Mr. Zhong Shan

Minister of Commerce


Minister Zhong Shan attended the 2019 Press Conference for the National People’s Congress and answered questions from Chinese and foreign journalists on questions relating to "fostering a robust domestic market and advancing all-round opening-up"

Moderator: Friends from the press, good morning. Welcome to the press conference of the Second Session of the 13th National People’s Congress. The theme of this press conference is the promotion and fostering of a dynamic domestic market and all-round opening-up. Today, we are honored to have with us Mr. Zhong Shan, Minister of Commerce, Mr. Wang Shouwen, Vice Minister of Commerce and Deputy International Trade Representative, and Mr. Qian Keming, Vice Minister of Commerce to take your questions.

Now, I’d like to give the floor to Minister Zhong for opening remarks.

Zhong Shan:Friends from the press, good morning. At the outset, on behalf of the Ministry of Commerce, I’d like to thank you for your interest in, help and support for our work. In 2018, under the strong leadership of the CPC Central Committee with comrade Xi Jinping at its core, MOFCOM implemented the essence of the 19th CPC National Congress in real earnest and delivered positive progress in the reform and development of commerce work. This year, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will put into practice the new philosophies guiding development, meet the requirement for high-quality development, work to foster a strong domestic market and advance opening-up on all fronts, so as to commemorate the 70th anniversary of the PRC with an impressive score sheet. Now, my colleagues and I are happy to take your questions.

CNR: it is pointed out in this year’s Report on the Work of the Government that we will stimulate the development of a robust domestic market and keep unlocking the potential of domestic demand. Total retail sales of consumer goods exceeded 38 trillion yuan last year, registering a growth rate of 9%. What’s your take on the slight slowdown in consumption growth rate last year? Besides, what new measures will be taken this year to stimulate consumption? Thank you.

Zhong Shan: First of all, thank you for your two questions. The first question is about the slowdown in China’s consumption growth rate. The second is about how to promote consumption this year. For the first question, China is already a consumption powerhouse. Last year’s total retail sales of consumer goods reached 38.1 trillion yuan, up by 9% with the growth rate down by 1.2 percentage points. That said, the increment of the total retail sales of consumer goods reached 3.2 trillion yuan, which is equivalent to the total retail sales of consumer goods in 1998. More importantly, China’s consumption structure kept optimizing, as represented by the following facts. Services consumption grows faster than goods consumption. Last year, the share of China’s services consumption grew to 49.5%, which is nearly 50%. Rural consumption grows faster than urban consumption by 1.3 percentage points. Consumption quality further improved. Individualized, diversified and customized consumption has become new trends. Consumption’s contribution to economic growth further improved, accounting for 76.2% of GDP growth last year, which means consumption remains the No.1 driving force of economic growth. Therefore, last year’s growth rate of consumer goods consumption fits China’s current development stage and meets the requirements of high-quality development.

Next, about the second question on promoting consumption. President Xi Jinping proposed on the Central Economic Work Conference to stimulate the development of a robust domestic market. Premier Li Keqiang also makes new requirement in the Report on the Work of the Government. This year MOFCOM will focus on three areas in promoting consumption.

First, we will enhance urban consumption and facilitate consumption upgrade. To be more specific, we will make efforts in two areas. First, we will renovate and upgrade a number of pedestrian streets and build them into platforms for high-quality consumption growth. Second, we will optimize the distribution of convenience stores and encourage the brand-building and franchising of convenience stores to give consumers more convenient and reassuring shopping experiences.

Second, we will expand rural consumption and promote the introduction of agricultural produce to cities and industrial goods to the countryside. We will tap into the advantages of commerce work in connecting internal and external markets, urban and rural areas and also the production and the sales links. By sending agricultural products to cities, we will improve farmers’ incomes and boost their consumption capability. And by introducing industrial goods to the countryside, we will give farmers access to industrial goods of good quality and affordable prices. And by introducing e-commerce to the countryside, we want to connect urban and rural markets and smooth the circulation channels. In 2018, national rural online retail sales reached 1.37 trillion yuan, up by 30.4% year on year. We believe rural consumption still has huge potentials. At the same time, special operation on express delivery will be conducted to cover the last mile for the introduction of agricultural products to cities and industrial goods to the countryside.

Third, we will grow services consumption and optimize services supplies. Services consumption is a new growth spot, but it still has quite a few weak links. Currently, culture, tourism and sports have become hot spots in consumption, while customized consumption and online consumption are also new growth spots in consumption. We want to make these hot spots and bright spots hotter and brighter. At the same time, we will also work to fill in the gaps. Currently, elderly care is a pronounced gap. China has an increasingly aging population. According to statistics, currently, every year, there will be around 8 million newly-added aged people in China. And the elderly care services for these people represents a huge challenge for us. For example, there is a gap of 2 million beds for elderly-care service every year. Another weak link is domestic service in cities. In cities, especially large and medium-sized ones, it is very difficult to find domestic workers and sometimes the service is very expensive. And it is even more difficult to find a good, satisfactory domestic worker. The main cause of this phenomenon is poor connection between supply and demand. Actually, there is abundant labor resource in the countryside. But it is very difficult for the rural labor to move to cities without skills and access. So there are difficulties on both sides. It’s difficult to find domestic workers and on the other hand it’s difficult to find a job in cities. In 2018, MOFCOM conducted the “100 cities and 10,000 villages” operation. We organized 101 cities to connect with more than 10,000 villages to train domestic workers. In the past year, we helped more than 100 thousand rural workers to find jobs in cities, which increased the farmers’ incomes while reducing the burden on urban households. Moving forward, we will keep up the job to ensure its success and better meet people’s needs for a better life. Thank you.

CGTN: The economic and trade frictions between China and the US have lasted a year. Despite this, China’s foreign trade set a record high in 2018, exceeding for the first time the 30 trillion-yuan mark. What is your assessment of China’s foreign trade last year? In this year’s Two Sessions, Premier Li Keqiang pointed out in the Report on the Work of the Government that we will ensure stable foreign trade in 2019 and promote stable and higher quality foreign trade. Although there has been no escalation with regard to the current China and the US tariff measures, the additional tariffs that were imposed are still there. Against such a backdrop, what measures will you take to ensure that the above work target is achieved? What is your forecast for China’s foreign trade this year? Thank you.

Zhong Shan:Thank you for your question. As you just mentioned, the conditions faced with China’s foreign trade in last year was indeed complex and daunting with many uncertainties and destabilizing factors. However, under the firm leadership of the Party Central Committee and the State Council, China’s foreign trade has expanded in volume and improved in quality. We have achieved very good effects. Last year, the total import and export reached a new historical high of USD 4.62 trillion with a foreign trade increment of over USD 510 billion. I’ve also taken a look at the increment rankings of other countries in the world. Our increment is the same as the total trade volume of the twentieth largest trader in the world. Apart from the expanded volume, more importantly, the quality has improved. In particular, the export of high and new technology products grew rapidly and accounted for 30% of our total export. China’s position as the largest trader in the world is further strengthened, and the development of a quality trader accelerated.

This year we will focus on accomplishing three work priorities according to the requirement of ensuring stable and higher quality growth set out in the Report on the Work of the Government. First, ensuring stable scale. We need to maintain the current development scale and ensure the stability of our market. Firstly, we need to have stable policies and fully implement the policies and measures introduced by the central government to stabilize foreign trade, such as export credit insurance, financing credits, and trade facilitation measures, with a view to substantially reducing burden and improving the efficiency of foreign trade companies. We also need to reassure the market players. By market players, I mean the foreign trade operators, which normally refer to as state-owned enterprises, foreign enterprises, and private enterprises. We need to reassure these market players, create a favorable environment for them, shore up the confidence of all kinds of enterprises in seeking development, and galvanize such market players. What I’d like to emphasize here is China’s private enterprises, which have become a major force of China’s foreign trade in two aspects. First is their share in foreign trade. Last year, private enterprises accounted for 48% of China’s total export. Second is the marked quality improvement in their foreign trade. We need to further support the development of private enterprises and let them fully play their roles. We need also to stabilize the market, which is indispensable for trade. We need to intensify international cooperation under the BRI, optimize international market layout, solidify traditional markets while constantly exploring emerging ones. In 2018, the share of emerging markets accounted for 57.7% of China’s total import and export, 1.3 percentage higher than that of 2017. Therefore, the emerging markets have great potential.

Second, improvement in quality. In general, China’s foreign trade has a large volume but is not strong enough yet. The priority is to encourage the export of high tech, high quality and high added-value products and to move up in the global value chain. As a matter of fact, our work in this area is fruitful. Five years ago, there were only a few Chinese small-scale passenger cars exported at low prices. However, after five years of efforts, we have registered significant progress. Five years ago, the unit price of exported passenger cars was only over USD 8,000 whereas now it has already exceeded USD 12,000. Some Chinese companies have acquired relevant technologies of some countries, passed relevant technical and quality certifications and could enter their markets without inspection. In addition, some enterprises have won world-renowned quality awards. For example, the International Europe Award for Quality is very well known globally and was conferred to a Chinese company last year. What’s more, we need to actively expand import, optimize the import structure, and further satisfy market demand.

Third, a change in drivers. President Xi Jinping has emphasized that innovation is the primary engine of development. The development of foreign trade should fundamentally depend on innovation. We need to support enterprises to conduct innovation in technologies, institutions and management and translate such innovative advantages into advantages in their export competition. We will also encourage new business formats and models in foreign trade, constantly foster new strengths in foreign trade competition and help China’s foreign trade to become stronger on the basis of its large volume. Thank you.

China Media Group, CCTV: People are greatly interested in Hainan’s bid to build a pilot free trade zone across the whole island and to explore developing a free trade port with Chinese characteristics. What will MOFCOM do to advance this task?

Zhong Shan: Last April, President Xi Jinping announced at the Conference Commemorating the 30th Anniversary of Hainan Special Economic Zone support for the development of pilot free trade zone in Hainan and also support for Hainan to gradually explore and steadily advance the development of a free trade port with Chinese characteristics. This is a major decision taken by the CPC Central Committee. It is also a significant measure for reform and opening up in the new era.

Last October, the CPC Central Committee and the State Council approved the masterplan for Hainan pilot FTZ. The masterplan has the following characteristics. First, it is about island-wide overall opening-up. The opening-up area covers 35.4 thousand square kilometers, which makes it China’s largest pilot FTZ. And by setting up this pilot FTZ, we want to use high-level opening-up to promote quality development. The second is provincially coordinated reform. The pilot FTZ is one with administrative jurisdiction and will consolidate all kinds of resources in the province to make the reform more systematic and better-coordinated. Third, there will be full-dimensional pilot to cover primary, secondary and tertiary industries and promote regional synergy as well as land-sea coordination to form diversified pilot experience. At present, the implementation of the masterplan is going well. The seed industry and financial sector of Hainan have already opened. Last year 33 countries were added to the visa-free list for tourism to Hainan. The first batch of eight institutional innovation outcomes have been forged. Last year, Hainan’s foreign trade grew by 21% and FDI was up by 113%. It can be said we achieved very good results.

This year, we will conscientiously implement the spirit of the important instructions of President Xi Jinping and enforce the new development concept and stay committed to quality development. We will spare no effort in promoting the development of pilot FTZ and putting forward the policies and institutional system for the exploration of the free trade port.

In terms of the development of the pilot FTZ, the priority is to promote the implementation of the masterplan. First, we will further expand liberalization in international shipping, tourism and professional services. Second, we will support the accelerated development of healthcare and wellness as well as international exhibitions and conventions, among other industries to attract more innovators. Third, in terms of trade and investment facilitation and government regulation, we will give Hainan greater autonomy in reform. In the development of Hainan pilot FTZ, we will stay committed to the new development concept and not sacrifice the environment.

In the exploration of the development of a free trade port with Chinese characteristics, we will follow the requirement of President Xi Jinping for development step-by-step and stage-by-stage to study and promulgate policy and institutional systems for the free trade port. Free trade port is the highest form of opening-up in today’s world. Hainan’s free trade port should highlight Chinese characteristics, suit China’s realities and also meet the development positioning of Hainan. At the same time, we will also learn from internationally advanced operation models and management methods of free trade ports in other countries. The development of the pilot FTZ in Hainan is in full swing. I’d like to welcome all of you to invest and do business in Hainan. I also welcome friends from the media to visit and tour Hainan to experience Hainan’s new changes. Thank you.

Economic Daily: It is fair to say that last year’s first China International Import Expo has amazed the world and also become a milestone in China’s opening-up process. People now have very high expectations of the second CIIE. Could you tell us a bit about the preparations for the second CIIE? And in what ways will it be different from the first one? Thank you.

Zhong Shan: The China International Import Expo was personally planned, put forward, deployed and promoted by President Xi Jinping. The first CIIE scored a complete success. I’d like to share with you the following aspects.

First, the big size of the expo. It covers an area of 300,000 square meters. We expanded the area twice. Still, the exhibition area fell short of demand. 172 countries, regions and international organizations attended the first CIIE, which fully speaks to the strong attraction of the Chinese market.

Second, the high level of the exhibition. More than 220 out of the Fortune 500 companies and industrial champions attended the CIIE. During the expo, over 300 new products and new technologies débuted. The launches are an important measure of expos. The CIIE has witnessed the biggest number of such debuts and launches worldwide.

Third, good results of the expo. Over 800,000 exhibitors and buyers attended the expo. During the expo, seven sections, including industrial products, agricultural produce as well as services, have seen good transactions with a total value of USD 57.8 billion. One exhibitor said that they sent helicopters to the expo for exhibition. It never occurred to them that there would be transactions. But it later turned out to be a pleasant surprise that orders were placed for 15 helicopters. Some of the medical devices also sold well, for example, the smallest cardiac pacemaker. In the course of the exhibition, lots of hospitals expressed their willingness to import the pacemakers. Currently the small devices of pacemakers are already being used in China’s hospitals, which is also a surprise for the exhibitors. There are also very interesting stories for some agricultural produce. For example, a country in Latin America had never exported coffee to China. Exhibitors said they had the best coffee in Latin America and wanted to find buyers. With the help of the expo, they found a customer. About USD 50,000 of coffee was on offer. The buyer said that was too little and hoped to sign an order of USD 500,000. This shows that China’s domestic market is huge.

The first CIIE is a public platform established by China to uphold the multilateral trading system and support economic globalization. It is an international public good. It is also an effective vehicle to promote China’s quality economic development and to meet the needs of businesses for progress and the needs of people for a good life. The first CIIE has generated extensive influence worldwide and is highly applauded at home and abroad. It is also named one of China’s top 10 news stories of 2018.

President Xi Jinping emphasized at the first CIIE that the CIIE will not only be held year after year, it shall feature high standard, good effect and greater success. We will follow up conscientiously and spare no effort in preparing for the second CIIE.

First, we want to further expand the scale. This year, the exhibition area is planned to be 330,000 square meters. From registrations, it is estimated more countries and more businesses will take part. Some of the exhibition areas have been fully booked. For example, the area for health has been 100% fully booked. Fast progress has also been made in the registration for other sectors.

Second, we will improve the quality of the expo. The second CIIE will see more new products, new technologies and new services. The contents and formats of the expo will be more diversified.

Third, we will provide better services. We will organize more supporting activities for exhibitors and buyers and provide more professional services.

Fourth, we will achieve better results. It is projectable that the second CIIE will present more business opportunities for transactions and offer greater choice for consumers. It is our aim to let more businesses have greater sense of gain from their participation. At the same time, we will also host the second Hongqiao International Economic Forum during the second CIIE and invite more personalities from global political, business, academic and research communities. Many of you from the press may have visited the expo and done extensive reporting. So here I’d like to express my appreciation. And today I’d like to welcome the press, present here or not, to experience the CIIE first hand. Last year, nearly four thousand friends from the press visited the CIIE. We hope there will be larger attendance from the media to this year’s CIIE. Regarding the specifics of the second CIIE, we have prepared some materials. If you are interested, you can find copies at the entrance of the room. Thank you.

Phoenix TV: Reform of the World Trade Organization is a topical issue in the international community. The G20 Summit in Buenos Aires also clearly supported necessary reforms of the WTO. What is China’s position on this issue? And what are the plans for the next step?

Zhong Shan: The WTO is an important pillar for global economic governance. China firmly safeguards the multilateral trading system and supports necessary reform of the WTO. However, in conducting reforms, we should not start all over again. Instead, through reforms, we want to make improvements and promote the authority and efficacy of the WTO.

China has proposed three principles and five suggestions for WTO reform. The three basic principles are: first, preserving the core values of the multilateral trading system. The core values are first and foremost non-discrimination and openness. Non-discrimination means sticking to the Most-Favored-Nation treatment and national treatment; openness means that we should not limit trade at will. Second, WTO reform should safeguard the interest of developing Members by allowing them flexibility and policy space. Third, the decisions of reform should be made by consensus. The decision-making mechanism should not be dictated by a few large Members, but broadly seek comments and suggestions from all Members.

The five suggestions are: first, the WTO reform should uphold the primacy of the multilateral trading system. One should not introduce new concepts or terminology that could undermine the authority of the multilateral trading system. Second, the priority of the reform is to address the existential problems faced by the WTO. At present, one of the key issues is appointment to the Appellate Body. The Appellate Body is the teeth of the multilateral trading rules. The rulings of the Appellate Body are binding and enforced mandatorily. The Appellate Body is critical to the WTO. Third, the imbalances in trade rules should be addressed to answer the needs of our times. The current rules were formulated more than 20 years ago. Lots of new trade models, such as e-commerce and investment facilitation, are not covered. So they need to be updated and further improved. Fourth, special and differential treatment should be ensured for developing Members. We need to take differences in global development head-on and maintain the right to development for developing Members. Fifth, we should respect the development models of Members and safeguard the inclusiveness of the multilateral trading system. Not a single model should be imposed on others.

Moving forward, we will follow the spirit of the important instruction of President Xi Jinping about active participation in WTO reform, step up communication and cooperation with the Members to jointly move forward the WTO reform, and give it a better role to play in global economic governance as an important pillar. We will jointly promote economic globalization and build a community with shared future for mankind.

Xinhua News Agency: Minister Zhong, how often do you go shopping? We have taken special notice that pedestrian street was mentioned in the Report on the Work of the Government. We know that this is something MOFCOM has been vigorously working on over the past years. We are interested in knowing your views as Commerce Minister on what future pedestrian streets should look like in China? What will MOFCOM do to develop pedestrian streets?

Zhong Shan: Thank you for your question and your interest in the development of pedestrian streets. Last year, we launched the pilot program for the renovation and upgrade of 11 pedestrian streets in the country. Now the programs are carried out in cities involved in an orderly way. You asked me whether as Commerce Minister I go shopping. Every year, I would visit the local stores around the country several times as part of my job, but I seldom go shopping myself due to the lack of time. At the end of last year, before Spring Festival, I visited the Wangfujing pedestrian street, with the purpose of checking the supply for the festive season and gauge the progress of the renovation and upgrade. I was very satisfied to see that market supply was abundant. I also went to the farmers’ market and found plenty of vegetables. I was also satisfied with the briefing about the considerations and progress of the renovation. The Beijing Municipality has completed the “1+3” planning for the pedestrian streets, which is composed of one overall plan and three special plans for the improvement of neighborhood environment, business distribution, and transport networks. Currently, the renovation and upgrade of the Wangfujing pedestrian street is moving forward in an orderly way.

This year, we will conscientiously implement requirement of the Report on the Work of the Government with high starting-point planning, high-standard renovation, and high-level operation to ensure the success of the first batch of pedestrian streets. We will focus on work in the following four areas:

First, optimizing neighborhood environment. We will push the pilot neighborhoods to step up overall planning to highlight the main street and provide good support for the side streets. The transport networks surrounding the area should be complete. Sanitary and green standards should be improved. We want to build pedestrian streets into beautiful, comfortable and distinctive neighborhoods.

Second, enhancing business quality. We will enrich the business types of the pedestrian streets and attract more domestic and foreign famous brands. There are lots of top international brands, some of them have already settled down in the pedestrian streets, while others are yet to come. In China, there are also traditional old brands. Similarly, some of them have come to the streets while others have not. In the future, we will attract more such brands to the pedestrian streets. Apart from products, there should also be such traditional consumption as shopping and catering in the pedestrian streets. We will also develop experience-based and interactive consumption to make the streets more recreational and leisure-oriented, so as to satisfy the individualized and diversified demand of consumers.

Third, building smart streets. We will focus on building digital, smart streets and speed up the application of 5G technologies. We will provide information service platforms and speed up online and offline integration. For young people, one inconvenience when they go shopping is parking. So we need to provide more and better parking space. We are also going to provide better smart services, such as mobile payment, in the hope that when you go shopping or have some recreational activities, there’s no need for you to bring a wallet. Your mobile phone will suffice. Food, clothing, goods and services can all be paid with the phone, or even with a facial scan. I know that today we have many foreign friends, don’t worry if you don’t have mobile payment for the moment. Cash and credit card are also accepted.

Fourth, enhancing cultural heritage of the pedestrian streets. We will protect the cultural facilities, especially places of historical figures and cultural heritage along these streets. We will promote the integrated development of commerce, tourism and culture, better inherit traditional Chinese culture, display the distinct characteristics of the cities, so that visitors get both material rewards and spiritual pleasure.

The pedestrian streets after renovation and upgrade should both demonstrate Chinese and local characteristics and meet international stands. The pedestrian streets in my mind should have pleasant environment, flourishing business, and rich cultural heritage, and serve as a brilliant business card for the city.

We will renovate and upgrade the pedestrian streets with a people-centered approach, as required by President Xi Jinping in the report of the 19th Party Congress, aiming to build them into platforms for consumption upgrading, enablers of high-quality economic development, and windows for expanded opening-up. Thank you.