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Gao Feng: Good afternoon. Welcome to MOFCOM’s regular press conference. First of all, let me make an announcement on China’s trade in services in 2020.
In 2020, as a result of the pandemic and other factors, the total imports and exports of services in China stood at RMB4,564.27 billion (RMB, the same below), down 15.7% year-on-year. Under the strong leadership of the Party Central Committee and the State Council and the joint efforts of all parties, the growth rate of service imports and exports narrowed quarter by quarter and stabilized, with service exports significantly better than imports, decreased trade deficit, and the proportion of knowledge-intensive services trade increased. The main features are as follows.
First, December reported the highest growth rate of service exports in the year. In December, China's service exports reached RMB231.62 billion, an increase of 6.9%, the highest monthly growth for exports in 2020. Among them, intellectual property exports were RMB7.94 billion, up 76.6% year-on-year; personal cultural and entertainment service exports were RMB1.35 billion, up 46.5%; transportation exports were RMB50.97 billion, up 56.9% year-on-year.
Second, the services trade deficit decreased significantly. In 2020, China's service exports totaled RMB1,935.67 billion, down 1.1%; imports were RMB2628.6 billion, down 24%. Service exports fell less than imports by 22.9 percentage points, driving the services trade deficit down by 53.9% to RMB 692.93 billion, a decrease of RMB 809.56 billion.
Third, the proportion of knowledge-intensive services trade increased. In 2020, China's knowledge-intensive service imports and exports totaled RMB2,033.12 billion, an increase of 8.3%, accounting for 44.5% of the total imports and exports of services, an increase of 9.9 percentage points. Among them, knowledge-intensive service exports reached RMB 1070.14 billion, an increase of 7.9%, accounting for 55.3% of the total exports of services, an increase of 4.6 percentage points; export growth is faster in intellectual property royalties, telecommunications computer and information services, insurance services, up respectively by 30.5%, 12.8% and 12.5%. Knowledge-intensive service imports stood at RMB962.98 billion, an increase of 8.7% year-on-year, accounting for 36.6% of total service imports, an increase of 11 percentage points; import-wise, fast-growing areas include financial services, telecommunications computer and information services, up 28.5% and 22.5% respectively.
Fourth, the imports and exports of travel services declined sharply. Given the severe global COVID-19 situation, world-wide travel service imports and exports were greatly affected. In 2020, China's travel service imports and exports stood at RMB 1019.29 billion, down 48.3%, of which exports fell 52.1% and imports fell 47.7%, which is the main contributor to the decline in trade in services. Excluding travel services, China's service imports and exports in 2020 grew by 2.9%, of which exports grew by 6% and imports were basically flat.
So much for the information release. Next, I would like to take questions from the media.
The floor is open for questions.
Central Media Group: Could you update us on China-CEEC economic and trade cooperation?
Gao Feng: Since the establishment of the cooperation mechanism between China and the Central and Eastern European countries in 2012, the economic and trade cooperation between China and the Central and Eastern European countries has been continuously upgraded. Positive progress has been made in the areas of trade, investment, contractual engineering and connectivity, forming an all-round, multi-layered, broad, mutually beneficial and win-win cooperation situation, which is mainly reflected in the following aspects.
First, the mechanism of economic and trade cooperation keeps getting perfected. The China-CEEC Economic and Trade Forum has been held for 9 consecutive sessions; the China-CEEC Ministerial Meeting on Promoting Trade and Economic Cooperation has been held for 3 times; the China-CEEC Investment and Trade Fair was successfully held for 4 sessions in Ningbo and upgraded to the China-CEEC Fair and held successfully in June 2019.
Second, two-way trade exceeded US$100 billion for the first time. In 2020, the trade volume between China and 17 countries in Central and Eastern Europe reached US$103.45 billion, exceeding US$100 billion for the first time, with an increase of 8.4%, which was higher than the growth of China's foreign trade and China-EU trade in the same period. Since 2012, the trade between China and the 17 countries in Central and Eastern Europe has grown at an average annual rate of 8%, which is three times more than the growth of China's foreign trade and twice more than the growth of China's trade with the EU. Central and Eastern European countries have actively participated in the China International Import Expo, and their high-quality products have gained popularity in China.
Third, investment and cooperation have continued to expand. By the end of 2020, China’s direct investment in all industries of the 17 countries of Central and Eastern Europe has reached US$3.14 billion, involving energy, minerals, infrastructure, logistics, auto parts and other sectors. In the same period, the 17 countries in Central and Eastern Europe have invested US$1.72 billion in China.
Fourth, contracted projects were advanced in an orderly manner. In 2020, the total amount of new contracts on engineering projects signed between China and the 17 countries in Central and Eastern Europe reached US$5.41 billion, up 34.6% year-on-year. Major projects such as Hungary-Serbia Railway, Croatia's Pelješac Bridge, Serbia's E763 Expressway, and sections of Montenegro's North-South Expressway are progressing smoothly in general.
Fifth, connectivity has been improved. China Railway Express has developed rapidly, with 12,400 trains in 2020. Poland, Hungary, Czech Republic, Lithuania and Slovakia have become important routes and destinations for China Railway Express. China enjoys close logistic links with major ports in Central and Eastern European countries, and the China-Europe land-sea express line is taking shape faster.
Sixth, local cooperation is gradually deepening. Ningbo City, Zhejiang Province actively promotes the development of the 17+1 Economic and Trade Cooperation Demonstration Zone, and regards Central and Eastern European countries as a major area to expand opening up; Cangzhou City, Hebei Province established the China-Central and Eastern Europe SME Cooperation Zone to promote cooperation in aviation, agriculture and high-end manufacturing; Liaoning Province actively establishes the 17+1 Economic and Trade Cooperation Demonstration Zone in the Coastal Economic Zone.
In the next step, China is willing to work with Central and Eastern European countries to gather cooperation forces, enhance cooperation level, further release cooperation potential, and push 17+1 economic and trade cooperation to a new level. Thank you!
Xinhua news agency: What is the role of Silk Road e-commerce cooperation between China and some countries in promoting trade growth as the global economy is influenced by COVID-19? What is the next step?
Gao Feng: Facing the impact of COVID-19 on the global economy, e-commerce shows strong vitality and resilience, and plays an active role in ensuring supplies, promoting consumption and keeping trade smooth. At present, China has signed a MOU of cooperation on "Silk Road E-commerce" with 22 countries and established bilateral cooperation mechanisms, so as to cope with the challenge of COVID-19 together with partner countries, enrich cooperation contents, expand cooperation areas and enhance cooperation confidence.
First, jointly create cooperation highlights. Under the cooperation framework of "Silk Road E-commerce", we have strengthened policy exchanges with partner countries and promoted local matchmaking and business cooperation by holding working group meetings and government-business dialogues. For example, we support Italy, Russia, Chile and other countries in setting up national pavilions on large domestic e-commerce platforms to help their enterprises and products directly enter the Chinese market. During the second "Online shopping fair for quality and brand products", partner countries was one of the themes, thus the sales of featured high-quality products of Austria, New Zealand, Cambodia, Rwanda and other countries increased significantly. This not only provides more choices for domestic consumption, but also creates new opportunities for smooth trade.
Second, build capacity in new ways. We worked with partner countries to set up Silk Road E-commerce online seminars, where we invited experts to give virtual lectures to the government officials and e-commerce players in partner countries, covering policies and laws, development trend, innovative practices, and practical skills. In light of the specialty products of the partner countries, we also invited experts in e-commerce operation for agricultural products and streamline players to discuss ways to tap the Chinese and international markets. Since it was launched in Q4 last year, 27 sessions of Silk Road E-commerce Seminar have been held, and the online course has had over 100,000 viewers.
Third, step up COVID-19 response through e-commerce. We encouraged e-commerce firms to provide anti-virus supplies by leveraging their souring channels and logistics networks. We also provided policy guidance and kept updating the control measures of 192 countries and regions, so that businesses can resume operation and cross-border e-commerce business successfully.
Going forward, we will continue to deepen the Silk Road E-commerce cooperation and establish cooperation mechanism with more interested and well-equipped countries. WE will help partner countries to unlock the Chinese market and enrich domestic supply, and in the meantime encourage e-commerce firms to go abroad to grow their business and explore new ways of cooperation. This will help e-commerce to thrive in their host countries, elevate the e-commerce cooperation to new levels, and foster new drivers to trade and economic cooperation. Thank you.
CNBC: Since many people will stay in cities to spend the Spring Festival, what impact will it have on the market for daily necessities?
Gao Feng: As planned by the CPC Central Committee and the State Council to meet the needs for daily necessities during the Spring Festival, MOFCOM has held a national conference call to arrange for the festive supply and measures to promote consumption and benefit people. The regional governments are also working proactively to secure supplies of goods, smooth supply channels, and match producers with sellers.
Recently, market supply of daily necessities such as rice, powder, cooking oil, meat, egg and vegetables has increased, keeping the prices stable or driving down the prices of some goods. MOFCOM statistics collected from 36 large and mid-sized cities show that between January 25th and 31st, the market price of agricultural products fell by 0.5% week-by-week. In breakdown, wholesale price of powder narrowed by 0.5 percentage points; the price of egg and pork fell by 3.9% and 1.7%; the price of cooking oil, beef and chicken remained the same as the week before. The average wholesale price of 30 kinds of vegetables remained the same as the week before. The price of 17 kinds of vegetables, including cauliflower, spinach, and broccoli, fell by varying degrees. Thank you.
21st century economic daily: Recently the duty-free shops in Hainan has been very popular. According to the Action Plan for Building a High-standard Market System, China will develop policies to reshore overseas consumption, encourage major cities to open offshore duty-free shops, and increase the number of duty-free cities and outlets in Hainan. How do you view the popularity of the duty-free shops? What are the considerations for increasing tax refund and duty-free services?
Gao Feng: According to customs statistics, Hainan posted RMB27.48 billion of sales of off-shore duty-free products in 2020, up by 103.7%. 4.484 million person times have made purchases, up by 19.2%; 34.10 million pieces of products have been sold, up by 87.4%. The off-shore duty-free shopping is gaining greater traction, and plays an active part in reshoring overseas consumption.
Over the past month, five new offshore duty-free shops were opened in Hainan. There are now 9 offshore duty-free shops in Hainan in total, which can serve more tourists. The market entities are also more diverse with four newcomers, namely China National Service Corporation for Chinese Personnel Working Abroad, Shenzhen State-owned Duty-Free Commodity (Group) Co., Ltd., Hainan Provincial Tourism Investment Holding Group Co., Ltd., and Global Consumer Boutique (Hainan) Trading Co., Ltd., starting to operate in the province, alongside with China Duty Free Group and Hainan Duty-Free Co., Ltd. Together, they are forming a duty-free market featuring orderly competition in Hainan.
In the next step, MOFCOM will follow through with the requirements of the Action Plan by working with the Ministry of Finance and other authorities to improve administration of Hainan offshore duty-free shops and carry out reforms to streamline administration, delegate power, improve regulation, and upgrade services, thus enabling Hainan to play a bigger role in managing offshore duty-free stores, tap into the dividend of offshore duty-free business, and actively attract consumption back from abroad, so as to effectively support the development of Hainan Free Trade Port. Thank you.
Reuters: A recent report by German Chamber of Commerce in China said that China business was an important underpin for German businesses in China, and that expectations for the China-EU comprehensive investment agreement was high. What’s your comment?
Gao Feng: We have taken notice of the annual business confidence survey published by German Chamber of Commerce in China. According to the survey, 39 percent of German companies in China managed to increase their turnover and 42 percent their profits in 2020. The majority of German businesses in China are optimistic about 2021, with 77 percent of the respondents expecting their industry to perform better in China than in other markets, 72% expecting rising sales in China, and 56% expecting higher profits in 2021. 96% of the companies surveyed state that they have no plans to leave China, and 72% have planned further investments. The German companies surveyed see great business opportunities in China, especially with innovative technologies and digital solutions. This survey reflects the confidence of foreign-invested enterprises in the Chinese market and continued business presence here.
We also noticed the expectations of European corporates, including those from Germany, for the China-Europe comprehensive investment agreement. Both sides should work together for the early signing of the agreement to create a business environment that’s more open, fair, and predictable. Thank you.
Nikkei: It was highlighted at the Central Meeting on Economic Work in December that China would favorably consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Not long ago, the UK has formally applied to join it. When will China make its application? Is there a timetable?
Gao Feng: China is actively looking into the accession to the CPTPP; meanwhile, we are willing to enhance technical exchanges and communication with all CPTPP members.
In general, China will favorably consider joining the CPTPP to foster a new development paradigm and contribute to economic globalization and regional economic integration. Thank you.
National Business Daily: There has been media coverage of senior citizens facing difficulties ordering meals by scanning QR codes. What will MOFCOM do to help the elderly overcome difficulties in adopting smart technologies?
Gao Feng: The CPC Central Committee and the State Council place great importance on identifying possible obstacles faced by the elderly in using smart technologies. Under unified instructions, MOFCOM conducted in-depth research and is working with local commercial authorities to urge retailers, catering facilities, and shopping centers to retain face-to-face service and accept cash and card payment, while encouraging them to offer accessible and feasible smart services designed for senior customers.
In the next step, we will strengthen steering and guidance over local commercial authorities in inspecting convenience facilities and working with relevant departments to handle non-compliance in accordance with laws and regulations. In the meantime, we will optimize catering service standards, instruct relevant industries to enhance self-discipline, and ask life service businesses to raise awareness of serving senior customers and improve service processes, so that the elderly can enjoy considerate service in a cheerful, safe, and reassuring atmosphere. Thank you.
Gao Feng: This is the end of today’s press conference. In a few days, we will be celebrating the Chinese Spring Festival. In the unusual year of 2020, we have seen you, friends from the press, in all fields of the commercial work. It is your hard work that presented to the world an objective and vivid depiction of the all-out effort and progress of China’s commercial work. On behalf of the Information Office of MOFCOM, I would like to thank you for your support, help, company and commitment over the past year. I wish you all a happy Lunar New Year in advance and wish you all the best in the Year of the Ox.
Thank you.
(All information published on this website is authentic in Chinese. English is provided for reference only.)
