth, we will strictly disinfect the aircraft after each mission to ensure safety before performing other flight missions.

In the next step, the CAAC will strictly follow the task deployments of the joint prevention and control mechanism of the State Council, promptly launch aviation support mechanisms for overseas students who need to return to China from countries that are severely affected by the pandemic, and do an excellent job in transport capacity adjustment, crew arrangements, and onboard prevention and protection to ensure the successful completion of the task of helping overseas students return home. Thank you.

Hong Kong China Review News Agency:

How many overseas Chinese students have been diagnosed with COVID-19? What kind of assistance will relevant departments offer if overseas students are diagnosed with the disease? Thank you.

Tian Xuejun: 

As of March 31, 36 Chinese students studying abroad have been diagnosed with COVID-19, according to Chinese embassies and consulates. After learning that some Chinese overseas students showed signs of infection, Chinese embassies and consulates immediately activated emergency response mechanisms and assisted the students in seeking medical treatment. All of the diagnosed students have received timely treatment, and 11 of them have recovered.

Hong Kong Economic Herald:

Just now, Mr. Ma said the Ministry of Foreign Affairs, along with Chinese embassies and consulates, took active measures to address the problem that some overseas students were stranded in transit due to domestic flight adjustments. What should overseas students do if they encounter such problems in the future? Thank you.

Ma Zhaoxu:

As a result of flight adjustments and other reasons, some Chinese citizens, mainly overseas students, were recently stranded in countries such as Ethiopia, Bangladesh, and Cambodia. As soon as the problem occurred, Chinese ambassadors and consul generals in these countries arrived at airports and made all-out efforts to provide consular protection. After active communication and coordination with airlines, airports and local governments, we made proper accommodation arrangements for the citizens and solved their problems efficiently. The departments of foreign affairs and civil aviation kept close coordination and adopted urgent measures for pressing issues, sending temporary flights to bring home the overseas citizens. They were very satisfied with the solutions, saying, "Thank our motherland. We love our motherland. We love the embassy." These are their true feelings.

Here I'd like to remind overseas Chinese students and other Chinese citizens living abroad to pay close attention to the entry policies of countries while in transit and contact airlines for related information in advance. It is strictly necessary to check your flights, especially connecting flights, with the airlines before buying tickets and boarding. If you get stranded while traveling, please contact local Chinese embassies and consulates for assistance or call the 24-hour consular protection hotline. The Ministry of Foreign Affairs and China's embassies and consulates will do our utmost to provide consular assistance to Chinese citizens. Thank you.

Economic Daily:

If chartered flights are arranged to help overseas Chinese students return home, how can we ensure they are safe during their flight and after they arriving at the airport? Thank you.

Zhang Yang:

Thank you. To make sure they stay healthy, experts suggest that they should carry personal protection equipment with them, such as masks and quick-drying hand sanitizer, if available. They should avoid touching their mouth, nose and eyes with their hands, and they should cover their mouth and nose with a tissue when sneezing or coughing; they can also sneeze into their elbow. Masks should be worn throughout their return trip, except for when they pass through the security check. After completing facial recognition, they should put their masks back on immediately and finish the security check as quickly as possible. Stairs or escalators are preferred, and they should keep at least one meter of distance between themselves and others. Face-to-face communication should also be avoided. If they do choose to take elevators, some distance must be maintained between passengers and crowds should be avoided. They should also pay attention to hand hygiene and avoid directly touching public facilities, such as doorknobs or elevator buttons; if they do, they should wash their hands or use quick-drying hand sanitizer as quickly as possible. Masks should be worn during their flight and while waiting for it, and during this time they should try to eat as little as possible. Thank you.

Hu Kaihong:

The next question will be the last question for today.

China Education Television:

We've noticed that some overseas Chinese students have experienced panic and anxiety due to the pandemic. Could Mr. Tian share with us some suggestions from the Ministry of Education for providing psychological assistance to these students? Thank you.

Tian Xuejun:

You've raised a fairly important question. In terms of psychological counseling, the Ministry of Education has coordinated relevant resources from universities and colleges, making counseling services available to overseas students 24 hours a day. Education administrators in many places and Chinese embassies and consulates in many countries have also set up a helpline for overseas students, providing counseling services for them and their parents in a timely manner. As you may notice, many Chines ambassadors and consul generals have issued open letters to overseas Chinese citizens, and they are also communicating with overseas Chinese students via video chats, building confidence among them amid the pandemic.

We hope that overseas students can set up the concept of preventing the pandemic in a scientific manner, put this concept into practice with the help of Chinese embassies, and build the confidence to overcome it. In accordance with suggestions from the WHO and epidemiologists, we hope overseas students will avoid traveling as much as possible so as to eliminate cross infection. We also hope that these students’ parents and family members who are in China can share with them messages of positive energy that will help them get rid of unnecessary panic and anxiety; meanwhile, they should also do their part in epidemic prevention and control in China. Thank you. 

Hu Kaihong:

Today's press conference is hereby concluded. Thank you all. 

.

Read in Chinese

Speakers:

Ma Xiaowei, member of the Central Guidance Team, and minister of the National Health Commission;

Yu Xuejun, member of the Central Guidance Team, and vice-minister of the National Health Commission;

Chang Jile, director of the Bureau of Disease Prevention and Control, National Health Commission;

Jiao Yahui, deputy director of the Bureau of Medical Administration, National Health Commission;

Luo Huiming, chief physician of the Chinese Center for Disease Control and Prevention.

Chairperson:

Shou Xiaoli, Information Bureau of the State Council Information Office

Date:

March 31, 2020

Shou Xiaoli:

Good afternoon, everyone. Welcome to the press conference held by the State Council Information Office in Wuhan, Hubei province. Today, we have invited Mr. Ma Xiaowei, a member of the Central Guidance Team, and minister of the National Health Commission (NHC); Mr. Yu Xuejun, a member of the Central Guidance Team, and vice-minister of the NHC; Mr. Chang Jile, director of the Bureau of Disease Prevention and Control, NHC; Ms. Jiao Yahui, deputy director of the Bureau of Medical Administration, NHC; and Mr. Luo Huiming, chief physician of the Chinese Center for Disease Control and Prevention (CDC). They will introduce the progress being made by the Central Guidance Team in organizing and guiding work related to epidemic control and medical rescue. Later, they will answer your questions. 

First, I'll give the floor to Mr. Ma Xiaowei.

Ma Xiaowei:

Good afternoon, friends from the media. Since the COVID-19 outbreak, the CPC Central Committee with Comrade Xi Jinping at its core has consistently put people's safety and health first. General Secretary Xi Jinping has been personally deploying, commanding and leading the battle against COVID-19. Since Jan. 27, the Central Guidance Team has been stationed in Wuhan and effectively guiding, organizing and promoting the work related to epidemic prevention and control in Hubei province. We have taken a two-pronged approach to focus on both treatment and community-level prevention to contain infections, treat the infected and control the variables. With much effort, we have essentially cut off domestic transmission across the whole nation with Wuhan as the main battlefield, which means we have achieved a milestone in epidemic control.

With patient treatment as the top priority, the Central Guidance Team has made special deployments on dispatching medical team, increasing available hospital beds, treating severe and mild patients, applying traditional Chinese medicine (TCM), monitoring and managing recovered and discharged patients, and preventing hospital-acquired infections. We have worked from two aspects: management and treatment. We have overcome one difficulty after another and conducted much research. To date, more than 63,000 patients in Hubei province have now recovered, with a recovery rate of over 93%.

With regards to hospital management, we have organized more than 42,600 medical workers from NHC's subordinated and administered hospitals, hospitals of provinces across the country and hospitals of the PLA to form over 340 medical teams. They took equipment and supplies to assist Hubei province. Among them were more than 15,000 specialists in intensive care, respiratory medicine, circulatory medicine and anesthesiology. 10 provinces sent 20% of their intensive care specialists.

The Central Guidance Team carried out sophisticated coordination and dispatch work, matching medical treatment capacity with the treatment tasks and degree of difficulty. The team made resolute decisions to build Fangcang shelter hospitals and designated hospitals; accelerated the revamp of existing hospitals; and expanded medical resources via various channels. Due to these actions, the health system was able to withstand the shock of the rapidly increasing amount of cases at the peak of the outbreak. We adopted a model that directed national medical teams to take over whole wards, while provincial, regional and local-level medical staff took charge of specific departments. Also, joint medical affairs offices, nursing departments and hospital infection control offices were established, and joint expert teams were formed at the national, provincial and municipal levels. We implemented five systems: the daily assessment of patients; discussions and group consultations about difficult diseases; regular visits to patients; holistic nursing; and discussions about cases resulting in death . We revised our diagnosis and treatment guidelines seven times, revised the guidelines for severe cases three times, and standardized treatment plans.

In terms of clinical treatment, we made efforts to make it more targeted, creative and holistic, and achieved "five combinations." The first was a combination of basic medicine with clinical practice. We adopted targeted treatments based on damage to organs shown by pathological anatomy. We grasped major problems in clinical practice, paying special attention to the early stages of the illness; identifying severe cases;. adopting invasive mechanical ventilation and oxygen supplies; providing supporting treatment; and using anticoagulants. We implemented multiple organ protection, and ensured that we treated the disease in the early stages and in a targeted way. 

Second, we combined frontline treatment with rear support, giving play to the advantages of rear resources, using information technology to conduct remote multidisciplinary consultations, and providing comprehensive guidance on treatment timing, means and dosage.

Third, we combined medical treatment and nursing. We placed a premium on basic nursing, critical nursing, specific nursing and psychological nursing to find changes in patient conditions as soon as possible. We paid special attention to details and took good care of the patients. 

Fourth, we combined medical treatment and management. We established a management system of joint diagnosis and treatment and an efficient operation mechanism, providing a reliable institutional guarantee for treatment. 

Fifth, we combined traditional Chinese medicine (TCM) and Western medicine, involving TCM in the whole process of prevention, diagnosis and treatment and recovery. Meanwhile, we paid attention to the treatment of mild cases, and reduced the viral load to prevent mild cases from progressing into severe cases. We also rigorously implemented measures preventing and controlling hospital infection. None of our 40,000 assisting medical staff contracted the disease, which is most comforting of all.

In terms of epidemic control, the Central Guidance Team in Hubei has precisely identified changes in different phases of the epidemic situation, and adjusted its priorities and response measures accordingly. It dispatched nearly 1,000 top public healthcare workers, community healthcare personnel and testing staff from across the country to Hubei, forming 36 epidemic prevention teams and working alongside the local disease control personnel. Vice Premier Sun Chunlan personally promoted wide-ranging investigations in all subdistricts and communities across Wuhan city, identifying more than 6,000 confirmed or suspected COVID-19 cases. All of these have been admitted to hospitals, effectively preventing the spread of the disease in communities, and playing a decisive role in containing it. 

With an emphasis on nucleic acid testing, we have managed to increase the detection capacity from 300 to 35,000 people a day, and the interval for obtaining test results has been shortened from six days to 4-6 hours. We have endeavored to ensure that testing covers all those necessary, and that all cases are tested the same day. With all residential communities and villages adopting closed-off management, we have carried out work there on environmental improvement, disinfection and popularizing knowledge of epidemic prevention and control measures. Based on extensive practices, the disease control staff have revised the prevention and control plans six times, and summarized distinctive Chinese experiences as follows. We have focused on epidemic prevention in communities and fever clinics, and carried out face-to-face epidemiological surveys. We have ensured each case is "reported through the online direct reporting system within two hours and tested within 12 hours," and "conducted an epidemiological survey for each patient within 24 hours." We have emphasized the prevention and control work in key areas and locations, and for key populations. We have implemented the early detection, reporting, quarantine and medical treatment measures. Focusing on the four categories of personnel – confirmed and suspected COVID-19 cases, people with fever, and those in close contact with coronavirus infections – we have admitted them to hospitals, provided medical treatment, and tested and quarantined them as necessary. We have implemented a responsibility system for community control, distributed epidemic protection supplies to disadvantaged groups, and ensured our investigation, control, supervision, publicity and education work progresses smoothly in communities while showing our concern and love for residents. We are unswervingly carrying out the above requirements, and gradually seizing the initiative in epidemic prevention and control.

At present, as the epidemic spreads rapidly overseas, we are focused on guarding against imported COVID-19 cases and a rebound in domestic cases according to the requirements of the CPC Central Committee. We will carry out the epidemic prevention and control work at home with caution, and implement targeted measures to ensure that every household and individual adheres to them. We will continue to put medical treatment first. There are nearly 1,500 infections at present in Hubei, with severely and critically ill patients accounting for one third, which renders treatment very difficult. The medical team will spare no effort in carrying out its treatment work. As long as there is a glimmer of hope, we will do our best to save every life. We will take targeted measures to effectively respond to imported infections and improve the prevention and control strategy along the whole route from overseas to the country, and to each home. We will investigate every imported case and conduct treatment immediately. As the COVID-19 situation continues to improve in the country, we will not allow our hard-won results to reverse.

Finally, I would like to say that in the magnificent fight against COVID-19, large numbers of medical workers clad in white rushed to the frontlines. Their organization and management capability, professional qualifications as well as medical ethics have been thoroughly tested. It has been proven that they are a group of personnel with solid political faith, excellent capabilities and noble medical ethics, whom the Party and the people can fully rely on. During the medics' return, the Party and the people showed their appreciation to all of them, and having worked in Hubei, they deeply felt the sincere gratitude of the people there. Under the strong leadership of the CPC Central Committee, all staff working within the national health system will make unremitting efforts in the epidemic prevention and control work to achieve an ultimate and great victory against COVID-19. Thank you.

Shou Xiaoli:

Thank you, Mr. Ma. Now we will take questions. Today, we will still be doing this via video link. Please identify your media organization before asking questions.

People's Daily:

Currently, daily new imported COVID-19 cases have surpassed new domestic confirmed cases. What measures will the NHC take to prevent imported cases? Thank you.

Ma Xiaowei:

The prevention of imported cases is a very important task facing the country right now. I would like to invite Mr. Yu Xuejun to answer your question.

Yu Xuejun:

Thank you for your question; it is indeed a question we are all concerned about. We all know that the current situation regarding the epidemic prevention and control work in China is moving in a positive direction. Although there are still some sporadic cases, the spread of the epidemic in the country has been generally contained. However, at the same time, the rapid spread of the epidemic outside China has brought great pressure to our epidemic prevention and control work. In accordance with the overall deployment of the CPC Central Committee and the State Council, the NHC will coordinate with relevant departments of the Joint Prevention and Control Mechanism of the State Council, and carry out the overall prevention and control strategy on preventing imported cases and a rebound of the epidemic at home. We will prevent and control the whole chain of the spread of the epidemic from foreign countries to the border, and from the border to the door of every household. We will strengthen seamless connection and closed-loop management to prevent imported COVID-19 cases from overseas. We will take the following measures:

First, we will control the source of the infection. We will timely classify and transfer overseas arrivals, promote precise management of key population groups, and transfer confirmed cases, suspected cases and overseas arrivals with fevers discovered in ports to designated hospitals for further diagnosis and treatment.

Second, we need to block the transmission route of the virus. We should enhance the tracking of people entering the country, build interregional collaboration mechanisms and set up a "point-to-point" system to transfer them. We need to ensure the seamless transfer of passengers to their destination and lower the risk of virus infection and spread during transportation. Supported by information technology, we have carried out dynamic management for inbound personnel and enhanced their 14-day quarantine medical observation. If they display symptoms, they will be immediately transferred to designated hospitals to receive further diagnosis and treatment.

Third, we should prevent the virus spreading at the community level. Local communities must register inbound personnel who have just returned and conduct follow-up work and grid management for them. By strictly adhering to the requirements, local communities have also closely monitored the health condition of those inbound arrivals during the 14-day quarantine. If any symptoms are shown, they will be transferred to designated hospitals to receive further diagnosis and treatment.

At the same time, we should strengthen the management of close contacts. This refers to the management of people who have had close contact with confirmed cases. For inbound confirmed cases and those who are asymptomatic but tested positive, public health departments should work together with relevant departments to conduct epidemiological tests on them according to the regulations. Quarantine and medical observation should be carried out on close contacts in order to reduce the possibility of spreading the virus. Thank you.

Nihon Keizai Shimbun:

Around 500 patients, including those with both severe and critical conditions, are still in Hubei now. What is the treatment plan for them? Thank you.

Ma Xiaowei:

I would like to give this question to Ms. Jiao Yahui, the specialist from the National Health Commission.

Jiao Yahui:

Thank you for your question. Under the direct leadership of General Secretary Xi Jinping and the direction of the Central Guidance Team, Hubei province has made great progress in its medical treatment fighting COVID-19. The number of patients hospitalized for COVID-19 in Hubei continues to decrease and the accumulative cure rate has reached 92%. As of March 30, the number of severe cases has dropped from its peak of over 9,000 to the current number of 493. Both severe and critical cases had the same features: They are seniors with multiple underlying health conditions. The duration of the diseases lasts for a long time, and multiple organs are harmed. Some cases have severe infections with huge difficulties in saving and treating them. So far, among the severe cases in hospital, 82 are trachea intubated, 13 are on extracorporeal membrane oxygenation (ECMO), 33 are receiving prone position ventilation, and 38 are undergoing continuous renal replacement therapy (CRRT). In order to treat these severe patients well, we are currently undertaking the following measures:

First, we took additional measures to implement the principle that patients are classified and given concentrated treatment, quality resources are pooled and experts are called together for the virus fight. While concentrating patients with severe conditions in high-level hospitals, we also tried to transfer them to special wards managed by national medical teams to optimize medical resources and strengthen capacity for treating severe cases.

Second, we have further strengthened life support and multi-organ support. Most of the severe and critically ill patients have multiple organ impairment. Apart from the lungs, they may also suffer from damage to other organs, such as the heart, kidneys, and the liver, as well as problems with their immune and circulatory systems. While applying ECMO (extracorporeal membrane oxygenation), invasive ventilation, prone position ventilation, and CRRT (continuous renal replacement therapy), we have also provided nutritional support to improve their immunity and circulation. Various other measures have also been taken to strengthen life support.

Third, we strengthened disease monitoring and patient care. For critically ill patients whose conditions keep changing, we have enhanced holistic care and looked closely at disease progression. For patients treated with ECMO, endotracheal intubation, prone position ventilation, and CRRT, we have strengthened special care. Meanwhile, we have also enhanced basic care, which, together with special care, plays a vital role in improving treatment efficacy.

Fourth, we upgraded the expert inspection system by sending national experts to stay at hospitals. We dispatched national experts to designated hospitals that receive severe and critically ill patients so that they can work with the experts of those hospitals in the treatment and rescue of patients. In particular, they can work together to develop a personalized treatment plan for each patient.

Fifth, we established a case discussion system. We organize daily case discussions where military medical and civilian experts across the country make an in-depth analysis of their treatment. At this point, the recovery rate of severe and critically ill patients has increased from 14% to 88%. Since the beginning of March, 100 to 150 severe cases have turned into mild cases each day. Thank you.

Hong Kong Bauhinia Magazine:

We have noticed that China has recently held a series of bilateral or multilateral conferences to share its experience in fighting the COVID-19 outbreak. President Xi Jinping put forward four proposals to win the battle against the pandemic at the Extraordinary G20 Leaders' Summit. How will the National Health Commission translate these proposals into action? Thanks!

Ma Xiaowei:

The COVID-19 pandemic is largest disaster so far faced by humanity in the 21st century. There is an urgent need for countries around the world to strengthen cooperation and unity and work together to build the most thorough network for joint prevention and control. China's fight against the pandemic has won wide support from the international community. Many countries, regions and international organizations have shown support by sending messages of sympathy and donating medical materials.

China has passed the most difficult and challenging period in epidemic prevention and control. We therefore have sympathy for other affected countries and regions. Under the arrangement of the CPC Central Committee，we have sent medical teams to many countries including Italy, Serbia, Cambodia, Pakistan, Venezuela and Laos. These teams are providing guidance and consultation on the epidemic fight. We have also sent medical materials and equipment to many countries and regions including nucleic testing kits, antiviral drugs, traditional Chinese medicines, ventilators and patient monitors, as well as protective items such as medical protective suits and face masks. We have established online "Knowledge Centers," held briefings with the WHO, and organized over 40 videoconferences with more than 100 countries and regions to enable targeted and in-depth communications.

China has also donated US$20 million to the WHO to support it in carrying out the fight the COVID-19 pandemic, and to help developing countries improve their public health emergency responses. These measures let the world see a united and resilient China which is ready to shoulder responsibilities and benefit the world. We have therefore gained a deeper understanding of the practical meaning of President Xi's grand vision of "building a community with a shared future" which transcends time and space.

On March 26, President Xi delivered an important speech at the Extraordinary G20 Leaders' Summit. Sticking to the idea of "a community with a shared future", Xi put forth a series of important proposals on strengthening international cooperation, which injected a huge amount of confidence and strength into the world. The National Health Commission will earnestly implement President Xi's four-point proposals and the spirit of the summit. We will continue to strengthen international cooperation and steadfastly support the leading role of the WHO. We will support the G20 to boost information sharing as well as policy and action coordination. We will actively prepare ourselves for a G20 health ministers' meeting and strengthen cooperation on drugs, vaccines and epidemic control. We will consolidate the network for joint prevention and control under the regional and multilateral frameworks such as the China-Japan-South Korea cooperation mechanism, the China-ASEAN cooperation mechanism and the Shanghai Cooperation Organization. We will guide the medical teams sent to over 50 countries to carry out epidemic prevention and control. We will, under the arrangement of the CPC Central Committee, provide support and help within our capacity to the countries hardest hit by the outbreak. China can also learn from the epidemic prevention and control measures taken by other countries. We will share our strategies, methods, technologies, standards, and cases in fighting the COVID-19 without reservation, and hope other countries and regions can also share their experiences in an effort to contain the pandemic as early as possible and jointly safeguard global security.

The Straits Times:

Asymptomatic cases have not been included in China's official statistics. But there is a growing concern that these asymptomatic cases could grow and cause a second wave of infection as control measures begin to relax. How will the National Health Commission deal with this phenomenon?

Ma Xiaowei:

Recently there has been growing concern about asymptomatic infections. Let's invite Chang Jile, director of the National Health Commission's Disease Prevention and Control Bureau, to answer this question. 

Chang Jile:

Thank you for your attention to this phenomenon. The commission has always paid close attention to the situation of infected people without symptoms and insisted on the strict management of asymptomatic cases and their close contacts. Asymptomatic COVID-19 patients refer to those who do not show any clinical symptoms, including fever, cough, and pharyngalgia, and have no clinically identifiable symptoms or signs, but their test results for COVID-19 are positive.

Asymptomatic cases can mostly be identified through active monitoring. There are four ways of monitoring these cases. The first is the medical observation of close contact. The second is the investigation of clustered COVID-19 outbreaks. The third is tracking the source of the infection. The fourth is the detection of people who have traveled or lived in regions where COVID-19 cases have continued to spread.

In terms of report management, the commission has asked local health authorities to strengthen the prevention and control management of asymptomatic patients. The first is to enhance the management of information reporting. Medical and health institutions at all levels are required to make online reporting within two hours after asymptomatic infections are found. The second is to carry out epidemiological surveys in a swift manner. County and district level disease control centers are required to complete case investigations within 24 hours after receiving the report of asymptomatic infection, carry out timely registration of close contacts, and promptly complete case reports through the infectious disease reporting management system. The third is to take strict measures of quarantine management. Infected people without symptoms are required to undergo a 14-day quarantine. After their 14-day quarantine, they will be released if two consecutive nucleic acid tests at an interval of 24 hours are found to be negative. If their test results are found to be positive, quarantine and medical observation should continue. Close contacts of asymptomatic patients are also required to undergo a 14-day quarantine and medical observation. The fourth is to standardize medical treatment. If there are clinical symptoms during their quarantine and medical observation, asymptomatic patients should be counted as confirmed cases and transferred to designated hospitals for standard treatment in a timely manner. 

In response to public concerns about asymptomatic infections, we encourage medical experts to respond and discuss cases in mainstream media. From April 1, we will publish reports, outcomes, and the management of asymptomatic cases in our daily briefing and respond to social concerns promptly. Next, we hope to replicate the spirit of the meeting convened by the leading group of CPC Central Committee on coping with COVID-19 and highlight the monitoring, tracking, quarantine, and treatment of asymptomatic cases. We will accelerate our pace to collect a certain percentage of samples from heavily affected areas to carry out surveys and epidemiological analyses to improve prevention and control measures. Thank you.

Southern Metropolis Daily:

Recently, the NHC and the Hubei provincial epidemic prevention and control headquarters conducted large-scale training together on the epidemic prevention and control, and adopted a "1+2+3+N" training model. What is the purpose of conducting large-scale epidemic prevention and control training under the current circumstances? How has the training work progressed so far? Thank you.

Ma Xiaowei:

NHC Vice Minister Yu Xuejun will take this question.

Yu Xuejun:

Thank you for asking this question, and thank you for your attention regarding the epidemic prevention and control training. In the fight against COVID-19, nearly 1,000 medical professionals from disease control departments and the field of public health from all over the country headed to Wuhan to help. They made great contributions to the epidemic prevention and control work, while accumulating a lot of experience.

In order to consolidate the hard-won achievements in epidemic prevention and control, in accordance with the requirements by the Central Guidance Team in Hubei, the NHC, in conjunction with the Hubei provincial COVID-19 epidemic prevention and control headquarters, launched a weeklong series of large-scale epidemic prevention and control training activities in the province in late March.

The purpose of this large-scale training was very clear. On the one hand, based on the current situation, we aimed to promote communities' forward momentum in epidemic prevention and control, put the focus of their work at the grassroots, and improve the level of epidemic prevention and control in grassroots communities. On the other hand, focusing on long-term progress, we aimed to promote the improvement of the Hubei provincial epidemic prevention and control team's abilities, and cultivate a local team that is able to win an epidemic battle. The large-scale training lasted a week and adopted a "1+2+3+N" model. "1" refers to a training session with medical professionals, whereby National and provincial experts conducted training across the whole province. "2" refers to two special themed training courses centered around the epidemic prevention and control. "3" refers to the three key fronts, as the training was focused on communities, the resumption of work and production, and teaching practical operations at special key areas and locations. At the same time, in accordance with the individual needs of each region, there was support for "N," or "numerous," targeted customized training sessions.

Regarding the progress of the training you mentioned, I have a set of data here. During this large-scale training, senior experts at the national and provincial level went to the grassroots, conducting hands-on training and on-site guidance for 5,597 disease control, public health and medical personnel in all counties, towns and districts in 17 cities and prefectures in a point-to-point manner. A total of 444 special training sessions and 262 customized training sessions were held in cities, counties and districts, training more than 48,000 people in a concentrated manner and more than 21,000 people in on-site practical operations, while more than 5,000 lectures were held during the sessions.

The large-scale training, through lectures, has helped regions and various departments to further enhance risk prevention awareness and continuously improve epidemic prevention and control plans throughout Hubei province. Through drills, the training uncovered loopholes and made up for shortcomings and weaknesses, laying a solid foundation for comprehensively building up the grassroots community network. Through training, we could improve both the epidemic prevention and control abilities and daily work abilities of grassroots public health teams. We could also build a stronger defensive line to protect the lives and guarantee health of the people. Thank you.

CCTV:

I have two questions. First, how likely are sporadic cases tore-emerge, given the newly confirmed case in Wuhan on March 24, despite the city having experienced zero growth for several consecutive days? Second, what measures are being adopted to prevent potential risks caused by increased mobility when exits from Hubei province are reopened and transportation in Wuhan has been partially resumed? Thank you.

Ma Xiaowei:

Please allow me to invite Chang Jile, director of the Disease Prevention and Control Bureau of the NHC, to answer your questions.

Chang Jile:

Thank you. The transmission of the virus has been basically halted in Wuhan, thanks to the strenuous efforts made under the strong leadership of the CPC Central Committee and the State Council as well as the guidance by the the Central Guidance Team. As you said, there has been good momentum whereby confirmed and suspected cases have been reduced to zero for several consecutive days across the entirety of Hubei province, including Wuhan. However, we must be aware that "zero growth" does not equal "zero risk." Potential risk cannot be totally ruled out as the possibility of sporadic or cluster infections remains when the frequency of mobility and the chances of exposure to external pathogenic sources have increased following the removal of restrictions on exits from Hubei province and with the resumption of local work, production, schools and transportation. Therefore, we should still be highly vigilant, and neither lax in thought or practice. 

First, we need to precisely calibrate our prevention and control work, acting in accordance with the facts, laws and scientific principles rather than being overwhelmed by the pursuit of "zero growth." Second, with concerted efforts and group work, we will take a firm grip on implementing every concrete measure regarding the prevention and control work and ensure that every individual realizes and practices their duty. Third, we will intensify our efforts to prevent, control and monitor the disease by means of discovering, reporting, quarantining and treating people in a timely fashion, taking control of confirmed and suspected cases and putting those developing fever or close contacts under medical observation. Meanwhile, we will highlight the work conducted in key regions, places and among certain groups of peoples. Reports should be delivered directly online within two hours once new cases are confirmed, test results from laboratories should be produced within 12 hours, and the epidemic disease investigation should abide by "the restrictions of time in three phases" within 24 hours. Fourth, the requirements issued to fever clinics and designated medical institutes in terms of categorized treatments should be strictly followed to prevent the epidemic from returning. Fifth, the public should be allowed easy access to updates on the epidemic situation in line with timely, accurate, open and transparent principles. Sixth, multiple platforms should be used to guide people how to adopt healthier lifestyles, such as, by washing hands, ventilating rooms, wearing face masks and avoiding large gatherings, to safeguard people's physical and psychological conditions. Thank you.

Sputnik:

I have two questions. First, in addition to COVID-19 patients, are hospitals in Wuhan city and Hubei province at large now able to accept other patients? Have the medical institutions there resumed their normal work? Could you give some data in details? What's the percentage of hospitals that have resumed normal medical care and when will they come into normal operation completely? Second, in light of NHC's experience and views, what's the possibility that a patient will be re-infected with the novel coronavirus after being discharged from hospital with a normal temperature? Can a cured patient acquire immunity to the virus? Thank you.

Ma Xiaowei: 

Ms. Jiao Yahui, a commissioner on supervision at NHC's Bureau of Medical Administration, will take the first question, and Mr. Luo Huiming, a CDC chief physician, will take the second question.

Jiao Yahui:

Thanks for your questions. I will answer your first question. Since the outbreak of epidemic, while guiding the medical treatment of COVID-19 patients in Wuhan and Hubei province, we have paid attention to the normal medical needs of other patients. At the peak of the epidemic, we directed some hospitals in Wuhan city and Hubei province to be exclusively used for patients in need of continuing medical care, such as maternal pregnancy care and hemodialysis for patients with chronic renal failure.

With the improving epidemic situation in China, more designated hospitals have completed their medical care tasks and have gradually restored their normal order of medical care. We have instructed practices of online diagnosis and treatment, long-term prescriptions for chronic diseases and drug distribution in Wuhan city and Hubei province to meet the needs of patients with common and frequently-occurring diseases. According to the reports of Wuhan city and Hubei province, as of March 30, a total of 62 hospitals in Wuhan have resumed normal medical care, accounting for 40 percent of hospitals of secondary grade and above. Among these hospitals, a total of 60 hospitals have restored outpatient services and 53 hospitals have reopened emergency services, receiving 25,000 visits per day. A total of 26,500 beds were available in the 62 hospitals, accounting for 47 percent of total beds and 32 percent of beds available in Wuhan's secondary and higher hospitals. In breakdown, ten of these hospitals have reopened over 80 percent of their beds, six of which have reopened all their beds. They are mainly comprehensive hospitals at the district level and maternal and childcare hospitals. There are 14,300 inpatients currently in the 62 hospitals, accounting for 54 percent of the total beds available.

According to statistics, 120 patients are currently receiving dialysis treatment in Tongji Hospital in Wuhan every day. This figure exceeded that of the same period last year. In addition, over 20 surgeries have been performed on a daily basis in Wuhan Union Hospital and Zhongnan Hospital of Wuhan University; and more than 70 births have taken place in Hubei's Maternity and Child Health Care Hospital every day. Outside of Wuhan, 75 cities and counties in Hubei province deemed low-risk have resumed normal medical services. Next, we will provide guidance to Hubei province as well as Wuhan city to free up further beds in hospitals, offer outpatient services, and expand the supply of medical services. Thank you.

Luo Huiming:

Thank you for your concern about the discharged patients. Just now, you mentioned that patients would be discharged from hospital once their body temperature returned to normal. In fact, clinicians make their decisions based on the NHC's diagnosis and treatment plan for COVID-19. Patients will only be discharged when they meet the standards in four categories concerning body temperature, symptoms, CT imaging and two consecutive negative nucleic acid tests. In addition, discharged patients are required to undergo a 14-day period of quarantine for medical observation and health checks.

For those infected with the novel coronavirus, specific antibodies will be gradually developed in their bodies to neutralize and clear the virus, allowing these patients to recover. After they are discharged from hospital, they will have also developed immunity from the virus. As such, normally speaking, they will not be re-infected.

Here are two examples. First, some discharged patients have tested positive for the viral nucleic acid. There are differences in individual cases, although, we have not found any cases in which discharged patients who have recovered then infected others or spread the virus to others again. Second, clinically speaking, there is the plasma therapy using plasma from recovered COVID-19 patients. As these patients recover, their plasma contains antibodies and develops immunity. Therefore, their plasma can be used to save other COVID-19 patients. Here, I would like to call for recovered patients to donate their plasma as long as they meet the clinical standards in order to help others recover. Thank you.

Shou Xiaoli:

Thank you to our five speakers. Today's press conference is hereby concluded. Thank you all. Goodbye. 

.

Read in Chinese

Speakers:

Luo Zhaohui, vice minister of foreign affairs;

Xu Nanping, vice minister of science and technology;

Zeng Yixin, vice minister of the National Health Commission;

Deng Boqing, vice chairman of the China International Development Cooperation Agency.

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

March 26, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference being held by the State Council Information Office (SCIO). As the novel coronavirus has been rampaging through many countries around the world, strengthening international cooperation has become a matter of utmost urgency. Today, we have invited Mr. Luo Zhaohui, vice minister of foreign affairs; Mr. Xu Nanping, vice minister of science and technology; Mr. Zeng Yixin, vice minister of the National Health Commission (NHC); and Mr. Deng Boqing, vice chairman of the China International Development Cooperation Agency (CIDCA), who will brief you about the cooperation between China and the international community in fighting COVID-19. They will also answer your questions. First, let us hear from Mr. Luo.

Luo Zhaohui:

Thank you. It is my pleasure to be here and share with you China's efforts to fight the novel coronavirus in terms of international cooperation. Since the start of the COVID-19 outbreak, under the personal command and deployment of President Xi Jinping, the Chinese people have been racing against time in a fight against the epidemic. After the whole country's arduous effort, our domestic epidemic prevention and control situation continues to show a positive trend, prompting an acceleration in the resumption of life and work. This once again demonstrates the notable strength of the leadership of the Communist Party of China as well as socialism with Chinese characteristics. China has not only managed to curb the spread of COVID-19 domestically, but also buy the world time, gain experience and provide assistance in the global fight against COVID-19. 

While leading the domestic effort to prevent and control the novel coronavirus, President Xi Jinping has also attached great importance to the global fight against COVID-19, commanding us to participate in it and carry out international cooperation accordingly. President Xi Jinping has made hands-on efforts, meeting and holding talks with Cambodian Prime Minister Samdech Techo Hun Sen, Mongolian President Khaltmaa Battulga, Pakistani President Arif Alvi, and WHO Director-General Tedros Adhanom Ghebreyesus during their special visits to China. In almost two months, through "telephone diplomacy," President Xi Jinping has conducted 26 phone calls with 22 leaders of foreign countries and international organizations. He also sent messages of sympathy to the leaders of South Korea, Italy, France and Spain, and replied to the letters from Bill Gates and other foreigners who are friendly to China. President Xi Jinping will also take part in a special G20 leaders' summit tonight on responding to the COVID-19 pandemic. It has been clearly pointed out by President Xi Jinping that the international community should step up its efforts and act to carry out effective cooperation with a joint prevention and control mechanism, so as to build a strong synergy and curb the pandemic. The international community truly feels the unwavering spirit of cooperation and responsibility of the Chinese leadership. In addition, Premier Li Keqiang talked over phone with the leaders of Germany and the European Commission. State Councilor and Foreign Minister Wang Yi has also conducted 57 phone calls with foreign ministers and dignitaries of 40 countries. 

Love knows no boundaries. China has received valuable support from the international community during the most difficult time in its fight against COVID-19. Leaders of over 170 countries as well as more than 50 international and regional organizations have sent messages of sympathy and support to China's leaders. A total of 79 countries and 10 international organizations have also provided the Chinese people with great assistance during this period.

Just as the situation surrounding the epidemic prevention and control in China saw positive improvement, COVID-19 was declared a pandemic and has rampaged through many countries around the world. Currently, Europe remains the epicenter of the COVID-19 pandemic, while the situation in the United States is still severe and that in Asian countries is not optimistic. In addition, there is a risk of possible spread of COVID-19 in Africa. 

"A drop of water in need shall be returned with a spring in deed." China sympathizes with countries suffering from the COVID-19 pandemic, and is offering help and providing assistance within its ability. The Chinese government has pledged to provide emergency assistance, including medical supplies such as test reagents and face masks, to over 80 countries as well as international and regional organizations such as the WHO and African Union. China has also donated US$20 million to the WHO, supporting it in playing a better coordinating role in international action against the pandemic. Local governments, enterprises and private institutions in China have also lent a helping hand to the hardest-hit countries.

We share our experience in epidemic prevention and control with other countries by providing multilingual prevention and control measures, as well as therapeutic plans; holding international conferences to exchange ideas; hosting video conferences with foreign health experts; sending medical expert teams to countries including Iran, Iraq, Italy, Serbia and Cambodia; and cooperating with relevant countries on vaccine research as well as drug development. Thanks to China's initiative, the Special ASEAN-China Foreign Ministers' Meeting on Coronavirus Disease (COVID-19) was held successfully in Vientiane, Laos. Foreign Ministers of China, South Korea, and Japan held a video conference to discuss issues related to COVID-19. One outcome included China and South Korea specially establishing a joint prevention and control mechanism to cope with the pandemic.

China's good will and efforts have been highly commended by the international community. Serbian President Aleksandar Vucic and Hungarian Prime Minister Viktor Orban went to airports to personally welcome Chinese medical team who had brought donated medical supplies. The arrival of a team of Chinese medical experts at the Phnom Penh International was broadcast live on the official Facebook page of Cambodian Prime Minister Samdech Techo Hun Sen, which garnered 600,000 views. Italian Foreign Minister Luigi Di Maio noted that Chinese health experts and the aid they had brought "will help save Italy."

WHO Director-General Dr. Tedros said that China is doing the right thing and that it's that kind of solidarity we need. Solidarity, solidarity and more solidarity. UN Secretary General Guterres also told President Xi Jinping that the United Nations appreciates China's assistance in fighting the epidemic in countries currently facing difficulties. China's support is vital to multilateralism and looks forward to China's continued leadership in international affairs.

Currently, the pandemic is still spreading around the world. Effectively preventing imported cases has become the primary task of China's epidemic prevention and control.

In the era of globalization, the interests of human society are highly integrated. We are intertwined and interdependent, with responsibilities shared together. As President Xi Jinping pointed out, viruses recognize no national borders and epidemics do not discriminate between races. COVID-19 once again proves that human beings live in a community of shared future. China will continue to firmly adhere to the concept of building a community with a shared future for humanity, work together with people of all countries, and strive to win the final victory in the fight against the epidemic. One of Chairman Mao's poems states that "peace would then reign over the world, with the same warmth and cold throughout the globe." We expect and believe that the days described in the poem will be realized soon. Thank you.

Hu Kaihong:

Thank you, vice minister Luo. Next, the floor is given to vice minister Xu.

Xu Nanping:

Thank you. Good morning, ladies and gentlemen. First of all, I would like to thank the media for your attention and support for scientific and technological work. Since the outbreak, the Chinese scientific and technological community resolutely implemented General Secretary Xi Jinping's instructions and established a scientific research group focusing on five areas: clinical treatment and medicine development, vaccine research, virus tracing and transmission research, testing reagents and equipment, as well as animal model development. Ten sub-groups were also set up accordingly. Our goal is to make sure that we can "trace, prevent, control the virus and treat the patients." We have been working around the clock to speed up scientific and technological research. A number of effective scientific and technological achievements have been made.

We isolated and identified the virus strain in the first place, then shared the entire genome sequence with the WHO, which provided an important basis for scientists to start work on medicines, vaccines and diagnostic studies worldwide; we have gradually deepened our understanding of the pathogenic mechanism and transmission mode of the virus, providing a scientific basis for prevention and control strategies; we quickly filtered, selected and evaluated chloroquine, fapilavir, tocilizumab and a batch of traditional Chinese medicine prescriptions, traditional Chinese patent medicines and other effective therapeutic drugs, as well as convalescent plasma therapy, stem cell therapy, artificial liver therapy, etc.; we have established various treatment plans suitable for patients at different stages of the disease; we have established and formed a testing technology system coupled with nucleic acid and antibody testing in a very short time, and continuously improved its sensitivity and convenience; we have been able to promote five parallel technical routes in the study of possible vaccines, under which the recombinant adenovirus-vectored vaccine has been undergoing clinical trials since March 16.

These achievements are hard-earned and are the result of the dedicated hard work of the Chinese science and technology community. Since the reform and opening up, China's scientific and technological innovation capabilities have been continuously improved, with continuous improvements in innovation system building.

At the same time, these achievements are also based on the experience and theoretical exploration accumulated in the struggle of humanity versus the virus. In the scientific research of epidemic prevention and control, we always adhere to the concept of a community of shared future for mankind, seeking to promote exchanges and cooperation with international counterparts, as well as in-depth communications. Every day, we receive a lot of suggestions and statements of intent to cooperate from our international peers. It is very touching. Meanwhile, we also share our scientific data, technical results and prevention and control strategies with the global scientific and technological community in a timely manner. It can be said that the spirit of helping each other who find themselves in the same boat, sharing and cooperation runs through the whole process of China's anti-epidemic science and technology research.

At present, the COVID-19 pandemic is spreading globally. Viruses know no borders. The Chinese science and technology community will continue to carry out in-depth scientific and technological research cooperation and exchanges with scientists from various countries in epidemic prevention and control, patient treatment, and basic research, share research progress and anti-epidemic experience, and work together to provide solid scientific and technological support for the globe's ultimate victory against the pandemic. Thank you all.

Hu Kaihong:

Thank you. Next, Mr. Zeng, please make your introduction.

Zeng Yixin:

Good morning, media friends. Under the deployment and command of General Secretary Xi Jinping, under the leadership of the leading group of the CPC Central Committee for COVID-19 epidemic prevention and control, as well as the joint prevention and control mechanism of the State Council, the National Health Commission attaches great importance to actively carrying out international cooperation in the fight against development of epidemics. We are sharing China's prevention and treatment experiences and technologies, and providing the aid and technical support to other countries affected by the current pandemic. Our work has been widely recognized by the international community. Let me introduce to you the main work we have undertaken recently in three aspects.

First, we are actively sharing China's experiences in the prevention and treatment of COVID-19. Our prevention and control strategies, methods, technologies, standards, and cases have been tested in actual epidemic control situations. These are also what we have explored, analyzed, and summarized through continuous practices. These experiences are very precious. China is actively sharing these with the international community according to the needs of different countries. The National Health Commission compiled a set of technical documents such as the latest versions of diagnosis and treatment plan, and prevention and control plan. We have shared them in a timely way with 180 countries and more than 10 international and regional organizations, to help maintain global health security.

Second, we organized experts for in-depth technical exchanges. The National Health Commission and the WHO jointly hosted a briefing to share China's experience on COVID-19 response. Representatives from 77 countries and seven international organizations attended the event, and over 100,000 people watched the briefing online. WHO Director-General Tedros Adhanom Ghebreyesus, U.N. Resident Coordinator in China, and World Bank officials all spoke highly of China's prevention and control efforts in video and on-site speeches. They called on countries to learn from China's experience and jointly fight against COVID-19. We established an online knowledge center and an expert pool for international cooperation in prevention, control, diagnosis, and treatment. We held close to 30 technical exchange meetings with over 100 countries and regions via video call. The video meetings were timely, comprehensive, and effective, allowing China to respond promptly to the needs of the international community and provide precise technological support.

Third, we sent medical and health experts to assist relevant countries. The experts were sent in accordance with the arrangements of the Chinese central government and at the request of the countries. The experts shared experiences, exchanged views, and provided guidance and advice on prevention, control, diagnosis, and treatment. The countries now include Italy, Serbia, and Cambodia, and we are preparing to send experts to other affected countries. We have also guided Chinese medical teams who have long stationed in 56 countries to help developing countries prevent and control COVID-19 and provide technical advice and health education to locals and overseas Chinese. Over 200 online and offline training sessions have been held. 

Next up, in line with the decisions and arrangements of the CPC Central Committee and the State Council, the National Health Commission will continue cooperating effectively with the WHO, share China's experience with the international community in various ways, and provide technical support to other countries. Playing its role as a responsible country, China joins hands with other countries in combating the virus and building a community with a shared future for mankind. Thank you.

Hu Kaihong:

Thank you, Mr. Zeng. Now, let's invite Mr. Deng.

Deng Boqing:

Thanks. Good morning, friends from the media.

Currently, COVID-19 has broken out in many countries and is still spreading. It is urgent to carry out effective international cooperation in prevention and control. Only through solidarity can we overcome the difficulties, and only with joint efforts can we beat the disease.

Assistance to other countries is an important part of international cooperation. Offering such support within capacity is crucial for China to keep with the principle of upholding justice while pursuing shared interests and live up to the vision of a community with a shared future for mankind. It is China's responsibility to support other countries in need as a major responsible country and a country that has once been helped by other countries in difficult times. By doing this, China can also control and reduce the risk of imported infections.

The CIDCA resolutely implemented the important instructions of General Secretary Xi Jinping and the decisions and arrangements of the CPC Central Committee, swiftly offered emergency humanitarian aid, and raced against the clock to provide international assistance in close coordination with China's Ministry of Foreign Affairs, National Health Commission, Ministry of Commerce, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Finance, General Administration of Customs, Civil Aviation Administration, and relevant enterprises.

We have sent four batches of aid to 89 countries and four international organizations. We are making implementation plans for the fifth batch.

China offers aid to hard-hit countries, countries struggling with relatively weak public health systems and virus prevention capacities, and international organizations such as the EU, the African Union and ASEAN. Echoing the WHO's call for donations, we have donated US$20 million to the organization for designated purposes including strengthening their capacities of epidemic prevention and control, and improving their public health systems.

Geographically, we have offered emergency assistance to 28 Asian countries, 16 European countries, 26 African countries, nine American countries and 10 South Pacific countries. 

The assistance we provide to foreign countries comes in the form of medical supplies and medical technologies. Medical supplies include testing kits, masks, protective suits, goggles, infrared thermometers, medical gloves and shoe covers, ventilators, and other diagnosis and treatment equipment. Medical technology assistance is carried out in the form of sending medical expert groups to share experience and advice on diagnosis and treatment. Moreover, many Chinese local governments, businesses, private institutions and individuals have provided support and assistance to foreign countries as well. 

Chinese aid supplies carry eye-catching words. For example, the logo features the words "FOR SHARED FUTURE" in English. This highlights China's aspiration and mission when conducting foreign assistance. From those donated supplies, we can see not only ancient Chinese adages like "Although miles apart, the friendship between true friends is stronger than metal and stone," but also famous lines by celebrated French author Victor Hugo, former South African President Nelson Mandela, as well as lines from Italian operas. These words show the reality of building a community with a shared future for mankind.

Our assistance to foreign countries is the most concentrated and wide-ranging emergency humanitarian action we have conducted since the founding of the People's Republic of China. It manifests the Chinese nation's ideal of building a world shared by all, and the Chinese people's generosity and readiness to help others in hard times. This has won recognition from the international community. Leaders of many countries and international organizations expressed gratitude to China for its valuable assistance and support. Pakistani President Arif Alvi paid a special visit to China to extend appreciation for China's contribution to the world, as well as the brotherhood between the two countries. Serbian President Aleksandar Vucic personally approved the Serbian message posted on China's aid materials to Serbia, greeted Chinese medics arriving in Serbia at the airport in person, and kissed the Chinese national flag. The Italian prime minister specially called President Xi Jinping to express his sincere thanks. President of the European Commission Ursula von der Leyen lauded and thanked Chinese assistance and support in a video speech in English, French and German. People from a variety of countries gave thumbs-up to China on the internet, staged light shows to support China, played the Chinese national anthem in residential communities and chanted "Thank you, China" on the streets.

As the global pandemic is developing, China finds itself amidst a crucial moment of guarding against imported cases and a rebound in indigenous cases. The Chinese government will continue to offer assistance, within its capacity, to affected countries, while carrying out epidemic prevention and control at home. 

Thank you.

Hu Kaihong:

Thank you, Mr. Deng. Now we will take questions. Please identify your media organization before asking your question.

CCTV:

What are China's expectations and propositions regarding the G20 Summit being held tonight to address the global coronavirus pandemic in particular?

Luo Zhaohui:

That is a very good question. The special G20 Summit for state leaders will draw immense attention from across the world. The outbreak of the pandemic has ravaged many regions around the globe, threatening people's lives and health and dealing a heavy blow to the global economy. The meeting is being held to meet the expectations of the international community as member countries are supposed to work in a concerted manner, making all-out efforts to fight the epidemic and avoid global economic volatility. Having played a decisive role in dealing with the 2008 global financial crisis, the G20, which is considered an important platform in promoting economic cooperation and addressing global crises, should ensure that it takes the lead in confronting the pandemic, especially when all member countries have fallen victim to the disease. This summit will be the first-ever G20 video conference, with parties involved taking the opportunity to deliberate about how to take joint action.

This will be the first major multilateral diplomatic conference that President Xi Jinping has taken part in since the outbreak of the epidemic. China has made notable progress in preventing and controlling the epidemic, and its support to other countries in their work fighting the epidemic has been lauded extensively. We expect and believe that a consensus regarding joint effort in fighting the pandemic and extensive cooperation in maintaining global economic stability can be reached at the summit, which is intended to signal stronger solidarity, deeper cooperation and closer coordination.

China is willing to work with the other G20 member countries to make concrete achievements as a result of the summit. Now, let's wait and see. Thank you.

CGTN:

Prior to the press conference of the State Council Information Office, CGTN conducted a poll of internet users overseas, asking what their major concerns were regarding the summit. Based on the data we collected, many of their questions focused on how China will share its experience. On behalf of our overseas audience, I would like to ask how China will share its precious experience in detail with the international community threatened by the rampant pandemic?

Luo Zhaohui:

Thank you for raising the question on behalf of internet users about their major concern. As the representative of the Ministry of Foreign Affairs, I would like to take this opportunity to pay tribute to them as well. When the severe epidemic spread across China, we made all-out efforts to build the initial defensive line which gave the rest of the world more time to prepare and more experience to learn from. Now, because the pandemic has spread to many regions around the world, China will on one hand continue to ramp up its efforts to prevent and control the virus domestically, and on the other hand, share its experience and solutions with the international community.

First, we have held video conferences with experts from over 100 countries and international organizations to discuss prevention and control measures for the epidemic. So far, we have held nearly 20 video conferences for experts from the WHO, the Association of Southeast Asian Nations (ASEAN), the African Union (AU), the European Union (EU), the Caribbean Community (CARICOM), the Shanghai Cooperation Organization (SCO) and more than 110 countries from the South Pacific Island Countries, Europe, South Asia, Africa and Latin America. We have shared our experience on how to identify the epidemiological characteristics, launch prevention and control measures, conduct diagnoses and treatments, and trace contaminations. We have given advice to our overseas counterparts and answered their questions. Experts from many countries have provided positive feedback on these conferences, which have been considered transparent, inclusive, informative and professional. The sincerity of the Chinese experts who have shared their knowledge has been essential for the prevention and control work outside China.

Second, we have dispatched Chinese medical experts to hard-hit countries. We have sent seven batches of medical experts to the five countries of Iran, Iraq, Italy, Serbia and Cambodia, and the first team arrived in Iran on Feb. 27. Every time these fighters brave the coronavirus risk to travel to other countries, they have received warm welcome from local governments and people. As I mentioned earlier, Serbian President Aleksandar Vucic greeted the Chinese medical team at Belgrade Nikola Tesla Airport in person, "bumped elbows" with each member, and kissed the Chinese national flag. Cambodian netizens showed their appreciation by writing such comments as, "The divine soldiers are saving us" and "the friendship between Cambodia and China is unbreakable" online when the medical team arrived in Cambodia. When the team arrived in Italy, local people lined up to welcome them, and played the Chinese national anthem to thank China for its aid to Italy. These moves have deeply touched us and encouraged the medical teams to aid the local fights against COVID-19. 

Third, we have actively shared our epidemic prevention and control experience, as well as diagnosis and treatment plans. Since the outbreak, we have maintained an open, transparent and responsible attitude, actively summarizing our experience during the intense campaign against COVID-19. As of today, we have formed serial files of the COVID-19 prevention and control plan, diagnosis and treatment plan, case monitoring plan, epidemiology research plan, close-contact management plan, and laboratory testing technology guidelines, and translated them into other languages, providing our experience to the rest of the world. These files have been uploaded to official websites of the Ministry of Foreign Affairs as well as overseas embassies and consulates, and we will continue to update them in real time. 

China will continue adhering to the concept of a "community with a shared future for mankind," providing more high-quality public products, actively sharing Chinese experience and solutions, and joining hands with all countries to win the battle against COVID-19. Thank you. 

Zeng Yixin:

I would like to add a few words. This question from the media is very important. As everyone has noticed, China's prevention and control situation has achieved great success under the joint effort across the country. There are indeed some experience that is worth summing up, providing a reference to the world. 

I think China's experience can be summarized from several aspects:

First is the conceptual aspect. "For the people, relying on the people, always prioritizing people's lives and health" is a very important concept as well as a key factor in effectively preventing and controlling COVID-19. 

Second is the command system. Under General Secretary Xi Jinping's personal arrangements and command, we have formed a highly unified and effective command system which has been crucial.

Third is the strategy. We have carried out the prevention and control work based on the principles of rule of law, science and accuracy. This is a crucial support point. 

Fourth is about the measures, or how to transform these concepts and strategies into effective measures. We have emphasized advancing strategic passes, moving the focus down to primary levels, and especially mobilizing each community and family to play their role in the prevention and control. We have attached great importance to ensuring a coordinated national response, deploying medical resources as a whole, closely cooperating and improving our medical care capacity. We have paid high attention to science, giving full play to technology as a supporting role at every link in the epidemic prevention and control work. As Mr. Luo mentioned earlier, we highly value a great nation's image with an open, transparent and responsible attitude, and are deepening exchanges and cooperation between countries. 

China's concepts on prevention and control, as well as its strategic and practical measures have withstood the practical tests and proven effective. We would like to continue sharing with the international community and jointly promoting global health security. Thank you. 

Macao Daily News:

How has the Chinese government decided which countries they will offer anti-epidemic assistance to? How did the government decide the types and quantities of the anti-epidemic materials? And when the Chinese government made these decisions, did they take into consideration if the recipient countries had previously helped China? Will China meet every country's demand if they ask for help?

Deng Boqing:

Thank you for your questions. When China put together its assistance programs, we took into consideration the following factors: First, we evaluated how bad the recipient country had been hit by the epidemic, the state of its medical and health system, and how bad the shortage of medical supplies was. Second, we evaluated the specific needs of the country. Third, we evaluated our own capabilities. By sticking to the principle of acting according to one's own ability, we made the assistance plan on the premise that domestic anti-epidemic needs must be guaranteed. The two countries would negotiate to make the specific plan, including the types and quantities of the anti-epidemic materials, the obligations of both parties and the division of work.

There is an old saying in China, "A drop received in need will be repaid with a whole river." China will remember the countries who helped us in the fight against COVID-19 and repay them in time. At the same time, we understand that different countries have different conditions. China is grateful for both material aid as well as political and moral support. 

In China's foreign-aid policy, we believe in not only the idea that, "You throw a peach to me, I give you a white jade for friendship," but also, "A friend in need is a friend indeed." This year marks the 70th anniversary of China's foreign-aid policy. Over the past 70 years, China has offered aid to developing countries in the spirit of internationalism and humanitarianism. China's foreign aid to countries severely affected by natural disasters and epidemic outbreaks has earned high praise from the international community. China's foreign aid has so far covered the Indian Ocean tsunami, Nepal earthquake, and the fights against the Ebola epidemic, plague and Zika virus epidemic.

At present, the world is sparing no effort in its fight against the raging epidemic. The spread of COVID-19 across China has been basically halted. However, China is still facing the risk of scattered and regional outbreaks as well as imported cases. China will continue to offer assistance to relevant countries while ensuring domestic epidemic prevention and controls are in order. We also hope more forces will join the global fight against COVID-19. There is an old saying in China, "The more people that collect firewood, the higher the flames," which means "Many hands make light work." We can defeat the epidemic and safeguard the welfare of all people as long as the international community works together. Thank you.

Associated Press of Pakistan:

Since the outbreak of COVID-19 in Pakistan, China has provided help to its "iron brother" Pakistan to effectively fight against the epidemic. Can you provide us some details about the assistance from China to Pakistan? Thank you.

Deng Boqing:

Thank you to our friend from the Pakistani media. China and Pakistan have all along been true friends standing together in time of difficulty, as well as good brothers sharing weal and woe. Our special friendship is the choice of history and is deeply rooted in the hearts of the two peoples. As China makes all-out efforts to fight against domestic epidemic, Pakistan has stood firmly by our side and pooled medical protection supplies drawn from all over the country to help China. Pakistani President Arif Alvi said during his recent visit to China that, "[It is] what friends do. Whatever we have, we give; we didn't worry about what will happen in the future. But because friends were suffering, we sent everything to China." These measures have deeply moved hundreds of millions of Chinese, forming a widely-told story speaking volumes about the strength of the iron-clad friendship between China and Pakistan.

As both countries are facing challenges posed by the pandemic at present, China stands ready to share its epidemic-control experience with and provide urgently-needed medical supplies to Pakistan to jointly address the emerging challenges. I just mentioned China's anti-virus external assistance. So far, we have provided medical supplies in four batches to Pakistan, including test reagents, medical protective suits, N95-rated medical masks, surgical masks and ventilators.

Next, we are preparing to provide more medical supplies and equipment that are scarce and urgently needed by Pakistan. In addition, China will help Pakistan build a temporary hospital with quarantine facilities. We believe that, although the pandemic shows no mercy, human beings will always share their affection towards each other. We also believe that all countries around the world, including China and Pakistan, will be able to win final victory over the COVID-19 pandemic through global cooperation. Thank you.

Zeng Yixin:

I would like to say a few more words about your question from the perspective of medical technology. China immediately shared with Pakistan its latest COVID-19 treatment guidelines and national diagnosis and treatment plan, as well as its knowledge base of the disease. Also, Chinese medical experts held video conferences with their Pakistani counterparts, sharing with them details of China's experience in containing, diagnosing, and treating the pandemic, as well as exchanging views with them on issues of their concern. What's more, at the request of Pakistan, China is now proactively preparing to send an expert group consisting of anti-epidemic and medical professionals to support the country's pandemic fight. Our expert group will visit various regions and conduct technical exchanges and experience sharing with our Pakistani brothers on site. Experts back in China will also undertake further discussions with their Pakistani counterparts and provide medical and technical support and help in containing the epidemic, on the basis of the information that is fed back by the on-site expert group. Thank you.

Economic Daily:

Since the outbreak of the epidemic, China has shared the genome sequence of COVID-19 with the WHO from the very start. My question is, what has China done in guaranteeing scientific data and information sharing? What kind of role are Chinese scientists play in combating the COVID-19 epidemic? Thank you.

Xu Nanping:

Thank you for your question. This is a very important question as scientific data and information sharing is the prerequisite and basis for international cooperation. I think media friends are aware President Xi Jinping inspected the scientific work some time ago. As for international cooperation, he put forward a requirement to share scientific research data and information, undertake joint research and create various response measures. Our interpretation is that the COVID-19 pandemic is an issue faced by all humanity and to defeat it, we have to rely on the joint efforts in the scientific community around the world, pool the wisdom and share achievements. Simply speaking, we should jointly face the challenge, undertake joint research and share the results. In this context, sharing scientific data and information is vital and this is our general attitude. We have made efforts in the following aspects:

First, sharing the genome information. We undertook this on Jan. 11 for the first time and I want to emphasize the significance of that. Just because of this action, all the countries were able to conduct virus research, medicine development and vaccine research based on that. It was a fundamental task. As for data sharing, we've established two platforms, namely, the Global Coronavirus Data Sharing and Analysis System issued by the National Microorganism Scientific Data Center, and the COVID-19 Resource Data Base from the China National Center for Bio-information. The two platforms have played important roles, and the second one in particular has offered data services for 76,000 visitors from 152 countries and regions and documents have been downloaded more than four million times from the website. Some 4.44 million downloads had been made by yesterday. At the same time, I've noted that experts from both home and abroad have made analyses on the virus based on this data and published high-level theses. That's what we have done in genome information sharing.

Second, we have established academic sharing platforms. I will talk about some incidents manifesting the Chinese government's resolution in regard to information sharing. One time when we reported the progress of some scientific and technological project to a leader from the State Council, the leader asked that whether we can share the information with the international community and colleagues in the first place and give full play to the role of the achievement in epidemic control, so as to avoid making detours. He offered two pieces of advice as follows: one is to establish a data platform for collecting and displaying all the achievements, and the other is to encourage scientists and clinicians to publish their most valuable achievements through authoritative international journals in English to facilitate communication. Following the requirement, we established the COVID-19 Prevention and Control Scientific Research Achievement Sharing and Communication Platform on the National Medical Journal of China. By now, a total of 99 journals have engaged with the platform and over 700 theses and reports have been published with the page views totaling 2.3 million. As for theses publication, Chinese scientists have published 54 theses on the four mainstream medical journals like the Lancet and the New England Journal of Medicine, and seven main comprehensive ones like Science, Nature and Cell. The theses published by the team led by Academician Zhong Nanshan covered 1,099 case analyses and articles published by the Chinese Center for Disease Control and Prevention covered case studies involving 70,000 cases. Even a layman like myself can get a lot of inspiration from reading the articles, so I think the publication of the valuable achievements can be used for reference on global control and prevention of the pandemic. 

Third, build exchange mechanisms. There are 10 working groups under the WHO mechanism and we participate in all of these groups. As far as I know, there is frequent communication between all the groups. For example, Qin Chuan, a researcher at the Institute of Laboratory Animal Sciences, CAMS & PUMC, told me she had attended four meetings in 20 days and carried out in-depth communication concerning animal models with her international counterparts. We have also established a sound exchange mechanism with government authorities and non-governmental organizations in other countries through science and technology counselors at Chinese embassies and consulates; and conducted video conferences and academic exchanges. In addition, there have been exchanges between non-governmental institutions and scientists. As you all know, many exchanges through video have also achieved very good results. 

Fourth, carry out technical cooperation research and provide technical services. Everyone knows that we have five major research areas, each of which involves international cooperation. Meanwhile, in terms of foreign aid, we have scientific and technological products and researchers involved. We also share our solutions and experiences, and have offered technical services to hard-hit areas. 

As for your question about the role of Chinese scientists, simply put, they have provided solid scientific and technological support and played an important role in containing the outbreak; it is one of the main reasons why China can effectively improve the cure rate and reduce the mortality rate, and bring the virus under control in a short period of time. There have been many moving situations. As I said at the last press conference, one month is too short for scientific research, but a long time in terms of people's lives and health. Now, two months are still very short for scientific research but a very long time in terms of people's lives and health. The achievements made by Chinese scientists in these two months can be attributed to their hard work as well as global wisdom and international cooperation. As such, I believe that science and technology have played a very important role and we are very proud of that. Thank you.

Hu Kaihong:

I would like to add a little more about this. The media has also played a very important role in sharing information. As far as I know, CGTN has a program where Chinese and foreign experts can exchange their views on this aspect. In addition, China Daily recently published special coverage introducing China's practices in this respect and sharing China's experiences and information in fighting the outbreak with the rest of the world. I hope the media can play a bigger role in this regard.

Hong Kong Economic Herald:

We all know that China has sent medical expert teams to Italy, Serbia and Cambodia to help fight the pandemic. What are the main tasks of these experts? What work have they done there? Thank you. 

Zeng Yixin:

Thank you for your questions. The outbreak of the coronavirus has now become a global pandemic. Pandemics know no borders, and the world is a community with a shared future that shares weal and woe. Many countries are facing pressure and challenges in terms of epidemic prevention and control. We can completely relate to what they are going through because we have also been through this. Many countries gave precious support to China at the critical moment in its fight against the virus. Under the premise that the outbreak has been basically under control in our country, we are willing to uphold the vision of building a community with a shared future for mankind and take concrete actions to support the prevention and control of the virus in these countries by sending medical expert teams, conveying our confidence in overcoming the pandemic. We will stand with other countries around the world to tide over the pandemic.

As for Chinese medical teams working in Italy, Serbia and Cambodia at the invitation of the three governments, we have followed the decisions of the central leadership and dispatched anti-epidemic medical teams including public health experts, epidemiologists, clinical medical experts, psychologists and TCM experts. The expert teams have shared experiences and exchanged ideas with local medical and health institutes and experts, introducing China's experience and strategy in fighting the epidemic, and offering guidance and advices on disease prevention and control, clinical diagnosis and treatment, and community management in light of local conditions. Meanwhile, under the premise of abiding by local laws and regulations, and with the support of local embassies and consulates, the expert teams have also provided medical and health guidance and assistance to local Chinese communities. This work is also very important, because people in many countries have little knowledge of the disease and they are prone to anxiety. Our experts have answered their questions at each step forward in gaining some knowledge and experience of dealing with the disease. All of this is of great help to the local authorities.

In Serbia, a team of Chinese medical experts was invited twice to attend the meeting of the country's epidemic prevention and control command. Serbia has spoken highly of the knowledge and expertise of the experts and has adjusted and decided their own work orientation in epidemic prevention and control as well as treatment. In Cambodia, as Mr. Luo and Mr. Xu have already introduced, the arrival of the Chinese medic group was broadcast live on the official Facebook page of Cambodian Prime Minister Samdech Techo Hun Sen. At present, the team is working with its Cambodian counterparts in joint epidemic prevention and control. In Italy, a team of Chinese medical experts offered advice on epidemic prevention and control, which has been highly valued.

Next, we will follow the overall decision by the joint prevention and control mechanism of the State Council, continue our efforts in dispatching teams of medical experts abroad and provide all assistance we can to relevant countries. Thank you.

Deng Boqing:

I'd like to add a few words about the supply aid to Italy. There are two things that impressed me most regarding Italy. The first is that Italy was the first country that dispatched the medical team to support earthquake-hit Sichuan province after the Wenchuan earthquake in 2008. The second is that the Italian government and people provided badly needed materials to assist China not long ago when we were at a critical moment of combating Covid-19. We remember all of these generous acts. Just as a saying goes, a friend in need is a friend indeed.

The pandemic in Italy is still severe. We also feel anxious every day about the increased number of new cases. We have seen many medical staff in Italy are facing a shortage in medical supplies. In such a situation, China has instantly shipped emergency medical supplies to Italy on chartered aircraft. At the recommendation of the E.U., a total of 2 million surgical masks, 200,00 medical N95 masks and 50,000 testing kits China offered have been delivered to Italy. We will see their efficacy in the coming days. The second team of Chinese medical experts arrived in Milan with a banner quoting a saying of the ancient Roman philosopher Lucius Annaeus Seneca, "We are waves of the same sea, leaves of the same tree, and flowers of the same garden." International solidarity and cooperation are vital for battling a pandemic. We believe that the Italian government and people will finally win the battle against the pandemic with the joint efforts of countries all over the world.

Nanfang Metropolis Daily:

As the COVID-19 epidemic further extends its global reach, and poses a growing threat to the health security of Chinese citizens overseas, my question is what measures the Chinese government has worked out to care for and help them? Thank you.

Luo Zhaohui:

This is a good question. Lately, media from home and abroad have published many reports on the Chinese government's care for overseas Chinese. The Communist Party of China (CPC) and the Chinese government are solicitous about their safety at all times. The Ministry of Foreign Affairs (MFA) instructed Chinese embassies and consulates to do their best to provide good consular protection and help overseas Chinese deal with the epidemic.  

First, we enhanced communications with the governments in countries where our embassies and consulates are stationed, and urged them to take measures to effectively protect the safety and health of overseas Chinese and students. Through telephone conversations with foreign leaders, such as British Prime Minister Boris Johnson, President Xi Jinping expressed his hope that those countries would take measures in safeguarding the health, safety and legitimate rights of Chinese nationals including those studying there. Chinese State Councilor and Foreign Minister Wang Yi talked about consular protection every time he had a phone conversation with his counterparts. Chinese embassies and consulates keep in close and regular touch with health, education, police and immigration authorities of the countries where they are stationed and have urged those governments to take measures to cope with practical difficulties Chinese nationals face in diagnosis and treatment, visa extension and continuation of studies, etc. and are firmly opposed discriminatory words and deeds of any kinds. They also keep close contact with local designated hospitals and provide timely assistance for Chinese nationals. 

Second, we keep close touch with overseas Chinese, so as to gain a very real-time idea of their needs and difficulties and guide them to protect themselves against the virus. The MFA and Chinese embassies and consulates receive a high volume of calls for help every day and have taken many measures such as increasing hotlines and creating WeChat groups to provide better services and respond to the concerns of Chinese nationals. In less than two months, the MFA hotline 12308 has manually received 70,000 calls, almost triple that of the same period last year. Ambassadors and consul-generals of China in countries such as United States, Britain, and Germany talked online with overseas Chinese nationals, especially students, during a live broadcast, and provided authoritative answers to questions all worried about and eliminated unnecessary anxieties. The Chinese Embassy in Italy organized our medical experts to broadcast live videos to introduce prevention knowledge and provide authoritative consultations for overseas Chinese and students.  

Third, we increased assistance to help overseas Chinese cope with their practical difficulties. Chinese embassies and consulates have been promoting domestic online medical and health consultation platforms among overseas Chinese nationals and provided them with free online consultation and psychological counseling services. We helped infected Chinese nationals and those with a symptom of fever access timely treatment, and followed up with checks on their condition. We also sent disease control and overseas Chinese affairs working groups from provinces with large population of overseas Chinese to those hardly hit countries to visit Chinese nationals there. After passengers on the virus-affected Diamond Princess cruise ship were quarantined, the Chinese embassy in Japan did its best to provide consular assistance for Chinese nationals.  

Fourth, we care about the special groups including overseas students and safeguard their health, safety and legitimate rights. Most overseas students stay abroad without company of their families and are very young, and they have poor capacity of self-protection. Chinese embassies and consulates attach great importance to their practical difficulties in study, accommodation, and visa extension. Chinese embassies and consulates coordinate local Chinese and enterprises to give them assistance in dining and shopping. Chinese embassies and consulates in Britain, France, Italy and the United States mobilized resources to provide local overseas Chinese students with a "health package" including necessary epidemic prevention materials and guidelines. Some Chinese embassies and consulates set up special hotlines to answer questions of parents of overseas students. 

We will follow the situation closely, and make all-out efforts to maintain the health and legitimate rights of overseas Chinese. I would like to take this opportunity to remind our overseas compatriots once again that there have been a number of confirmed cases in which travelers got infected on their way home. It is recommended that people should not travel to high-risk countries and regions in accordance with the advice of the World Health Organization, as well as the safety warnings and travel guidance issued by the Ministry of Foreign Affairs and the Ministry of Culture and Tourism, and avoid unnecessary international travel, reduce mobility, stay at home so as to keep yourself safe and healthy.

There are some concrete numbers that I would like to share with you. Among the confirmed imported cases in China, 90% are Chinese passport holders. Our priority right now is to prevent imported cases. Some of them were infected when they were abroad, but they weren't aware of it. However, some had known of their infection, and still came back. It shows that they have trust in their motherland. However, the trip has also aggravated their illness, and caused risks to all the passengers on the same flight. Among the 90% of Chinese passport holders, 40% are students. These figures tell us that traveling abroad is highly risky. We understand that some overseas students are eager to get back home, but we hope that they and their parents will weigh the pros and cons carefully and make the right choice. Recently, some Chinese ambassadors, in accordance with advice provided by the Ministry of Education and related authorities, have answered questions in terms of whether overseas students should travel back home. Under the current circumstances, staying where they are can avoid cross-infection while rushing back home or being blocked halfway triggered by border control measures adopted by transit countries. It will also avoid possible impact on the study or visa issues. It is also consistent with the professional suggestion offered by the WHO. 

China always provides strong backing for overseas Chinese citizens. Governing on behalf of the people is the purpose of the Chinese government. When overseas students have difficulties, they will seek help from the government. It shows they have trust in the government, and it is also the responsibility of the government to meet the expressed needs. We have repeatedly instructed our embassies and consulates overseas to make all-out efforts to provide overseas Chinese citizens, overseas students in particular, with consular protection and epidemic prevention assistance. The Ministry of Foreign Affairs and the Ministry of Education will continue to follow the relevant requirements and deployments made by the CPC Central Committee and the State Council, and care for the overseas students as well as provide good service for them and help them address difficulties. Thank you.  

The Asahi Shimbun:

Countries are stepping up efforts to research and develop vaccines for COVID-19. What cooperation has China carried out with other countries in this regard? Thank you.

Xu Nanping:

Thanks for your question. We all know that a vaccine is the key to combat the pandemic, and countries are working with high hopes. Vaccine research and development is very difficult, as it must be both safe and effective, so the research and development process always faces many uncertainties. It is wise for all of us to conduct international cooperation and pool human wisdom to develop such an effective vaccine the world needs badly and is critically important to fight against the pandemic. So, your question is very important.

We have been working with the international community since the beginning of the vaccine development phase. Why did we share with the world information on the virus and its genome sequence in a timely manner? We just hoped that all countries will start developing vaccines as soon as possible. We have adopted a five-prong approach in vaccine research and development. We have been cooperating with international community in all these five directions, and all the research are open for more international cooperation. 

For example, in terms of the DNA vaccine, Chinese enterprises are working with the U.S. company Inovio. For the mRNA vaccine, we are working with the German company BioNTech. Regarding the recombinant protein vaccine, Chinese companies are working with the U.K. company GSK. Actually, more cooperation is in the pipeline. Generally speaking, China's vaccine research and development depends on global endeavors. It is pooling wisdom of the world, and will be shared by the whole world. Thank you for your question.

Financial Times: 

We have noticed that there are some arguments and frictions between China and the U.S. about the COVID-19 outbreak. I want to know what you think of such escalating disputes. Are these disputes going to affect international cooperation in the fight against the epidemic? How are the U.S. and China currently cooperating? How would you rate the current exchanges and cooperation between China and the U.S.? Thank you.

Luo Zhaohui:

Thank you for your questions. The international cooperation in response to COVID-19 has been smoothly carried out in general. You mentioned specifically about the China-U.S. cooperation, which has been underway in a practical manner. When China was in the most severe phase of the outbreak, U.S. companies, civil society organizations, and oversea Chinese people and communities all provided much support and help to China. The U.S. leadership also publicly praised China's epidemic prevention and control work and China-U.S. cooperation on many occasions. As you mentioned, some U.S. politicians recently stigmatized China, carried out inappropriate actions and made improper statements. These actions have indeed impaired China-U.S. epidemic cooperation and also harmed China-U.S. relations. This is not what we wanted to see. These slanderous statements and actions have harmed our interests and outraged the Chinese people. So, China will certainly be making necessary responses. 

As a matter of fact, the source of COVID-19 is a scientific issue. We need to listen to professional and scientific opinions. The WHO has stressed many times that linking viruses to specific races, skin colors or geographical areas should be avoided. This is also the international consensus. Since the outbreak started, China has implemented the most comprehensive, strictest and most thorough prevention and control measures in a timely manner. China has made huge sacrifices and contributions to uphold global public health security and to safeguard the health and safety of all mankind. Everyone should still remember that on Jan. 23 we made the decision to lock down the entire city of Wuhan. This decision was not easy at all back then, but as we see it now, it was quite a right decision. Wuhan, Hubei and the Chinese people have all made sacrifices and put in considerable effort to buy time for the world to respond. We gained experience in fighting against the epidemic and our efforts are recognized.

Maintaining the sound and stable development of China-U.S. ties not only benefits the people of the two countries, but also meets the expectations of the world. We urge the U.S. to work together with China on the basis of mutual respect, managing our differences and expanding mutual beneficial cooperation. We should work together to boost China-U.S. relations based on coordination, cooperation and stability.

We hope that we can work together with countries around the world including the U.S. to jointly fight against the epidemic. A global issue needs a global cooperative response. China and the U.S. are global leaders for the research and development of COVID-19 related medicines. Our cooperation will benefit not only each other, but all countries and mankind. Thank you, that is my answer to your questions on China-U.S. cooperation on fighting the epidemic.

Deng Boqing:

I would like to add a few words. Viruses are a common threat for the whole of humanity and cherishing life is the common value for all of humanity. The COVID-19 epidemic is a touchstone. It reveals both the bright and dark sides of humanity. It is worth putting in all our efforts to save lives. We have seen that, since the COVID-19 outbreak, many U.S. businesses, civil society organizations and individuals have actively provided support for China. We're thankful for all of these actions. We also have seen that, while the epidemic spreads in the U.S., many Chinese companies, NGOs and local authorities are providing help. Faced with the epidemic, the international community including China and the U.S. should collaborate and jointly respond to uphold global public health security and safeguard the interests and well-being of all mankind. Thank you.

China News Service:

Just now, Mr. Zeng mentioned that nearly 30 video conferences had been held among Chinese and foreign medical experts to communicate and meet each other's needs. Could you go into detail about these conferences? What has been achieved? Thank you.

Zeng Yixin:

Thank you for your question. At the request of some countries and international organizations, the NHC has organized close to 30 video conferences on the treatment of COVID-19, involving medical experts from over 100 countries. These exchanges have proven to be very effective amid the current pandemic. We will hold more than 10 such events in the near future. On March 12, the NHC and the WHO jointly held a briefing on China's experience in COVID-19 prevention and control. Ma Xiaowei, minister of the NHC, introduced China's experience, which he believes features eight essential elements. They are a unified and efficient command system with science-based and targeted prevention and control strategies in accordance with the law, a prevention and control mode with the focus moved forward and shifted to the community level, coordinated deployment of medical resources, concerted efforts to improve prevention and treatment capacity, extensive use of science and technology, a vision of fighting COVID-19 for the people and by the people, and close communication and cooperation with other countries. Chinese experts also shared experience through video conferencing. Renowned Chinese respiratory specialist Zhong Nanshan, epidemiologist Li Lanjuan, and other experts on the frontline in Wuhan exchanged ideas with their foreign counterparts on the treatment of severe cases, nosocomial infection control, the prescription of medicine, the use of ventilators, and actions of self-protection of medical workers. These exchanges have contributed to global efforts to combat the pandemic.

Participants from around the globe spoke highly of the video conferences. For example, the WHO and countries in the Western Pacific Region thanked China for the timely experience sharing, which offered valuable support for countries around the world in uniting together to overcome the pandemic. As a matter of fact, all experiences were drawn from continuous exploration and analysis during our clinical practice and epidemic control. Some of the experiences are relatively universal. For instance, when treating some patients, doctors need to decide whether hormones should be used or not; if yes, when, how much, and for how long they should be used. Such experience is clinically urgent and instructive. Despite race differences, it offers some guidance for clinicians across the world in their prescription of medicine. I once attended a video conference with WHO officials as well as Italian officials and experts. They expressed a keen interest in convalescent plasma therapy introduced by Chinese experts. They asked questions about every detail, including how to collect and purify plasma, how to do testing safely, and how much plasma should be used. The therapy is beneficial to them. When social measures, such as community-based prevention and control, as well as traffic restrictions, are rolled out, national conditions, including culture, customs, weather, and geography, need to be taken into consideration. Still, other countries can learn from China's experience in this respect. Therefore, our international counterparts can fully recognize the significance and value of China's experience. They all considered it precious and expressed sincere gratitude to China. Thank you.

CNR: 

The novel coronavirus is a new strain of virus. China has done a great deal of work to find effective drugs and clinical treatments for the virus and has formed a complete set of technical schemes. Is China willing to share its technical schemes and research outcomes with other countries? What are you going to do next? What are the most critical experiences and outcomes China can share with other countries to fight COVID-19 in the fields of science and technology? Thank you. 

Xu Nanping: 

Thank you for your questions. As you said, China's scientific and technical personnel have done a great deal of work to find effective drugs and clinical treatments. However, I need to correct your statement that a complete set of technical schemes has been formed. We can only say that we have initially formed a relatively complete set of technical schemes. Since the virus is a new one, there are still many issues to be studied. We can say that the set is only relatively complete because we didn't own any in the past and we have one now. In terms of technical schemes, our research outcomes can be summarized in three sentences. First, a series of TCM and TCM-based treatment approaches we have developed have proved effective in relieving symptoms and significantly increasing the recovery rate of mild or moderate cases. For example, none of the 456 patients with mild symptoms in a temporary hospital developed severe conditions after receiving TCM treatment. The effect of TCM treatment is very obvious. Second, in antiviral treatment, we selected drugs, such as chloroquine phosphate, favipiravir, and carrimycin, and these drugs have shown certain efficacy in our clinical research. It is very important that they can prevent moderate cases from progressing to severe and critical cases. Third, we have developed a series of drugs and treatment schemes, including convalescent plasma, stem cell therapy, tocilizumab, and artificial liver in treating severe and critical cases, and thus effectively reduced mortality rate. This is very remarkable.

Generally speaking, we have achieved some outcomes and initially formed a set of technical schemes. To answer your question on whether we are willing to share our research outcomes on these drugs and treatment schemes with other countries, I think I have made it very clear when answering another question just now. We all believe that these research outcomes are not only the achievements of China's scientific and technical personnel but also the quintessence of human beings' wisdom formed in their fight against infectious diseases over a long period. They are our joint achievements in overcoming the common threat of mankind. Therefore, the research outcomes should be unreservedly shared with other countries to help save the lives of people around the world. Our attitude is clear-cut.

To answer your second question on what we are going to do next, I can tell you that we will take actions in the following three areas: 

First, we will continue to share our research outcomes. China has carried out a vast number of clinical trials, during which some drugs proved to be effective, some showed no apparent effect, and some were ineffective. No matter what the results of the research are, our experience is invaluable because it helps others avoid detours and thus save time. As we know, time is of the essence now. Therefore, how to promote sharing of successful experience and communications on unsuccessful outcomes is very important. We are pleased to see that our previous efforts have offered a reference, as seen in the recently released WHO suggestions on clinical trials and some countries' plans on clinical application and screening of drugs. We will strengthen our work in this respect and publish the results of our previous clinical trials as soon as possible to deepen exchanges with our international counterparts and help them avoid detours by drawing on our experience. 

Second, we will join our efforts for breakthroughs in our research. We have recently noticed that many countries are carrying out large-scale clinical trials on some drugs that have proved effective in our previous clinical practices, such as favipiravir and chloroquine. We have also seen that the scientific and technical personnel in some countries have been screening new drugs for clinical trials. We pay close attention to the progress of such practices as they will be helpful in our work in the future. Meanwhile, we expect to further cooperate with our counterparts in other countries, mainly by participating in more international multi-center clinical trials. Chinese respiratory specialist Zhong Nanshan is currently in an international multi-center clinical trial. We are willing to join multi-center clinical research or launch joint research with other countries to combine our forces in fighting the virus. 

Third, we need to strengthen communication. As for medicine, each country has its own laws and regulations and its people have their own customs, so a lot of medicine exported could not be used immediately, and there must be a lot of work to do. In this regard, we are now also conducting in-depth communication with many countries, such as through video conferences, to solve these problems and share our experiences.

The third question is China's most important experience and achievements in science and technology. As we have just said: in a short time we have brought the epidemic under control, improved the rate of those recovered and reduced the death rate. This is an important achievement from the scientific and technological community. But what has China's experience been regarding science and technology? Personally, I don't think it is time to sum up all the experiences – we still have a lot of work to do and a lot to explore. But one thing is certain: in the face of such a global problem and global disaster, we can only achieve the best results if we face things together, study together and share our results. Because we are in a race against time, in this process, we must work together to come up with the best plan. For example, drug development, including vaccine development and testing reagents, is subject to approval by the drug regulatory authorities of different countries. In China, the authority is the National Medical Products Administration. In the past, every unit has done their work well and reported to the administration for examination and approval. What did we do this time under the joint prevention and control mechanism of the State Council? We did all the former serial works in parallel, conducted joint research and review, and solved problems together with the researchers. In this way, the road behind is clear. So, the reason we took only two months to gain these results is because of our concerted efforts. The most important experience is to face, study and share the results together. This is my biggest experience. Thank you.

Cover News:

We are aware that during this epidemic outbreak, China has provided a large amount of anti-epidemic assistance, including epidemic prevention materials and dispatched medical teams to other countries. Will the foreign aid affect prevention and control of the epidemic at home? Thank you. 

Deng Boqing:

Thank you. China's foreign aid has always been carried out under the principle of doing what we can and doing our best. The same is true of the ongoing foreign anti-epidemic aid. Whether we provide material assistance or dispatch medical teams to foreign countries, the first thing we must do is to ensure the need for prevention and control at home. Because the domestic prevention and control work progressing well, in fact, is also a contribution to the entirety of mankind.

Under the personal command and deployment of General Secretary Xi Jinping, the epidemic situation in China continues to improve. The domestic medical teams supporting Hubei province are being withdrawn in an orderly manner, and the production capacity of detection reagents, masks and other medical protection and treatment materials is also rapidly increasing. When we provide anti-epidemic material assistance to foreign countries, we should first of all, in conjunction with other relevant departments, carefully analyze the needs of the domestic anti-epidemic work, and take into account various factors such as the existing domestic material stockpiles and production capacity. The proposed material assistance plan will not affect domestic anti-epidemic work. In addition, the number of medical expert teams we have sent to other countries is not large. Although there are many batches of medical experts going to many countries, the main task is to exchange experiences, share medical practices and provide some policy suggestions and medical advice. At the same time, we can also provide epidemic prevention guidance to overseas Chinese, Chinese students, and Chinese-funded institutions and enterprises.

We should also note that China's current anti-epidemic work is facing a severe challenge, that is, the risk of imported cases is increasing. Our assistance to relevant countries is also conducive to the efforts of the international community in combatting the epidemic, reducing the risk of inbound cases from overseas regions, and consolidating our hard-won achievements in fighting the epidemic in the previous stage. Thank you.

Yonhap News Agency: 

The epidemic situations in both the Republic of Korea (ROK) and China have become much better. I wonder what China thinks of the cooperation between the two countries? And where is this cooperation headed in the future?

Zeng Yixin:

Your first question is concerning what we think of the epidemic control work in the ROK. Each country has its own specific situation, including number of infected cases, how serious the epidemic is, the distribution of the cases and so on. Each country also has its own social system and management system too. Therefore, we believe the ROK formulated its prevention and control measures according to its own conditions, and we are happy to see that the situation there is gradually improving. 

As for your second question on the cooperation between China and the ROK after the outbreak. Foreign ministers of both countries have mentioned in phone conversations that the two sides have maintained close exchanges centered around two aspects: prevention and control, and medical treatment. The two countries have carried out cooperation in both aspects. Officials in the health authorities of both countries have also kept close policy communication via written exchanges. Since Jan. 3, the health authorities of the two countries have maintained close cooperation regarding epidemic information, and shared such information between them. The disease control centers of the two countries have also established expert hotlines to share information and carry out technical exchanges. China has shared technical guidelines and measures regarding COVID-19 prevention, diagnosis and treatment with the ROK via various channels. On Feb. 3, the two sides participated in a video conference held between senior health officials of the ASEAN, China, the ROK and Japan, during which they carried out technical exchanges on epidemic prevention and control. Foreign ministries in China, the ROK and Japan also established a joint multi-department prevention and control mechanism. Epidemic control involves not only health authorities but also other government agencies, thus foreign ministries of the three countries took the lead on this mechanism. Under this mechanism, health authorities in China and the ROK jointly established a clinical and prevention committee to further carry out cooperation in fighting the epidemic. 

Next, under the aforementioned mechanisms and committee and through video and phone calls, China and the ROK will continue to carry out technical exchanges, share epidemic control experiences and clinical experiences, coordinate epidemic control efforts, and carry out further cooperation in order to respond to the pandemic. Thank you.

China Daily:

The current COVID-19 pandemic once again highlights the common destiny and shared weal and woe of all countries. What do you think the meaning of constructing a community with a shared future for mankind is?

Luo Zhaohui:

The question is very good; both general and theoretical. In the era of globalization, mankind faces common development opportunities and bears common risks and challenges. At present, the COVID-19 pandemic is developing rapidly. It took 67 days from the first case to reach 100,000 cases, 11 days to the second 100,000 cases, and four days to the third 100,000 cases. The pandemic has seriously threatened the lives and health of people around the world and impacted the global political, economic and social layout. The way to deal with this severe challenge is not only related to the safety and security of the people of all countries and the future of the world, but also tests the common wisdom of human society.

Facing the outbreak of the COVID-19 pandemic, the concept of a community with a shared future for mankind proposed by President Xi Jinping has further highlighted its value at this time. It is a universally applicable truth, and the international community has truly felt the importance and urgency of unity and cooperation. In these crucial times, will the international community be selfish, narrow-minded and secluded, or come together to protect our homelands? Will the international community spread rumors, prejudice and xenophobia, or join hands to fight the pandemic? Over the past two months, the fight against the pandemic has clearly shown that collaboration and mutual assistance are the two most powerful weapons for coping with the pandemic, and only by sharing weal and woe is it possible to achieve a better future for mankind.

Building a community with a shared future for mankind is an important part of President Xi Jinping's thoughts on diplomacy, while the Belt and Road Initiative offers a significant platform for building the community with a shared future for mankind. The concept has now been included in U.N. documents and gained broad recognition. China has been building a community with a shared future along with neighboring countries on a bilateral basis, including Pakistan, Myanmar and Cambodia. We are happy to see that the concept has translated into a vivid demonstration of working in unity and joining hands to fight against COVID-19, and that the concept also has brought trust and strength to an international society in crisis. We believe, when we finally achieve victory against the pandemic, the idea of building a shared future and win-win cooperation will inevitably take root, and the international society will definitely energize the building of a community with a shared future for mankind.

Hu Kaihong:

The press conference is hereby concluded. Thank you to our four speakers. Thank you all.

Translated and edited by Zhu Bochen, Li Xiao, Wang Yiming, Li Huiru, Zhang Rui, Zhou Jing, Zhang Jiaqi, Yuan Fang, He Shan, Wang Wei, Wu Jin, Huang Shan, Qin Qi, Xiang Bin, Fan Junmei, Wang Yanfang, Mi Xingang, Yang Xi, Zhang Junmian, Duan Yaying, Gong Yingchun, Wang Qian, Zhang Liying, Guo Xiaohong, Wang Zhiyong, Zhang Lulu, Gao Zhan, Yan Xiaoqing, Jay Birbeck, Laura Zheng, David Ball, Geoffrey Murray. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Yu Yanhong, a member of the Central Guidance Team in Hubei province, a member of the Leading Party Members' Group of the National Health Commission, and secretary of the Leading Party Members' Group of the National Administration of Traditional Chinese Medicine;

Zhang Boli, academician of the Chinese Academy of Engineering and president of Tianjin University of Traditional Chinese Medicine;

Huang Luqi, academician of the Chinese Academy of Engineering and president of China Academy of Chinese Medical Sciences;

Liu Qingquan, president of Beijing Hospital of Traditional Chinese Medicine;

Qiu Haibo, vice president of Zhongda Hospital of Southeast University.

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office of China

Date:

March 23, 2020

Xi Yanchun:

Good afternoon, friends from the media. Welcome to the ninth press conference held by the State Council Information Office in Wuhan, Hubei province. We will brief you on the important role of Traditional Chinese Medicine (TCM) in prevention and control of COVID-19. First, a short video will help us get to know today's speakers.

(video clip)

Let me introduce the speakers: Yu Yanhong, a member of the Central Guidance Team in Hubei province, a member of the Leading Party Members' Group of the National Health Commission, and secretary of the Leading Party Members' Group of the National Administration of Traditional Chinese Medicine; Zhang Boli, academician of the Chinese Academy of Engineering and president of Tianjin University of Traditional Chinese Medicine; Huang Luqi, academician of the Chinese Academy of Engineering and president of China Academy of Chinese Medical Sciences; Liu Qingquan, president of Beijing Hospital of Traditional Chinese Medicine; and Qiu Haibo, vice president of Zhongda Hospital of Southeast University.

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

Yu Yanhong:

Friends from the media, good afternoon! This is my third time to join you in a press conference held by the State Council Information Office in Hubei. On the previous two occasions, I introduced the role and effect of TCM. I would like to take this opportunity to thank journalists for their coverage. Your recognition spurs us to continue with relevant work. 

As COVID-19 moves from epidemic to global pandemic status, the question arises as to what China can offer to the world in terms of its experience in the use of TCM? Many of you have shown keen interested in how TCM can exert its influence.

Friends from the media, under the situation when COVID-19 poses a global threat, several experts and I have gathered here today hoping to conduct more discussion and exchanges, to share with you our thinking on the role of TCM in the prevention and control of COVID-19, as well as its effect in patient treatment. 

General Secretary Xi Jinping has attached great importance to the prevention and control of COVID-19. He has personally led, commanded and deployed all available forces in the battle against the outbreak, emphasizing many times the usefulness of combining TCM and Western medicine. Under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, with the deployment of the central leading group on epidemic response, as well as Premier Li Keqiang and Comrade Wang Huning, the Central Guidance Team in Hubei led by Vice Premier Sun Chunlan has promoted the involvement of TCM in treating COVID-19 patients. I will brief you on the role TCM has played in epidemic prevention and control in the following aspects:

First, we have mobilized a great many TCM experts. More than 4,900 TCM medical staff across China have been organized to support Hubei, including three academicians and hundreds of experts, accounting for about 13% of the total medical staff assisting Hubei. The size and professional level of the TCM assisting team is unprecedented.

Second, we have been carrying out classified treatment. For mild cases as well as patients in the recovery stage, we applied TCM early on. For severe and critical patients, we combined treatment with TCM and Western medicine. Corresponding treatment plans and norms have been formulated. In the early stage of the outbreak in Wuhan, many suspected cases were waiting for the diagnosis results at the quarantine areas, we offered them TCM decoctions or ready-made TCM formulae to effectively relieve their symptoms and ease the burden on medical services.

Third, we have screened traditional Chinese medicine (TCM) prescriptions and medications in treatment and selected those that are effective against the COVID-19 disease. We promoted breakthroughs in medical science and technology, and synchronously observed the clinical effectiveness of Chinese patent medicines and herbal compounds for inclusion in the fifth, sixth, and seventh editions of the national diagnosis and treatment plan for the COVID-19. Up to now, "three medicines and three formulas" have been proven effective in treating the disease, namely: Jinhua Qinggan Granule, Lianhua Qingwen Capsule, Xuebijing Injection, Lung Cleansing and Detoxifying Decoction, Huashi Baidu Formula, and Xuanfei Baidu Formula. 

People in all the sectors agree that TCM has played an important role and become a highlight in the epidemic prevention and control work. Here is a set of data. A total of 74,187 COVID-19 patients, or 91.5% of the total confirmed cases nationwide, have been treated with TCM. Among them, 61,449 were from Hubei, accounting for 90.6% of confirmed cases in the epicenter province. Clinical observation showed that the total effective rate of TCM treatment reached over 90%. TCM has proven effective in relieving symptoms, preventing mild and common cases from developing into severe cases, improving the recovery rate and reducing fatality rate, and boosting the recovery of patients during their rehabilitation process.

During the epidemic prevention and control, TCM professionals were among the first to arrive at the scene. With proficient medical skills and strong medical ethics, they boosted their motivation to move forward, demonstrated the uniqueness and strengths of TCM treatment, and made great contributions in the fight against COVID-19.

Friends from the media, TCM is a treasure of ancient Chinese science, and a form of holistic medicine that covers prevention, treatment and rehabilitation of illnesses. It enjoys a history dating back to antiquity and extensive popularity among Chinese households. Whenever a serious epidemic has broken out, we have always found suitable solutions using TCM treatment. Various ancient medical classics, including Qian Jin Fang (Essential Formulas for Emergencies [Worth] a Thousand Pieces of Gold) by Sun Simiao, Shang Han Za Bing Lun (Treatise on Cold Damage Disorders) by Zhang Zhongjing, Wen Yi Lun (A Treatise on Epidemic) by Wu Youke, and Wen Bing Tiao Bian (Analysis of Pestilential Febrile Diseases) by Wu Jutong, offer a systematic summation of basic TCM theories, clinical practices, prescriptions, medications and medical techniques for the prevention and treatment of infectious diseases. Such books embody the wisdom of ancient Chinese people who have constantly explored, considered and summarized the rules of epidemic prevention and treatment. Inspired by the ancient TCM classic Zhou Hou Bei Ji Fang (Manual of Clinical Practice and Emergency Remedies) written by TCM master Ge Hong, Tu Youyou, a researcher at the China Academy of Chinese Medical Sciences, discovered artemisinin, which saved millions of lives across the world. The discovery won her the 2015 Nobel Prize in Physiology or Medicine.

TCM has also proven effective in treating infectious diseases caused by viruses. In recent years, with frequent outbreaks and the spread of viral respiratory diseases, the TCM treatment of SARS and influenza virus A subtype H1N1 have yielded significant results. Meanwhile, we have accumulated rich experience in responding to emerging infectious disease epidemics. Research confirmed that TCM can enhance the body's immunity by holistic adjustment and can also inhibit the viral infections and even kill viruses.

Despite the lack of any effective drugs or vaccines in the early stage of the COVID-19 outbreak, medical staff carefully examined TCM procedures and drew on the lessons from the past experience of using TCM in treating viral infections. We have also studied the classic TCM prescriptions devised in ancient times in the light of our clinical practices, putting forward a plan for COVID-19 diagnosis and treatment involving TCM alone and a combination of TCM and Western medicine. This is an important feature and also the advantage of the Chinese plan. We have selected a series of effective TCM treatments featuring three types of medicines and three kinds of prescriptions. This once again demonstrated that TCM, as an everlasting and valuable asset inherited by many generations through the ages, is something to be cherished. It is not only still useful and effective, but also economical and easy to access. 

Diseases know no borders, and a virus is the enemy of all humanity. We are willing to share with the rest of the world our valuable experience and effective treatment on COVID-19. WHO Director-General Tedros Adhanom Ghebreyesus has also underlined the effectiveness of the measures taken by China to deal with the virus, urging other countries to learn from China's experience. 

I would like to take this opportunity to say that TCM community in China would like to strengthen cooperation with the rest of the world, share experiences concerning epidemic prevention and control as well as medical treatment procedures, and provide any part of the world in need with effective Chinese patent medicine, advice, and assistance as much as we could. Thank you.

Xi Yanchun:

Thank you, Ms. Yu Yanhong. Next, we will move on to questions. Please ask questions via the video link, first identifying your news outlet. The floor is now open for questions. 

CGTN:

TCM has been widely and effectively applied in the treatment of COVID-19 in Wuhan. My question is for Mr. Zhang Boli. What are the lessons you've learnt in the course of the medical treatment in Wuhan and are willing to share with the rest of the world?

Zhang Boli:

Thank you for your question. I arrived in Wuhan on Jan. 27. That is almost two months ago. When I first came here, the epidemic situation was fairly severe. Hospitals were filled to capacity. Hundreds of people were waiting in line at fever clinics, and they couldn't get medical treatment for hours. Patients and accompanying visitors were mixed together, which was very worrying. Two months later, what is the situation in Wuhan today? The number of hospitalized patients has been reduced from over 60,000 to around 5,000, and that of patients in critical condition has fallen from 12,000 to about 1,800. In particular, until yesterday, no new confirmed cases of COVID-19 were reported in Wuhan, marking the fifth day in a row we have seen zero increase, including zero new confirmed case, zero new suspected case, and zero existing suspected case. Therefore, the situation in Wuhan is turning for the better, just like Dante Alighieri wrote in Divine Comedy that "E quindi uscimmo a riveder le stele ["And so we went out to study the steles."]

However, when I read about the current situation in Europe and the U.S., I'm also very worried and sympathize with them. Therefore, we are very willing to share our experience with all our peers around the world. In the light of our experiences with a disordered situation in Wuhan at the very beginning of the outbreak of the epidemic, the Central Guidance Team made a decisive decision, seeking to conduct classified management and centralized isolation of all suspected infection cases. People with fever symptoms, people who need a 14-day quarantine for medical observation, suspected infection cases, and people who had close contact with COVID-19 infected cases were totally separated. Thanks to the great efforts made by local community workers and residents in Wuhan, it only took a few days to separate the different types of cases for appropriate treatment. However, without medicine, isolation is only half of the battle. Since there is no effective medicine or vaccine, we began to give TCM decoctions and proprietary Chinese medicines to our patients. At the beginning, it didn't go well; we only delivered medicines to some 3,000 to patients from 13 districts of the city on the first day. The curative effect of TCM appeared after two or three days, however. With the fever gone and cough reduced, patients began to try TCM on their own initiative, and more than 10,000 bags of TCM decoction were delivered at that time. So far, we have delivered TCM products to more than 600,000 patients. What's the effect? It has contained the spread of the epidemic. Let me give you some data. In early February, over 80% of the four types of people I mentioned previously became confirmed COVID-19 infected cases. By the middle of February, it dropped to 30%, and then down to under 10% at the end of February. Centralized isolation of all suspected infection cases, and enabling our patients to take TCM have contained the spread of the epidemic, which is the foundation of our fight against COVID-19.

The second experience is classified management and scientific treatment. The central government asked to leave no coronavirus patient unattended, and treat every single one regardless of cost; however there weren't enough hospital beds at that time. The Central Guidance Team then decided to treat severe cases in specially hospitals designated, while keeping the mild cases in Fangcang shelter hospitals, and introducing management standard of treatment for mild and ordinary cases. However, Fangcang shelter hospitals are quite different from ordinary hospitals. With thousands of people living in a super large hall, how to manage them in an orderly way is a big problem. Under such circumstances, Professor Liu Qingquan and I jointly advised the headquarters to adopt TCM to treat the patients in Fangcang shelter hospitals. At the same time, the first temporary TCM hospital was built in Jiangxia district of Wuhan. In this temporary hospital, we put service ahead of treatment. How did we provide our service? Because of the large space, the temperature inside Fangcang shelter hospital was relatively low. We provided every patient with a warm bed, hot water, hot meals, as well as our hospitable service. At the same time as treatment, we also tried our best to show our care for the patients. For example, we communicated with our patients a lot, celebrated birthdays with them, and lead them to do exercise together. Because of our enthusiasm, the doctor-patient relationship became very harmonious. After staying a few days at Fangcang shelter hospital, patients felt it was more like a big community or extended family instead of hospital, which was also helpful to the treatment of all patients.

Patients treated in Fangcang shelter hospitals were all mild and ordinary cases. According to the WHO, severe cases account for 13% of the total COVID-19 infected cases, while critical cases account for around 7%. So, our goal when treating patients in the Fangcang facilities was protecting them from developing a severe or critical condition. We adopted a comprehensive treatment which combined TCM with Western medicine. In addition to TCM decoction and oral proprietary Chinese medicine, we also provided massage, guasha (or scraping therapy), and medicine for external application. What's the effect? Let me take Jiangxia temporary hospital as an example. There were a total of 564 patients treated, and none developed severe symptoms. We then shared our experience with other Fangcang temporary hospitals, and treated more than 10,000 patients with TCM. As a result, around 2% to 5% of patients treated in Fangcang hospitals developed a severe condition. Therefore, we could say that TCM treatment has significantly reduced the possibility of mild cases turning into severe and critical cases, which is the key for our fight against COVID-19.

Another point is that treatment of severe cases is the most important of all. So for severe patients, we still prioritize the use of Western medicine, while traditional Chinese medicine (TCM) is used as a supplement –in other words, we use the combination of TCM and Western medicine. The use of TCM can often have a significant effect despite being supplementary. It has been used in the treatment of severe cases in Jinyintan Hospital, Hubei Provincial Hospital of Integrated Chinese and Western Medicine, and Leishenshan Hospital, and have achieved very good results. So our conclusion is that TCM injections should be used boldly and early. For example, Shengmai Injection and Shenmai Injection can stabilize the saturation of blood oxygen and improve the oxygenation level of patients; Tanreqing Injection and Reduning Injection can work along with antibiotics; while Xuebijing Injection has some effect on inhibiting inflammation and controlling disease progression. Thus, the treatment of severe cases and the combination of TCM and Western medicine have helped reduce mortality rates and contributed to our victory. 

Lastly, when patients turned negative for the virus, they will be discharged from hospital and moved to isolation centers for rehabilitation. During the rehabilitation stage, patients may sometimes experience fatigue or cough, or are not in very good spirit. Their lung inflammation have not been fully squashed, and the immune function has not been completely repaired. In this case, we combine TCM and Western medicine to help them do some breathing exercises, in addition to TCM acupuncture, massage and other comprehensive therapies. This can improve their symptoms, promote lung inflammation reduction, protect the damaged organ, and repair immune function. Therefore, we can say that TCM and Western medicine play their respective roles and their combination is conducive to the rehabilitation period, thus securing the final victory.

The early intervention of TCM and its participation in the whole process of treatment of the COVID-19 plays an important role. The course of COVID-19 is like a parabola, and TCM is effective at both ends of the curve. And although there is so far no specific cure for the disease, TCM has provided effective treatment plans. The combination of TCM and Western medicine is the highlight of the Chinese approach to the disease. Currently the epidemic is rampant across the world and the disease knows no border, and TCM is always ready to help. We are very willing to share the above experience with our colleagues. Thank you.

Reuters: 

Du Bin, a member of the High-level Expert Panel of the National Health Commissio, said during a press briefing last week that he hoped that TCM will use the evaluation methods of Western medicine to prove its effectiveness in treating the novel coronavirus. What are the TCM treatment methods that are endorsed by the Chinese government? What evidence is there to prove their effectiveness? Thank you. 

Qiu Haibo:

Professor Du Bin is a colleague of mine, and we are treating severe and critical patients together. We often discuss COVID-19 diagnosis and treatment as well as the combination of TCM and Western medicine in the treatment.

I myself practice Western medicine and I am an ICU doctor. As to how to evaluate the effectiveness of TCM, we can see that it is increasingly evaluated by internationally recognized evidence-based medicine methods. Also, we can see that more and more TCM, proprietary Chinese medicines and TCM injections are using internationally recognized randomized controlled trials to evaluate their efficacy. As we all know, the randomized controlled studies led by Academicians Wang Chen and Gao Runlin evaluated the treatment of influenza H1N1 and chronic heart failure by Chinese patent medicine Jinhua Qinggan Granule and Qiliqiangxin Capsule respectively. The sample sizes were 410 to 526 cases respectively. It was observed that, as compared to standard treatment solely, the additional use of Jinhua Qinggan Granule can significantly shorten the fever time of influenza patients, while Qiliqiangxin Capsule can significantly improve the cardiac function of chronic heart failure. These studies have been published internationally.

In addition, Xuebijing, a Chinese medicine injection, has been highlighted during COVID-19 treatment. The academicians and professors here today have been adopting the internationally recognized method of evidence-based medicine to make clinical research on this. Indeed, we know that TCM treatment is usually based on syndrome differentiation, and that prescriptions vary among individuals. However, we are increasingly using internationally recognized methods of evidence-based medicine to evaluate the efficacy of TCM.

TCM was used early on coronavirus treatment, especially for the treatment of severely and critically ill patients. According to our clinical observations, the treatment is mainly useful in the following circumstances: First, preventing patients with mild and moderate symptoms from becoming severely ill; second, preventing severely ill patients from developing into critically ill cases; third, treating severely and critically ill patients; fourth, helping severely and critically ill patients recover. TCM has played a very important role in the above four aspects. To reiterate, it works well in preventing moderate and severe symptoms from becoming worse, plays a certain role in the treatment of severely ill patients, and proves to be a very effective method for the rehabilitation from COVID-19.

Actually, TCM and Western medicine adopt quite different treatment models. In Western medicine, most chemical drugs are designed to hit a single target, while TCM drugs mostly act on multiple targets. That is to say, TCM works more like as a team. But, as far as the disease is concerned, there are many targets to hit. In the case of COVID-19, the virus can cause inflammation and immune disorder, leading to impaired organ function including that of the lungs and heart. In other words, the virus, inflammation and the organ damages caused by immune disorder are all targets. Western medicine relies on chemical drugs that attack a certain target for treatment, while TCM could hit multiple targets, that is, it might have an effect on curbing virus replication, the regulation on inflammation and immunity, later organ damages and coagulation, among others. 

Here, I would like to take Xuebijing Injection as an example. Xuebijing has been well studied in recent years, and has been proven to be effective with at least six chemical constituents by the Shanghai Institute of Materia Medica of the Chinese Academy of Sciences. Moreover, in vitro experiments have shown that Xuebijing Injection can inhibit the replication of novel coronavirus. In related animal experiments, we have also found that Xuebijing Injection can suppress inflammatory responses and restore coagulation disturbances. Based on these preclinical studies that show Xuebijing is effective in treating severe pneumonia, we decided to use it to treat severely and critically ill patients. 

We know that there is no specific drug for the treatment of COVID-19. As such, would a TCM injection have therapeutic effects on it? First of all, the efficacy of Xuebijing has been widely demonstrated during the treatment of severe pneumonia and sepsis. For example, one study tested Xuebijing Injection on critically ill patients with severe community-acquired pneumonia (SCAP) in 33 Chinese hospitals. This study was led by Professor Bai Chunxue from Fudan University. Outcomes included an 8.8% lower 28-day mortality rate, and a significantly shorter duration of mechanical ventilation and ICU stay. This research, as well as research for treating patients with sepsis, revealed that Xuebijing Injection was effective in reducing mortality rates. 

We have seen the therapeutic effects of Xuebijing in previous studies of SCAP and sepsis, so now we are observing whether it is effective for the treatment of severely and critically ill patients infected with the novel coronavirus. We have learnt that a study on 156 severely and critically ill patients in 32 hospitals has found promising results for Xuebijing Injection combined with basic treatment among some cases. However, final conclusions can't be made until the research is finished. At least given the current situation, Xuebijing Injection might be a very important therapy for the treatment of COVID-19, especially for the treatment of severely and critically ill patients.

Of course, there is also a lot of concern about the safety. However, the post-marketing safety research of Xuebijing Injection showed that its clinical adverse reaction rate was no higher than 1%, which is basically safe. As a multi-target therapy of the COVID-19 treatment, I believe that traditional Chinese medicine, combined with current traditional therapies, will certainly save more lives of severe and critical patients. Thank you.

Xinhua News Agency:

According to current research, which traditional Chinese medicines are most effective for treating COVID-19 and how did you evaluate their efficacy? Thank you.

Zhang Boli:

Thank you for your question. Don't panic if you have good medicine in your hand. Every time after a major epidemic, good medicines will emerge. There's a saying that goes, "good medicine comes from a terrible plague." There is no specific drug or vaccine to treat COVID-19, so just like our fellow practitioners of Western medicine, we have focused on finding effective existing drugs. Meanwhile, we have developed several new drugs and prescriptions, which Ms. Yu just mentioned: "three drugs and three prescriptions." Since Professor Qiu has made a very good introduction of Xuebijing Injection, I would like to mainly introduce the Jinhua Qinggan Granule and the Lianhua Qingwen Capsule.

The Jinhua Qinggan Granule was developed during the 2009 H1N1 influenza pandemic, and was already available on the market. The drug itself is the combination of two drugs: one is Maxing Shigan Decoction from Shanghan Lun (the Treatise on Cold Pathogenic Diseases), and the other is Yinqiao Powder from Wenbing Tiaobian (the Detailed Analysis of Epidemic Warm Diseases). By now, Maxing Shigan Decoction has been used for 1800 years, while Wenbing Tiaobian has a history of 300 years. Therefore, both are effective prescriptions which stand the test of time. The drug's main effects are dispelling wind, ventilating the lungs, clearing heat and removing toxicity. During the course of its development, Wang Chen, an academician of the Chinese Academy of Engineering, performed a RCT (randomized control trial) study, and published a paper in the American journal Annals of Internal Medicine to demonstrate that the drug is as effective as Tamiflu in treating H1N1 influenza, but has less adverse reactions and a lower price.

We have also done a 102-case clinical RCT study at the frontline in Wuhan. The results showed that in treating mild and moderate patients of COVID-19, patients who took the Jinhua Qinggan Granule, compared to the control group, reduced their rate of turning more severe by two thirds, and decreased their fever 1.5 days faster. At the same time, white blood cell, neutrophil and lymphocyte counts reflecting immune function were significantly improved. The results proved that the Jinhua Qinggan Granule dose have an effect, especially in reducing the rate of patients turning severe and improving immunological indicators.

Beijing You An Hospital has conducted clinical observations on this medicine given to over 80 patients, and found it shortened the time taken to obtain a negative nucleic acid test result by 2.5 days. The absorption of pneumonia exudate started to show improvement two or three days earlier than those in the control group, with leukocytes and lymphocytes increasing significantly. Therefore, we consider this an effective medicine to treat the COVID-19, and is widely used in the clinic. 

Prescribed by academician Wu Yiling during the fight against SARS, Lianhua Qingwen medicine can detoxify the lungs and clear dampness and heat. It has shown curative effects on mild and common COVID-19 patients. China has donated 100,000 boxes of Lianhua Qingwen to Italy, and I also heard that Italy would like another 100,000 boxes. 

A total of 284 COVID-19 patients from 23 hospitals in nine provinces and municipalities were involved in a random controlled trial (RCT) guided by academician Zhong Nanshan, academician Li Lanjuan and myself. Research showed that, compared with the control group, the symptom disappearance rate of the treatment group was higher and the duration of symptoms was shorter. About 83.8 percent of the patients in the treatment group saw an improvement in their lung scan images, and 78.9 percent recovered, while the figures for the control group were respectively 64.1 percent and 66.2 percent. As for the rate of mildly-ill patients entering a more severe infection was 50 percent lower for the treatment group than the control group.

In-vitro studies also showed that Lianhua Qingwen has an inhibitory impact on the novel coronavirus outside the body. So, how to distinguish it from Jinhua Qinggan in the clinic? Well, those with low-grade fever and a severe headache could take Jinhua Qinggan, while those with high-grade fever and dry stool could be given Lianhua Qingwen. Thank you.

US network NBC:

It was reported that China has flown medical materials to Italy and dispatched a medical team consisting of TCM experts. Many people don't believe TCM is scientific. Are you worried that Western patients may be not ready to receive TCM treatment? Thank you.

Huang Luqi:

Thanks for your question. I am not worried at all. I don't worry because I am confident in TCM and the practice confirms this. Belonging to totally different medical systems, TCM and Western medicine study diseases and health from different perspectives based on clinical efficacy. Just now, Ms. Yu Yanhong mentioned Chinese scientist Tu Youyou, who received the 2015 Nobel Prize for Physiology or Medicine for her work in helping to discover artemisinin, which is widely used to treat malaria. Based on clinical efficacy, TCM has now been spread to 183 countries and regions. Statistics from the World Health Organization (WHO) show Chinese acupuncture has been recognized by 103 WHO member countries. The 72nd World Health Assembly passed the Eleventh Revision of the International Classification of Diseases that, for the first time, adopted chapters on traditional medicine originated from TCM.

Based on clinical efficacy, Ms. Yu introduced you to the "three medicines and three formulas", and Mr. Qiu and Mr. Zhang briefed on other three prescriptions. Now, I will also elaborate on the "three formulas" in accordance with their clinical efficacy.

The first formula is the Lung Cleansing and Detoxifying Decoction which is derived from several classic recipes including Ephedra, Apricot, Kernel, Gypsum, and Licorice Decoction, Belamcanda chinesis and Ephedra Decoction, Minor Bupleurum Decoction, and Poria Five Powder. It can be used as a general recipe for treating mild, moderate, severe and critically-ill patients.

Out of the 1,263 patients at 66 designated medical institutions in 10 provinces (excluding Hubei), 1,214 or 96.12% have been discharged from hospital after recovery. According to clinical observation, among the 57 patients with severe symptoms who received TCM treatment combined with Western medicine and took the Qingfeipaidu Formula, 42 or 73.7% have been discharged from hospital after recovering and none developed into critical cases. A comparison of CT images showed that lesions in the lungs of 53 patients (or 93%) had more or less shrank in size after they took the Qingfeipaidu Formula for two courses of treatment (six days).

Data from clinical studies suggest that the Qingfeipaidu Formula has played a positive role in preventing mild and common cases from worsening into severe and critical ones. By avoiding a deterioration in the patients' conditions, the medicine has greatly reduced the mortality rate and blunted the harm of the epidemic.

The second formula is the Xuanfeibaidu Formula, which was derived from several classic formulas, including Maxingshigan Decoction, Maxingyigan Decoction, Tinglidazao Xuanfei Decoction, and Qianjinweijing Decoction. A case-control study was conducted at Wuhan Hospital of Traditional Chinese Medicine and Hubei Provincial Hospital of Integrated Chinese & Western Medicine to compare the outcomes of 70 patients who took the formula with a control group of 50. The study proved the significant efficacy of the formula in controlling inflammation and increasing lymphocytes. Compared with the control group, the lymphocyte recovery of the patients treated with the formula was 17% higher, and the clinical recovery rate was 22% higher.

The First Affiliated Hospital of Henan University of TCM treated 40 mild and common patients with the formula. After taking the formula for an average of 9.66 days, the patients saw the nucleic acid test turn negative. None developed into severe or critical cases, and the improvement rate by CT diagnosis was 85%.

Wuhan Hospital of Traditional Chinese Medicine, Hubei Provincial Hospital of Integrated Chinese & Western Medicine and the makeshift hospital in Wuhan's Jiangxia district conducted a cohort study among 500 patients treated with the formula. The study showed that the symptoms of mild and common patients, including fever, cough and fatigue, were significantly alleviated, as shown by CT scans, and none turned into severe cases.

The third formula is the Huashibaidu Formula, developed by the national TCM team from the China Academy of Chinese Medical Sciences. It is based on the recommendations of the early national diagnosis and treatment plan as well as experiences from clinical practice.

Clinical observations were conducted at Wuhan Jinyintan Hospital, the makeshift hospital in Wuhan's Dongxihu district and the health center of Wuhan's Jiangjunlu street on the curative effect of the formula for severe, common and mild patients respectively. CT images of the 75 severe patients at Wuhan Jinyintan Hospital showed significant improvements in lung conditions and clinical symptoms. The time it took to turn the nucleic acid negative and the length of hospital stay was shortened by an average of three days. The efficacy was further confirmed by a study on 124 common patients at the health center of Wuhan's Jiangjunlu street, as well as randomized controlled observations of 894 mild and common patients (452 were treated with TCM) at the makeshift hospital in Wuhan's Dongxihu district. No adverse reactions related with the medicine were identified after monitoring the hepatic and renal functions of the patients who took the Huashibaidu Granule. In addition, an experiment on guinea pigs with the coronavirus found the formula can reduce lung viral load by 30%.

The National Medical Products Administration approved clinical trials of the Huashibaidu Granule on March 18. The research and development process of TCM is different from that of chemical or biological medicines. The Huashibaidu Formula is derived from clinical practice. The approval document has provided material evidence for the theories and clinical efficacy of TCM, and an opportunity to effectively translate the research data of TCM into high-level clinical evidence.

After receiving the approval, a great number of foreign friends asked us for the medicine. They nicknamed the formula "Q-14." The letter Q stands for "cure," while "14" refers to the fact that the medicine is composed of 14 herbal components. As the saying goes: "One for all, and all for one." We are ready to stand together with the people of other countries to fight the coronavirus, and share our experiences and achievements in TCM. Thank you.

The Kyunghyang Shinmun:

TCM was known to have been included in the treatment of diseases such as SARS and MERS. Are there any differences in TCM treatment for COVID-19 and SARS? If so, why did you make such changes? Thank you.

Liu Qingquan:

Thank you. Just now, Ms. Yu Yanhong, Mr. Zhang Boli, and Mr. Huang Luqi answered your question to some extent. TCM has been used to treat infectious diseases for thousands of years and we have developed a relatively mature scientific law during the process. The treatment of infectious diseases mainly focuses on three methods, namely clearing heat, eliminating dampness, and detoxing. Each method will be prioritized according to the causes of different infectious diseases. Several famous classic prescriptions have been developed over thousands of years. Earlier, Mr. Zhang Boli and Mr. Huang Luqi introduced that some TCM prescriptions have proved to be effective in treatment, such as the Maxing Shigan Decoction and Daqinglong Decoction of Zhang Zhongjing, a renowned Chinese physician in Eastern Han Dynasty (25-220); Reed Decoction recorded in "Qianjin Yaofang" (Essential Prescriptions Worth a Thousand Pieces of Gold) by Chinese pharmaceutical expert Sun Simiao of the Tang Dynasty (618-907); Membrane Source Opening Beverage by Wu Youke, a renowned physician of the Ming Dynasty (1368-1644) specialized in infectious diseases; and Yinqiao San (Lonicerae and Forsythiae Powder) and Zhengqi San (Qi-Righting Powder) by Wu Jutong of the Qing Dynasty (1644-1911). These prescriptions can be used in the early stages of the disease to eliminate pathogen and strengthen vital qi. TCM can quickly mobilize the human body's defense system to evict invading enemies and prevent viruses from causing significant damage to the body. For example, the method of eliminating dampness boosts immunity, like boosting the morale of military forces. In Chinese, "mianyi" (immunity) is a word with TCM characteristics, meaning preventing epidemic disease. The method of detoxing is equivalent to giving the enemy (virus) a head-on blow. The method of clearing heat can change the internal environment of the human body so that the virus cannot escape or hide. Therefore, these treatment methods can be used together to defeat the virus.

In the past two decades, China has developed several new prescriptions based on classic ones while dealing with the outbreak of new infectious diseases. For example, as Mr. Zhang Boli just mentioned, we introduced Lianhua Qingwen capsule/granule, a drug for virus infections, during the SARS outbreak in 2003. And several domestic academicians, including Mr. Wang Chen and Mr. Zhang Luqi, were inspired to develop Jinhua Qinggan granule to cope with the H1N1 pandemic in 2009. This proves the efficacy of TCM and its role in the fight against modern infectious diseases.

As for new diseases such as COVID-19, these conventional drugs have been put into new use. Clinical studies show that Jinhua Qinggan granule and Lianhua Qingwen capsule/granule have apparent efficacy for the clinical treatment of COVID-19 patients with mild and moderate symptoms and play a significant role, especially in the treatment for COVID-19 in Wuhan.

Xuebijing Injection has a clear phased effect in treating "inflammatory storm" and coagulopathy. Just now, Mr. Qiu Haibo gave a detailed introduction about Xuebijing Injection. I am not going to elaborate on it anymore.

In the battle against COVID-19 in Wuhan, based on the three methods, we have developed three effective prescriptions from classic ones, namely lung-clearing and detoxing decoction, dampness-eliminating and detoxing prescription, and lung-ventilating and detoxing prescription. This is a process that seeks innovative ways to treat various diseases. Thank you.

The Star:

What kind of TCM diet therapy or treatment can help people improve their immunity and enhance the cardiopulmonary function to fight against the virus? Thank you. 

Huang Luqi:

Thank you for your question. I know that traditional Chinese medicine is quite popular in Malaysia. People there have a good knowledge of TCM. So, I would like to quote two sentences from the Medical Classic of the Yellow Emperor (Huang Di Nei Jing), an ancient TCM document, to answer your question:

The first sentence is "Shang Gong Zhi Wei Bing", which means that the best doctors perform preventive treatment. Preventive measures are highly valued in TCM. In the fight against the COVID-19 epidemic, preventive measures have also played an important part. In accordance with the requirements of the health commission of Hubei province, medical workers working at the Fangcang shelter hospitals were provided with preventive prescriptions taken in the form of both medicine and food, and none of them have been infected so far.

The other sentence is "Bu Xiang Ran Zhe, Zheng Qi Cun Nei, Xie Qi Ke Gan, Bi Qi Du Qi". This theory emphasizes the improvement of bodily resistance, which can be achieved through physical exercises of TCM features such as taichi and baduanjin, or by taking TCM products serving as both medicine and food. Health-building diets, taken according to TCM theories, are effective in building immunity to realize the goal of improving bodily resistance and eliminating pathogenic factors. The theory also emphasizes the importance of warding off epidemic diseases, which can be achieved by home isolation and disinfection of the living environment. 

TCM theories also hold that mental health is important to improving bodily resistance. This means that, during an outbreak, we should pay more attention to balancing work and rest, harmonizing form and spirit, and keep a sound mental attitude, so we will not be susceptible to the attacks of epidemic diseases. Thank you.

China News Service:

The number of patients infected with COVID-19 has been reduced remarkably in the hospitals in Wuhan and Hubei province in general. Many of the remaining patients are severely or critically ill. For these patients, how could TCM play a bigger role in treating them? Thank you.

Liu Qingquan:

Thank you for your question. The issue you raised is very important. The treatment and cure of critically-ill patients is very important to the reduction of mortality rate at the moment. I am a doctor of intensive care medicine and an emergency physician, except that I study critical care medicine from a TCM perspective. In recent clinical treatment of COVID-19 patients over a period of more than two months, I have been talking to Director Qiu Haibo and Professor Du Bin about the relevant issues. In the two-month period, we gradually gathered experience in treating patients with a combination of TCM and Western medicine to reduce mortality. The National Health Commission and the State Administration of Traditional Chinese Medicine built a team of experts to offer guidance to conduct coordinated TCM and Western medicine treatment to treat the severe cases. TCM and Western medicine professionals worked together to treat patients with a combination of medicinal methods. Western medicine's life support technologies are very important methods to treat critically-ill patients, such as use of ventilators, hemofiltration, ECMO (extracorporeal membrane oxygenation), and maintaining water and electrolyte balance. TCM doctors have used medicines such as Da Huang (Rheum palmatum L.) to clear the hollow viscera. To tackle asynchrony between the patient and the ventilator, they found ways to lower dosage and shortening the duration in the use of tranquilizers, painkillers and muscle relaxants. Medicines such as Shenmai Injection, Shengmai Injection and Pure Ginseng Decoction were used to stabilize the circulatory system and blood oxygen saturation. Xuebijing Injection was used as a therapeutic intervention for cytokine storm. TCM methods have been working well in coordinated treatments. 

In the process of visiting patients while integrating TCM and Western medicine therapies, our Western medicine experts focus on standardizing the treatments, such as through the use of mechanical ventilation, the use of hemofiltration, choosing the best time for tracheal intubation, and so on. TCM doctors, based on such problems mentioned above, have promoted the use of TCM for the severe and critically ill patients. The organic combination of TCM and Western medicine brings out the strengths in one while making up for the other's weaknesses, thereby reducing the mortality rate. These are indispensable Chinese experiences in treating severe and critically ill patients with COVID-19 and reducing the mortality rate. In the global response to the epidemic, these experiences can be provided to countries around the world for use, and ultimately help the mortality rate of severe and critically ill patients decline further, and further alleviate the condition. Thank you.

Bloomberg:

Which countries has China given advice to on TCM in the treatment of COVID-19? And have other countries used TCM in their treatment? What have the results been?

Yu Yanhong:

Thank you for your interest in the international cooperation regarding TCM. The public health crisis is a common challenge facing mankind, in which solidarity and cooperation are the most powerful weapons. After the COVID-19 outbreak, many countries and people gave selfless aid to China. People from different countries called out "Stay strong China, stay strong Wuhan," making us feel understanding, support and trust from beyond national borders. Now that the epidemic is breaking out at many locations in many countries, China is willing to cooperate with countries in need in the epidemic prevention and control with TCM and to provide aid within our capacity. The following works have so far been carried out:

First is sharing treatment experiences. We are actively cooperating with the WHO in a timely manner, sharing relevant information on the use of TCM in epidemic prevention and control, translating the latest Chinese versions of the COVID-19 diagnosis and treatment plan into English, putting the full text on the new media outlet of the National Administration of Traditional Chinese Medicine, and actively sharing it with other countries and regions in need. You can check these texts online at any time. These versions of the plan are the most valuable experiences obtained from the centralized management and treatment of tens of thousands of patients over a short period of time. This is indeed precious and the results are very clear. We have also provided technical solutions through remote video conferences for exchanges, and shared treatment experiences with Japan, South Korea, Italy, Iran, Singapore and other countries. For example, Professor Zhang Boli, Professor Liu Qingquan, and President Qiu Haibo, who sit with us today, have carried out several video conferences and international online exchanges. A few days ago, Mr. Zhang Boli connected and exchanged online with counterparts in the United States. Yesterday, Academician Tong Xiaolin also participated in a remote video consultation to check patients far away in Iran.

Second, we have donated TCM products. The donations of these products, such as Chinese patent medicines, prepared slices of Chinese crude drugs, and acupuncture needles, from relevant domestic organizations and institutions, have been delivered to more than ten countries and regions, including Italy, France, and China's Hong Kong and Macao special administrative regions. Since Mr. Zhang and Mr. Huang have detailed the issue, there is no need for me to repeat it.

Third, a number of TCM experts and practitioners have been selected to provide overseas medical assistance. We have noted that some experts have already headed to Italy and Cambodia to lend a hand in the fight against the virus. Based on my knowledge, some TCM experts have also kept close contact with their overseas counterparts, and the feedback has been positive.

Friends from the media, as an oriental wisdom formed in the practices of understanding, interpreting and revealing relations between life and death, TCM has offered up its approaches to prevent the outbreak and exacerbation of infectious diseases. Therefore, its legacy is worthy of being inherited, developed and utilized. During her acceptance speech, Chinese Nobel laureate Tu Youyou said that TCM is a great treasure-house and Artemisinin is a gift from TCM to the world. It is my belief that TCM has always been an essential tool in dealing with epidemics. We are willing to join hands with all countries around the world to defeat COVID-19 and usher in a new glorious era whereby the health of the human race is much improved. Thank you.

Xi Yanchun:

We are much obliged to the speakers here today. No matter whether they are government officials or TCM experts, they went to Wuhan and braved the virus outbreak there for more than two months from winter to spring. For this, we deeply admire them, especially Mr. Zhang, who is at an age above 70. Therefore, please allow me to take this opportunity to pay homage to them again.

Recently, the newly confirmed cases in Hubei province have dropped to zero for several consecutive days. Under the strong leadership of the CPC Central Committee with General Secretary Xi Jinping at its core, with full support from other parts of the country, and with the strong will and mutual help among the people in Hubei province, especially in Wuhan, we finally achieved what we had long expected. Now the cherry trees have blossomed to announce the commencement of spring. On this bright sunny day today in Wuhan, I would like to take this opportunity to wish a more promising future for Wuhan, for Hubei and for China. I would also like to again thank the guests and all of you. Today's press conference has now concluded.

Experts from Peking Union Medical College Hospital attend a press conference held by the State Council Information Office in Wuhan, central China's Hubei province, March 16, 2020. [Photo/China SCIO]

Speakers:

Du Bin, director of Medical ICU, Peking Union Medical College Hospital; chairman of the Intensive Care Medicine Branch, Chinese Medical Doctor Association

Yan Xiaowei, deputy chief of the Department of Internal Medicine, Peking Union Medical College Hospital

Cao Wei, associate chief physician, deputy head of the Department of Infectious Disease, Peking Union Medical College Hospital

Wu Dong, associate chief physician at the Department of Digestive Disease, Peking Union Medical College Hospital

Chairperson:

Xi Yanchun, spokesperson of the State Council Information Office 

Date:

March 16, 2020

Xi Yanchun:

Ladies and gentlemen, friends from the media, good afternoon. Welcome to today's briefing. Now, the COVID-19 epidemic has become a common challenge facing the whole world. In order to save people's lives, the Chinese government has acted decisively and launched a large-scale rescue mission. In a very short time, China has dispatched over 330 medical teams and sent more than 40,000 medics to the virus-hit Hubei province. Today, it is a great honor for us to invite four experts from among those 40,000 medics. All of them are from the Peking Union Medical College Special Aid Medical Team. They will share their experiences in the treatment of COVID-19, especially in severe cases in Wuhan. Before I introduce the distinguished experts, let's watch a short video about them.

Welcome back. Please allow me to introduce to you the four experts from Peking Union Medical College Hospital: Professor and Dr. Du Bin, director of Medical ICU. He is also the chairman of the Intensive Care Medicine Branch, Chinese Medical Doctor Association. Professor and Dr. Yan Xiaowei, professor of cardiology and deputy head of the Department of Internal Medicine. Dr. Cao Wei, associate chief physician and deputy head of the Department of Infectious Disease. Dr. Wu Dong, associate chief physician at the Department of Digestive Disease. Now, I would like to let them say a few words about their team and also about themselves. Dr. Du, please. 

Du Bin:

Good afternoon, ladies and gentlemen. This is Dr. Du Bin, again. I'm one member of the national expert team as well as a member of our team. I spent the last two and half days visiting five different hospitals in five cities to review the most critically ill patients with COVID-19 there, and I just rushed back to Wuhan a few hours ago. I would like to say a few more words about our team.

As you may know, Peking Union Medical College Hospital has been the number one hospital according to the "national best hospital rankings" for about 10 years. It's the responsibility of my colleagues and I to participate in the medical rescue team, when the local health care resources have been overwhelmed by the COVID-19 outbreak. We spent the first couple of days remodeling one of the general wards into an intensive care unit and started admitting the most critically ill patients with COVID-19 on Feb. 4.

It is not just ourselves fighting alone against COVID-19. We have strong support from the teams of Tongji Hospital, as well as other medical rescue teams. In addition, we also have very strong support from our colleagues in our hospital back in Beijing, through weekly teleconferences to communicate with them about the most difficult cases. This can maximize our efforts in order to rescue the lives of patients. Thank you.

Xi Yanchun:

Thank you very much Dr. Du. Professor Yan, please go ahead.

Yan Xiaowei:

Hi, good afternoon, ladies and gentlemen. I'm Dr. Yan from the Internal Medicine of PUMC Hospital. My duty in Wuhan is to coordinate the different departments of internal medicine for successful performance. I also propose and organize the MDTs with PUMC Hospital. As a cardiologist, I'm also responsible for the management of COVID-19 patients complicated by cardiac events and those with previously established cardiovascular diseases. Thank you.

Xi Yanchun:

Thank you very much Dr. Yan. Dr. Cao, please. 

Cao Wei:

Good afternoon, ladies and gentlemen. I'm Dr. Cao Wei from the same hospital. I'm a physician of infectious diseases, and I treat patients with different infections. I arrived in Wuhan on Feb. 7 and have been here ever since as a member of the national medical team of PUMC Hospital. As a team, we worked together, as Dr. Du said, to set up an emergency intensive care unit, and have been taking care of critically ill patients with COVID-19 in Wuhan. Personally, I participate in the clinical care of these patients and I'm also involved in the coordination of the clinical collaboration with local hospitals here in Wuhan. Thank you.

Xi Yanchun:

Thank you very much, Dr. Cao. Lastly, Dr. Wu, please. 

Wu Dong:

Thank you, good afternoon. I'm Dr. Wu Dong, an associate professor in gastroenterology in PUMC Hospital. I've been working there since 2003, the year when SARS epidemic took place. I came to Wuhan about five weeks ago and I took the service here as a calling to myself, because last time I wasn't offered the opportunity to fight coronavirus, and I didn't want to miss it this time. So, currently I'm an attending physician working in the ICU, taking care of patients who are very sick. I'm very glad to share my experiences with you. Thank you. 

Xi Yanchun:

Thank you very much to all the experts. You're doing a great job because you're saving people's lives, competing against death. The floor is now open for questions. Please identify your news outlet before asking your question. Please raise your hands. OK, in the left area, the first line, the gentleman in the blue shirt, please.

Reuters:

Hi, I'm from Reuters and I have three questions. First, what is the current risk of reinfection amongst recovered patients in China? Second, how does the weather affect infection rates, and should we expect higher or lower rates of infection as it gets warmer? Last, when can we expect to find patient zero in China? And what clues do you have so far? Thank you. 

Du Bin:

Dr. Yan, would you please answer the first question and Dr. Cao the second.

Yan Xiaowei:

Thanks. The first question is about re-infection. Actually, reinfection is a problem after patient discharge from hospital. In China, a patient discharged from hospital in recovery from COVID-19 will be followed regularly at in two weeks and four weeks after discharge. The patient will also be monitored by local inspectors.

They will be asked to isolate themselves at home for at least two weeks. Also, they will be asked to take their temperature twice a day. If the temperature relapses, the patient will be sent to hospital for a chest CT scan and nucleic acid detection. One point I would like to address is that a positive nucleic acid test on its own doesn't mean that the patient has the intact virus particle in his body. Also, it doesn't mean the patient is infectious. So, a positive nucleic acid test alone which can be seen after virus infection is not a sign of reinfection. 

So, if we think a patient is re-infected, we should check for fever and the progression of the chest x-ray. Thank you for your question.

Xi Yanchun:

And Dr. Cao, please.

Cao Wei:

I'll take the second question. I bet that's a question many people are interested in. Currently, there has been no data regarding COVID-19 and its relation with the weather. But if we take a look from the past experience of SARS, which was another coronavirus, we can see that there are multiple factors that influence the rates of infection. For example, the gradual loss of virulence with the progression of time or regaining of virulence, because of mutation and other joint measures of prevention and control, etc. among them. Unfortunately, the impact of the weather hasn't been confirmed yet. Thank you.

Xi Yanchun:

Next question, please. In the middle area, the first line, the gentleman in the dark suit. Thank you very much. 

CGTN:

Thank you very much, I'm from China Global Television Network. Could you please introduce the latest situation of the combined method of treating COVID-19 patients with traditional Chinese medicine (TCM) and modern medicine? Also, what kinds of patients are generally being treated with TCM methods? And how effective have they been? Thank you. 

Du Bin:

I'll take the question. I think some of my colleagues might add some comments after my words. It's my belief that traditional Chinese medicine (TCM) is both familiar and unfamiliar to our practitioners of Western medicine. Every day in Wuhan, we're working together with our colleagues from the traditional Chinese medicine department. It seems to me, at least in my mind, that traditional Chinese medicine works quite well in patients with mild disease and in those who have been recovering from critical illness. However, I do notice that people are suspicious of the efficacy of traditional Chinese medicine. I would say that TCM and Western medicine do not share the same philosophy. They have quite different philosophies. They have quite different evaluation systems for efficacy. 

For example, whenever we have the chance to test the efficacy of a specific medication in Western medicine, we will try to separate patients into different groups, and give those who are assigned randomly to the experimental group or the study group a specific drug at a fixed dose and fixed duration. Then we try to interpret any difference between the experimental group and the control group with regards to clinical outcomes as a manifestation or an evidence of the efficacy or safety of the specific drug. However, this is not the case for traditional Chinese medicine. From my own observation, when working with the TCM practitioners, I noticed that even for patients with quite similar appearances from my personal point of view, they would prescribe quite different medications with different doses every day. This makes the evaluation system futile or invalid. 

So it's very hard for us to assess the efficacy and safety of TCM from the Western medicine point of view. But my belief is that we should respect each other. We should know that both Western medicine and traditional Chinese medicine have their own strengths and weaknesses, and we should learn from each other. We also encourage our colleagues in the TCM sector to adopt our system of evaluation or assessment in order to let not only us but also the international community understand what they're doing. Thanks.

Xi Yanchun:

Does anyone want to add some words? 

Wu Dong:

I do have some comments. First of all, I agree with Professor Du that we don't have panacea here. We don't have any specific anti-virus drug or medication that has been proved effective. But from a perspective of gastroenterology, which is my specialty, I would like to say that at least in some cases, traditional Chinese medicine seems work well. Because we know that for some patients in ICU, their bowel movements just stop, and their abdomens are quite distended. In several cases, the condition is severe enough to force us to stop enteral nutrition, which we all know is essential for the patient to recover. So we use TCM to treat this type of patients. I would say that they have a very good laxative effect, which enables us to continue to feed them. Thank you. 

Xi Yanchun:

Ok. Next question, please. The gentleman in the first row in the middle area, who, I guess, is from India. 

Press Trust of India:

Thank you. First of all, let me compliment the doctors, not simply those who are here, but hundreds of their colleagues who went to this epicenter and tried to confront this virus or the vicious virus head-on. Definitely, today as the virus winds down as well as the figures in Wuhan and probably in Hubei and the rest of China, the question being asked is, will there be a relapse? Will there be a second wave that can come up at a later stage or anytime soon here, because it's happening all over the world now. Secondly, there is not much data that has come out about the virus' impact on children. Now that there is debate about when the schools should be reopened, not simply here, but as well in places where this virus is popping up perhaps. What exactly is or are you rather reading about this virus' impact on children of different ages? Thank you. 

Du Bin:

I'll ask my colleague, Dr. Cao Wei, to answer the question about the relapse. And I'll take the question about the children. 

Cao Wei:

Thank you. I will take the first question. We all know that the status of pandemic has been declared by the WHO a few days ago, which means that the situation of the epidemic globally will not be solely dependent on the situations in China or any other single area or country in the world. Currently, after three months of fights, the outbreak in China, which started in December of last year, has almost come to an end. 

I think we will still wait for another month to see and make a final judgment. But for me, a second domestic outbreak in China wouldn't be a great concern under such measures of prevention and control. But we all know that another important source of newly onset cases now comes from the imported patients from outside China. So it is most probable that the newly reported cases, including the imported ones, may be kept at a relatively low level, but may last for a certain period of time. Thank you. 

Du Bin:

Okay. The second question is concerning COVID-19 in children. Actually, from my observation and discussion with the pediatricians, we know that there are some children that contracted COVID-19. However, the majority of them are doing quite well. There are actually three recent publications, one in JAMA describing nine infants, all under the age of one year old. The other one is about six children, with ages ranging from two to seven years old. Among all these 15 children, only one was admitted to the intensive care unit requiring some sort of supportive therapy, including oxygen therapy; however, all children survived. 

Another paper just published earlier today in Nature Medicine described that, among all the close contacts, the adults have a higher likelihood -- about 2.7 times -- of contracting COVID-19 than children. We currently don't know what the rationale is behind this phenomenon, but we do understand that -- despite the fact they got infected -- the majority of children exhibited a mild disease course, and all of them recovered. According to my understanding, this is what is happening in Wuhan, Hubei, and other provinces. Thank you. 

Xi Yanchun:

Ok, next question, please. The gentleman in the right area in the 3rd row in the suit.

Dutch Public Broadcaster:

Thank you very much. With NOS the Dutch public broadcaster. Doctors, could you give us a bit of an insight into how the situation is now in the hospitals in Wuhan? We've seen that several temporary hospitals have been closed down. Also, what I would like to know, since we're talking to the best doctors of this country, what advice or lessons would you like to share with people on the frontline in other countries that are facing the start of the epidemic, for instance the Netherlands? Thank you very much.

Du Bin:

Is there anyone who wants to answer the question? I'll answer first. Yes, you are right. I believe that all mobile cabin hospitals have been closed. Some of the designated hospitals for COVID-19 have also been closed, either discharging their patients or transferring their patients to other designated hospitals. It seems to us that, like Doctor Cao just said a minute ago, the outbreak of COVID-19 in Wuhan and Hubei has come to an end. 

We should be alert, though, to any abnormal signals or sporadic cases that rise from communities, what is happening during these days, and the imported cases from other countries out there and anywhere else. The second question: what kind of lessons or cleanup experience we can share. There are so many things. However, I should say the most important thing when combatting infectious diseases, such as COVID-19, is to prevent and control the disease rather than treatment. Thus, treatment is only secondary. Prevention and control are the primary goals. Previously, I remember talking about planning. You must have a plan. Failure to prepare is preparedness for failure. So even now, in Wuhan and Hubei, we have fewer newly diagnosed cases, but we should remain alert and prepare for future sporadic cases and imported cases, as well as learn from our own experiences of success and failure. Thanks.

Xi Yanchun:

Yes, Dr. Yan, please. 

Yan Xiaowei:

To my overseas colleagues, I would like to address two points. The first is to the doctors: you should take good care of yourself from the coronavirus infection. This is the precondition for you to take care of patients. Also, it's a precondition to protect your colleagues and your family. My second point is the public should be educated widespreadly for the protection of themselves.

It is not complicated. Just wash your hands, wear a mask, and avoid gathering, etc. Otherwise, health care facilities and systems will be overwhelmed by the outbreak of COVID-19. Thank you.

Xi Yanchun:

Okay, Dr. Wu, please. 

Wu Dong:

I want to share a few words with the general public of other countries. I want to say that we totally respect that every nation, every person, has their own condition that could be very different from others. 

We are not saying that this is the Chinese example and you should follow. We're not saying this. We totally respect that you should take your own actions. But every one of us should take this very seriously, take necessary actions, change your behavior, and be responsible. As for the medical community, I would like to say that we have to protect them because, in the last few days, we know that our European colleagues have also contracted the disease during daily practice. And the proportion is quite similar to that in the early stages in Wuhan. 

So we need to protect our medical staff working in the ICU. The environment is quite stressful. The mortality is relatively high. As a physician, you will lose some of your patients from time to time, no matter how hard you have been trying to save their lives. This could easily damage the morale of the ICU staff. So I suggest them to rest and relax. You need to take very good care of yourself. Thank you. 

Xi Yanchun:

Ok. Next question, please. The gentleman in the right area in the second row, please. 

People's Daily:

Thank you very much. I am from the People's Daily English language app. As we all know, some countries are short of medical resources, so, the majority of patients with mild symptoms have to stay at home in isolation. My question is: which alarming signals should they heed to prevent dangerous escalation? Thank you. 

Xi Yanchun:

Dr. Cao, please. 

Cao Wei:

Thank you. First, if you have to stay at home in isolation because of other reasons, the first important thing is to identify or ensure that you are the right person who can accomplish this. This means you are not associated with identified risk factors of deterioration, such as elderly people, people with multiple comorbidities, including hypertension, diabetes, chronic lung diseases, or other chronic diseases. Secondly, if you are young and generally healthy, and you have decided to stay at home in isolation by yourself, then it is very important for you or one of your family members to keep a close eye on your symptoms or feelings. 

Once you begin to have a persistent high fever or when you begin to feel short of breath, or maybe you feel altered mental status, it is time for you to go to the doctor and seek help. The last and most important thing during your home isolation period is to make sure not to let your family members get the virus from you. There are multiple measures of prevention and protection for the family members, and you can get the full version from the WHO website. I'm sure. Thank you. 

Xi Yanchun:

Okay, next question. The lady in the middle area in the third row from South Korea. 

The Kyunghyang Shinmun:

Thank you. I'm a journalist from South Korean newspaper. The problem of COVID-19 infection by medical staff in Wuhan is a little bit serious. What protective measures are the medical staff taking? Please explain the local situation as a medical team. Thank you. 

Du Bin:

Thanks for your question. I do believe that my colleague Dr. Yan has already answered the question. But any way, I may add a few words that as Dr. Yan said that there are multiple reasons, multiple factors, contributing to the infection of COVID-19 in the health care workers, especially during the initial stage. 

One is the lack of knowledge that this is a human-to-human transmission disease. So you may know that a lot of health care workers have been infected in a couple of local hospitals in Wuhan, such as the Wuhan Central Hospital. This is the hospital that is located very close to the Huanan Seafood Market, that at the initial phase that many patients went there to see doctors, and the doctors didn't know. 

They didn't know that this is a human-to-human transmission disease. And the second important factor is the lack of personal protection equipment (PPEs), especially during the initial phase. And you can see that, as many external assistances came to Wuhan, as the supply of the PPEs became adequate, that as just mentioned by my colleague Dr. Yan, that no healthcare workers has been infected anymore. I mean during the second phase—if we can call it that. And another important lesson we learned is that, even within the same hospitals, some of the specialists—let's say, ENT doctors, and eye doctors—became easily infected, than their pulmonary colleagues, than their emergency colleagues, or their ICU colleagues. 

My personal interpretation is that, whenever you see an eye doctor or ENT doctor, he or she will have a very close contact with their patients, right? So that's the major reason for the phenomena that they got easily infected, in addition to the lack of knowledge of infectious diseases among these specialties. So, my belief is that it is important to let your colleagues—no matter what specialty they are—that they got educated, that they got trained about these infectious diseases, in order to prevent the nosocomial transmission of COVID-19. Thanks. 

Xi Yanchun:

Ok, next question, please. Middle area, second line. The gentleman. 

Bloomberg:

I'm from Bloomberg News. Thank you for taking your time to speak to us today. I'm sure you're all very busy. I have three questions. My first question is: What are the underlying conditions that really influence whether a patient survives or doesn't survive this disease? Dr. Cao mentioned various comorbidities, but are these the main factors you look for when you look at some patients who do and don't survive? My second question is: Now that you're saying that the outbreak in Wuhan and Hubei more generally are sort of petering out towards an end, what do you expect the case fatality rate to be across the whole province? I think in Wuhan, initially it was it was much higher than the rest of China. Do you expect the case fatality rate and Hubei to come down towards the rate in the rest of China? My third question goes back to the first question from Reuters: Do you expect to be able to trace the patient zero, where this disease cross from animals into humans? And is your expectation that will be linked to the seafood market that Dr. Du just mentioned? Thank you. 

Cao Wei:

I'll take the first question. As I just mentioned, there are some risk factors already identified for COVID-19 patients, including the elderly people, comorbidities, etc. And these are the risk factors you could identify before you go to the hospital, once you have been diagnosed. 

And there are also very important signals showing that you are transferring or you are processing from a mild type of case, or common type of case, to the severely or critically ill patients, which include the change or continuous decreasing of lymphocytes, which is the indication that your immune system is gradually being broken down. And also the elevation, or robust elevation of inflammatory markers, which is also another sign that the immune systems are activating. And also if there is progressing changes of the lung radiology, including the infiltrations of bilateral lungs. This is another important sign you should pay attention to, which indicates you might be going to the critically ill patients. 

Du Bin:

For the risk factors for mortality in patients with COVID-19, I do believe we are still waiting for more evidence coming from the investigations. Because previously during discussion with my colleagues, all of us believe that the hypertension is a risk factor for either the severe cases or the mortality rates. However, we also know that hypertension is associated with older age. 

So currently we have no idea, which is the confounding factor. Because these two risk factors—older age and the hypertension, diabetes as well—are closely correlated with each other. So we're still waiting for more evidence. However, according to current data, I agree with Dr. Cao that the lymphocytopenia is one of the signals, and probably the cardiac injury biomarkers is another signal for mortality. 

And the second question concerns the case fatality rate. I am sorry that I don't think this is the right time to calculate or estimate the case fatality rate. Even though, right now, the majority of the patients have been discharged back home, but we are still having more than 3,000 or 4,000 patients in the hospital. We still have no idea how many of them will survive, and how many of them will die. A certain number of them will die. Absolutely. So it's not the right time to estimate the case fatality rate at present. In my mind, the case fatality rate is a retrospective term rather than the terminology we can discuss right now. And we also know that the supportive, life-sustaining treatment employed in the intensive care unit may prolong the patient's life, which will make some early deaths into late deaths. That's one of the reasons for the later increase in the case fatality rate, as you can see. 

And the reason for a higher case fatality rate in Wuhan than in other provinces—that I just can't remember if I have already answered the same question in the last press conference or not, but anyway—in my mind that the reason number one is that there is always a learning curve. Our colleagues—the healthcare workers in other provinces—they learn from our experience, and they learn from our failures, so they can treat their patients better than us. And the second reason: They have much fewer cases than what we have here in Wuhan, in Hubei, which means that patient there had a better chance for better medical care. They have enough resources; they have enough human beings, enough health care workers around them; they have enough ventilators, monitors, and all the other devices. I don't think the difference can be explained by any genome mutation at the present time. But if this is the case, I'm not surprised. 

The last question concerns the number zero patient. I'm sorry, I'm not the right one to answer the question, because I think this is the task for the CDC staff. They should look for who is the index case for this whole outbreak. But currently, I have no idea what is going on there. Sorry for that. Thanks. 

Xi Yanchun:

OK. Next question, please. The middle area, the lady in the fourth line with long hair.

Hong Kong China Review News Agency:

Thank you. Hong Kong China Review News Agency. My question is about ECMO. We know that ECMO is recommended for rescue treatment for severe cases. How do you assess the role that ECMO had played so far? Are there enough ECMO equipment for severe patients in Wuhan? Thank you. 

Du Bin:

Thank you very much, for that is a specific question for ICU doctors like me, but not for my colleagues. I don't believe ECMO plays an important role in the whole outbreak. For example, according to data, a couple of days ago, there were 260 patients still on the ventilator, and there are fewer than 30 cases treated with ECMO. Apart from this, we still have more than 4,000 patients hospitalized. I think that you can have your own judgment based on this number, that ECMO—although a technical innovation, and to some of my colleagues working here and working in other provinces, is a life sustaining treatment—but I don't believe, based on these numbers, it plays a significant role in decreasing the case fatality rate. Of course, it is a device to buy the time for the patient in order for the definitive therapy to have some effect. So, my personal impression is that, no.

Xi Yanchun:

OK, next question. Right area, third line. The gentleman. 

NTV:

Thank you very much. I'm from Japanese TV. It's called NTV. My question is: In China, various new technologies, including 5G network or robots are used to fight against coronavirus. How do technologies help doctors? What do you think about the most dramatic change by these technologies? Thank you. 

Wu Dong:

Thank you. I will take this question. You raised the issue of new technology in this campaign. But first of all, please allow me to make clear that, I don't think it's new technology that we rely on to bring the situation under control. I think we have brought the situation under control because we are still following the classic theory of epidemiology, which is to control the source of infection, cut down the spread route, and protect those susceptible population. 

But on the other hand, in terms of new technology, I'm glad to share with you that by utilizing the 5G network, we have established a virtual online consultation system. We routinely have those online meetings with experts in PUMC hospital back in Beijing, so we can discuss some difficult and complicated cases with them almost face-to-face. I think this enables us to provide high-quality care to all of our patients. And also in our daily practice, we routinely use mechanical ventilation, bedside ultrasonography, continuous renal replacement therapy. I think these new technologies will give us more weapons or opportunities to fight the coronavirus and protect people. Thank you. 

Du Bin:

I only have a few words apart from what Dr. Wu said. As far as I know, the teleconference with doctors and experts back in their mother hospital, thousands of miles away, is a common practice within each national medical team here in Wuhan or in other cities in Hubei. So this is number one. 

And number two, the so-called virtual hospital, or virtual medical care system, is not only for us the doctors, but also for the patients. Whenever the patients are advised to stay at home, as patients with other diseases, other than COVID-19—especially in epicenters as like Wuhan or other cities in Hubei, that they are advised to stay at home—however, whenever they think there's any need to seek for medical advice, medical care, they can get access to the doctors through the virtual hospital or medical care apps. 

And third, as far as I know, some of the investigators are now trying to do some research that, with the use of the wearable devices, for those patients who are asked to do the home isolation or home quarantine, that some kind of artificial intelligence will tell what is the probability that they have the COVID-19 or the disease progression, and when is the right time to go to see the doctor, or you should be okay to continue staying at home. Thanks. 

Xi Yanchun:

Okay, the very last two questions: one for a foreign journalist and one for a Chinese reporter. The gentleman in the middle area, 3rd line. 

Wall Street Journal:

Thank you very much. I'm from the Wall Street Journal. Thank you doctors for sparing the time to do this. Dr. Du, you mentioned the importance of preventing and controlling the disease rather than treating it. I was wondering if you could go into a bit more detail about what you think were the most effective steps that were taken in Wuhan to prevent and control the spread of the epidemic, and at what point those came into effect. I was also wondering, you spoke a little about the fatality rate and I take the point that it's a little early to calculate that. But, given the evidence that the fatality rate does seem to have been higher in Wuhan, I was wondering if you could go into some more detail about why you think that was, particularly amongst medical workers. You spoke a little in the last briefing about treatment with steroids and invasive ventilation and I wonder if you could elaborate on that a little? With hindsight, is there anything that could have been done to avoid that or was it simply inevitable? Is there anything that you could advise other countries facing similar problems now? Thank you. 

Du Bin:

Okay, thank you very much for the questions. The first question was concerning the specific measures to control the epidemic. I'm not an expert for this, but anyway: test, test and test. Whenever you fail to do the nucleic acid test for COVID-19, you don't know who is the carrier, who is the patient, who should be quarantined and who are close contacts. 

I know there are different approaches than here in China, like what you're doing in the States. I'm not the one who make the judgment about which is right and which is wrong. But, apart from testing, I just have no idea how you can identify suspected cases and quarantine close contacts. I mean, there was just a question to Dr. Cao about what is the turning point. In my opinion, the major reason or decision that led to a turning point was when we had the opportunity to isolate all suspected patients and close contacts. That was the turning point of the outbreak here in Wuhan, and in Hubei.

Now for the second question about what specific factors contributing to the higher case fatality rates in Wuhan. I would say that a strong belief of mine is that delayed mechanical ventilation, delayed endotracheal intubation and long-term cortical steroids make a difference. I mean, they are major risk factors for mortality rates. I have seen dozens of cases who tried inappropriately or failed, an NIV trial – NIV meaning noninvasive ventilation. 

They failed the NIV trial, but doctors maintained the noninvasive ventilator. They doctors did not intubate them. But eventually, even after endotracheal intubation, after the initiation of mechanical ventilation, the patients still died. So, we can actually make a huge difference, at the later stage, by encouraging every physician to intubate their patients as soon as possible – as soon as they see their patients fail an NIV trial. There's one study, although not a large one, from my colleagues in Tongji hospital. They found that an aggressive approach for endotracheal intubation will significantly improve the patient outcome. 

I believe the paper has been submitted, but I have no idea whether it's accepted or not. Thanks. 

Xi Yanchun:

Ok, the last question, please. Okay. Right area second line, the lady, please. 

China Daily:

Thank you. Question from China Daily. It has been more than a month since medical workers from across China raced to Wuhan to help fight the virus – and we know that you are all part of that effort. So, my question is, what have those medical teams contributed in terms of treating COVID-19 patients in Hubei, and in Wuhan. Second, after weeks of intense work, what is on the top of your mind right now? What would you like to share with us the most? Thank you. 

Xi Yanchun:

May I suggest each of you say a few words for this question please? 

Du Bin:

Thanks. I'm not quite sure if I'm the right person to answer the first question, because I think the question is to the healthcare authorities rather than us. But anyway, I'll come directly to the second question. Although this is a chance for us, my colleagues and I, to share our experiences to the international community, I would say that the Chinese approach for the control of the epidemics may not be the only approach. 

We can see what has happened in Singapore and what has happened in Japan. I would say that my colleagues and I can learn from their experiences. Whenever you have a quite different situation, in terms of the number of cases and the community support system, you can adopt a quite different approach that achieves a similar success in controlling epidemics. 

So, it's also an opportunity for us to learn from each other – just like we said for the Chinese medicine and western medicine. So, the last sentence from me is that the beauty of the world lies in its diversity, but not identity. Thanks. 

Xi Yanchun:

Okay, Professor Yan, please. 

Yan Xiaowei:

I think it's my great pleasure to come to Wuhan as a doctor in the intensive care unit to save my patients. Yes, in the intensive care unit, I have had so many casualties – this kind of experience I will never forget in my life.

And also, I'm very glad to be here to share my experience with overseas friends and colleagues. Thank you very much.

Xi Yanchun:

Ok. Cao Wei, please.

Cao Wei:

I want to share some personal feelings. 17 years ago, when SARS came, I was still a medical student in college. At that time, I was the one to be protected. And this time, I was able to come here with my teachers and seniors to fight together for my people and my country. I'm very proud of that and I'm sure that's a common feeling of all the medical workers here in Wuhan – despite sacrificing a lot, personally, and being apart from our families for such a long time. But it deserves. 

Lastly, I want to express my deep thanks and show respect for all the nurses that have been working with us. They have taken the same responsibilities as us and, not like me, many of the nurses who have come to Wuhan are actually very young. Most of them were born in the 1990s with only remote memories of the SARS season. But when it came, they all stood up and came here. Without them we wouldn't have achieved so much, especially for these critically ill patients. So, thank you very much.

Xi Yanchun:

Okay, Dr. Wu, please.

Wu Dong:

Thanks for the question. Also, some personal feelings. During the last five weeks, I was totally devoted to caring for patients in the ICU. The only thing I feel sorry for is that I couldn't take care of my own family, as a father and as a husband. Five weeks ago when I left Beijing for here, my eight-year-old daughter asked me, "dad, why are you going to Wuhan?" To be honest, it was a question that I couldn't quite answer at that time. But last week I had a patient in the ICU. She was a 57-year-old woman and she was very sick. So, our plan was to intubate her and put her on mechanical ventilation. That seemed the only way to save her life.

Before incubation, she whispered several words to me in Wuhan dialect, so it was difficult for me to understand what she was talking about. But finally, I figured out what she said and it was, "Doc, I don't want to die. The end of this month is my daughter's wedding day." At that very moment, and deep in my heart, I saw that many of our patients are parents too. They love their own kids, the same as I do. It also reminds me of the novel by Gabriel García Márquez, "Love in the Time of Cholera." What I learned from the novel is that human beings are mortal, but love is not.

So why did I come to Wuhan? It's not only about professionalism or responsibility; it is also about love. I love my daughter, I love my patients, I love my country and I love humankind. As humankind, we are all in this together and we will get through this together. Thanks.

Xi Yanchun:

Thank you. I'm quite touched by what all these experts have just shared with us. I'd like to say that the COVID-19 outbreak is neither the first nor the last challenge confronting all mankind. 

The pandemic knows no borders. The only right thing for the world to do is to make concerted efforts. While combating the disease at home, China will work hand in hand with other countries and contribute our strength and wisdom to securing a final victory.

Today, the four experts from the PUMC hospital shared a lot of valuable experiences. When they came to Wuhan, they didn't know how long this would take and how many difficulties and challenges would be faced. But from what they just said, we know how important it is to have them with us when combating the virus. 

I'm sure people in Wuhan and in Hubei will remember all of them forever. And the Chinese people will be very proud of them – all the Chinese doctors and nurses. So lastly, I suggest we take a group photo together and give a thumbs-up to all the Chinese doctors and nurses. Well done. 

Thank you very much. That's the end of the briefing. Thank you. Bye bye.

.

Read in Chinese

Speaker:

Mao Shengyong, director general of the Department of Comprehensive Statistics and spokesperson of the National Bureau of Statistics

Chairperson: 

Hu Kaihong, spokesperson of the State Council Information Office

Date: 

March 16, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference organized by the State Council Information Office. We have invited Mr. Mao Shengyong, director general of the Department of Comprehensive Statistics and spokesperson of the National Bureau of Statistics, to brief you on China's economic performance in the first two months of this year. He will also be happy to answer your questions. Now I give the floor to Mr. Mao.

Mao Shengyong:

The Chinese economy withstood the impact of the COVID-19 epidemic in January and February. Under the strong leadership of the Communist Party of China (CPC) Central Committee with Xi Jinping at its core, governments at all levels and various departments coordinated to control and prevent the spread of COVID-19 while advancing economic and social development during the first two months of this year. We have already achieved some encouraging phased results. Thanks to promotional policies and measures, enterprises have accelerated resumption of work and production. Industries and social life are gradually returning to normal. The national economy is running smoothly, and fundamental livelihood has been effectively guaranteed. 

First, agricultural production has remained strong as spring plowing and farming preparations commence. 

The sown area of winter wheat nationwide reached 331 million mu (about 22 million hectares). The present seeding situation is stable, and the growth is generally good. As of the end of February, the proportion of first- and second-class seedlings in the main winter wheat production areas increased by nearly 3 percentage points compared with the same period of last year. The area of vegetable cultivation has expanded. Spring plowing preparation work has been deployed nationwide, and supply of agricultural materials such as seeds, fertilizers and pesticides has been guaranteed.

Second, industrial output decreased but production of important materials saw a constant increase. 

From January to February, the value added of industries above designated size fell by 13.5% year-on-year. In terms of different types of economic entities, the value added of state-holding enterprises fell by 7.9%, joint-stock enterprises dropped by 14.2%, foreign-invested and Hong Kong, Macao and Taiwan-invested enterprises fell by 21.4% and private enterprises fell by 20.2%. In terms of the three major categories of industries, the added value of the mining industry fell by 6.5%, the manufacturing industry dropped by 15.7%, and electricity, heating, gas and water production and supply industries fell by 7.1%. In terms of product output, production of medical and protective materials and daily necessities grew rapidly. Output of masks and distilled alcohol increased by 127.5% and 15.6%, respectively, while frozen meat and instant noodles increased by 13.5% and 11.4%, respectively. Growth of high-tech products remains promising. Output of smart watches, smart bracelets, semiconductor devices and integrated circuits increased by 119.7%, 45.1%, 31.4% and 8.5%, respectively. Production of basic raw materials was stable, and the output of cast iron, crude steel, flat glass and 10 non-ferrous metals increased by 3.1%, 3.1%, 2.3% and 2.2%, respectively. According to survey data on purchasing managers nationwide, as of February 25, the resumption rate of large and medium-sized manufacturing enterprises reached 85.6%, and production and operation activities continue resuming smoothly.

Third, the service industry dropped but a new emerging service industry maintained development momentum. 

From January to February, the national service industry production index decreased by 13.0% year-on-year. On major industries, the financial industry grew by 4.5%, the information transmission, software and information technology services industry increased by 3.8%, while other relevant industries declined to varying degrees. In February, the business activity index of the service industry was 30.1%, of which the business activity index of the financial industry was 50.1%, which continued to expand. The business activity indices of the telecommunications and internet software industries were 43.3% and 41.4%, respectively, higher than the average of all service industries respectively by 13.2 and 11.3 percentage points, which were significantly better than the overall performance of the service industry.

Fourth, market sales dropped but online retailing of daily necessities and physical commodities increased dramatically. 

From January to February, total retail sales of consumer goods exceeded 5.2 trillion yuan (US$743 billion), a year-on-year decrease of 20.5%. Location of business entities made a difference: Retail sales of consumer goods in urban areas hit nearly 4.49 trillion yuan (about US$634 billion), a year-on-year decrease of 20.7%, while retail sales of consumer goods in rural areas were 724.9 billion yuan (US$103.3 billion), a year-on-year decrease of 19%. Across consumption types, catering revenue was 419.4 billion yuan (US$59.7 billion), a year-on-year decrease of 43.1% and retail sales were nearly 4.8 trillion yuan (US$682.8 billion), a year-on-year decrease of 17.6%. Commodities used in daily life showed a trend of growth. Food commodities like grain and cooking oil, beverages and traditional Chinese and Western medicines increased by 9.7%, 3.1% and 0.2%, respectively. From January to February, China’s online retail sales surpassed 1.37 trillion yuan (US$195.3 billion), a year-on-year decrease of 3%. Among them, online retail sales of physical goods exceeded 1.12trillion yuan (about US$160 billion), a year-on-year increase of 3%, accounting for 21.5% of the total retail sales of consumer goods, an increase of 5% over the same period of last year.

Fifth, investment in fixed assets decreased, and investment in high-tech industries and social sectors fell below the average level.

From January to February, investment in fixed assets (excluding farmers) across the country exceeded 3.33 trillion yuan (US$474.7 billion), a year-on-year decrease of 24.5%. Across various sectors, infrastructure investment fell by 30.3%, manufacturing investment fell by 31.5% and real estate investment fell by 16.3%. The sales area of commercial housing nationwide was 84.75 million square meters, down by 39.9%. Sales of commercial housing totaled 820.3 billion yuan (US$116.4 billion), down by 35.9%. Investment in the primary industry fell by 25.6%, investment in the secondary industry fell by 28.2%, and investment in the tertiary industry fell by 23%. Private investment was nearly 1.9 trillion yuan (US$269.7 billion), a year-on-year decrease of 26.4%. Investment in high-tech industries decreased by 17.9%, lower than the average decrease rate of total investment by 6.6 percentage points, of which investment in high-tech manufacturing and high-tech service industries fell by 16.5% and 20.8%, respectively. Investment in inspection services and professional technical services increased by 26.1% and 4.3%, respectively. Investment in the social sector decreased by 20%, of which investment in the health sector decreased by 11.2%, lower than the average decrease rate of total investment by 13.3 percentage points.

Sixth, market prices remained basically stable while the Consumer Price Index (CPI) and the Producer Price Index (PPI) diverged.

In the first two months of this year, China’s CPI rose by 5.3% year-on-year. The prices of food, tobacco and alcohol increased by 15.6%, clothing increased by 0.5%, housing increased by 0.4%, daily necessities and services increased by 0.1%, transportation and communications decreased by 0.4%, education, culture and entertainment increased by 1.6%, and medical care increased by 2.2% while other supplies and services rose by 4.6%. Among food, tobacco and alcohol prices, grain prices rose by 0.6%, fresh vegetables rose by 13.8%, pork rose by 125.6%, and fresh fruit fell by 5.3% compared to the same period of last year. Taking out food and energy prices, the core CPI rose by 1.3%. The CPI saw a year-on-year increase of 5.4% and 5.2% in January and February, respectively, and rose by 1.4% and 0.8% month-on-month.

From January to February, the producer’s price index for manufactured products in China fell by 0.2% year-on-year. The figure increased by 0.1% year-on-year in January, unchanged from the previous month, but fell by 0.4% year-on-year in February and decreased by 0.5% month-on-month. From January to February, the purchasing prices for industrial producers nationwide fell by 0.4% year-on-year.

Seventh, the surveyed unemployment rate rose, but employment of major groups remained generally stable.

From January to February, 1.08 million new jobs were created in cities and towns across the country. In February, the national surveyed unemployment rate in cities and towns was 6.2%, and the surveyed unemployment rate in 31 major cities was 5.7%. The surveyed unemployment rate of prime working aged people between 25 and59 years old was 5.6%, 0.6 percentage points lower than the average level of cities and towns across the country. The unemployment rate for people aged 20 to 24 with a junior college degree or above decreased by 0.4 percentage points from January. The average weekly working hours of employees in enterprises was 40.2 hours, a decrease of 6.5 hours from January. 

Eighth, China began to see trade deficit, but its trade structure continued to improve. 

From January to February, the total value of imports and exports of goods exceeded 4.1 trillion yuan (US$587.4 billion), a year-on-year decrease of 9.6%. Exports were more than 2.04 trillion yuan (US$290.7 billion), down by 15.9%. Imports were more than 2.08 trillion yuan (US$296.8 billion), down by 2.4%. The trade deficit was 42.6 billion yuan (US$6.1 billion). China's trade structure continued to improve. The share of general trade in total imports and exports was 60.6%, an increase of 0.3 percentage points over the same period last year. The share of imports and exports by private enterprises in total imports and exports was 41.9%, an increase of 1.3 percentage points over the same period last year. China's trade with ASEAN and countries along the Belt and Road maintained a growth trend, with imports and exports increasing by 2.0% and 1.8%, respectively. For the first time, the proportion of imports and exports with countries along the Belt and Road accounted for more than 30% of all of China's foreign trade. From January to February, the export delivery value of industrial enterprises above designated size in China reached nearly 1.36 trillion yuan (US$193 billion), a year-on-year decrease of 19.1%.

The COVID-19 outbreak left a big impact on China's economy in the first two months of 2020, but generally, the impact is short-term, external and controllable. The spread of the virus in China has been basically contained, proving that the control and prevention work has been effective. Fundamental living standards can be guaranteed, society remains stable, and the long-term positive and upward trend of the Chinese economy remains unchanged. Next, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will firmly implement decisions and arrangements from the CPC Central Committee and the State Council including a coordinated response to COVID-19 and measures to ensure social and economic development. While continuing to advance the epidemic control and prevention work, we will constantly aid enterprises in resuming work and production, ensure orderly flow of people and materials, enhance organic alignment of production, supply and sales, and balance imports and exports. By strengthening the hedging force of macro-policies, we will get microeconomic entities back to full steam to reduce the damage caused by the epidemic as much as possible and recover normal social and economic order while boosting stable and healthy economic development. 

Hu Kaihong:

Thank you, Mr. Mao. We will now take questions. Please identify your news outlet before asking.

China Media Group:  

Major economic indicators point to a decline in January and February. However, the data you just released shows industrial, investment and consumer sectors all plunging beyond expectations. Why did you still say that China's national economy has withstood the shock of the COVID-19 epidemic? Thank you. 

Mao Shengyong: 

Thank you for your question. We just released our economic performance statistics from the January-February period. The actual performance of those indicators may not exactly match market expectations. Since the novel coronavirus outbreak, to protect the lives and health of the people, the Chinese people have made a concerted effort throughout the country to fight the epidemic under the strong leadership of the CPC Central Committee. Right now, epidemic prevention and control efforts have achieved important, hard-won phased results.

The statistics we released show that the epidemic has indeed made a major impact on China's economy. But in-depth analysis shows that the impact of the epidemic on China's economy will largely be short-term and external. It will not change any fundamentals such as the long-term positive trend and strong upward momentum of the Chinese economy. Essentially, the impact of the epidemic on the economy in the short term is generally controllable. The Chinese economy has withstood the shock of the COVID-19 outbreak during the first two months of the year. How can we reach this conclusion? I would like to explain from the following perspectives:

First, the volume of production demand remains huge, and China's advantages as an economy of super-large scale have not changed. In 2019, China's economic aggregate was close to 100 trillion yuan (US$14 trillion), with per capita GDP exceeding US$10,000. Its output of major industrial products has remained top in the world for several consecutive years. These achievements have provided China with strong material guarantees when responding to emergencies. From January to February this year, despite of the severe impact of the epidemic, the scale and volume of major production indicators remained huge. From January to February, the total output value of industrial enterprises above designated size in China reached 11.5 trillion yuan (US$1.6 trillion), total retail sales of consumer goods exceeded 5.2 trillion yuan (US$743 billion), and fixed-asset investments topped 3.3 trillion yuan (US$471 billion). The scale of China's economy has remained impressive. 

Second, as basic industry has managed to provide sufficient supplies, production of anti-epidemic materials has been guaranteed. The strong resilience of the Chinese economy remains unchanged. During the COVID-19 outbreak, productions in important industries vital to national wellbeing and the people's livelihood have never been suspended. Regular production and operations are maintained. Some industries even witnessed remarkable growth. In the first two months of this year, yield of ethylene increased by 5.6%, yields of both crude steel and cast iron increased by 3.1%, and output of 10 non-ferrous metals increased by 2.2%. During the COVID-19 outbreak, demand for epidemic control and prevention products such as masks, protective suits, and ethyl alcohol has soared. Through orderly adjustment, output of these products has increased and relevant production capacity has greatly expanded in a short period of time to satisfy the needs of epidemic prevention and control. Take masks for example: From January to February, statistics from industrial enterprises above designated size show that newly added mask production nearly tripled this year compared to the same period of last year. According to February 29 data from relevant departments, the average daily output of masks reached 116 million, indicating China's powerful supply capacity has adequately supported the supply of medical materials in demand. 

Third, supply of basic commodities and public utilities remains abundant. The overall balance between supply and demand has not changed. During the epidemic, the basic livelihood of China's 1.4 billion population has been effectively guaranteed. Total retail sales of consumer goods maintain relatively stable growth. For example, retail sales of meat, poultry and eggs increased by 37.8%, and retail sales of vegetables increased by 27.1%. Output of frozen meat and instant noodles increased by double digits. During the epidemic, the communications sector including the internet and providers of public utilities such as water and electricity, maintain smooth operations to meet the demand of residents. In general, the supply of goods including basic commodities could meet demand. Prices remain stable, and the country maintains overall economic and social stability. None of these achievements were easily won. 

Fourth, the internet economy is embracing promising development, and its rapid development momentum has not lost any steam. During the COVID-19 outbreak, the internet has played an essential role in coordinating epidemic prevention and control efforts, allocating supplies, delivering consumer goods, facilitating online education and online remote consultation and maintaining cultural and entertainment consumption. The internet-related industries have seen satisfying growth. From the perspective of market sales, from January to February, online retail sales of physical commodities increased by 3% year-on-year, accounting for 21.5% of the total retail sales of consumer goods, five percentage points higher than the same period of last year. Some high-tech products are still growing in such difficult times. The sales of electronic products such as 3D printers and smart watches have increased by more than 100%, and output of monocrystalline silicon and polysilicon has increased by about 45% and 35%, respectively. Despite the short-term impact of the epidemic on the economy, the momentum of accelerated development of new growth drivers has not changed.

Fifth, China's macro-control policy towards hedging economic risk and uncertainty is strong and effective. We are confident the China can achieve its goals for this year. Recently, the central government introduced a series of policies and measures to support epidemic prevention and control and resumption of work and production including supporting enterprises and boosting production. These policies are gradually taking effect. 

The next step of epidemic prevention and control will still be arduous, considering the spread of the coronavirus in some foreign countries has been quite fast. We must continue to consolidate the positive results of epidemic prevention and control and at the same time strengthen international cooperation in fighting the epidemic. In addition, we should push all links in the industrial chains to resume work and production in an orderly manner and accelerate restoration of regular production and life. We must also further strengthen macro policies to hedge the impact of the epidemic as well as external risk and uncertainty. We should promote stable and healthy economic operations and make solid efforts to win the three critical battles of avoiding major risk, performing targeted poverty alleviation and preventing pollution while striving to complete development goals for this year. Thank you.

Bloomberg News:

I have two questions. First, what is your forecast for the first-quarter GDP? Do you expect that being negative? Will that continue to the second quarter considering what is happening globally now, in the U.S., in Europe, and elsewhere? My second question is: Do you expect the jobless rate to continue rising? What will the government do to try to bring that down and decrease the unemployment in China? Thank you. 

Mao Shengyong: 

Thank you for your questions. First, regarding the first-quarter GDP, I just released the main economic indicators from January and February. Since statistics for the first two months have already come out, the situation in March will be decisive for quarterly data. After deployment of coordinated epidemic prevention and control measures coupled with economic and social development policies from China's central leadership, resumption of work and production has been speeding up since mid-to-late February. We expect a marked improvement in March. This is our prediction. 

Second, in the first quarter, economic output in March will account for about 40% of the total, with January and February accounted for the rest 60%. March has taken a larger proportion than either January or February in the economic aggregate. We believe that economic performance in March will be significantly better than that of January and February. This is most likely the case in the first quarter. As for the first-quarter GDP, we must wait until the next month to find out. We will know around the same time in the next month. 

As for the next step, our preliminary assessment is: Today, the effectiveness of domestic epidemic prevention and control efforts has become increasingly evident. More importantly, the resumption of work and production is accelerating, and regular production and everyday life are being gradually restored. Domestically, the impact of the epidemic on the economy will decline in the second quarter. By then, some economic activities that have suffered will gradually return to normal. Therefore, the economy in the second quarter is expected to bounce back significantly. In the second half of the year, especially with existing policies and a series of stronger hedging policies which will be introduced, the effects of such measures will become more evident. We believe that China's economy will realize more stable growth in the second half of the year, which will continue as the basic trend for the whole year.

To your second question about the unemployment rate, we did see rising jobless rates in January and February, especially February. The unemployment rate was 5.3% in January and 6.2% in February. We have attributed this mainly to the impact of the epidemic. Production and business activities of enterprises were affected, and demand for labor dropped. As a result, fewer people were employed. How is the jobless rate calculated? The numerator is the unemployed and the denominator is the unemployed plus the employed. If the number of the employed drops, the jobless rate goes up. This is what happened in February. Although the unemployment rate rose in February, we also saw the employment situation of some key groups remained relatively stable. For example, the jobless rate of prime working-age population between 25 and 59 years old was 5.6%, 0.6 percentage points lower than the average. The unemployment rate for people aged 20 to 24 with a junior college degree or above decreased by 0.4 percentage points from January. This is the basic employment situation in the first two months of this year.

Soon, gradual restoration of production and life will increase employment demand and relieve employment pressure. This is our prediction. Due to the resumption of work and production, the employment situation for enterprises is improving, and the demand for labor will continue to increase. A stable approach to gradual recovery of the economy, especially in the second half of the year, will alleviate employment pressure.

In terms of policy, employment is the foundation of public wellbeing and affects every household in this country. The CPC Central Committee and the State Council attach great importance to the employment issue. Employment has been highlighted in policy support of the "Six Stabilities" (which calls for work to stabilize employment, finance, foreign trade, foreign capital, investment and expectations). In terms of macro policy, China has adopted proactive fiscal policy, prudent monetary policy and employment-first policy over the past two years. The country attaches great importance to employment, thus employment policy goes hand-in-hand with fiscal and monetary policies. In general, the employment situation in 2020 has been severe. Overall employment pressure and structural employment problems still exist. However, the central government will continue to increase the hedging effect of macroeconomic policies and strive to help enterprises, especially small and medium-sized enterprises which rely heavily on labor. If we can stabilize enterprises and economic performance, we can stabilize employment. We will strengthen employment-first measures such as improving the training of new employees, transferred employees and migrant workers, making better use of employment funds, and doing more to help and support employment for some key groups like university graduates and migrant workers. Such measures will promote more flexible employment. 

In a word, intensified policies will be introduced to realize overall employment stability this year. Thank you.

CNBC: 

My question is about employment. The import and export volumes for January and February dropped considerably. What has been the direct influence on the labor market and unemployment rate? Thank you. 

Mao Shengyong: 

Thank you for another question about employment. First, the epidemic has certainly influenced enterprises, especially small and medium-sized enterprises which have suffered greater blows. Furthermore, the number of college and university graduates this year will reach 8.74 million, a record high, which would exert pressure on the labor market. China's epidemic prevention and control measures have seen remarkable results. However, the situation is still severe outside the country. The world economy is facing emerging challenges including a volatile financial market and commodities prices. The growth rates of the world economy and trade are expected to drop to a certain degree, which will impact China's economy as well. Considering such circumstances, I have to say that such pressure on employment is remarkable. 

Second, we should recognize the resilience of China's economy. Riding good momentum from epidemic prevention and control efforts, enterprises are starting to resume operations and production, so recovery of the economy will accelerate in the second quarter or second half of the year. At the same time, stronger hedging macro-policies will be introduced. Stronger policies to promote employment will also come into force. Employment will certainly improve in the second half of the year, and the surveyed unemployment rate will decline. Thank you. 

The Cover:

I have a question about pricing. We noticed that the growth rates of CPI in January and February remained at around 5%. The People's Bank of China recently cut the requirement reserve ratio for RMB deposits again and subsequent monetary policy will likely be looser. Will such measures lead to higher prices? Thank you. 

Mao Shengyong: 

First, to the questions about the prices of consumer goods, the growth rates of CPI in January and February did stay above 5%, which is relatively high. The year-on-year growth rate of CPI in February, however, was 5.2%, 0.2 percentage points lower than that of January. And the growth rate compared to the previous month was 0.8%, 0.6 percentage points lower than the January level. In general, there are three major reasons behind the high CPI growth rate over the first two months of the year. First, food. The high growth rate of CPI at present has mainly been caused by a rise in food prices, especially the price of pork, which recorded a year-on-year growth rate of 135.2%. Pork prices contributed 3.2 percentage points to the CPI growth rate. That means that 3.2 of the 5.2 percentage points were from pork. The growth of food prices has remained high. Second, the epidemic has taken a toll. Prevention and control measures by concerned parties have raised cargo transportation costs. Third, the tail-raising factor. Volatile prices in last year have had major influence on the first two months of 2020. It should be noted that the growth rate in February which exceeded 5% could have easily been only 1% without major contributions from food and energy, 0.5 percentage points lower than that of the previous month, maintaining a relatively low level. This shows that although the CPI is high, it is mostly caused by structural factors. 

Second, it is doubtful that the CPI would grow even faster in the following period. Why? The three factors I just mention: The first is food. China achieved record high grain production last year. Agricultural production still has pretty strong momentum. Hog inventory and those available for slaughter have both increased year-on-year. The price of hog has gradually declined from a peak. Compared to mid-February, the price of hog dropped by 4.6% in late February, and the figure further decreased by 1.3% in early March. So, pork price shows a general trend of tumbling from recent highs. The second factor is the epidemic. Following effective prevention and control efforts, logistics and operation of enterprises are recovering quickly. Supply of industrial goods will increase and circulation of materials will be further smoothened, which will help stabilize prices. Third is the tail-raising factor. From the big picture of the whole year, the tail-raising factor of prices will diminish, especially in the second half of the year. There is no evidence pointing to a continuous surge in the CPI. The growth rate of CPI will steadily decline, especially in the second half of the year. 

Third, the monetary policy. In the context of the epidemic and complicated and grave situation in China and around the world, macro policies should be stronger and prudent monetary policies should be more flexible and moderate. We have carried out targeted cuts of the requirement reserve ratio, directed lowering of interest rates and increased refinancing and rediscount. The core purpose of those measures is to support enterprises through maintaining rational liquidity and encouraging decrease in interest rates or quoted interest rates. So instead of strong stimulus policies that would have economy-wide impact, we opted for targeted aid, which will not drive price growth dramatically from the perspective of monetary policy. 

Although recent price growth rates have been remarkable, the growth rate of the CPI is highly likely to taper off in the future. Thank you. 

Market News International: 

The epidemic spiked in February. The economy in January should have been mostly normal. Can you estimate the total impact on February? Will production and consumption fully recover by April? With the "two sessions" postponed, will this influence the formulation and implementation of economic development targets for this year, especially the second half of the year? Thank you. 

Mao Shengyong: 

Thank you for your questions. To offset the influence of the Spring Festival holiday, the major indicators of January and February are always calculated together because the Chinese New Year can fall in either January or February, which brings some volatility. This year was not the first time the statistics were combined. It has always been this way. The economy was pretty good before January 23. It was operating normally. Then it was influenced by epidemic prevention and control. So, the economy was mostly impacted in February. Since mid-February, however, the central government has been coordinating epidemic prevention and control with economic and social development. And the disruption has been abated. Enterprises are resuming production gradually and life is creeping back to normal. This is how things developed across January and February. 

Generally, the disruption in February was bigger than in the previous month. I think that life and production have accelerated towards full recovery. Different departments have different angles and samples of statistics in terms of the resumption of operations of enterprises above designated size. The National Bureau of Statistics conducted three quick surveys from February 12 to 29. By February 29, the ratio of enterprises above designated size, including major industrial and construction enterprises, that resumed production increased by 19.8 percentage points compared to the previous week. Recently, statistics released by relevant departments showed that 95% of enterprises above designated size in regions outside Hubei Province have resumed production. We believe that great progress has been made in terms of resumption of work.

Nevertheless, the epidemic is still spreading elsewhere in the world, which will probably cause uncertainty for us. For this reason, we should continue epidemic prevention and control in earnest. Meanwhile, we should promote resumption of production and a return to normal life. We will strengthen international cooperation on epidemic prevention and control and play a key role as a responsible major country in helping other countries combat the epidemic. After March, especially in the second quarter, production and daily life will largely return to normal. 

As for the targets set at the "two sessions," that is normally where major targets for the economic and social development for the year are determined. Those targets reflect the performance of every sector in economic development. But they should be formulated according to the actual situation. Facing the disruptions caused by the outbreak, strong hedging policies will be introduced to diminish the impact of the epidemic and keep things on track to meet the targets set for the year, especially poverty alleviation. Thank you. 

Phoenix TV:

Director General Mao, you just mentioned that we should still strive to achieve annual development goals and tasks. What are the specific goals and tasks? Were you referring to the targets of doubling 2010 GDP and per capita income by 2020? Do you think that considering the current situation, it would be advisable to reduce the economic growth target for this year? Thank you.

Mao Shengyong:

Building a moderately prosperous society in all respects was the first of the Two Centenary Goals set at the 18th CPC National Congress. It remains a solemn commitment made by our Party and must be realized. However, the concept of a moderately prosperous society in all respects has profound connotations. According to my personal understanding, the most important thing now is still resolutely winning the battle against poverty. General Secretary Xi Jinping recently made an important speech which we should earnestly study. He mentioned ensuring that the current 5.51 million poor people are lifted out of poverty according to existing standards and that poverty relief is a quality goal that should satisfy public demand and withstand tests of history and practice. Second, it is now very important to continue to consolidate gains in epidemic prevention and control. We should accelerate the resumption of production and living order and strive to return economic operation to a track of healthy development. All policies, including fiscal, monetary and employment policies, should serve these development goals.

As for annual development goals, we still need to reference the Report on the Work of the Government at the "two sessions." Once the goals are set, all people of the country will strive to achieve them. Thank you.

China Media Group:

We noticed that investment in fixed assets is constantly decreasing and that the sales area and volume of commercial housing are also declining. It was recently announced that housing price growth rates in 70 large and medium-sized cities in February are steadily falling. What is your opinion of the drops? Will the housing market stay cold? How will this affect the overall national economy? Thank you.

Mao Shengyong:

Thank you for your question. On real estate, I think the policy is very clear. First, the prohibitions on real estate speculation have not changed. In recent years, we have constantly strengthened and improved real estate regulation and control policies, implemented differentiated policies for various cities and enhanced key responsibilities of cities. In past few years, the real estate market has remained generally stable, especially in terms of stabilization of land prices, expectations and housing prices. 

Second, it is still clear that development policy on real estate should promote high-quality development. It is not the realm for short-term stimulus policy.

Third, regarding investment, China's perspective of areas and space for investment is quite large and includes manufacturing, infrastructure and other areas. Next, we should continue to increase policy support for investment. For example, recently, 23 departments issued suggestions and measures to improve consumption quality and expand consumption capacity. We also need to increase the effectiveness of investment which includes investment in relatively weak areas, promotion of industrial upgrading and strengthening areas of weakness in public service including the emergency response system. The areas and space for investment are huge. Our next step is not only to strengthen effective investment, but also to improve consumption quality and expand consumption capacity. We should make better efforts at the intersection of promoting consumption and expanding investment to maintain the overall stability of our economic operations. Thank you.

South China Morning Post:

Recently, new infrastructure such as 5G and the industrial internet has become a hotly discussed topic, which is expected to become the driving force for economic growth in the rest of the year. Does the National Bureau of Statistics have a comment on this? Is there a forecast for the scale of investment in new infrastructure? Is it able to keep China's economy in a reasonable range? Thank you.

Mao Shengyong:

Thank you. We have seen many recent online discussions on this matter. The core of this issue is the basic orientation of next-step macro policy. To support epidemic prevention and control, including supporting affected enterprises, we recently introduced a series of policies and measures that have already achieved favorable outcomes. To better hedge against the impact of the epidemic including external risks and challenges, we will increase the adjustment of macro policies in the next step. For active fiscal policy, we should seek greater effectiveness. For prudent monetary policy, we should be more flexible and appropriate. We should further strengthen the employment priority policy, which is a basic policy orientation. From the perspective of fiscal policy, we need to further reduce the burdens on enterprises and promote tax cuts and fee reductions. Over the past two years, we have made great efforts to reduce taxes and fees. This year, we will continue these efforts including the reduction of fees, reduction of energy and gas costs and other areas. The monetary policy has the same goal. To provide targeted assistances for enterprises, we should maintain reasonable and sufficient liquidity and strive to reduce loan costs.

Another perspective is domestic and external demand. As of domestic demand, we need to expand consumer demand and investment demand. The two "wheels" should align with each other. There is still much space for investment, including many weak areas that require industrial upgrading and technological progress and some inadequate areas in public service. All of these need greater efforts in the future. We should work hard at the intersection of expanding consumption and investment to achieve better results. If we can better leverage private investment, the results will be better. Therefore, we believe that expansion of investment and consumption should happen simultaneously.

Second is external demand. Although domestic demand is our central driving force, we should actively consolidate external demand. We should further strengthen the reform and opening up, actively consolidate foreign investment and trade, stabilize the foundation of foreign investment and trade and stimulate the vitality, dynamic and potential of microeconomic entities. In future reform and opening up, we need to keep moving forward with greater momentum.

In a nutshell, we must pay attention to both domestic and external demand and reinforce the foundation of external demand. Domestic demand is the key driving force, but neither investment nor consumption can be tailored exclusively to domestic demand. The fields and space of investment will be more focused on eliminating weaknesses and strengthening potential, promoting industrial upgrading and enhancing the level and capacity of supply. Thank you.

Hu Kaihong:

Due to limited time, we can take two more questions. 

Reuters:

Will the noticeable growth in unemployment rate in February exert a far-reaching impact on Chinese incomes and future consumption? The national debt-to-GDP ratio is also getting a lot of attention—will it surpass 3%? Thank you!

Mao Shengyong:

To the first question about the unemployment rate, in February, China's unemployment rate did increase. This was mainly because enterprises' demand for labor obviously decreased due to the impact of the epidemic, resulting in a drop in employment. However, this situation won't last long. With more enterprises resuming production and operations, demand for labor will grow and employment will increase, causing the overall unemployment rate to drop. It is predictable that the rise in unemployment in January and February will have a negative impact on residents' income growth in the first quarter of this year. From the second quarter, with production and daily life returning to normal and enterprises creating more jobs, especially when economic recovery reaches robust levels by the second half of the year, the income growth rate is expected to gradually improve. 

To the second question about the fiscal deficit, the Chinese government's overall debt level remains relatively low at present. In terms of policies to be taken, we need to further reduce taxes and fees to relieve the burdens on enterprises and help them overcome difficulties in this time of crisis while at the same time implementing a proactive fiscal policy composed of more active, effective measures. In general, the overall national debt of China remains relatively low. Some assets arising from debts are even profitable. In this sense, we still have plenty of room to appropriately raise our budget deficit ratio. Thank you!

Ta Kung Pao & Wen Wei Po:

How many percentage points of GDP growth by the end of this year does China need to achieve its 2020 targets on economic development and its goal of doubling its 2010 GDP? One more question: You just mentioned that China would expand domestic demand while consolidating external demand, but do you think global proliferation of the epidemic will affect China's overall external demand? 

Mao Shengyong:

As of your first question on the goal of doubling China’s GDP from 2010, I think the core of the question is China's economic growth this year. Indeed, the economy is facing some headwinds since the year started: On the one hand, the epidemic has left a clear negative impact on the economy in the first quarter, especially January and February, and on the other hand, the external environment is seeing new changes like sharp fluctuations in the financial market and commodity prices, resulting in gloomy predictions that global economic growth may slow. However, there are some encouraging factors emerging out there: First, the results of epidemic prevention and control in China are going to leave the country stronger. Second, progress has been continuously made in coordinating epidemic control and socioeconomic development and helping enterprises resume production and operations. Third, after the results of epidemic prevention and control are further consolidated, the endogenous dynamic of the Chinese economy will be constantly unleashed, and economic activities that were temporarily contained will reactivate. In the next stage, if work on epidemic prevention and control proceeds well, China will land on a good foundation for strong economic growth in the rest of the year. Especially after more robust hedging policies are implemented, the effects will continue emerging in the second half of this year. I am confident that China will maintain stable, healthy economic development this year. 

To your second question on the epidemic's impact on China's foreign trade: So far, the epidemic has been basically contained in China, but it still maintains momentum of rapid spread outside of China. Certainly, the pandemic situation will impact China's foreign trade. Under this circumstance, two things are extremely important: First, we must continue advancing epidemic prevention and control instead of just calling it a day. In addition to stepping up epidemic prevention and control domestically, we also need to strengthen international cooperation on prevention and control of the epidemic. China has gained valuable experience on this very task and should play a more prominent role as a responsible major country. Second, the global economy is facing some difficulties. Those irrational trade rules and barriers should be removed and abolished to enable the world economy to more effectively offset the impact of the epidemic and bring global trade back to normal. Thank you!

Hu Kaihong:

The press conference is hereby concluded. Thank you, Mr. Mao. Thank you all.

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Read in Chinese

Speakers:

Xin Guobin, vice minister of the Ministry of Industry and Information Technology 

Yang Liping, chief supervision officer of the China Banking and Insurance Regulatory Commission

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

March 13, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the Joint Prevention and Control Mechanism of the State Council. Today we have invited Mr. Xin Guobin, vice minister of the Ministry of Industry and Information Technology, and Ms. Yang Liping, chief supervision officer of the China Banking and Insurance Regulatory Commission, who will brief you about the work to support the coordinated and orderly resumption of industrial chain operations. They will also answer your questions. First, let's hear from Mr. Xin Guobin.

Xin Guobin:

Thank you. Ladies and gentlemen, friends from the media, good morning. Since the start of the COVID-19 outbreak, the CPC Central Committee and the State Council have been assessing the situation and leading the nation to adopt unconventional measures as part of the "people's war" against the virus. As the epidemic has been effectively controlled in China, relevant adjustments have also been made promptly by the CPC Central Committee and the State Council, so as to coordinate the prevention and control efforts with continued social and economic development, and smoothly restore order in the social and economic sectors with the categorized management strategy. The coordinated and orderly resumption of industrial chain operations is of crucial importance to maintain the steady economic and social development. General Secretary Xi Jinping has stressed many times that industrial chains are closely linked in their development, and the absence of one link may hinder the operation of businesses at upstream and downstream. It is important to adhere to the principle of coordinated development, advocate the building of an integrated national market, and further promote the coordinated work resumption of small, medium and large-sized enterprises both upstream and downstream to ensure smooth resumption of production, supply, and sales. Meanwhile, the overall economic performance of these companies should be improved as the work and production resume. On March 10, Premier Li Keqiang chaired an executive meeting of the State Council, issuing instructions to further ensure the smooth running of industrial and capital chains, and promote the coordinated resumption of work and production in all sectors. All of these provide guidance and fundamental principles for companies to resume work and production.

The Ministry of Industry and Information Technology (MIIT) has been fully implementing the decisions and deployments of the CPC Central Committee and the State Council. We have adopted a holistic approach to provide guidance and strengthen supervision in our organizing efforts. We have also established clear priorities and focused on key tasks, so as to advance the coordinated and orderly resumption of industrial chain operations. On Feb. 13, the MIIT set up a leading group on the resumption of work and production. We also introduced 20 separate policies and measures supporting resumption of productive operations in small- and medium-sized enterprises (SMEs), hosted two video conferences for companies of industrial and communication sectors to share experience on this topic, and published guidelines on orderly resumption of work and productive activities in the manufacturing and communication industries. In addition, we have sent liaison officers to the industry and information technology departments in seven major industrial provinces, in order to promote the implementation of policies and solve the difficulties and specific issues put forward by companies.

Under the firm leadership of the CPC Central Committee and the State Council, and with the joint efforts and close cooperation among various sectors in different regions, the resumption of work and production has shown a positive trend with orderly progress. The average rate of work resumption among industrial enterprises above designated size outside Hubei province has exceeded 95%. On average, about 80% of staff in those enterprises have returned to work. About 60% of SMEs have resumed work and production. Nevertheless, there are still problems such as the logistical and transport difficulties, a lack of capital flow for SMEs, shortage of epidemic prevention materials, low efficiency throughout the industrial chains, as well as inconsistency of work resumption between upstream and downstream enterprises. At the same time, the spread of the virus around the world has also brought great uncertainty to the resumption of work in China.

With this in mind, the MIIT will step up efforts accordingly so as to adopt a problem-oriented strategy and make preparations for the most difficult scenarios. Based on the idea of coordinated development among enterprises of different sizes both in China and abroad, and with the joint efforts from central and local governments, the MIIT will work precisely to promote the coordinated and orderly resumption of industrial chain operations, sparing no efforts to realize an orderly flow of personnel, capital, and materials; the proper connection among production, supply, and sales, as well as facilitate the domestic and foreign trade.

First, we focused on such areas as epidemic prevention supplies, daily necessities, public utilities, spring ploughing, foreign trade and high-tech industries. We also compiled a list of large-scale leading enterprises and core supporting enterprises into batches, and encouraged leading enterprises to spur on the development of supporting enterprises.

Second, we focused on smoothing supply chains and industrial chains, clearing logistics and transportation blockages, and alleviating the problem of personnel movement, as well as the transportation of raw materials and products.

Third, we gave full play to the coordination mechanism of the State Council's leading group office on the promotion of SME development, and pushed forward the introduction of monetary, taxation, financial, innovation, social security, employment and other support policies to help SMEs overcome difficulties.

Fourth, in accordance with the requirement that "provincial-level governments assume overall responsibility," we promoted the work of provincial-level joint prevention and control mechanisms, classifying counties into three levels, namely: low, medium and high risk. Then we clearly established the situation and carried out policies precisely. 

Fifth, we focused on enhancing the risk-prevention capabilities of foreign trade companies and strengthening such key industrial chains as automobiles, medicine and electronics to improve the stability of the global industrial chain and supply chain.

Next, the MIIT will implement the spirit of the State Council's executive meeting on March 10, focus on the core industrial chains, enhance overall coordination, key links and policy implementation, boost growth momentum, and ensure the industrial chain resumes production in a solid and orderly manner. We will reduce damages and losses caused by the epidemic as much as possible, and endeavor to keep the industrial economy running within a reasonable range.

That's it for my introduction. Thank you.

Hu Kaihong:

Thank you, Mr. Xin. Next, Ms. Yang Liping, please make your introduction.

Yang Liping:

Thank you. Ladies and gentlemen, friends from the media, good morning. Since the COVID-19 outbreak, the China Banking and Insurance Regulatory Commission (CBIRC) has thoroughly studied and implemented the important instructions made by General Secretary Xi Jinping. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we have issued nine documents, either by ourselves or jointly with other departments, to provide financial services for the epidemic prevention and control work and for economic and social development.

First, we have strengthened credit support in key areas. In the first two months of this year, RMB loans from financial institutions increased by 4.2 trillion yuan (US$0.6 trillion). Currently, the credit support provided by banking financial institutions to fight the epidemic has exceeded 1.4 trillion yuan. We have also further increased financial support for private companies, and micro and small enterprises, as well as credit availability for manufacturing, spring farming and other fields.

Second, we have supported banks to implement temporary deferred debt-and-interest payment arrangements for enterprises in difficulty affected by the epidemic. We have asked banking financial institutions to refrain from seeking early repayment of loans, delaying loans, or stopping loans for micro, small and medium-sized enterprises (MSMEs, including entrepreneurs of micro and small enterprises and self-employed business owners) that have been affected by the epidemic and are now temporarily encountering difficulties. In accordance with the principles of marketization and rule of law, a temporary delay in the repayment of principal and interest has been implemented on loans due since Jan. 25. For personal business loans, including those to truck drivers, taxi drivers and other special groups, as they lost business during the epidemic, they have also had difficulties repaying the loans used to purchase vehicles. The individual business loans for these groups can refer to the policy for self-employed business owners, so that they can also enjoy the policy. We will make flexible adjustments to such personal loan repayment arrangements. 

What I want to explain here is that the second point is regarding stock, while the first point, you may have noticed, is regarding increments. The second point is about existing loans that have already been made but cannot be repaid on time due to the epidemic. As such, the banks have made temporary repayment arrangements for the principal and interest. I would especially like to note that temporary repayment arrangements are not automatic extensions, but require an application from the lender, who is willing to extend it, and also the application needs to be reviewed by the bank.

Third, we will actively encourage insurance institutions to help enterprises overcome any difficulties they may encounter. By way of reducing fees, duly delaying payment of premiums, insurers are encouraged to bolster their support for all kinds of enterprises in terms of property, liability, export credit insurance etc. Premiums for vehicles, ships, and planes whose operation is suspended due to the epidemic will be appropriately reduced. When risks can be managed, we encourage life insurance companies to moderately extend the term of policy loans and increase their amount to help customers ease short-term funding pressure. For owners of small business or self-employed business who bought life insurance, they can pledge their policies. In the past, the pledge basically lasted for six months and the pledge rate was about 80%. During the epidemic prevention and control period, the policy loan period can be appropriately extended, depending on individual situations.

Yang Liping:

Recently, in accordance with the requirements of the 85th Executive Meeting of the State Council, we undertook timely research and implemented the key roles of the financial sector to support the coordinated resumption of industrial chain operations.

First, we will strengthen the support for crucial enterprises in any industry chain. We will guide banking institutions to actively cooperate with key companies of the industry chain, enhance support for liquidity loans, and give reasonable lines of credit. After the key enterprises gain finance via credit, bonds, etc., we encourage them to pay cash to upstream and downstream enterprises in the way of prepayment, so as to reduce the pressure on SMEs in terms of their cash flow and financing costs.

Second, we will optimize the financial services of upstream and downstream enterprises in industrial chains. We will guide banking institutions to pay attention to needs of upstream and downstream enterprises in any industrial chain when they resume work and production. Banks should support enterprises to finance by means of accounts receivable, warehouse receipts and inventory pledges. At the same time, we will promote the work of banks in appropriately reducing the proportion of acceptance bills for creditworthy enterprises. These measures will also help to increase the cash flow of enterprises and enhance their liquidity.

Third, we will strengthen the coordinated development of the global industrial chain. We will promote banks to play their role in stabilizing foreign trade and ensure resources allocation in regard to trade, financing and credit. The incentive mechanism will be improved and more foreign trade loan will be granted. We will ensure that relevant policies will be implemented properly, including deferring repayment of the principal and payment of interest on loans. For promising SMEs affected by the epidemic, the repayment period can be extended. It is known that, according to the policy, interest payments can be deferred to June 30; however, for heavily-hit enterprises that need a longer time to recover, they can negotiate with the banks about further deferring paying principal and interest, especially the former promising SMEs severely affected by the epidemic may extend their repayment beyond June 30, after negotiating with their bank. There will be case-by-case negotiation. We will support commercial insurance companies to develop short-term export credit insurance business and reduce the rates.

Fourth, we will use financial technology to optimize the supply chain financing services. We will encourage qualified banking institutions to develop supply chain business systems. By connecting with crucial enterprises and government departments, combining online and offline methods, they can provide customers involved in a chain with more convenient and efficient supply chain financing services. We will encourage policy banks and commercial banks to strengthen business cooperation with private banks mainly relying on the internet to operate to provide targeted financing services for SMEs and improve the availability for those resuming work and production to apply for loans. Private banks that rely mainly on the internet have access to huge amount of big data but they don't have enough branches, therefore, their sources of funds, especially deposit funds, are not as large as traditional commercial banks. Thus, we encourage policy banks and commercial banks to lend them money, give them funds, and, at the same time, use their big data, because the private banks have a good understanding of their customers that are mainly SMEs, as well as self-employed business owners. In this way, we can reach out and give targeted support to these businesses.

Looking forward, the CBIRC will step up financial support for epidemic prevention and control as well as economic and social development in accordance with the decisions and plans issued by the CPC Central Committee and the State Council. We will intensify efforts to make financial sector better serve the real economy and urge banking and insurance institutions to fully implement relevant financial policies and measures. Thank you.

Hu Kaihong:

Thank you, Ms. Yang. We are now open to questions. Please identify your news outlet before asking questions.

CCTV: 

I have two questions for the speakers. First, what difficulties are there in speeding up coordinated work resumption within the various industrial chains? What specific measures have been or will be introduced to address them? Second, on the part of financial sector, what supportive policies will help open up industrial chains and facilitate cash flow? Thank you.

Xin Guobin:

Thank you for your questions. On Feb. 3, General Secretary Xi Jinping called for efforts to coordinate epidemic prevention and control with economic and social development, and ensure stable performance in six key areas (namely, stability in employment, finance, foreign trade, foreign investment, domestic investment, and market expectations) at a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee. Since then, local authorities and relevant departments have acted to promote the resumption of work and productive operations. Thanks to their concerted efforts, positive progress has been achieved. However, when resuming operation, enterprises still face a series of difficulties and problems, which we believe, involve the following five aspects.

First, there are "pain points" in personnel movement. Due to varying epidemic situation as well as prevention and control levels in different regions, some enterprises are still suffering from a labor shortage, with staff members holding key posts stranded in hard-hit regions. For example, some technical personnel from Hubei province take the job of debugging the equipment for the production of key epidemic control supplies such as protective suits at factories in Guangdong. Large demand of such equipment in Guangdong has added new urgency of those technical personnel, most of whom from Xiantao in Hubei, to return to their work. However, the lockdown of Xiantao has left them no way out, affecting the debugging work of the equipment manufacturers to some extent.

Second, there are logistical obstructions. The "last mile" problem of transportation has not been entirely resolved. The regions hard-hit by the outbreak are still subject to restrictions on logistics, making resumption of production difficult for some enterprises occupying crucial positions in the industrial chains.

Third, there are breakpoints in the cash flow of small and medium-sized enterprises (SMEs). Various supportive measures have eased the financing strain on SMEs, but some enterprises in certain regions have been complaining that the measures are not readily available due to failure in implementation.

Fourth, "sticking points" remain in the supply of raw materials. Some enterprises are facing a lack of raw materials, as some important raw material enterprises have yet to resume operation. With modernized production and management systems, many enterprises rarely stockpile raw materials so as to reduce their costs, thus leading to the shortages observed during the viral outbreak.

Fifth, there is difficulty in offering sufficient epidemic control supplies. Despite a great increase in output, the supply gap still persists as a result of huge demand created by the resumption of work and production. For example, enterprises are facing a shortfall of facial masks and disinfection products when resuming operation.

Regarding those problems, the authorities concerned have introduced a series of policies and measures playing an effective role in reducing the difficulties challenging the enterprises in resuming work and production. However, the implementation of those policies should still be reinforced. 

In the next phase, the Ministry of Industry and Information Technology (MIIT) will step up efforts to better communicate and coordinate with other departments to address difficulties and concrete problems. A number of tasks will be highlighted as follows:

First, the essential industrial chains will resume operation in what we expected to be an orderly fashion. Regarding the requirement issued at the Executive Meeting of the State Council, MIIT will join hands with other authorities and take a lead in setting up a team designated to address cross-departmental and cross-regional problems affecting smooth resumption of work in key industries. Because different departments are in charge of different production factors and resources, the team needs to remove obstacles and solve concrete problems reflected by the industries concerned. Meanwhile, including officials from fiscal, financial and transportation sectors, the team is supposed to target problems concerning logistics, migrant population movements and capital flows, to name just a few, ensuring the hammer really hits the nail. We will give full play to the driving force of leading enterprises and make a list of them and their key partners, with their major concerns to be addressed by the team. That is how the production and work of upstream and downstream industries combined will continue to resume operations, and how the industrial ecology is further remedied to ensure stable supply chains to meet demand from both home and abroad.

Second, the difficulties facing micro, small and medium-sized enterprises should be much alleviated. The ubiquitous SMEs, indispensable to the industrial system, are a major part in various industrial chains. The MIIT will give full play to the coordinated mechanism of the State Council's Leading Group Office for Stimulating the Development of SMEs with the implementation of preferential financial, fiscal and tax policies devised for those enterprises. At the same time, State-owned big enterprises and governments at all levels should pay off debts owed to private firms and SMEs and prevent debts from snowballing during the epidemic period. We will continue to explore more policies to suspend the charges considered legitimate at ordinary times but inappropriate in this critical period in an attempt to further reduce costs of SMEs.

Third, the efforts to stimulate the resumption of normal operations in the industrial chains will be strengthened. The MIIT will team up with other departments to stimulate the expansion of domestic demand, foster new-type consumption and help secure sales of common industries, like automobile manufacturing. We will work to boost emerging industries and new business models, such as, application of technology scenarios supported by 5G, remote medical treatment and online education and online office. At the same time, the ministry will step up efforts to accelerate the constructions of major industrial and telecommunication projects, including, infrastructure built for the 5G network, the Internet of Things, big data, artificial intelligence and smart cities. The projects under construction will be encouraged to resume normal operations and reach target outputs as soon as possible. We will continue to follow a number of major projects and programs, especially those with substantial foreign investments to be launched to boost consumption demands for raw materials.

I will end my briefing here, thank you.

Yang Liping:

Thank you for the question about how to open up capital flows on the industrial chain. When Mr. Xin introduced the situation just now, I noticed that there are two existing issues and difficulties mentioned in the introduction. These are the "breakpoint" in the cash flow, as well as the financing difficulties faced by SMEs affected by the epidemic. Now that production is resuming, the progress of each industry and enterprise will be different. Industrial chains are interdependent, so if one link is affected or blocked, companies that lie upstream and downstream on the industrial chain may not run smoothly. The resumption of production in the industrial chain requires financial support, so there needs to be a stable flow of funds. Therefore we must identify the "blocking points" which disrupt the stable flow of funds. We think the "blocking points" of capital flow lie in two main areas. First, core enterprises occupy the funds of upstream and downstream SMEs. Earlier, Mr. Xin mentioned this issue, in which he addressed the appropriation of funds. Second, it is difficult for SMEs to raise funds, and Mr. Xin also mentioned that just now.

In view of these two "blocking points", the Banking and Insurance Regulatory Commission is ready to step up its efforts in two main areas.

The first aspect is to stabilize core enterprises that are critical to their relevant industrial chains. To stabilize the chain, we must first stabilize the head. Core enterprise affected by the epidemic may be encountering financial difficulties. Therefore, we encourage banks to increase their liquidity support, including credit limit increases, to help stabilize their production and operation.

Second, we hope we that core enterprise can help upstream and downstream micro, small and medium-sized enterprises. We will do this by increasing credit, loans, or helping the core enterprises issuing bonds, which will bring them more funds. After these businesses have funds, they can pay upstream supply companies that have given them goods. We will support businesses to get the funds in cash or in real-time payments, and not by payment notices, or deferred payments. Once core enterprises have credit or bond funds, we want them to transfer the money to upstream enterprises in real time, so the upstream enterprises will also have the funds to stock. In cases in which the upstream supplier has not delivered the goods, but has received an order, we also encourage core enterprise to advance payments to the upstream supplier, so the upstream supplier can better prepare the goods. This is how core enterprises can help upstream and downstream small and medium-sized enterprises, reducing the amount of capital stuck in the core enterprises. 

As for the downstream buyers, in practice, some core enterprises use their strong position in the industrial chain to demand a pay before shipment policy. They delay the payment to upstream supplies, and collect the money from downstream distributors, and tie up a lot of money. The downstream buyer's advance payment is actually a 100 percent prepayment. In this case, we will also grant credit to the core enterprise, so that the core enterprise has enough money to produce and operate on its own. We will support them to reduce the proportion of prepayments to downstream companies. For example, if you have already received money and can operate normally, you don't need your prepayments to be 100%. 10%, 15% or 20%, 30% of prepayment would be a buffer for downstream companies' cash flow and capital chain. This is the first aspect, that is, how we will firmly support core enterprises in the industrial chain to open up "blocking points".

Secondly, we are offering direct financing support for upstream and downstream firms on the industrial chain. We are taking the following measures. First, banks will pitch in if core enterprises do not make cash payment or pre-payment to upstream suppliers. If upstream suppliers can provide contracts or related invoices, which evidence that they have got orders from core enterprises, banks will directly offer financing support for their receivable accounts. If core enterprises don't make cash payments, suppliers can present related certificates of the transaction to the bank, which will then offer the suppliers financing for the receivable accounts. During the epidemic control period, we encourage banks to improve financing ratio appropriately so as to expand fund sources and increase liquidity. As for downstream dealers, if core enterprises do not lower the ratios of advance payments, we encourage banks to conduct pledge financing based on warehouse receipts or inventories, or conduct financing for advance payments based on orders. If you have a true transaction background and you have stock at the warehouse, the receipt or stock can be used as pledge to acquire financing from the bank. As for enterprises which are affected by the epidemic but have good credit status, banks can lower the security deposit ratio of the acceptance bills for them and reduce their commission charges so as to increase their cash flow.

Friends from the media have noticed that the above-mentioned measures should be based on real trading. Banks should step up risk prevention, while core enterprises, as well as upstream and downstream firms, should all be honest and not cheat. If you do not have an actual transaction but apply for this kind of financing, it would violate laws and regulation. If a financing application is based on real transactions, banks can offer sufficient support.

To smooth cash flow, we are mainly applying two measures: one is by financing core enterprises which link upstream and downstream enterprises; the other is to encourage banks to provide financing support directly to upstream and downstream micro, small and medium-sized enterprises. Thank you.

CNR:

We've noted that the epidemic has impacted the production and operation of private small and micro businesses, as well as self-employed business owners. In the collaborative resumption of industrial chains, how will you help SMEs resume work and production and realize their synergetic development with large enterprises? What financial supportive measures are being put in place? Thank you.

Xin Guobin:

Thank you for your question. Small and medium-sized enterprises generally have a lower capacity to deal with risk. They suffered a big blow from the epidemic and have greater difficulties in resuming work and production. As the department that oversees small and medium-sized enterprises, helping them resolve problems as they attempt to resume business is our utmost concern. Following decisions made by the CPC Central Committee and the State Council, all localities and departments have issued a series of fiscal, financial and social security policies and measures to help them resume normal business operations. 

First, we lower taxes and fees to reduce their burdens. For example, for a certain period of time, we lower VAT rates for small-scale taxpayers, exempt small and medium-sized employers from paying pension, unemployment and work-related injury insurances and reduce their contribution to employees' basic medical insurance. In addition to these measures, we encourage all localities to lower urban land use taxes, so leasers can lower their rents and property fees for tenants, and thus reduce the operating costs for enterprises. All localities have implemented a series of measures following the decisions made by the CPC Central Committee and the State Council. For example, the city of Qingdao established the "Good Leasers" Platform, which publishes a list of how much rent has been reduced each day by industrial parks, entrepreneurship and innovation bases, mass innovation spaces and so on. As of yesterday, 8292 businesses have had their rent and property fees reduced by a total of 160 million yuan thanks to 187 "good leasers."

Second, supporting measures have been strengthened to ease the financial strain on SMEs. Ms. Yang elaborated on this part just now. We have encouraged financial institutions to provisionally defer loan principal and interest repayments for SMEs. For eligible SMEs that have temporary liquidity difficulties, loan principal and interest repayments can be deferred until June 30. We have also increased the re-lending and re-discount quotas and lowered the re-lending rate, so as to support small and medium-sized financial institutions in offering more loans to micro- and small-enterprises at preferential rates. So far, some progress has been made in implementing these policies. For example, the Bank of Ningbo in Ningbo city has provided interest-free or low-interest loans for up to 30 days to eligible SMEs, allowing them to meet their provisional funding needs.

Third, we have upgraded services to strengthen confidence in MSME development. On February 9, the Ministry of Industry and Information Technology (MIIT) issued a notice on work programs to help SMEs resume operations and overcome difficulties caused by the COVID-19 epidemic. The notice guided local authorities at all levels to apply policies tailored to their local conditions and specific situations, so as to promote the precise resumption of orderly operations of SMEs by region and classification as soon as possible. For example, Guangdong province has established an online platform to respond to the needs of SMEs. By March 10, the platform had responded to a total of 1,998 claims related to SMEs, of which over 98% had been settled. Meanwhile, the MIIT has launched a database on gov.cn, the official website of China's central government, detailing all the policies that have been applied to support SMEs during the COVID-19 epidemic. The database lists all the supporting policies issued by relevant departments of the central government and local governments at all levels, which can be accessed by MSMEs via gov.cn. In addition, an app for SMEs to self-test their size and type has been developed to facilitate the implementation of preferential policies. We have also launched an online micro-course training program to strengthen guidance and training for SMEs. By March 12, the program included 318 courses and had received a total of over six million visits.

Fourth, we will cooperate and take concerted measures to unblock industrial chains. The interruption of industrial supply chains is the biggest difficulty facing SMEs in their resumption of work during the fight against the epidemic. In terms of breaking points and blockages in different industrial chains, the MIIT has organized for industrial associations and specialists to examine 50-plus major leading enterprises and over 7,000 core small and medium-sized supporting enterprises, and has made coordinated efforts to promote enterprises of all types to resume operation in a concerted way. Alongside the MIIT, local industrial and information technological authorities also followed its example, such as in Jiangxi province, where over 20 events have been held to increase connectivity according to different industries, regions and projects. Consequently, the resumption of work and production for 64 enterprises and 65 providers outside the province and 26 providers within the province has been realized in a timely manner. In the city of Sanming in Fujian province, an industrial chain support platform has been built for the steel, equipment manufacturing, new material, and modern agricultural industries, to match online supply and demand information for equipment production, factories, logistics and raw materials. The city of Shishi launched a successful live-broadcast event selling branded clothes, with turnover amounting to 53.7 million yuan (US$7.65 million) on the opening day. 

The MIIT will do more to help SMEs better resume operation over the coming period in the following four aspects: First, the State Council's leading group in promoting the development of SMEs will continue to play its full part in increasing the publicity and implementation of policies to add more vitality to SMEs. Second, major enterprises in different chains will take the lead in the concerted resumption of work and production for upstream and downstream supporting SMEs and promote their integrative development. Third, high-quality SMEs, including enterprises with high levels of expertise, advanced, unique or self-reliance technology, will take the lead in the orderly resumption of operation for various SMEs on the premise of making good preparations during the epidemic. Fourth, micro and small-sized enterprise demonstration bases for innovation and entrepreneurship and public service platforms for SMEs will play their full part in using new information technology to provide high-quality and efficient online and offline services for their resumption of operation. Thank you.

Yang Liping:

Thanks for your question. Concerning financial support measures, you may notice that most upstream and downstream firms of the core enterprises in the industrial chain are private, micro, small, and medium-sized businesses. Small in scale but large in number, their capabilities against risks are relatively weak. They are more vulnerable to external impact. The China Banking and Insurance Regulatory Commission (CBIRC) has paid great attention to financial service for those enterprises and encouraged financial institutions to increase credit expansion to those enterprises to reduce their financing costs. Here are some data. In 2019, loans to private enterprises increased by 4.4 trillion yuan year-on-year, and the number of enterprises that received loans increased by 31.5%. The annual interest rate on the total loans issued was 93 basis points lower than in the previous year, and the new medium- and long-term loans accounted for nearly 70% of the total new loans. These are all very gratifying changes.

Since the beginning of this year, the CBIRC has continued to promote financial institutions in the banking industry to increase credit supply and reduce overall financing costs to maintain a favorable growth trend in loans to private enterprises. According to relevant statistics, the comprehensive interest rates of enterprise loans dropped after the outbreak of the epidemic. Enterprises, with the effective comprehensive interest rate of existing and new loans dropping to less than 5% for 51% of the total enterprises, which means the financing costs of enterprises have declined further. 

We have just introduced the supporting policies for private, small, and micro-sized enterprises, most of which are upstream and downstream firms in the industrial chain. I want to repeat that in order to help them resume work and production, as well as gain business development, our policies are focused on both existing loans and incremental loans. Regarding existing loans, we will keep lending to medium, small, and micro-sized enterprises (including small and micro business owners and individually owned businesses), never call in loans ahead of the scheduled time, and will avoid delays in issuing loans. How many medium, small, and micro-sized enterprises, small business owners and individually owned businesses are there in total? There are more than 22 million such enterprises, and over 14 million of them are individually owned businesses. The second policy is based on the principle of marketization and legalization. We have implemented temporary measures to defer principal and interest repayment for loans already due since Jan. 25, 2020. The measures work not only for some special groups, such as lorry and taxi drivers, but also for relevant business entities with financial debts during the period when free access to toll roads was given. For those who are unable to repay principal and interest, banks are allowed to provide different support in various circumstances, such as delaying payment of interest, extending principal repayment periods, or rolling over maturing loans. As I just mentioned, for those medium, small, and micro-sized enterprises which have to undergo an extended period for recovery, they can negotiate with banks for a longer extension period beyond June 30. 

We have made a statistical statement based on the effects of the policies issued on March 1, and we received the statement on March 15. We conducted a quick survey on policy implementation in several banks and six provinces as well. According to the survey, many individually owned businesses have already enjoyed the benefits of the policies. For example, the data from the Agricultural Bank of China showed that individually owned businesses accounted for a considerable proportion. The statistics of Huaxia Bank showed that many medium and small enterprises have already gotten benefits from the policies. We believe that with the further implementation of the policies, more enterprises and banks will connect, and more businesses will enjoy the benefits of the policies.  

In terms of increasing the volume of loans, two measures are being considered. One is to continue strengthening credit support. I also have a couple of figures I would like to provide the press. This year, we will continue supporting both private as well as micro- and small-sized enterprises by requiring banks to increase the volume and lower the price of loans. This means that the total amount of loans released will be greater than the amount released previously, and the price of the loans will also be lower than before. The other measure is researching and evaluating the percentage of clients who obtained their first bank loan. This allows more enterprises, which have never received bank loans before, to get funding from banks now. We required five large stated-owned banks to keep growth rate of the inclusive loan balance for micro- and small-sized enterprises over 30% year-on-year for the first half of 2020. Policy banks will add a total of 350 billion yuan in special loans on the basis of last year's amount. In addition, the special loans will be released with preferential interest rates to private, micro-, small- and medium-sized enterprises. This year, different banks and financial institutions will also add over 500 billion yuan in loans for self-employed businesses based on the amount last year. Thank you.

Market News International:

The epidemic is spreading quickly in foreign countries, especially across Europe and America. Have any evaluations been made regarding the impact this may have on the resumption of work for the Chinese manufacturing industry? In particular, the impact on the many micro- and small-sized enterprises involved in importing and exporting. What policies will be implemented to cope with this situation? Thank you.

Xin Guobin:

Thank you for your questions. The epidemic has swept across the world, outstripping our predictions. Objectively speaking, the trend of industrial globalization is clear. It is also evident that the spread of the outbreak in European countries and the U.S. will impact and affect the development of Chinese manufacturing. This is also dependent though on the duration of the epidemic and the joint-efforts made by all nations. If the outbreak can be controlled relatively quickly, I believe the effect on China and the global economy will be limited. But if the duration is longer, there will be a certain impact on China for sure. However, from our perspective, China has the largest scale industry, the most complete product categories and the largest domestic market demand in the world. Therefore, we have a good foundation for the development of the manufacturing industry. We also have huge domestic demand and enormous product categories with supporting industries which are fully equipped. So, we believe that the effect on China is still manageable.

However, since China has been deeply integrated into the global industrial chain system, any changes in the global economy will impact and affect China to a certain amount. We will conduct serious research on this issue and enhance communications regarding relevant policies between governments all over the world. We will boost the resumption of work and production for industrial chains by implementing market-oriented methods. And hopefully, we will strive to lower the economic impact caused by the epidemic. Thank you.

Hong Kong Economic Herald: 

The industrial chain consists of interlocked links. Should any of them break down, upstream and downstream enterprises would be affected. What are the China Banking and Insurance Regulatory Commission's long-term plans on supporting the coordinated development of the industrial chain? Thank you. 

Yang Liping: 

Thank you for your question. You may have noticed that there are some temporary arrangements for coping with the epidemic's impact in the policies introduced earlier. For example, we will appropriately raise accounts receivable, or ratio of inventory and warehouse receipt pledge financing, and encourage banks to charge businesses with good credit records less cash deposit for acceptance drafts to increase the cash flow of upstream and downstream enterprises. Such policies were formulated with consideration to the situation that these enterprises didn't have cash revenues when they had to suspend normal production and operation due to the epidemic, and now, they need more cash flow to organize production and maintain operation, including cash for essential expenses arising from paying workers, keeping machines running, and other business activities. 

We have made some annual arrangements to support micro-, small-, and medium-sized enterprises (MSMEs). Just now, we have briefed some of our targets. For example, the five large banks will increase the balance of their inclusive loans to micro and small businesses by no less than 30 percent year-on-year in the first half of this year. There may be certain adjustments to the target as the situation changes, but we will not shift our long-term policy direction on guiding large banks to support micro and small businesses. 

We also introduced some policies on industrial chain financing, especially the one that is in great concern of upstream and downstream MSMEs of core enterprises — increasing working capital loans to core enterprises and setting a reasonable line of credit to ensure unimpeded capital flow between upstream and downstream enterprises. This should be a long-term arrangement. To tackle the two bottlenecks in the long run, first, we should give full play to the role of core enterprises in making the links unobstructed between upstream and downstream enterprises; second, we should make all-out efforts to help micro and small businesses solve financing difficulties and reduce financing costs. However, this is a relatively complicated issue. Earlier, when I cited the case that the core enterprises may occupy funds on account of upstream and downstream enterprises as an example, you may think the core enterprises refer to those in the manufacturing industry. Actually, there are also many other types of core enterprises in our industrial chains, such as e-commerce platforms and logistics companies. Recently, we have been planning to ask banks to reach out to them and carry out studies and discussions on how to utilize core enterprises in these industrial chains to smooth the capital chain between upstream and downstream enterprises.

We will make timely adjustments to our work when it is necessary. Thank you. 

Farmers' Daily:

It is currently the critical period for spring farming. We know that there is huge demand for agricultural materials, and Hubei province is one of the major regions for phosphate fertilizer production in China. What measures have been taken to ensure the regular supply of phosphate fertilizers so as not to interrupt the farming season?

Xin Guobin:

A few days ago, General Secretary Xi Jinping gave important instructions on the country's agricultural production for spring, emphasizing that full effort should be made to organize spring farmingand production in order to ensure the farming season is not missed and to guarantee the summer grain harvest. Now is the crucial time to prepare fertilizers for farming in spring. A regular supply of phosphate fertilizers is extremely important for both spring farming and production. The main work we have done is as follows: 

First, we have accelerated the resumption of work and production in phosphate fertilizer enterprises within Hubei province. We know that Hubei is an important production base for phosphate fertilizers in China, with its output of monoammonium phosphate (MAP) and diammonium phosphate (DAP) accounting for one third of the country's whole. In particular, places such as Yichang city have relatively high concentrations of phosphate fertilizer manufacturers in Hubei. As such, the MIIT is highly focused on the resumption of work and production of phosphate fertilizer enterprises in Hubei province. Back on Feb. 23, Minister Miao Wei personally spoke to the Yichang government by video link to learn about the resumption of work and production of local phosphate fertilizer enterprises, to study and resolve the existing difficulties and problems in transporting and funds, and to communicate and engage with the Hubei government and provincial joint prevention and control mechanism so as to promote the resumption of work and production in local phosphate fertilizer enterprises. As of March 10, a total of 19 of the 24 ammonium phosphate production enterprises had resumed production subject to the scheduling of Hubei province, and their ammonium phosphate production capacity has reached more than 80%. More enterprises are expected to resume work and production in the near future. Thanks to the resumption of work and production in Hubei enterprises, the province's annual production capacity is expected to surpass 10 million metric tons.

Second, we have linked the upstream and downstream of industrial chains and increased the total supply. We have enhanced trace scheduling of raw materials and accessories supply and production of ammonium phosphate enterprises in Yunnan, Guizhou and Sichuan provinces as well as primary compound fertilizer enterprises across the country. With regards to raw materials and accessories supply, for example, we have helped contact relevant manufacturing enterprises to provide several alternative plans for some enterprises with problems getting supplies of raw materials. If one enterprise is unable to provide supplies, we will consider another one and help them connect. As for transportation support, we have promoted and coordinated to solve problems related to railway transport. For instance, some enterprises have manufactured phosphate fertilizers, but been unable to ship them out. We connected with the China Railway Corporation in a timely manner to help and coordinate with railway carriage problems. In terms of financial support, we have also helped to coordinate with the People's Bank of China in solving the liquidity issues of key phosphate fertilizer enterprises. The financial institutions have done a great job in this regard.

Third, we have filled the regional supply gap by strengthening the connection between production and demand. We have jointly issued a document with the Ministry of Agriculture and Rural Affairs requiring that provincial agricultural, industry and information departments coordinate with local fertilizer producers. For provinces struggling with supply shortages, we will help them with cross-regional coordination. As of March 11, a total of 12 provinces have demanded to regulate supply. On the basis of considering the geographical distribution of supply and demand, as well as manufacturing enterprises' capacity to take new orders, we have recommended manufacturing enterprises to those in demand for them to choose from, effectively relieving the phosphate fertilizer shortage in some provinces. In the future, we will further follow up the fertilizer preparation for spring farming across the country. While ensuring the output, we will also coordinate allocation among regions. Thank you.

CRNTT:

China is one of the world's largest auto makers and auto markets. And Hubei province is home to numerous suppliers of auto parts. Reports indicate some overseas auto manufacturers have been forced to suspend production due to lack of the car parts. So what measures will be taken to support the resumption of the whole automotive industrial chain? Thanks.

Xin Guobin:

Thanks for your question. The auto sector has a long industrial chain that covers a wide range of areas and exerts an enormous impact on other fields. It's a typical international industry. China's auto manufacturers need to import some auto parts from the international market, and multinational enterprises also need to import auto parts from China. We know that each car has tens of thousands of parts, and each company has hundreds of tier one automotive suppliers and thousands of tier two and three suppliers. Hubei province is China's fourth largest automobile production base. In the process of epidemic prevention and control, some multinational enterprises, such as Volkswagen, BMW and Hyundai Motor, reported that some of their car parts were usually made in Hubei province and there was a shortage in stock. And these companies will face the risks of suspending production if their suppliers are unable to resume production and operation in time. Some domestic car makers also have suppliers in Hubei province. For example, among over 400 auto parts suppliers of Guangzhou Automobile Group, 156 are located in Hubei. To overcome such difficulties, the Hubei provincial department of industry and information technology worked with the companies to dispatch relevant inventory to meet production needs. Hyundai Motor, the South Korean multinational automotive manufacturer has wire harnesses manufactured in both Hubei and Shandong provinces. The company had to halt production due to a short supply of wire harnesses. To fix that problem, we worked with the departments of the related provinces to prioritize the resumption of work at the wire harness manufacturers. Now, Hyundai Motor is back on track of normal production and operation.

In addition, as the epidemic has been effectively contained in Hubei, we should put the resumption of work and production on the propriety agenda. We have already made contacts and communicated with the Hubei provincial joint prevention and control mechanism, the provincial department of industry and information technology, and the prefecture-level cities of the province. We plan to give priority to the resumption of auto parts manufacturers, which has also earned great support from the CPC Hubei Provincial Committee, the Hubei Provincial Government and the Hubei provincial joint prevention and control mechanism. Auto parts manufacturers in Hubei now are resuming production in an orderly way. For example, Dongfeng Motor Corporation is located in Hubei province, and most of its automobile production enterprises and auto parts suppliers are located there as well. So, Dongfeng was hit hardest by the outbreak. However, its truck production base in Shiyan city has already resumed work and production, with a daily output of more than 200 vehicles. Some auto parts manufacturers in Xiangfan city have also resumed work. Two passenger car manufactures in Wuhan city have resumed production, including Dongfeng Honda and Dongfeng Motor Corporation Passenger Vehicle Company. 

With combined efforts, we will forge ahead with the resumption of normal operations in China's automotive industry in an orderly manner. That will play a pivotal role in stabilizing the global supply chain. We will work to follow the resumption process of these companies, help them to solve any problems they may encounter promptly and ensure a stable global supply chain. Thanks.

Hu Kaihong:

That concludes today's press conference. Thank you, Mr. Xin and Ms. Yang. Thank you all.

Translated and edited by Wu Jin, Fan Junmei, Li Xiao, Wang Yanfang, Li Huiru, Lin Liyao, Zhang Junmian, Yan Xiaoqing, Zhou Jing, He Shan, Duan Yaying, Wang Qian, Wang Yiming, Wang Wei, Zhang Rui, Cui Can, Yuan Fang, Mi Xingang, Yang Xi, Zhang Liying, Guo Xiaohong, Wang Zhiyong, Zhu Bochen, Huang Shan, Jay Birbeck, Laura Zheng, David Ball, Geoffrey Murray. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.

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Read in Chinese

Speaker:

Liu Yongfu, director of the Office of State Council Leading Group of Poverty Alleviation and Development

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

March 12, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office. 2020 is the year of the completion of China's poverty alleviation tasks. On March 6, General Secretary Xi Jinping delivered an important speech at a symposium on securing a decisive victory in poverty alleviation. He emphasized the importance of overcoming the impact of COVID-19 to clinch a complete victory in the fight against poverty. Today, we have invited Mr. Liu Yongfu, director of the Office of State Council Leading Group of Poverty Alleviation and Development. He will introduce the measures to implement the guidelines derived from remarks made by General Secretary Xi Jinping on securing a decisive victory in poverty alleviation. He will also answer some of your questions. First, I'll give the floor to Mr. Liu.

Liu Yongfu:

Ladies and gentlemen, friends, good morning. Welcome to today's press conference. I would like to thank all of you for your long-term concern and support for China's poverty alleviation cause.

General Secretary Xi Jinping chaired a symposium on securing a decisive victory in poverty alleviation on March 6, at the critical moment for COVID-19 epidemic control and also the beginning of the 300-day countdown to the completion of the poverty eradication task. This symposium is the seventh one on poverty alleviation chaired by General Secretary Xi Jinping and was the largest of its kind in the past six years. The symposium was a teleconference attended by officials in provinces, autonomous regions and municipalities across the country, as well as responsible comrades at the county level in 22 central and western provinces who have signed the letter of responsibility for tackling poverty to the central government. At the symposium, General Secretary Xi Jinping fully acknowledged the achievements in poverty alleviation, made a profound analysis of problems and challenges, and issued new arrangements and strict instructions on securing a decisive victory in poverty alleviation and the completion of relevant tasks. Arguably, the symposium has charted out the direction to accomplish our poverty alleviation tasks and win the hard battle against poverty with determination.

This symposium has sent out a mobilization order for poverty alleviation to the entire Communist Party of China (CPC) and the whole society. It sounded a bugle for the victory in the fight against poverty, and provided fundamental guidelines for the completion of poverty alleviation tasks. It reflects the arrangements made by the CPC Central Committee on balancing epidemic prevention and control with economic and social development, as well as the plans of the CPC Central Committee on coordinating epidemic control and poverty alleviation with equal importance. The symposium has showcased General Secretary Xi Jinping's devotion to the people's well-being with a great sense of responsibility as a leader serving the people. It has also demonstrated our strong will and determination to win the fight against the novel coronavirus and the hard battle against poverty.

Since the symposium concluded, the State Council Leading Group Office of Poverty Alleviation and Development has been working with relevant parties to implement the arrangements made by the leading group. Government bodies at both central and local levels have been putting in enormous effort in this regard, learning from each other's experiences and forging ahead. With General Secretary Xi Jinping's guidance and hand-on efforts, as well as the strong leadership of the CPC Central Committee and the State Council, we have faith that we will win the fight against the COVID-19 outbreak, score a victory in the tough battle against poverty, and fully accomplish the task of poverty alleviation.

I would like to take this opportunity to briefly introduce the progress that has been made towards poverty alleviation and our future work plans. It is well known that in 2015 the Communist Party of China (CPC) and the Chinese government put forward clear targets on poverty alleviation. The aim was that by the end of 2020, all poor people and counties under the current standards would be lifted out of poverty and regional poverty would be resolved. After more than seven years of targeted poverty alleviation work, and especially intensified efforts over the past four-plus years, rural poverty population under the current standards has declined from 98.99 million at the end of 2012 to 5.51 million at the end of last year. The number of poor counties has also decreased from 832 to 52 this year. We are getting close to the goal of eliminating poverty. The income of impoverished people has increased noticeably and their working and living conditions in poverty-stricken areas have improved significantly. Socio-economic development in poor areas has accelerated remarkably and China's governance capacity for poverty alleviation has also improved considerably. These are our achievements so far.

Next, we will follow the arrangements of the CPC Central Committee and the requirements put forward by General Secretary Xi Jinping. First, we will minimize the impact of the epidemic on poverty alleviation work. We will not allow a scenario whereby the epidemic affects our progress in attaining the poverty alleviation targets. In particular, we will support the poor in seeking jobs outside their hometowns; we will carry out consumption-driven alleviation, focusing on the sale of agricultural products, especially those sold by poor people; and we will launch and resume poverty alleviation projects to ensure that they are completed in the first half of the year. Second, we will complete the remaining poverty alleviation tasks, focusing on the 52 counties and 1,113 most impoverished villages among the 2,707 poor villages. With supervision and scrutiny, we will make sure that they are lifted out of poverty on schedule. Third, we will consolidate the current achievements in poverty alleviation. Of the 93 million poor people who have been lifted out of poverty, some are relatively vulnerable. We must prevent these people from returning to poverty.

In addition, we will also prevent those living near the poverty line from falling into poverty. For those who have been lifted out of poverty, we will continue to carry out industry- and employment-based poverty alleviation work and follow-up on the task of relocating poor people. At the same time, we will establish a tracking and pairing assistance mechanism for vulnerable groups to prevent the occurrence of poverty and the emergence of new poverty cases. 

2020 is the final year in attaining the goal of eradicating poverty. We have already had to overcome many challenges, whilst the COVID-19 outbreak has brought new ones. I know you are very concerned about how we will meet the targets. Now I would like to take your questions on poverty alleviation. Thank you.

Hu Kaihong:

Thank you, Director Liu. We are now open to questions. Please identify your news outlet before asking your question.

CCTV:

I have a question for Mr. Liu. The year 2020 marks the target year for China's poverty alleviation endeavors, and less than 300 days are left before victory is secured. However，the ongoing COVID-19 epidemic has posed new challenges to the battle of poverty alleviation. Could you shed some light on the specific impacts of the epidemic on China's poverty alleviation efforts? There are some concerns that the poverty relief goals may not be achieved on time amid the epidemic. What do you make of that? Thank you.

Liu Yongfu:

Yes, you are right. When General Secretary Xi Jinping convened the meeting, we had 300 days left. Now we have only 294 days left. We are by no means saying that our poverty relief work will suddenly stop at a certain date, but there must be a "milestone" day. So, time is running out, indeed. The impact of the epidemic on poverty relief has been undeniable. But I would like to tell you that our confidence and resolution to fulfill the task will not alter due to the epidemic. We will stick to our goals and step up efforts.

The impacts of the epidemic are multifaceted. A major impact is the effect on the flow of people and goods due to the need for epidemic prevention and control. First, people's pursuit of work has been affected. A lot of impoverished households rely on finding employment outside their hometowns. Their pursuit of work has been affected, but the situation is changing for the better. Last year, 27.29 million poor people worked outside their hometowns. Until March 6, 2020, 14.2 million people had migrated outside their hometowns for work, accounting for 52% of the total number for last year. The number is slightly lower than in previous years. However, as our country turns a corner in epidemic control and the government has adopted a series of measures, the pace with which people are migrating outside their hometowns for work has accelerated. Between Feb. 28 and March 6, the number of migrant workers increased by three million. The pace is expected to continue to accelerate. Second, the sale of poverty relief goods has been affected, as well as tourism during the Spring Festival holiday. Although the spring is not a harvest season for most agricultural produce, the sale of some agricultural products in season has been affected. For example, the sale of Yunnan flowers has seen billions of yuan in losses, but we are gradually taking measures to cushion the impact. Third, the operation of poverty relief projects has been affected. Many projects that concern transportation，production, and drinking water need to be carried out at the village level. Until March 6, one-third of the projects had started. This work is also gaining momentum. As I said just now, the epidemic has affected our work in not a small way. But the impact has been lowered due to our measures. Some are trying to make up for the lost time. As the saying goes, when one door closes, another opens. Some short-term projects that are quick to yield profits have been launched. As we have finished the main work during the past years, we are confident about consolidating existing achievements and fulfilling the tasks on schedule. Thanks.

Kyodo News:

What are the current standards for poverty alleviation? For example, what is the standard for annual income? And, will those standards be adjusted this year? Thank you. 

Liu Yongfu:

The standards that China is using in poverty alleviation are quite comprehensive and cover three main aspects. First is income. The national poverty line is set at the per capita annual income of 2,300 yuan ($328) at constant price of 2011. According to the price index and other considerations, the actual poverty line reached 3,218 yuan by the end of 2019, and we plan to raise it to around 4,000 yuan this year. However, I would like to share some additional information with you. According to registration data, the per capita annual income of those who have been lifted out of poverty reaches over 9,000 yuan, and that of those still in poverty is more than 6,000 yuan. Income serves as a fundamental standard, but not the only one, as we still have the standards of "two no-worries" and "three guarantees."

Second is "two no-worries." This refers to ensuring that those who used to live in poverty no longer have to worry about food or clothing. We have succeeded in this case. Third is "three guarantees." This refers to the goal of guaranteeing compulsory education, basic medical services and housing security. Some children at the compulsory education stage have dropped out of school, but the number is very small. Regarding basic medical services, we have built a large number of hospitals, health centers and clinics in counties, townships and villages, so as to ensure that all villages have clinics and rural doctors and that impoverished people have access to medical services. We have also established a basic health insurance system, serious disease insurance system and medical assistance system. Moreover, the social security network for medical insurance has also been established. Consequently, we can provide convenient medical services and ensure access to basic health care for impoverished people. In terms of housing security, we have provided safe housing for over eight million poverty-stricken households over the past few years, and we are working hard to provide more. Moreover, ensuring access to safe drinking water is also a priority. According to our monthly statistics, there are approximately 150,000 people nationwide who do not have access to compulsory education, basic medical services, housing security or safe drinking water. Of course, the number may vary from time to time due to different conditions. For example, different seasons or construction of projects can all lead to shortage of drinking water. However, we will ensure that these problems can be spotted and fixed in a timely way. Moreover, the number of children who drop out of school also varies frequently due to multiple uncertainties, such as parents going to other places for work, their difficulties in getting to school or their reluctance to go to school, which in particular, requires our repeated persuasions. In conclusion, the standards of "one income," "two no-worries" and "three guarantees" are our comprehensive standards for poverty alleviation.  

Despite the impact of the epidemic this year, our basic standards for poverty alleviation will remain unchanged. We will not lower or raise them and will adhere to the standards unswervingly. Thank you.

Thecover.cn:

Since China first began its fight against poverty, the country has lifted more than 90 million people out of this condition. In this massive poverty alleviation campaign, how will you consolidate progress and effectively prevent people from slipping back into impoverishment? Thank you. 

Liu Yongfu:

Currently, only a few million people are living under the poverty line in China. However, it is important to maintain poverty alleviation efforts to ensure that the population of over 93 million people who have left this situation does not slip back into poverty. For years, we have been committed to the task. As a result, the number of people who have returned to impoverished conditions fell year by year, down from over 600,000 in 2016 to 200,000 in 2017, tens of thousands in 2018, then further dropped to the most current figure in 2019 of only several thousands. Although the quality of poverty reduction work has improved, we should strive to surpass our original goals and concentrate our efforts in three areas:

First, we should continue to pursue industrial development. Developing industries take steadfast dedication and strong effort.

Second, we should ensure that migrant workers can work in cities to increase their income. This will produce the fastest results to relieve impoverished farmers. So we should support them in every way to work in cities and have a steady income. 

Third, we should provide further support for those relocated from inhospitable areas. Nearly 10 million registered impoverished, and 5 million non-impoverished people were relocated from poverty-stricken areas. We should concentrate our efforts on supporting them to develop industries and find jobs.

What's more, a guideline on establishing supervision and support mechanisms for people to stay out of poverty has been formulated and will be published very soon. People with a risk of falling back into impoverishment should be identified, and people living on the poverty line should also be identified. We should identify them in advance and offer them the necessary help and support before they sink or slip back into poverty. Thank you.

China Media Group:

During the COVID-19 epidemic, banning wildlife trade has been part of certain efforts to meet the requirements of the epidemic prevention and control work. However, as we known, specific types of animal farming have been developed as the local special pillar industry in many poverty-stricken areas, contributing needed income locally. The policies established will have huge impact on these areas, so are there any programs to ease the impact for farmers and these areas? And what impact will this bring to the progress and achievements in poverty alleviation?

Liu Yongfu:

Regulations and laws were established before on wildlife farming limitations and bans, and there is regulation particularly dealing with eating wild animals. Recently, decisions were made by the Standing Committee of the National People's Congress on banning consumption of wild animals. As you mentioned, in certain rural areas, they do undertake wildlife farming and trading businesses developed as local special industries. However, the size is limited, so they are not "pillar industries" of those areas. Those areas with an intention to develop the wildlife businesses as the special industry have indeed invested hundreds of thousands of yuan or even millions of yuan in the businesses. However, none have assumed the status of a large-scale industry. Accurate data on this has not showed up in the statistics.

After the decisions went into effect, relevant departments have been developing detailed catalogues that will list what animals can be raised and which cannot. No matter what the current situation is, we will ensure that the decisions are carried out, the laws are put into effect and outmoded customs are abolished eventually. For those businesses that have continued to adopt wildlife farming, we will close down them or help them change into other business lines. For their losses in this regard, we will provide multiple forms of assistance, which will include finding them alternative products or help them switch into other production lines. In general, it will not have much impact on the poverty alleviation work, and it will not have any major impact on completing our tasks in particular. You can rest assured on that. Thank you.

CRNTT:

At present, there are still 52 poverty-stricken counties and 5 million people who have not been lifted out of poverty. With less than 10 months to go before winning the battle against poverty, how can we ensure that these remaining people will get out of poverty? Thank you.

Liu Yongfu:

52 counties, 2,707 villages and 5.51 million people have not been lifted out of poverty, but it is our task to accomplish by the end of this year. At the beginning of our fight against poverty, we advanced our work as a whole. Later, we found that it's more difficult in those deeply impoverished areas. On June 23, 2017, General Secretary Xi Jinping presided over a symposium on poverty alleviation in deeply impoverished areas held in Taiyuan of Shanxi province, which determined the "three regions" (Tibet, the four prefectures of Hotan, Aksu, Kashgar, and Kizilsu in southern Xinjiang, and the ethnic Tibetan areas in 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) as the focus of our work. Besides the "three regions and three prefectures," 169 crucial poverty-stricken counties have been designated as the focus of our work. We have increased support and intensified our work in those areas. By the end of last year, 52 poverty-stricken counties, 2,707 poverty-stricken villages and 5.51 million people were still living in poverty. General Secretary Xi Jinping has required that 1,113 villages, out of the 2,707 villages in these 52 counties, should be put under supervision, which is actually a step forward in deepening our poverty relief work. The seven provincial-level regions involved are required to formulate implementation plans, and all counties and villages are required to formulate specific plans so as to accomplish the task of poverty alleviation.

For example, the "three regions and three prefectures" recorded 5.32 million poor people in 2013. After the Taiyuan Symposium, we formulated an implementation plan for poverty alleviation in deeply impoverished areas. It was a three-year plan to be conducted from 2018 until 2020. By the end of last year, 85% of the task had been completed, and 95% of the funds were in place, which was close to completion. In 2013, the number of poor people was 5.32 million, and the incidence of poverty was 25.5%. By the end of 2017, when the plan was formulated, this number had been brought down to 3.05 million. After two years, there are still 430,000 people living in poverty, and the incidence of poverty has dropped to 2%. The rate of decline in deeply impoverished areas is faster than that in western China. From 2013 to 2017, the incidence of poverty fell by 11 percentage points, and by 12.6 percentage points in the following two years. The speed is accelerating. Therefore, we firmly believe that these 52 counties and more than 1,100 villages, with more support and work following this method, will be able to get rid of poverty by the end of this year. Thank you.

Phoenix TV:

I have two questions. First, the impact of this epidemic has been relatively large. Do you have any statistics on, or have you been focusing on new poor families created by the epidemic? Second, some places such as Guangxi province have established temporary jobs for the poverty-stricken families. Should such a short-term "blood-transfusion-style" practice be advocated? How do you view jobs of this nature in the future? Thank you.

Liu Yongfu:

Since the poverty alleviation campaign began, we have been conducting monitoring every year. Statistics are available. Just now I reported that the number of people falling back to poverty has been decreasing year-on-year. We also have statistics for those at risk of falling back to poverty or at risk of falling into poverty. Around two million people are at risk of falling back to poverty, and about three million are at risk of falling into poverty. That means a total of about five million people, plus the remaining five million impoverished people at the end of 2019. So, our task involves lifting 10 million people out of poverty this year. You just mentioned that some places have set up temporary public welfare jobs, which is also common across the country. During the poverty alleviation campaign, some public welfare posts can be set up. Government-invested projects concerning people's livelihoods can provide public welfare jobs for the poor. This approach helps them by giving them work, as they will have an income. This has been a successful approach in many areas and we will continue adhering to this approach. However, we must also gradually improve the setting of public welfare posts. Public welfare posts should only be set up when there is a need for public welfare undertakings. The posts requires holding public welfare activities, and impoverished people should go to work. In some places, the public welfare posts have turned into a kind of welfare. That is not right. So, we must gradually regulate this.

Except for China, I do not know of large-scale photovoltaic power stations being established for poverty alleviation elsewhere. In the process of poverty alleviation, tens of thousands of village-level photovoltaic power stations have been built in impoverished villages across the country. Each power station of around 300KW can produce an annual income of more than 200,000 yuan. This income can be regarded as the collective income of a village. In the beginning, some places distributed money directly to poor households. Now we encourage them to set up public welfare posts that allow poor households, semi-able-bodied laborers and less advantaged laborers to work. Their income ranges from 500 to 600 yuan per month, up to 800 to 1,000 yuan per month. By engaging in public welfare services, they solve the needs of public welfare causes, such as road maintenance, care for the elderly and cleaning. Due to the impact of the epidemic this year, more efforts must be made in this regard. A total of 80% of the revenue from village-level photovoltaic power stations will be used to create public welfare posts. Therefore, we are advocating the approach you just mentioned, but we must gradually implement regulations to prevent supporting "lazy people." Thank you.

China Education Television (CETV):

It is generally recognized that, to alleviate poverty, we need first to develop education, a major approach identified as of great significance in avoiding impoverishment passing from one generation to another. My question is: what additional roles should education assume when the anti-poverty campaign is being challenged at this most critical moment?

Liu Yongfu:

Poverty alleviation can be achieved by means of education, which enables an underprivileged population to gain access to a sea of knowledge and professional competences, signaling a farsighted and fundamental policy adopted to ensure poverty is not transmitted to coming generations. That is a consensus reached around the globe. To make the consensus adaptable to China's actual situation, we have taken a number of specific measures as follows:

First, the quality of nine-year compulsory education should be definitely guaranteed. All children reaching the age covered by compulsory education should be admitted to schooling and the pedagogic quality should continue to be improved. This must-do item is among a number of criteria for evaluating success in the work of poverty alleviation.

Second, the development of vocational training, higher education and preschool teaching must be stimulated. Policies are carried out for those who have failed in the entrance exams for senior middle schools or schools of higher education. Each of those students, who can receive an annual grant of at least 3,000 yuan (US$429.3), are enabled to continue their studies in professional training schools and graduate as professional technicians to fill the vacancies in urban and rural labor markets. This policy, which we have focused the most in recent years, has proved highly feasible. Meanwhile, we have encouraged institutes of higher education to target less developed regions by enlarging enrollment of local students, with hundreds of thousands of seats being made available each year. Before 2013, no student in many poor villages could be admitted to a university, but, now, that is no longer the case in a majority of the poverty-stricken areas. Meantime, pre-school education can serve as another example. To ensure the quality of compulsory education, the children, who do not speak standardized Chinese in some regions inhabited by ethnic groups, will study the language before entering primary school. By working with the Ministry of Education, we have launched a pilot program in Mt. Liangshan, Sichuan province, to teach local children, almost up to the age of normal schooling, to speak standardized Chinese. Notable progress has been made among roughly 300,000 local youngsters aged between four and six. Some of them who were admitted to schools last year have scored higher in tests. 

Third, education to nourish the development of thought is indispensable. Although to teach people with literacy and skills is inevitable, to cultivate the thoughts, including, hygienic and disease prevention awareness as well as diligent, hardworking and frugal spirits, are also instrumental, say, to the change of deep-seated wrong habits. That is why we should always take education an approach to eradicate poverty in the long run. Thank you.

China Poverty Alleviation:

We have known that since last year, the State Council Leading Group Office of Poverty Alleviation and Development has set up inspectors based on management style and special working groups. What effect did this have last year? In terms of management style, what measures has the State Council Leading Group Office of Poverty Alleviation and Development taken? Thank you.

Liu Yongfu:

The work of poverty alleviation is not only a great cause, but also a serious and difficult endeavor. Without good management style and strong abilities, we cannot complete the task. General Secretary Xi Jinping has always paid attention to the promotion of ethical standards, which mainly revolves around implementation, problem-solving and reducing the burden on the grassroots. Now we are going to investigate the work undercover. We will not simply let local governments fill in forms, nor will we listen to reports, including rectification issues. Instead, we will listen to the introductions by local governments and read the written materials, but we will also visit the villages and households. We have listened widely to the opinions of the local people. We are not working on filling in forms and reporting the numbers, but in fact, we still have some work that has not yet been fully implemented.

Since the COVID-19 outbreak, we started exploring the establishment of a response mechanism from Jan. 28. Although we cannot go to the epidemic area, we can acquire the situation at the grassroots. I think this is also a change in the style of working. During the period of epidemic prevention and control, we have been paying attention to the construction of the management style. Without a good working style, it will not be possible to achieve the desired results in poverty alleviation, and we will have to continue the work. Thank you.

Hong Kong Economic Herald:

Parts of the country have basically completed their poverty alleviation tasks, and some officials in charge of the work seem to think they can now somewhat relax with the job done. Does the accomplishment of a poverty alleviation task mean an end to the work of poverty alleviation? Thank you.

Liu Yongfu:

There is indeed such a trend. As more and more people, and poor counties, are lifted out of poverty, a small number of grassroots cadres and officials in charge of the poverty alleviation work might have thought that accomplishing the task would bring a relief for them. This tendency is true, but is not the mainstream. General Secretary Xi Jinping has pointed out this problem since 2018, saying we must not remit and slack off in our efforts. He has repeatedly stressed: "The last part of an endeavor is the hardest to finish." Generally speaking, grassroots cadres and those in charge of poverty alleviation locally have been keeping up their efforts.

Here are some data I'd like to share with you. A total of 99% of the working teams dispatched to various villages across the country are in place this year, and 97% of the cadres sent to villages have continued in their work despite the severe epidemic situation. They have mainly undertaken two assignments in the present situation. First, epidemic prevention and control; second, poverty alleviation. There is some relaxation perhaps, but is not the mainstream. We must always keep up our efforts and work harder just as required by General Secretary Xi.

As for your second question, poverty alleviation has its own special meaning. Its task is to eradicate absolute poverty that has remained unresolved in China for thousands of years, such as the basic survival problems due to lack of food and clothing, and the harsh environmental conditions for development, which are of an historical nature. However, this is not to say that there will be no poverty in China when absolute poverty is eliminated. After accomplishing the poverty alleviation task, China will shift its focus from addressing the challenges of absolute poverty to alleviating relative poverty, and next, we will address the development gap to prevent growing income disparity and achieve common prosperity. Different measures may be taken to eradicate absolute poverty and alleviate relative poverty, and the tough battle against poverty may not be the same as our routine work to reduce poverty. However, there will be no end to poverty alleviation, and we will continue working on this. Thank you.

Hu Kaihong:

Due to the time limit, we can only take two more questions.

Xinhua News Agency:

Mr. Liu, you mentioned that many measures targeting the 52 poverty-stricken counties have been put forward since the COVID-19 epidemic outbreak to reduce its impact. Are there any plans on the standards, timetables and detailed arrangements regarding lifting them out of poverty? My second question is, as the fight against poverty has entered the final stage, what are the arrangements for a national census on poverty alleviation? Could you please explain a little? Thank you.

Liu Yongfu:

The standards for eliminating poverty won't change. They are income, a guarantee that poor people do not need to worry about food or clothing, and that they have access to compulsory education, basic medical services and safe housing. The timings generally will not change, either. Some places like Liangshan and Nujiang may postpone the relocation of poor people for one or two months. So, some places may make a few adjustments, but the issue must be resolved this year. Some places may complete the task a little late, but all the plans were made allowing for unknown circumstances. So as to ensure the accuracy of the achievements in poverty alleviation, a nationwide census will be conducted this year. The related deployment has been made and it is expected to be completed in the second half of this year or at the beginning of next year. Thank you.

Bauhinia Magazine: 

Many entrepreneurs and non-governmental institutions in Hong Kong have been actively engaged in charity and poverty alleviation on the Chinese mainland. Mr. Liu, how do you evaluate Hong Kong's contribution to poverty alleviation on the mainland? Thank you. 

Liu Yongfu:

As you just mentioned, Hong Kong's ties with the mainland have always been close and are getting closer. The SAR government, social organizations, entrepreneurs and people of Hong Kong have done a lot of work and played an effective role in the development of charity and poverty alleviation on the mainland. In particular, the SAR government has provided assistance to Nanjiang county in Sichuan province. In 2013, the county was home to 70,000 to 80,000 impoverished people. It was removed from the poverty list in 2018 and all impoverished people there were lifted out of poverty in 2019. The area has benefited from contributions by the SAR government and people from all walks of life in Hong Kong. Social organizations and the Hong Kong people have also done a lot of work. The "Heifer Project," which has operated on the mainland for almost 20 years, provides impoverished households with a heifer cow, allowing farmers to learn the skills necessary to raise cattle. The cow is then transferred to another household after it produces calves. This project has benefited around 20,000 households in six provinces across China, many of them poor families. Social organizations, entrepreneurs and the people of Hong Kong have also helped a lot in every major natural disaster on the mainland, including the COVID-19 outbreak. We are very grateful and will not forget it. Thank you.  

Hu Kaihong:

That concludes today's press conference. Thank you, Mr. Liu. Thank you all.

.

Read in Chinese

Speakers:

Zhan Chengfu, vice minister of civil affairs

Liu Xitang, head of the Department of Social Assistance, Ministry of Civil Affairs

Chen Yueliang, head of the Department of Primary Level Political Units Development and Community Governance, Ministry of Civil Affairs 

Yu Jianliang, head of the Department of Elderly Care, Ministry of Civil Affairs 

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

March 9, 2020

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference held by the Joint Prevention and Control Mechanism of the State Council. Today we have invited Mr. Zhan Chengfu, vice minister of civil affairs, who will brief you about the work of civil affairs departments in the struggle to control and prevent the spread of the COVID-19 and to secure people's basic livelihood. Also present today are Mr. Liu Xitang, head of the Department of Social Assistance, Ministry of Civil Affairs (MCA); Mr. Chen Yueliang, head of the Department of Primary Level Political Units Development and Community Governance, MCA; and Mr. Yu Jianliang, head of the Department of Elderly Care, MCA. They will also be available to answer your questions. First, I give the floor to Mr. Zhan Chengfu.

Zhan Chengfu:

Ladies and gentlemen, friends from the media, good morning. Today, my colleagues and I will introduce the efforts of civil affairs departments to control and prevent the spread of COVID-19, as well as to secure people's basic livelihood. We will also answer your questions.

As we all know, the majority of elderly people, orphans, as well as children and people with physical disabilities are the most vulnerable segments of our society. They have suffered far more than the rest of the population during the epidemic prevention and control work. Merciless as the virus is, we human beings are sympathetic and caring. The CPC Central Committee and the State Council have always taken people's livelihood, especially that of disadvantaged groups, as its top priority. Since the outbreak of COVID-19, General Secretary Xi Jinping has issued important instructions on numerous occasions that institutions dealing with the elderly care, social assistance, children's welfare and mental health should make even greater efforts to prevent and control this virus and provide relevant assistance to those deemed vulnerable. Recently, the leading group of the CPC Central Committee on the prevention and control of the epidemic and the State Council's Joint Prevention and Control Mechanism have reviewed and released many important documents concerning civil affairs. Unified deployments have been made in order to further improve the work of epidemic prevention and control in institutions providing the wide range of civil affairs services, fully implement the favorable policies for frontline community workers, and secure the basic livelihood of vulnerable groups in the midst of the epidemic. These fully reflect the care from the CPC Central Committee and the State Council for community workers as well as people in need of civil services, demonstrating the superiority of the system of socialism with Chinese characteristics. Calls have been issued urging the civil affair departments of all levels to spare no effort to live up to the central government's trust and people's expectation.

Since the outbreak, the Ministry of Civil Affairs has undertaken many actions and fully performed its duty, coordinating and promoting epidemic prevention and control work along with civil affairs work. At the civil affairs sector, we implemented the major decisions and arrangements made by the CPC Central Committee and the State Council on epidemic control and economic and social development. Our work can be summarized in the following aspects. 

First, we have strengthened the organization and its leadership, and improved our execution capacity in regard to the decisions and arrangements made by the CPC Central Committee and the State Council. The ministry's leading party members' group set up a leadership team on prevention and control work in addition to seven special teams to make special arrangements and implement the requirements of duty regarding civil affairs service organizations, urban and rural communities, charitable donations, as well as civil affairs authorities. The ministry's leading party members' group and the leadership team on epidemic control have held 13 meetings, in order to learn the key guidance made by General Secretary Xi Jinping and the decisions and arrangements made by the CPC Central Committee, as well as to formulate working guidelines to guide prevention and control work across China.   

Second, we fully supported the prevention and control work in Hubei, and especially in Wuhan. We formulated in a timely way various policy documents on strengthening the supervision of charitable donations, issued notices to charity organizations across the country, and guided charity forces to donate to Wuhan, Hubei and other regions hit hard by the epidemic. We have sent work teams to Wuhan to guide charitable donations as well as civil affairs service institutions there on three occasions. We have also coordinated Jiangsu, Anhui and Hunan provinces to organize three teams totaling 118 people to rush to Wuhan to help with elderly care institutions in the city. We have also guided civil affairs authorities in Wuhan and Hubei to carry out temporary assistance for people stranded there, as well as strengthened support for people in difficulties and special groups. 

Third, we have mobilized personnel and resources from all sectors of society in the epidemic prevention and control work. We have offered guidance to communities in both urban and rural areas to establish or improve dedicated working mechanisms and grid management systems, fully implement joint prevention and control measures, unite the masses in creating a defensive line against the coronavirus, and coordinate society-wide efforts to strengthen care for frontline community workers. Meanwhile, we have encouraged various industrial associations at different levels, charities, social work and voluntary institutions to leverage their respective strengths to participate in the epidemic prevention and control work with systematic steps and in accordance with the law.

Fourth, we have taken solid measures to ensure the protection of staff and residents working or living in civil affairs service institutions. We have issued a series of guidelines to guide institutions of nursing homes, child welfare institutions, mental health welfare centers, relief and management institutions for vagrants and beggars, as well as funeral services, in the epidemic prevention and control work. For institutions offering face-to-face services, such as the registration of social organizations and marriages as well as welfare lottery sales, we have introduced measures including adequate ventilation and disinfection, online appointments, providing services at different time periods and reducing mass gatherings to curb the spread of the virus. We have also strengthened the epidemic prevention and control work at civil affairs offices, thus maintaining the nationwide steady operation of the civil affairs system.

Fifth, we have promoted the resumption of work in the civil affairs system in a prudent and orderly manner. In regions where the epidemic situation is not severe, we have offered guidance for civil affairs service facilities to receive and accommodate the elderly, children and people with disabilities. We have also guided institutions offering face-to-face services there in the resumption of work at an appropriate time using a region-specific and multi-level targeted approach. We have improved our services for disadvantaged groups including childless and "left-behind" elderly, children in difficulties, as well as residents with serious illnesses and disabilities, so that they can receive heartwarming care from the Communist Party of China (CPC) and the Chinese government amid the COVID-19 outbreak.

Generally speaking, under the strong leadership of the CPC Central Committee, the civil affairs system has adopted a vigorous and orderly approach to the epidemic prevention and control work, effectively ensuring the safety and health of the groups that we serve, and contributing to the overall progress in nationwide epidemic prevention and control. It is worth noting that local civil affairs officials and community workers, with the big picture in mind, have stuck to their posts with selfless devotion to safeguarding the people's health. Here I would like to call for more media coverage of their touching stories.

However, there is still a lot of room for improvement in our work, and we invite your oversight, comments and valuable advice. Going forward, we will continue to promote the in-depth study of the guiding principles embodied in General Secretary Xi Jinping's important speech on coordinating the epidemic prevention and control work with socio-economic development, and fully implement the three important documents recently issued by the Leading Group of the CPC Central Committee on Novel Coronavirus Prevention and Control, and the Joint Prevention and Control Mechanism of the State Council. We will take a more organized approach to epidemic prevention and control, endeavor to achieve this year's tasks, and make positive contributions to winning the people's war against the epidemic, finishing the building of a moderately prosperous society in all respects and completing the 13th Five-Year Plan.

That is all for my introduction.

Hu Kaihong:

Thank you, Mr. Zhan. Next, we will move on to questions. Please identify your media outlet before asking your question.

CCTV:

We noticed that the epidemic has reached some nursing homes in Hubei and other places recently. May I ask Vice Minister Zhan Chengfu, what is the current situation of epidemic prevention and control in civil affairs service institutions, including welfare homes for children as well as nursing homes? What measures will the Ministry of Civil Affairs take to prevent and control the epidemic? Thank you.

Zhan Chengfu:

Thank you for your question. First, allow me to explain the system of civil affairs service institutions for everyone. It is composed of five main types of institution: nursing homes, welfare homes for children, mental health welfare institutions, relief and management institutions for vagrants and beggars, and funeral services. Excluding funeral services, the first four institutions total 45,239 facilities, which serve more than 2.15 million people. There are 1,881 funeral services with cremation function. Recently, the "main battlefield" of civil services in the fight against COVID-19 has been in Wuhan. These institutions have all now implemented closed management, all those in care have undergone nucleic acid testing, while suspected and confirmed patients have all been isolated and treated following the guidance on receiving and treating all these in need via thorough examination. It should be noted that the epidemic management of civil affairs service institutions is carried out by local authorities, and relevant information will be issued by local governments. So, please check the information and data released by authorities at all levels.

Since the epidemic outbreak, the Ministry of Civil Affairs has prioritized the prevention and control of the epidemic in the civil affairs service institutions, and made every effort to ensure the safety of the institutions and people in care. That is a basic introduction, now we have carried out four major tasks: First, we have strengthened supervision and implementation. From the leaders of the ministry to the divisions and bureaus, eight working groups have been sent to local civil affairs departments to guide their work. Second, classification guidance has been conducted. We have formulated 18 guidelines, work regulations and process guides. Third, we will fully support the work in key epidemic areas. Two vice ministers led the teams to Wuhan to guide the charity donation and pension service work and 118 professionals in elderly care have been coordinated and sent to Wuhan to help. Fourth, we have carried out timely investigations and dealt with prominent problems. For example, we worked with the civil affairs departments of Hubei province and Wuhan to research and assist those stranded in Wuhan after the outbreak of the epidemic.

Overall, these measures have proven useful. Of course, we also clearly realize that the civil affairs service institutions have been crowded and the environment is closed-off. Also, the elderly, people with disabilities, orphans and vagrants and beggars living in the institutions have weak self-protection abilities, and funeral services also directly handle the deceased. As such, the risk of infection is high, and the prevention and control situation remains very grim. We will continue to tighten the controls, focus on key areas and key links, and consider general areas. We will continue to implement the existing policies and summarize the good experiences. Thank you.

Hong Kong Economic Herald: 

Many people who were living a passable life have met difficulties since the outbreak of COVID-19. They may not thoroughly understand the social assistance policies and procedures. How will the civil affairs authorities respond to and address their needs in a timely manner?

Zhan Chengfu: 

The Department of Social Assistance of the Ministry of Civil Affairs is in charge of social assistance work. I'd like to invite Mr. Liu Xitang to answer your question.

Liu Xitang:

Let me take this question. The outbreak of COVID-19 has brought many challenges for social assistance work. We have taken a slew of measures to promptly respond to public concerns and guarantee the living security for those who are in severe difficulties. It is our mission to help and save anyone in need, an important guideline for our work. On Jan. 29, we announced new arrangements and deployments in a notice. Responding to the new requirements of the Central Leading Group for COVID-19 Prevention and Control based on the current situation of epidemic prevention and control, we have adopted the following measures to promptly respond to people's needs for social assistance.

First, we have streamlined all procedures. In the past, to fairly assign the minimum living allowances, we have to go through a door-to-door household survey, democratic appraisal, and publicizing beneficiaries. Now, we conduct the household survey in a long-distance-range or non-contact mode, such as making inquiry calls or verifying applicants' financial situation based on big data. We have established a household financial situation checking system that can be shared among different departments. Also, we have halted the work of disqualifying basic living allowances beneficiaries in epidemic-stricken areas and it won't start until the crisis has passed. 

Second, we encourage the use of information technology. We deployed local civil affairs departments to respond promptly to applications, and they have taken to online platforms to manage the work of social assistance. For example, Sichuan province has developed an online platform to manage this vital work. People can apply through the WeChat remotely. We have also taken other measures, such as delegating the authority to examine and approve items down to lower administrative levels. For the hardest-hit areas we permitted government agencies to delegate the authority to examine and approve items for temporary assistance directly to communities. Community workers in Wuhan and other areas most affected by the epidemic can respond to the need of people in difficulties promptly and carry out assistance at first hand, and the information about the application of social assistance can be added later.

The third is to open up helplines. Channels through which the people in difficulty can make their voices heard about any difficulties are being smoothed out. People can dial the helplines for help and know whom to ask for. The Joint Prevention and Control Mechanism of the State Council has released the helpline information to the public, and the local governments have opened up the 12345 hotline service. We have also required the local civil affairs departments to promote knowledge of these helplines. Now, the helplines have been opened up at the county level, and we will put the information on the website of the Ministry of Civil Affairs.

Fourth, there is the aspect of policy promotion. From Jan. 29 to now, the Ministry of Civil Affairs, local governments and the Central Leading Group for COVID-19 Prevention and Control have issued a series of measures to protect the people in need. How can these measures be conveyed in a timely manner? We need to strengthen the promotion of these policies and encourage the use of new media, such as Weibo and WeChat. So, we hope you can follow our WeChat official accounts (ID: ZGMZWX and zhongguoshehuibao). Policies will be released on these platforms in the first place, and we also welcome more reports about our policies. Thank you.

China News Service:

Mr. Zhan just said that China has issued regulations to care for community workers on the frontline of the epidemic prevention and control work. I would like to ask, what key measures will be implemented further? Thank you.

Zhan Chengfu:

After the institutional reforms, the Department of Primary Level Political Units and Community Development of the Ministry of Civil Affairs was renamed the Department of Primary Level Political Units Development and Community Governance. Today, we have the director-general of the department Chen Yueliang present. He will answer your question.

Chen Yueliang:

Thank you for your interest in community workers. The urban-rural communities are the frontline of the joint epidemic prevention work, and are also the most effective control unit in preventing external imports and internal spread. Since the outbreak of the novel coronavirus, urban and rural community workers have implemented the decisions and plans of the CPC Central Committee and the State Council, stuck to their position and worked around the clock. Fighting at the forefront of the anti-coronavirus battle, community workers have made great contributions to curbing the spread of the virus. As of March 8, a total of 53 community workers had died in the line of duty, of which 92.5% were CPC members.

General Secretary Xi Jinping has repeatedly stressed caring for urban and rural community workers, and Premier Li Keqiang has also made specific instructions. To implement their guiding principles, the Central Leading Group on the Prevention and Control of COVID-19 held a meeting to discuss practical difficulties and questions faced by frontline community workers. It also specified basic requirements for such areas as strengthening incentives, security, safety protection and humanistic care. Eight "heartwarming" decisions have been made to solve the problems in the following five aspects: 

First, we will solve the problem of unclear regulations regarding subsidies. Concerned about the hardworking community workers, we will ensure proper subsidies are given to community workers who fight the epidemic on the frontline in urban and rural areas. Provincial-level government will guide the cities and counties to establish standards for subsidies.

Second, we will solve the problem of inadequate protection policies. Community workers in urban and rural areas who are injured or become ill during their work in the epidemic prevention and control, and conform to the conditions listed in the Regulations on Work-Related Injury Insurance shall be determined to have suffered from a work-related injury. For those who have purchased work-related injury insurance, the expenses for treatment of the injury will be paid according to the regulations. For those who have not, expenses shall be borne by the employing entity according to legal standards. The expenses incurred by the department in charge of giving financial subsidies shall be subsidized by the finance authority at the same level.

Third, we will solve the problem of insufficient protective gear. The grant money for community prevention and control work should be properly used in accordance with the regulations to improve working conditions for urban and rural community workers on the frontline. These workers should be equipped with masks, hazmat suits, disinfectants, non-contact thermometers and other protective equipment.

Fourth, we will resolutely relieve the burden on community workers in terms of formalism and bureaucracy. The notice clearly requests that authorities at different levels should avoid assigning repetitive tasks or asking workers to fill out repetitive forms. Except for the CPC Central Committee and State Council's clear requests, in principle, other authorities are not allowed to assign extra tasks to the community. Except for two documents – the residence certificate and the certificate proving completion of the medical observation period – which are required for community epidemic prevention and control, urban and rural community organizations shall not be required to issue other documents on the grounds of epidemic prevention and control. We will eliminate formalities for formalities' sake and bureaucratism with public supervision. The reported "fake practice" of Kaiyuan Mansion in Cuiyuan Community, Qingshan District, Wuhan, severely damaged the image of the Party and government, and should be resolutely corrected.

Fifth, we will issue policies of praise and honor. The notice requires that we timely commend outstanding community workers who fight the epidemic on the frontline in accordance with the relevant regulations. Those who die in the line of duty will be posthumously named as "national outstanding community workers in urban and rural areas." We will work in accordance with the law to designate those who devote their lives to the containment of the epidemic as martyrs, commend their contributions and give special pensions and preferential treatment to their family members. Thank you.

China Society News:

We learned that after the outbreak, nursing homes in Wuhan generally faced a shortage of nursing staff. Most of the nursing staff members currently on the job have been working continuously for more than 40 days. The overwork and high pressure has left them physically and mentally exhausted. We saw in the notice regarding the improvement of civil service agencies' epidemic prevention and control work, that there was a requirement to increase staffing. How does the Ministry of Civil Affairs implement these requirements to solve this problem? Thank you.

Zhan Chengfu:

I will refer this question to Mr. Yu Jianliang, director of the Department of Elderly Care.

Yu Jianliang:

You may be familiar or unfamiliar with the work of elderly care workers. There are more than 2 million elderly people living in around 40,000 nursing homes across country. However, there are only 370,000 workers, among which only 200,000 are caregivers. Consequentially, their workload is large and the amount of services they must provide is also very large. A nurse has to work around the clock. On average, and a nurse needs to serve around 10 elderly people, many of whom are disabled and suffer from dementia. Therefore, from the perspective of daily life care, a nurse has to take care of meal preparation and personal care, which is a tiring and stressful job. At the same time, we also find that their salaries are not high enough. In fact, before the outbreak, there was already a shortage of nursing care staff across the country.

After the outbreak, some nurses who were on vacation for Spring Festival couldn't return to their posts, which resulted in even fewer nurses. Another reason is that after some nursing homes were quarantined, nurses were required to live in their nursing homes. These nurses have basically been on the job from then on, which has caused an even greater workload than before the epidemic. The situation in Wuhan is even worse. There are currently more than 20,000 elderly people in Wuhan's elderly care institutions, but there are just over 3,000 nursing staff. Coupled with the chance of the nursing staff becoming infected or quarantined, the existing manpower is even more inadequate. There is a serious scarcity of care providers in Wuhan.

After the elderly care institutions were put into lockdown, nurses throughout the country, especially those in Wuhan, have selflessly worked day and night and been highly dedicated. We are very touched by their current status and work ethic, and we salute them for their hard work during this time. In response to the human resource shortages, the Ministry of Civil Affairs has taken the following measures to alleviate the shortage of nurses at nursing homes across the country, especially for Wuhan. 

First, for Wuhan, the Ministry of Civil Affairs has organized and coordinated cross-regional nurse aid. The Ministry of Civil Affairs coordinated and organized 118 staff from three other provinces to come to Wuhan. As for inter-provincial support, Hubei province also organized for 50 nurses from another 4 cities and prefectures to come and support Wuhan. We now have a total of 168 extra nursing staff who have come to our aid. Despite the severity of the epidemic in Wuhan, they quickly came here to work regardless of their own safety and security. We were very moved by their spirit of providing aid without considering the conditions and remuneration.

Second, to solve the most fundamental problems of elderly care, we still have to rely on the strength of the nursing home itself. Nurses who are at home should be encouraged to return to work in a timely manner after they have completed self-quarantine. Nursing homes should start recruiting, training and employing new nurses through various means and channels. Since the epidemic situation in Wuhan is still serious, the Ministry of Civil Affairs has formulated policies and give category-specific and class-specific guidance on how to resume work and accomplish epidemic prevention and control. For counties with a relatively mild epidemic situation, especially those with no confirmed cases, we require that under the unified leadership of the local government and the epidemic prevention and control mechanism, and on the premise of ensuring that prevention and control measures are in place, the original nurses and newly recruited personnel should go to work after being tested and meeting the standards. For medium-risk and high-risk areas, a 14-day quarantine should be implemented in accordance with the relevant epidemic prevention and control standards. If the nurses are confirmed to have no infection or symptoms after their quarantine, they can go to work. This will relieve the shortage of nurses. Thank you.

Thecover.cn: 

We know the epidemic has affected people's daily lives and disadvantaged groups in particular are facing more difficulties. What has the ministry done in providing the basic life support to the latter? Thank you.

Zhan Chengfu:

Mr. Liu will answer this question.

Liu Xitang:

Thanks for the care you are showing for disadvantaged groups. As you mentioned just now, everyone has been affected by the epidemic and the disadvantaged groups are facing even more difficulties. We learn that the living costs of the people in difficulties have increased since the epidemic outbreak and protective items have been in short supply. Also, some extremely poor people living at home need special care. On Jan. 29, the Ministry of Civil Affairs issued a notice to make arrangements for poor people to receive special basic life support. A series of measures have been introduced, such as simplifying the relief process, relaxing restrictions on applications for temporary assistance based on hukou (permanent residence) when people in dire need are staying in other locations, and implementing the policy of caring for the people who live at home in extreme poverty. Local governments have been doing a good job in this aspect and have achieved some significant results. 

Recently, with the further development of the epidemic, the situation has changed for people in difficulties in terms of their number and the level of hardship. For example, those migrant workers and flexible-hours employees, who can't go out to work right now, have seen their income reduced, making life more troubled. Also, tight traffic controls have led to the stranding of many members of the floating population. People who can't take care of themselves are left alone when their domestic helpers are isolated. The Central Leading Group for COVID-19 Prevention and Control has issued documents to make arrangements to solve these problems. Five measures have been undertaken:

First, the central authorities have demanded all-out efforts to ensure subsidies are paid in full. By the end of 2019, there were 43.17 million urban and rural recipients of subsistence allowances and 4.69 million in extreme poverty nationwide. Interim relief was carried out to help a total of 9.18 million people last year. We'll make sure the relief funds are paid out on time to these people. Other subsidies, like subsistence allowances for orphans and two subsidies for the disabled also need to be paid in a timely way. For some regions severely affected by the epidemic, the living allowance will be increased. For example, Hubei province has increased the relief fund since Feb. 20 with urban low-income people receiving 500 yuan a month and their rural counterparts 300 yuan a month. Measures have also been taken in other provinces.

Second, we must ensure that all those entitled to social security are covered. Some people living in difficulty, such as those who live above the poverty line, are unable to either go to work or to get flexible jobs during the epidemic. As a result, they may see their income fall below the minimum living standard and thus qualify to receive a subsistence allowance. If that happens, we must ensure that they are all covered by subsistence allowance welfare in a timely manner. Meanwhile, we should suspend the work of removing people from the list of those eligible for subsistence allowances in regions severely affected by the epidemic. During this period, our priority is ensuring the stability of the subsistence allowance recipients. We should help strengthen their ability to withstand financial risks, and postpone conducting dynamic management towards them until the outbreak is over.

Third, we must step up efforts to carry out temporary assistance to those in need. Recipients of subsistence allowances, as well as people in extreme poverty, low-income households and registered poor households, who are confirmed to be infected with COVID-19, must be given temporary assistance in a timely manner in accordance with the regulations. On some occasions, more assistance will be provided when deemed necessary. Also, temporary assistance should be given to poor families whose breadwinners are quarantined for treatment. Apart from the support to be provided to the individuals and families previously mentioned, we should also strengthen temporary assistance to families with members that have died because of COVID-19.

Fourth, we should provide social assistance to non-natives who are stranded because of the epidemic. We will take two main approaches. First, is to assist with physical goods. We will provide temporary accommodation, food and warm clothing to those in need. Second, is to offer cash assistance to those facing temporary financial difficulties who can neither find job due to the outbreak nor get any family support. As we all know, relevant channels have already been opened in Wuhan for people in need to access cash assistance of 300 yuan daily. 

Fifth, we should provide basic care services to those in need. Currently, the central authorities have demanded institutions and personnel in charge of quarantine or treatment to collect information on the elderly, people with disabilities and minors who are left at home without care while their guardians are quarantined or receiving treatment for COVID-19. Such information should be reported immediately to the relevant communities or local civil authorities, and special personnel should be assigned to look after them in a timely manner. In the meantime, the central authorities have demanded the civil authorities and community workers keep regular contact, pay more visits and offer timely assistance to elderly people with no family, abandoned orphans, left-behind children and elderly, as well as other disadvantaged people including the severely ill or disabled who are in isolation at home because of the epidemic. Thank you.

Yicai:

Charitable donations attracted much attention during the epidemic. We found that certain problems involving this subject, such as difficulty in making a donation and the allocation of donated materials, became a matter of concern for the general public. I would like to know the Ministry of Civil Affairs' opinion on these problems. Are there solutions to make the relevant working mechanisms better meet people's needs? Thank you.

Zhan Chengfu:

I want to say four things about this issue. First, in this epidemic, the broad masses of the people have shown great enthusiasm and support for charity. As of 24:00, March 8, the charitable organizations at all levels and the Red Cross Society of China (RCSC) branches had received donations of 29.29 billion yuan, and about 522 million items of anti-epidemic materials. So far, a total of about 23.98 billion yuan and about 466 million items of donated materials have been distributed. This shows the charitable enthusiasm of the people.

Second, charitable organizations link donators with recipients.. Since the outbreak, all sorts of charitable organizations at all levels have undertaken a great amount of work to pool the strengths of society, and joined the efforts of the Party and government authorities to create a powerful joint force for combating the epidemic. 

Third, we can see that the operation capabilities of charitable organizations in response to the epidemic still need improving, especially when it comes to the issues which attracted public attention a short time ago, such as slow allocation of donated funds, imprecise allocation of donated materials, and slow, incomplete and opaque information disclosures. There are laws regulating relevant issues. However, there is still some way to go before charitable organizations consciously and fully abide by them.

Fourth, it has been shown in the epidemic prevention and control work that the government's ability to regulate charitable organizations needs further improvement. After certain problems emerged, the Ministry of Civil Affairs, as the regulator of charitable organizations, responded in a timely way. We dispatched working groups, drafted relevant documents, issued notices to charitable organizations, including the RCSC, accepted public supervision, and quickly achieved improvements in the relevant work procedures, thus turning around the situation caused by the previous problems. 

We will draw lessons from our response to the epidemic in order to improve our governance capacity for charity work in handling major public health events and serious catastrophic events. This is a big task and together we will find the solution. Thank you. 

Hu Kaihong:

We have limited time, so we can only accept two more questions. 

China Daily:

A considerable number of urban and rural community-level workers, committed and dedicated to prevention and control work in regard to COVID-19, played an effective role in containing the epidemic nationwide. Therefore, what targeted measures will be adopted to show our concern for those people? Thank you.

Chen Yueliang:

Thank you for your concern about this particular issue. "The notice on complete implementation regarding the concern and care for the community-level workers involved in the anti-epidemic frontline in both urban and rural areas" issued recently clarifies the central authorities' support and addresses concerns relating to these workers. In the next phase, the Ministry of Civil Affairs (MCA) will be accountable for playing its part in fully implementing the Notice.

First, it is important to develop stronger duty-bound awareness. The MCA has issued a notice which stipulates the responsibilities of local corresponding authorities involved in community governance and in organizing teams to provide community-level services in both urban and rural areas. While setting out specific measures in implementing the Notice, localities are required to draw up standardized work subsidies allocated in a precise way to the workers engaged in preventing and controlling the epidemic from spreading in various communities. 

Second, there is a need to enhance publicity. We will use multiple publicity approaches, such as, media reports, press releases and social media platforms to promulgate both the significance and specifications of the Notice and share successful experience and measures in implementing the Notice among localities nationwide. We will create a strong publicity atmosphere to help implement the measures that provide support and care for community-level workers.

Third, it is necessary to launch special programs. We will step up our efforts to coordinate with the various authorities concerned to reward outstanding community-level workers involved in the epidemic prevention and control from both urban and rural areas. And we will also initiate a program to elect the best-performing community-level workers with their contribution being reckoned as models of virtue across the country.

Fourth, continuity in implementing the Notice is equally important. We will join hands with other departments to study various policies targeted at community-level personnel, guide localities to gradually refine the professional system, rankings and remunerations for those people and continue to improve the mechanism focusing on fostering, evaluating, promoting, utilizing and rewarding the people involved. In doing so, the workers at community level can continue to improve their working competence.

Fifth, it is very important to show love and care to community-level workers through philanthropic programs. The MCA will cooperate with a number of philanthropic foundations, such as, Tencent Foundation, to launch the program "Join hands in the fight against the epidemic—actions to ensure love and care to volunteers, community workers, social workers and staff from elderly nursing homes in Hubei province."

Sixth, we have a responsibility to strengthen psychological consultations. The MCA has coordinated with social workers and the organizations involved in providing psychological consultation to community-level workers. The mental health services are also designated to alleviate the pressure of those workers when the epidemic ends. Alternative working schedules and compensatory time off will be adopted for community-level workers involved in epidemic prevention and control to have enough rest.

CRNTT:

What difficulties have nursing homes faced when dealing with the prevention and control of the epidemic? What measures has the Ministry of Civil Affairs taken to help solve these difficulties? How will you effectively help the nursing homes to follow government guidelines on further improving the epidemic containment work at civil affairs service institutions? Thank you. 

Yu Jianliang: 

I will answer your questions. Nursing homes are enclosed and relatively independent facilities where people live in a communal setting, usually with two or more people sharing the same room. There is also frequent contact between the elderly and the nursing staff. As some of them are disabled or suffer from dementia, so care services are required 24 hours per day. It is difficult to avoid body contact in providing such service. And nursing staff serve many elderly people during their shift.

The old people at nursing homes are usually older and weak, with many of them having underlying chronic diseases. This factor makes some of them more susceptible to infections, and once they are infected, they face higher risks of cross infection and complications. Therefore, the task of avoiding outbreaks at nursing homes is pivotal, requiring special protection and efforts. These factors posed particular difficulties in fighting against the epidemic in the earlier stages at these facilities. 

Regarding these problems, the Ministry of Civil Affairs has taken a series of measures. First, we started closed-door management as soon as we could. Since as early as Jan. 23, we have issued notices requiring nursing homes across the country to implement strict closed-door management. Second, we promptly released a guide for epidemic prevention and control for nursing homes. It sets out specific operational standards for organizational leadership, access management, internal control, protection of the elderly, psychological comfort, and epidemic disposal and disinfection. Depending on the development of the epidemic, we have made timely revisions and updates to the guide -- the first and second editions of which have been released successively. Meanwhile, we released stricter requirements in accordance with the epidemic development situation in Wuhan city and published a guide for epidemic prevention and control, especially for high-risk areas and nursing institutions with the epidemic, on Feb. 25 to provide stricter and more accurate work guidance. Third, we made the overall supervision of nursing institutions in the country. We used the information system to monitor epidemic prevention and control. The Ministry of Civil Affairs has dispatched a working team led by Vice Minister Gao Xiaobing to Wuhan city to provide on-the-spot work guidance to civil service organizations, including nursing institutions. The ministry has held a video conference to offer guidance on epidemic prevention and control work in civil service institutions for the elderly and children. The meeting was attended by the principals of each nursing home via online video, making specific guidance and work requests for nursing homes in epidemic prevention and control. Hence, as far as these measures are concerned, those who strictly follow the guide created by the Ministry of Civil Affairs have achieved zero infection, while those with infections must have loopholes in the implementation.

Just now, the journalist mentioned the notice released by the State Council on further improving epidemic prevention and control work for civil affairs institutions. The notice is of great importance and came in time. Most of all, it included the epidemic prevention and control work into local joint prevention and control mechanism and offered measures to enhance the leading role of nursing homes in epidemic prevention and control. As required in the notice, all local governments must implement it. Besides, it has been fully strengthened to troubleshoot, quarantine, treat patients, make personnel deployment, and especially manage material supply. The notice has played a significant role in epidemic prevention and control of nursing homes in the country. 

Next, we will make efforts in the following aspects as required in the notice. First, we will take precise prevention and control depending on regions and levels and resume services in an orderly manner. As I mentioned, the newly recruited staff and target people will be admitted to nursing institutions based on the outbreak situation in different regions. Second, we will try our best to screen and care for the elderly living outside the institution with special difficulties. We cannot just take care of those inside nursing institutions. We also need to offer services to the left-behind elderly people isolated at home due to the epidemic. That's my answer. Thank you.

Hu Kaihong:

The press conference is hereby concluded. Thanks to the four speakers, and thank you all.