On the afternoon of March 8, 2021, the second plenary meeting of the fourth session of the 13th National People’s Congress was held at the Great Hall of the People. The second “Minister’s Passage” interview was held after the meeting, and Minister of Commerce Wang Wentao was interviewed via video link.
Minister of Commerce Wang Wentao answered questions on four topics: smooth dual circulation, the stabilization and expansion of consumption, the RCEP, and the further expansion of opening up to the outside world.
CCTV: In the 14th Five-Year Plan period, China will focus on fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. This has been viewed differently by some in the world. What’s your take on this dual-circulation paradigm? What are the key areas and measures to facilitate the two circulations? Thank you.
Wang Wentao: Thank you for your question. As a bridge connecting China and the rest of the world, commerce is an important component of the domestic circulation and an important hub linking the domestic and international circulations, playing an important role in fostering the new development paradigm. These three important aspects reflect the definition and focus of this year’s commerce work.
Wang Wentao: I believe commerce can play a big role in the smooth running of domestic circulation. As you may have known, China’s 1.4 billion people are now living in moderate prosperity, and over 400 million of them belong to the middle-income group. This makes China a vastly huge market that is the most promising one in the world. The key, however, is to translate this huge market into a main driver for domestic economic development and a magnet for overseas resources and factors of production. To make this happen, commerce should play an active part. As it involves both distribution and consumption, commerce can play a significant role in facilitating domestic circulation. The key is to follow President Xi Jinping’s instructions to focus on supply-side structural reform while paying attention to demand-side management, and make the strategic move of expanding domestic demand so as to boost consumption and promote domestic circulation.
In facilitating the interaction between the domestic and international circulations, commerce is an important hub between domestic and international demands, between import and export, and between outbound investment and FDI promotion, as it links domestic and international markets and resources. Of course, it is also imperative to pursue higher-quality opening-up, with which sound interaction can be formed between the domestic and international circulations. Such sound interaction will feature integrated industries, interconnected markets, mutually reinforcing innovation, and well-aligned rules. To sum up, commerce can play a significant part in connecting China with the rest of the world. Thank you.
National Business Daily: In the Report on the Work of the Government, Premier Li Keqiang proposed to stabilize and expand consumption this year. As we fight the virus on an ongoing basis, Minister Wang, what are your expectations for consumption in China this year? What measures will be taken to boost consumption and build a strong domestic market?
Thank you for your question. As we all know, COVID-19 has a great impact on consumption, especially catering, accommodation and retail sales. The total retail sales of consumer goods were RMB39.2 trillion last year, down by 3.9%. This year, as the situations with COVID-19 and economic recovery in China continue to improve, and the relief policies to help enterprises in difficulties take effect, our overall judgment is that this year would see rapid growth recovery in consumption.
How can we achieve such a target? I think we will work on the following areas.
First, traditional consumption should be upgraded. The potential of traditional consumption is still great. For example, the four pillars of traditional consumption, namely household appliances, home products, catering and automobile, account for one-fourth of total retail sales of consumer goods. Take automobile as an example, the consumption of new energy vehicles has increased rapidly. At the same time, some local administrative restrictions on purchases have been gradually and orderly removed, which will also unleash consumption potential. Household appliances, especially energy-saving and environmentally-friendly ones, have a large market. The rural market for household appliances is also gradually expanding.
Second, new consumption should be developed. After the COVID-19 outbreak, we have found that many new types of consumption mushroomed. Online consumption accounts for about one-fourth of total retail sales of consumer goods in China and grew rapidly last year, up 14.8%. We should encourage and develop such new types of consumption as they keep emerging and flourish in order to expand consumption. Just now, Minister Xiao Yaqing of the Ministry of Industry and Information Technology said that we are entering the era of digital economy. We also hope that these new types of consumption can drive and expand consumption through digitalization, intelligent transformation and transboundary integration.
Third, consumption platforms should be innovated. As far as cities are concerned, we are building international consumption centers, as some cities are upgrading pedestrian shopping streets, and some are developing business districts with unique features. At the same time, we are encouraging fifteen-minute community service circles that serve the general public. More importantly, they would also facilitate consumption at the primary level and resolve the “last mile” problem. The 4th China International Import Expo and the 1st China International Consumer Products Expo will be held this year. We would also encourage some cities to organize a series of activities to promote consumption, including shopping festivals. For example, today is Women’s Day, an occasion to expand and guide consumption.
Fourth, the consumption environment should be improved. In particular, it is necessary to build a sound consumption network, which covers both the commercial and distribution networks. For the rural area, this year we have a very important task of promoting rural consumption. Rural areas provide a large market, as towns and villages account for 38% of total consumption. However, as we all know, rural consumption has many shortcomings, pain points and chokepoints, so we should make great efforts in rural consumption going forward. For example, towns and villages should have commercial centers and enjoy a full range of e-commerce services, while distribution services should be expanded as extensively as conditions permit, so as to make it easier for people to shop, and to buy with confidence. Not only could rural consumption improve farmers’ quality of life, but the rural area itself is also a big market. By introducing some policies and market-oriented methods, we hope to encourage and guide commercial distributors to serve the countryside at the primary level and expand rural consumption.
Red Star News of Chengdu Economic Daily: We are interested in the progress that has been made in the entry into force and implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP). What will MOFCOM do to help companies seize the development opportunities brought about by the agreement and cope with the challenges that may arise? Thank you.
Wang Wentao: Thank you for your question. As we all know, the signing of the RCEP means that the region accounting for one third of the world’s economic output can form a unified market full of potential and vitality. The CPC Central Committee and the State Council attach great importance to the agreement and set up a special working mechanism for its entry into force and implementation. As regards the progress that has been made, the Chinese government has officially ratified the agreement. We also know that some participating countries are speeding up the ratification. We hope participating countries accelerate the process so as to eventually reach the threshold for entry into force, which requires at least six ASEAN Member States and three non-ASEAN Member States to ratify the agreement. The sooner the agreement enters into force, the more it will benefit the people in the participating countries.
In addition, MOFCOM is working together with relevant departments of the State Council to accelerate technical preparations for the implementation. So far, smooth progress has been made in our preparations, including for tariff concessions and certification of origin. After finishing the preparations, we need to consult with participating countries for mutual confirmation so that the agreement can be implemented upon its entry into force.
Last but not least, about how companies could seize the opportunities and cope with the challenges brought by the RCEP. MOFCOM has already organized the first national training program, which was attended by more than 6,000 people and very successful. In March, we will organize the second national training program, which will be attended by about 40,000 people. We plan to redouble our efforts to better present the agreement and organize more training about it, just as we did when China joined the WTO, so that more companies could learn about and skillfully apply the content of the RCEP. In this way, the agreement will bring concrete benefits to the business and people. Thank you.
Beijing Youth Daily: What measures will be introduced by the State to improve the business environment and open up further?
Wang Wentao: We have been committed to expanding opening up, a path that has been proved successful. In terms of attracting foreign investment, I wish to inform you that amid the difficulties of last year, FDI to China bucked the trend and reached USD144.4 billion, up by 4.5% year-on-year. What does it indicate? This record number means that China has become the world’s largest recipient of FDI. Previously China never accounted for more than 10% of global FDI utilization, but last year its share might have gone up to as high as 19%. Surely, last year was a special year, and the percentage rose significantly. The good news is that the FDI structure has also optimized, with high-tech industries accounting for 29.6% of FDI attraction. This year we will redouble efforts to attract foreign investment, open up wider across the board, and improve the business environment. We will work on the following areas:
First, we will open the door wider. As to the specific measures, we have published market access negative lists for foreign investment. The nationwide list (2020 version) contains 33 entries, the PFTZ list contains 30, and the list for Hainan Free Trade Port contains 27 entries. This year, we will work to shorten the lists as much as possible. A shorter list means the door is open wider and the threshold is further lowered for foreign investment to access the Chinese market more easily. We are also working on the negative list for cross-border trade in services.
Second, we will further solidify the platforms for opening-up. We have 21 Pilot Free Trade Zones and the Hainan Free Trade Port, as well as 217 national economic and technological development zones. To solidify these platforms, a critical step is to open up at a higher level, to move from the free flow of goods and production factors to institutional openness in rules, regulation, management and standards. Here, opening-up means alignment with high-standard international rules. This is both what our own domestic reform requires and a stress test for these platforms to make them more solid. We will also move forward the pilots and demonstrations for greater openness of the service sector.
Third, we will further improve the business environment. We will build a market-oriented, law-based, world-class business environment, so that after entering the Chinese market, foreign investors can rest assured in their development and share in the dividends of China’s development.
Fourth, we will further deepen and broaden international cooperation. As I said just now, after signing the RCEP, we will work toward its early entry into force and implementation. As you know, we have completed the negotiations of the investment agreement with the EU. Now is time to ensure it can be officially signed at an early date. We are also actively advancing the negotiation of the China-Japan-ROK Free Trade Agreement. President Xi Jinping has announced that China will favorably consider joining the CPTPP. In fact, we have done quite some preliminary work, made some informal engagements and are speeding up the work on this front. We will stay committed to reform and opening up, negotiate and join all types of FTAs and investment agreements, build a network of FTAs, promote trade and investment liberalization and facilitation, and make greater efforts in reform and opening up.
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