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CRI:

You have just mentioned that the China International Import Expo will be made into a landmark project implementing the new development philosophy and promoting a new round of opening up. How should we understand that? And what benefits and effects will there be in holding such an expo to carry out the new development philosophy and deepen the opening up? Thank you.

Fu Ziying:

China has entered a new era, wherein the Chinese economy has entered a new normal. Foreign trade is an important force to stimulate China's economic growth. We must seriously study and understand the new development philosophy put forward by General Secretary Xi Jinping to promote the development of foreign trade in the new era.

The expo is one of the most important contents of that, and a most important step in the innovative development of foreign trade in the new era. We have to follow the new development philosophy, and made the expo into an innovative, coordinated, green, open and sharing event. Just now, Mayor Zhou said Shanghai is also working hard on various security and logistics aspects for the expo in accordance with the demands of green development. This expo is a high-level, low-carbon and green event, reflecting the demands of cyclic development. The threshold for participating in this expo is relatively high, and some of the products to be exhibited, including some services, must certainly meet the demands of the green economy, the demand for innovation, and the need for openness and sharing. They must fully show the new development philosophy.

Nikkei:

U.S. President Donald Trump will visit China next week. He is concerned with the imbalanced trade between U.S. and China. China's Ministry of Commerce has expressed its willingness to expand the import of American products. What products do you think can be included in these expanded imports by China?

Fu Ziying:

Thank you for your question. You might know that the governments, business circles and scholars of both countries pay close attention to the trade imbalance, which is an old question, as well as a new issue. The reasons for imbalanced trade are various and complicated. Every year, China's Ministry of Commerce will publish a whitepaper on foreign trade, explaining the current situation and the reasons for the imbalanced trade between China and the U.S., and expressing hopes and suggestions for solving the situation.

I mentioned that the reasons for the imbalanced trade are complicated. Fundamentally, the situation is caused by the different economic structures of the U.S. and China, the different industrial distribution of the two countries, and the international division of labor. Besides, the imbalanced trade also derives from the two countries' statistical systems, which inevitable contain statistical errors and have different methods of calculating entrepot trade factors. And there is a very important reason -- the U.S. controls on high technology equipment sales. China has a market demand, but the U.S. is not willing to satisfy its needs.

China keeps a favorable balance in the trade of labor-intensive products, but in the trades of capital and technology-intensive products, agriculture products, and especially services, China has seen a trade deficit for a long time. This fully proves that both in U.S. and China, no matter whether in commodities or services sector, trade always follows the market rules, and the result is decided by the market, the importers and the customers.

We could do some analysis. According to the data my colleague gave, China was the biggest foreign export market for the U.S., and it's also one of the markets with the fastest growth. In the past 10 years, the growth of U.S. exports to China reached 11 percent every year, which exceeded the four percent average level of the total exports of the U.S. in the same period. In 2016, the U.S. exports to China have quintupled from the figure in 2001; however, in the same period, U.S. exports to other countries only increased 90 percent overall. China has become an important overseas market for many American products. For example, China is the biggest market for U.S. airplanes and soybeans. As to automobiles, integrated circuits and cotton, China is America's second biggest export market. The 62 percent of soybeans, 17 percent of automobiles, 14 percent of cotton and 25 percent of Boeing aircraft sold overseas by the U.S. came to China. I would like to ask you, if China is not an open market, how could these goods have been exported to China? And three decades ago, could American goods be exported to China?

So, Chinese President Xi Jinping has stressed that China did not pursue a trade surplus painstakingly. That's why we plan to hold the China International Import Expo. We will follow the new development philosophy and make adjustment to cope with China's new contradictions in the new era.

I had mentioned that Wilbur Ross, the U.S. Secretary of Commerce, will lead a delegation to China. I know you are keen to know what goods will be imported and how many of them will be imported, but I must observe professional ethics and tell you now. However, I can assure you that the result will be positive and balanced. Thank you.

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