On February 24, the State Council Information Office of China held a press conference with regard to China’s plan for trade and economic development. Chinese Minister of Commerce (MOFCOM) Wang Wentao, Vice Minister of MOFCOM and Deputy China International Trade Representative Wang Shouwen, and Vice Minister of MOFCOM Qian Keming attended the conference and answered questions related to World Trade Organization (WTO) reform, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-China Comprehensive Agreement of Investment (CAI), China-US relations, China-Australia relations, e-commerce, and the Belt and Road Initiative (BRI).
With regard to WTO reform, Wang Shouwen reiterated China’s positions and highlighted the need to work on (1) the restoration of the Appellate Body, (2) agricultural subsidies, (3) public stocktaking, (4) trade in services, investment and e-commerce. He said that
WTO has encountered some difficulties, such as the challenges posed by unilateralism and trade protectionism, the paralysis of the Appellate Body, and tough WTO negotiations. It needs to change in such a situation and China supports necessary reforms. In this regard, Dr. Ngozi Okonjo-Iweala, was officially appointed as the new Director-General of the global trade body on Feb. 15. China will actively support Okonjo-Iweala, and hopes the WTO, under her leadership, will resume its normal functions as soon as possible. For example, we hope the 12th WTO Ministerial Conference could be successfully held this year and an agreement on fisheries subsidies could be reached.
With regard to WTO reform, China has released its position paper and submitted a proposal to the WTO Secretariat. In our view, the first thing on the agenda is to restore the normal operation of the Appellate Body. If it is functioning normally, we can effectively fight against unilateralism and trade protectionism. In addition, we believe the WTO needs to properly reform some excessive agricultural subsidies, especially in regard to some developed countries, where subsidies in agriculture can be huge. The issue of public food security and reserves is also an issue about which the developing countries are concerned, which we believe should be a priority for WTO reform.
In addition, as we all know, the WTO already has a history of 25 years. During this time , the world economy, international trade and cross-border investment have undergone huge changes. For example, we are trading much more in services than 25 years ago, and cross-border investment has also greatly expanded. E-commerce was still in its infancy at that time, but today it is thriving. We also hope that the WTO can keep pace with the times and consensus can be reached on domestic regulation in trade in services, investment facilitation and e-commerce.
Not long ago, the Davos Agenda was held by the World Economic Forum and President Xi Jinping delivered a special address in which he said that we should build an open world economy, uphold the multilateral trading regime; we should advance WTO reform and protect the interests and opportunities of developing countries. China is now at a new stage of development and accelerating the building of a new development paradigm. In this process, we will further open up to the outside world and are also willing to work with other WTO members to continue to support the strengthening of the WTO’s authority and effectiveness, while at the same time, as the world’s largest developing country, we are also willing to make more contributions and fulfil our obligations commensurate with our capabilities, based on the principle of balancing rights and duties.
When answering a question about joining the CPTPP, Wang Shouwen responded as follows:
On Nov. 20 of 2020 at the APEC Economic Leaders’ Meeting, President Xi said that China would favorably consider joining the CPTPP. In December last year, the Central Economic Work Conference proposed again that China would actively consider CPTPP membership. As you know, the CPTPP covers a wide range of content, and we are doing our work in two aspects. The first is that we are conducting assessments, research and deep analyses of all CPTPP clauses including those you mentioned. Second, we have made informal contacts with some of the 11 members of the CPTPP. We also plan to engage with the rest of the members as well to talk at the technical level on issues involved, so we can have a more accurate understanding regarding the content of relevant agreements.
Wang Wentao spoke highly of China-EU relations, which, he said, has “a solid foundation, close high-level exchanges, and fruitful economic and trade outcomes.” He touted the volume of bilateral trade, which is $649.5 billion for 2020, and bilateral investment, with $5.7 billion of EU investment in China, and $4.7 billion for Chinese investment in the EU. He then discussed the importance of the CAI:
The negotiations on the Comprehensive Agreement on Investment concluded last year as scheduled. This is a landmark in China-EU economic and trade relations. The investment agreement is a high-level, balanced, mutually beneficial and win-win agreement, and provides many investment opportunities for enterprises of both sides. Creating a better business environment will be beneficial not only to China and the EU, but also to the recovery and growth of the world economy. At present, we are carrying out relevant work, including text reviewing and translating, and striving to sign it as soon as possible based on established procedures.
I would like to emphasize again that China and the EU are partners rather than opponents; cooperation between the two sides is far greater than competition. We should expand common interests through cooperation, and solve problems during development. China is willing to strengthen cooperation with the EU in fighting COVID-19, promote pragmatic cooperation in the fields including economy and trade, green development and digital economy, and maintain the stability of the global industrial chain and supply chain, so as to contribute to the recovery and growth of the global economy in the post-pandemic era.
The comments on China-Australia relations were less rosy. While saying that the relationship “has a very good foundation” with strong trade and investment exchanges, Wang Shouwen also said that:
it is very regrettable that some individuals in Australia have stigmatized bilateral economic and trade relations, investment projects, and some normal economic and trade cooperation, adopting some restrictive and even discriminatory measures which have damaged bilateral economic and trade cooperation. We always believed that a healthy and stable China-Australia relationship is very beneficial to economic and trade cooperation, and is of common interest for both sides. We hope that Australia can take more actions that are conducive to increasing trust and cooperation and that are more in line with the spirit of the comprehensive strategic partnership between the two countries. This in turn will promote the healthy and stable development of bilateral economic and trade relations.
With regard to China-US relations, Wang Wentao pointed out the continuing growth of trade between the US and China during the COVID 19 pandemic. He said “[i]n his call with President Biden, President Xi stressed that China and the U.S. should re-establish the various dialogue mechanisms, read each other’s policy intentions accurately, and avoid misunderstanding and miscalculation. ” He further expressed the interests on China’s side to “step up communication, enhance understanding, focus on cooperation and manage differences in order to take bilateral economic and trade relations back on the track of cooperation.”
E-commerce has risen into a prominent component of all economies during the pandemic, China is no different. Qian Keming said that “online retail sales of physical goods accounted for nearly a quarter of total social consumption [in China],” and because of its “prominent role” during the outbreak of the pandemic, “e-commerce has become a stabilizer of social and economic development.” He further outlined MOFCOM’s plan of supporting and regulating the development of e-commerce:
The MOFCOM, as the competent department of the e-commerce industry, always insists on developing and regulating the sector at the same time, and constantly optimizes the environment for the development of e-commerce. This year, we will focus on the following aspects.
First, we will improve top-level design. At present, we are pressing ahead with the devising of the 14th Five-Year Plan involving e-commerce development. Based on the new development stage, implementing the new development concept, and serving the building of the new development paradigm, we will put forward a series of targets, major tasks and supporting measures for the high-quality development of e-commerce in the 14th Five-Year Plan period, so as to provide new momentum for the building of a modern socialist country in all aspects.
Second, to promote innovation-driven development. We will actively develop and accelerate new types of consumption via platforms such as livestreaming e-commerce and fresh food e-commerce. We will build platforms, such as “Brand and Quality Online Shopping Festivals,” to upgrade consumption and enrich content for online consumption. We will promote the integration of online and offline consumption and support the digital transformation of brick-and-mortar businesses and guide e-commerce platforms to energize small and medium-sized companies. We will also deepen the development of e-commerce in rural areas. Mr. Wang just mentioned the building of business systems in rural areas. E-commerce is a major part of that. We will ensure that poverty alleviation and rural vitalization are well integrated and coordinate government and social resources. We will carry out campaigns to boost agriculture through e-commerce and develop new infrastructure to support the rollout of e-commerce in more rural areas and help farmers increase their income. We will also ramp up efforts to advance cross-border e-commerce and expand cross-border e-commerce retail import pilot programs, inviting more and more friends and partners to join Belt and Road cooperation. We will deepen exchange and collaboration with our Belt and Road partners concerning e-commerce and share the new opportunities of the digital age.
At the same time, we must also be aware that with the fast development of China’s e-commerce platforms, unfair competition and suspected monopolistic practices, among other related problems, have already aroused wide public concern. The MOFCOM will strengthen the management of e-commerce development. On the one hand, we will guide the creation of a social creditability system, put in place a credit filing system for e-commerce companies, and promote self-discipline within the industry. On the other hand, we will enforce mandatory and binding rules. We will improve the laws and regulations regarding e-commerce, and conduct supervision of each company’s compliance to prevent the uncontrolled expansion of business. We will work in collaboration with relevant departments to maintain an environment characterized by fair market competition.
Qian also said that MOFCOM needs to develop “Silk Road e-commerce” and “promote the integrated development of new forms and models of business such as cross-border e-commerce and the BRI.”
Wang Wentao noted that China’s international trade grew significantly in 2020, with imports and exports of goods growing at 1.9%, compared to the year before, to a total 32.2 trillion yuan (approximately 5 trillion USD). However, recognizing some shortcomings in China’s economy, Wang pointed out four areas for improvement: collaboration on the “continuity, stability and sustainability “ of the policy environment, securing supply chain and expanding imports, providing a business-friendly environment for foreign companies, and supporting new trading models such as cross-border e-commerce. Wang Shouwen also commented on ways to attract foreign investments and improve domestic logistics services, especially in rural areas.