SCIO briefing on China's foreign trade and economic cooperation

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Speakers:
Qian Keming, vice minister of Commerce;
Long Guoqiang, vice minister of Development Research Center of the State Council

Chairperson:
Xi Yanchun, vice director-general of the Press Bureau, State Council Information Office

Date:

July 31, 2017

Xi Yanchun:

Thanks to Mr. Long for his introduction. Now we'll open the floor to your questions. We kindly remind you to identify your media organizations before raising questions.

CCTV:

We have noted that there are waves of skepticism from the outside world questioning the business and investment environment in China, with some alleging the investment environment has started to deteriorate. Therefore, would you please discuss the actual environment and how you see the course of foreign investment in the country during the second half of this year?

Qian Keming:

Generally speaking, the scale of China's utilized foreign investment is stable and the structure improved, with 11 percent and 20 percent respectively of foreign capital invested in high-tech manufacturing and high-end service industries.

Let's first take a look at the macro environment. At both this year's World Economic Forum (Davos) and the Belt and Road Forum for International Cooperation, President Xi Jinping announced China's positive role in globalization and its firm standpoint and commitment to continuing to remain open to the world. The Chinese government spares no efforts to open wider to outside world. At the start of this year, the State Council issued a circular, entitled "Promote Further Opening-up Policies and Actively Use Foreign Investment". The circular consisted of 20 inspirational policies, such as, granting foreign investors greater access to the service, manufacturing and mining industries and ensuring equality between domestic and foreign investors, in their involvement in China's strategic policies and measures, such as, the nationwide campaign of "Made in China 2025," so that fairer competitions can be assured.

In April, we launched seven new pilot Free Trade Zones (FTZs) in several places, including, the one in Liaoning Province, and all are now operating. The FTZs are shaping a landscape stretching from east to west for all-round innovation-driven development. On June 6, the State Council issued a new negative list with 27 restrictive policies removed for facilitating foreign investors to start or expand businesses in the FTZs. On June 28, the Ministry of Commerce and the National Development and Reform Commission, issued an updated "Catalogue of Industries for Guiding Foreign Investment", reducing restrictive measures from 93 to 63. Those removed indicate the direction in which the country is heading to stimulate foreign-investment to flow towards high-end, smart and green production.

The foreign investment environment is improving. China has always viewed both domestic and foreign enterprises equally and exerted great efforts in upgrading the environment for foreign investment. Featuring streamlining the administration procedures and optimizing regulations and services, China's foreign investment reform is steadily advancing which has substantially facilitated foreign investment.

The international reports mentioned by Mr. Long, including the ones by some foreign chambers of commerce in China, all noted that the foreign investment environment in the country is improving. According to the World Bank's Doing Business 2017 report, China has achieved much progress in improving its investment environment by leaping 18 rankings in three years, annually six rankings forward. China has also made remarkable accomplishments in economic performance, government efficiency, and business efficiency, said the 2017 World Competitiveness Yearbook by the International Institute for Management Development.

Besides, we are also safeguarding foreign enterprises' intellectual property rights in accordance with the law and severely cracking down on infringements and counterfeits. In the first half of 2017, we organized two seminars which were attended by over 20 departments from the Chinese government and over 60 multinational companies and foreign commerce chambers in China. Opinions were polled and some were adopted by certain regulations we issued. On the whole, the foreign investment environment in China is getting better and better.

Foreign investors are more confident with the Chinese market. Just like what Mr. Long said, the foreign investors in China are best qualified to speak on the country's investment environment. As we have been informed, most foreign enterprises in China are operating smoothly and are optimistic about their future. On July 12, the American Chamber of Commerce in Shanghai issued its 2017 China Business Report. According to the report, 77% of its member companies were profitable in 2016, six percent up from 2015. About 73.5% reported revenue growth last year, recovering from the 61% recorded in 2015. It is obvious that more American companies are making profits in China.

The Business Confidence Survey 2017, published by the European Chamber of Commerce in China, also shows the percentage of European companies considering expanding their China operations increased from 47 percent in 2016 to 51 percent in 2017. According to a survey undertaken by the United Nations Conference on Trade and Development (UNCTAD), China is still one of the world's most attractive destinations for foreign investment.

At the 16th meeting of the Central Leading Group for Financial and Economic Affairs, General Secretary Xi Jinping delivered an important address on improving China's investment and market environment and accelerating opening to the outside world. He stressed that the "negative list" approach on foreign investment management, adopted in the country's pilot free trade zones, should be expanded to the entire nation as soon as possible, and new fundamental laws on foreign investment should put in place as soon as possible, helping to further improve the environment for foreign investment. The State Council executive meeting on July 28 set goals of attracting more foreign investment and creating a more enabling environment in opening up. Specific measures were introduced at the meeting to reduce restrictions on foreign investment access, provide more preferential financial and tax policies, improve the investment environment of national development zones, facilitate the trans-national flow of professionals and optimize the business environment. With all these positive signals to foreign investors, we are convinced China will witness sound and sustained growth in foreign investment in the second half of this year.

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