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Regular Press Conference of MOFCOM (January 21, 2021)

Gao Feng: Friends of the press,good afternoon. Welcome to MOFCOM’s regular press conference. First of all, I have two announcements to make.

Gao Feng: First, on China’s outbound investment cooperation,

In 2020, China's outbound investment cooperation maintained steady and healthy development with overall growth. According to the Ministry of Commerce and the State Administration of Foreign Exchange, China's outward direct investment for the year was US$132.94 billion (RMB916.97 billion), up 3.3% year-on-year, of which outward non-financial direct investment was US$110.15 billion (RMB759.77 billion), down 0.4% year-on-year. Foreign contracted projects remained stable, with new contracts amounting to US$255.54 billion (RMB176.261 billion), down 1.8% year-on-year. Completed turnover stood at US$155.94 billion (RMB1,075.61 billion), down 9.8% year-on-year. Foreign labor cooperation dispatched 301,000 laborers of all kinds, with 623,000 people working overseas by the end of December. The main features are as follows.

First, investment cooperation in countries along the Belt and Road advanced steadily. In 2020, non-financial direct investment by Chinese enterprises in the 58 Belt and Road countries amounted to US$17.79 billion, an increase of 18.3% year-on-year, accounting for a total of 16.2% over the same period and an increase of 2.6 percentage points over the previous year. In countries along the Belt and Road, newly signed contractual construction contracts amounted to US$141.46 billion, with completed turnover of US$91.12 billion, respectively accounting for 55.4% and 58.4% of the total amounts over the same period.

Second, investment flows into leasing and business services, wholesale and retail, scientific research and professional and technical services, and electricity production and supply grew faster. In 2020, the investment flow into leasing and business services was US$41.79 billion, up 17.5% year-on-year; into wholesale and retail trade was US$16.07 billion, up 27.8% year-on-year; into electricity production and supply, scientific research and technical services increased by 10.3% and 18.1% respectively.

Third, local outward investment was active. In 2020, local enterprises’ outward non-financial direct investment totaled US$80.75 billion, an increase of 16.4% year-on-year, accounting for 73.3% of the total outward direct investment in the same period. Of that, outward investment from the eastern region grew 21.8% year-on-year with Guangdong, Shanghai and Zhejiang ranking the top three.

Fourth, 80% of the newly signed overseas contractual engineering projects were concentrated in infrastructure. In 2020, Chinese enterprises undertook more than 5,500 overseas infrastructure projects, with a cumulative amount in new contracts signed of more than US$200 billion, accounting for 80% of the total contractual value. Of that, the newly signed contractual value of general construction and water conservancy construction projects grew faster, up 37.9% and 17.9% respectively.


Second, about China’s services outsourcing in 2020

In 2020, with the rapid and healthy development of China's services outsourcing industry, the brand influence of “Chinese services" continued to grow internationally. In particular, the completed turnover of offshore services outsourcing exceeded US$100 billion for the first time, driving service exports up by 3.8 percentage points and successfully delivering on the target of the 13th Five-Year Plan. The main features are as follows.

In terms of scale, in 2020, Chinese enterprises undertook services outsourcing contracts worth RMB1702.27 billion (the same currency below), with completed turnover of RMB1,211.32 billion, an increase of 8.4% and 13.3% respectively. Among those, offshore services outsourcing contracts amounted to RMB973.89 billion, with completed turnover of RMB730.2 billion, an increase of 5.8% and 11.4% respectively (In U.S. dollars, in 2020, services outsourcing contracts amounted to US$246.23 billion, with completed turnover of US$175.35 billion, an increase of 4.5% and 10.9% respectively. Of that, offshore services outsourcing contracts amounted to US$140.41 billion, with completed turnover of US$105.78 billion, up 1.1% and 9.2% respectively), meeting the development target of over US$100 billion in the 13th Five-Year Plan.

Structure-wise, information technology outsourcing (ITO) and knowledge process outsourcing (KPO) maintained faster growth, with offshore completed turnover of RMB320.41 billion and RMB292.14 billion, an increase of 10.7% and 17.9% respectively; business process outsourcing (BPO) reported offshore completed turnover of RMB117.65 billion, down 0.6% year-on-year. The offshore completed turnover of IC and electronic circuit design business with a high degree of digitalization was RMB49.09 billion, up 41% year-on-year. The offshore completed turnover of knowledge-intensive pharmaceutical and biotechnology R&D business was RMB48.81 billion, up 25% year-on-year.

In terms of markets, in 2020, Chinese companies executed offshore services from the US, Hong Kong SAR, the EU worth RMB 155.06 billion, RMB 119.83 billion and RMB 117.68 billion, up by 17%, 5.7% and 5.8% respectively. These top three markets combined accounted for 53.8% of China’s total executed value of offshore services. Chinese companies executed offshore services from Belt and Road countries worth RMB 136.06 billion, up by 8.9%.

In terms of regions, in 2020, the value of offshore outsourced services provided in the Yangtze River Delta Region grew by 13.3% year-on-year to RMB 367.86 billion, accounting for 50.4% of the national total. The value of offshore outsourced activities in the Beijing-Tianjin-Hebei region grew by 8.6% year-on-year to RMB 69.77 billion. The executed value of offshore services in the Greater Bay Area stood at RMB 83.88 billion, a year-on-year increase of 1.8%. The 31 demonstration cities of services outsourcing performed offshore outsourced activities worth RMB 603.95 billion, up 8.3% year-on-year and accounting for 82.7% of the national total. It’s noteworthy that driven by the development of the free trade port, Hainan executed offshore outsourced services worth RMB 200 million in 2020, up by 751.7%.

In terms of entities, in 2020, the value of offshore outsourced services provided by private businesses rose by 20.9% year-on-year to RMB 182.56 billion, 9.5 percentage points higher than the national average growth rate. The foreign-invested enterprises executed offshore outsourced services worth RMB 318.75 billion, up by 4.2% and accounting for 43.7% of the national total.

In terms of job creation, as of the end of 2020, China’s services outsourcing sector created a total of 12.909 million jobs cumulatively. 8.193 million (63.5%) of these new workers have at least obtained a bachelor’s degree. In 2020, China’s services outsourcing sector created 1.19 million jobs. 692,000 (58.2%) of these new workers have at least obtained a bachelor’s degree.

Gao Feng: Now the floor is open for questions.

21st Century Business Herald: Quite a few people are expected to spend the Spring Festival holiday at the places where they work this year. What measures are to be taken by MOFCOM to support these people and ensure sufficient goods supply during the holiday?

Gao Feng: To ensure sufficient goods supply during the Spring Festival holiday while maintaining COVID-19 containment routines, MOFCOM, in conjunction with commercial departments at local levels, will take vigorous measures to boost supply during the holiday.

First, expanding supply sources. We will strengthen the engagement between major vegetable sellers and vegetable producers to ensure stability of the vegetable market. We will guide companies engaged in the commercial circulation industry to supply the market with marketable products according to the diverse needs of different consumer groups, and improve the quality of services and goods. We will encourage supermarket chains, wholesale markets of agricultural products to beef up inventories, keep their supply channels unclogged, increase the market supply of aquatic products, beef, lamb, chicken and other products, so as to offer more choices to people’s Chinese New Year recipes.

Second, channeling merchandise reserves to the market. Since last December, to ensure sufficient market supply during the New Year and the Spring Festival, MOFCOM and relevant departments have released over 65000 tons of central pork reserves and over 2200 tons of beef and lamb, in order to add to meat supplies and stabilize market expectations. In light of the market supply, we will further tap the central reserves and guide local commercial departments to release vegetable and meat reserves to the market when needed, so as to maintain market stability during the holiday.

Third, enhancing services for the convenience of the public. We will organize the “2021 Chinese New Year Online Shopping Festival”, encourage online New Year purchases, guide e-commerce companies to offer around-the-clock services during the holiday, and launch more customized, smart, eco-friendly and quality products and services for the public. We will guide relevant companies to deliver food and drinks for Chinese New Year dinner, birthday and wedding banquets to meet people’s consumption needs during the holiday.

Fourth, stepping up market monitoring. We will keep a close eye on the market, in particular, keep updated on the key regions and initiate the daily reporting and monitoring mechanism in due time. We will instruct competent departments of commerce at local levels to reach out to wholesale markets, supermarkets and wet markets, and ramp up market monitoring and early warning for daily necessities. We will step up macro control based on the market conditions (supply, demand and prices) and ensure stable market supply during the holiday.


Phoenix TV: On January 19th, Swedish telecoms regulator PTS completed 5G spectrum auction with conditions attached, banning telecom operators from employing Huawei or ZTE equipment in their 5G network construction. What’s your comment on that?

Gao Feng: We noted that Sweden has excluded Chinese companies from its 5G network construction on the grounds of national security, a claim that is completely groundless. This is a breach of fundamental WTO rules and common international norms. China is strongly opposed to any practice that will harm the legitimate interests of Chinese companies.

China urges Sweden to immediately correct the wrong practice, and work with China to find a solution, bearing in mind the greater interests in bilateral trade and economic cooperation. China will take any necessary measures to safeguard the legitimate interest of Chinese businesses. Thank you.


CNBC: What is the impact of the sporadic COVID-19 cases that have emerged recently on food price and the consumer market?

Gao Feng: The run-up to the Spring Festival is traditionally the peak shopping season in China. The recent cold spell, plus the recurrence of sporadic COVID-19 cases, have pushed up the cost for producing and distributing agricultural products. The price of meat, egg, and vegetables all increased to varying degrees last December. In the meantime, consumers are encouraged not to gather in crowds and avoid close contact with people when they go shopping. In response, many places and risky regions have made greater efforts in sourcing and marketing, and ensuring smooth transport channel for agricultural products. As a result, the price rise of daily necessities have slowed down recently. On January 20th, MOFCOM monitoring data of a hundred large agricultural wholesale markets suggest that the food and cooking oil price remained stable. Food price edged up by 0.1% from the day before, while the price of cooking oil remained the same; meat prices witnessed ups and downs: mutton price grew by 0.2%, beef price fell by 0.1%, while pork price remained flat; egg price rose by 0.1% from the day before, a much smaller margin compared with January 19th. Thank you.


Yicai: In 2020, China signed RCEP and concluded negotiations of the Investment Agreement with EU. Are there any plans to expand free trade agreement in the future?

Gao Feng: To connect domestic and international markets and resources and foster a new development paradigm at a faster pace, we need to expand free trade agreements both in number and in quality

On the one hand, we will further expand the free trade network. We are interested in negotiating and signing more free trade agreements with our trading partners to jointly promote trade and investment liberalization and facilitation. For example, we will accelerate the negotiations of China-Japan-ROK FTA, and push forward FTA process with the GCC, Israel, and Norway. We will also favorably consider joining the CPTPP.

On the other hand, we will bring FTAs to a higher level. We will explore free trade rules that are both internationally acceptable and fitting for our own reform and development agenda. We will open up further at a higher level. For example, in terms of trade in goods, we will grant zero-tariff to a larger percentage of goods; in terms of service and investment, we will further ease market access for service trade and investment; we will also take an active part in the negotiations of new topics such as digital economy and environmental protection.

In addition, we will do a better job at promoting, publicizing and providing training on the FTAs we have signed up to, so as to help the business community better understand and make good use of the FTAs and benefit people around the world. Thank you.


CCTV: How is the work on the negative list of cross-border trade in services in the Hainan Free Trade Port going on now? When is it planned to be launched?

Gao Feng: At present, MOFCOM is working with Hainan Province and relevant ministries to actively advance the work. The negative list of cross-border services trade in the Hainan Free Trade Port will be the first of its kind in China, which will further expand market access in the sector of trade in services, boost the opening up of the Hainan Free Trade Port with higher quality, and explore the path and accumulate experience regarding the establishment of a sound negative list-based management system for cross-border trade in services. We all look forward to it. Thank you!


Gao Feng: This is the end of today’s press conference. Thank you all.

(All information published on this website is authentic in Chinese. English is provided for reference only.)