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Read in Chinese 

Speakers:

Guo Tingting, head of the Comprehensive Department of the Ministry of Commerce (MOFCOM)

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

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

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

Chairperson:

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

Date:

July 22, 2021

Xing Huina:

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

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

Guo Tingting:

Thank you. Friends from the media, good afternoon. I'll start by briefly introducing the overall statistics. 

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

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

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

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

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

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

That's all for my introduction. Thank you.

Xing Huina:  

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

CCTV:  

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

Guo Tingting:  

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

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

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

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

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

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

Phoenix TV:

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

Zhu Xiaoliang:

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

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

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

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

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

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

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

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

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

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

The Paper.cn:

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

Li Xingqian:

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

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

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

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

Southern Metropolis Daily:

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

Li Xingqian:

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

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

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

Cover News:

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

Zong Changqing:

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

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

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

Third, major foreign-funded projects were increased. 

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

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

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

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

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

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

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

Bloomberg News:

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

Zhu Xiaoliang:

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

National Business Daily:

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

Li Xingqian:

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

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

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

The Poster News APP:

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

Zhu Xiaoliang:

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

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

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

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

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

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

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

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

International Business Daily:

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

Li Xingqian:

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

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

Xing Huina:

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

Translated and edited by Zhu Bochen, Wang Wei, Xu Xiaoxuan, Chen Xia, Zhang Liying, Zhang Rui, Cui Can, He Shan, Lin Liyao, Zhang Junmian, Zhang Tingting, Liu Qiang, Qin Qi, Li Huiru, Wang Yiming, Yuan Fang, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.