[Gao Feng]: Dear friends from the press, good afternoon. Welcome to the online press conference hall of the Ministry of Commerce and participate in today's regular press conference. Today, we have invited Mr. Li Xingqian, Director of the Foreign Trade Department of the Ministry of Commerce, and Mr. Wang Bin, Executive Deputy Director of the Department of Market Operation and Consumption Promotion. I am Gao Feng, spokesman for the Ministry of Commerce. Mr. Wang Bin will first introduce to you the relevant work of the daily necessities market supply, and then we will answer the questions raised by the media. First, Executive Deputy Director of the Market Operations Department Wang Bin will make an introduction.

[Wang Bin]: Good afternoon, friends from the media! My introduction will be mainly about the following five aspects:

1. At present, the national market supply of daily necessities is generally sufficient, and prices are basically stable. According to the monitoring by the Ministry of Commerce, on March 4, the wholesale prices of grain and edible oil in 100 large-scale wholesale markets for agricultural and sideline products decreased by 0.6% and 0.3% respectively compared with that at the end of January. The prices of chicken and eggs decreased by 9.4% and 17.5% respectively. The average wholesale price of 30 kinds of vegetables decreased by 8.4%, and the average wholesale price of six kinds of fruits increased by 2.4%. The wholesale price of pork fell by 1.7%. At present, the price of pork is still at a high level. In order to ensure market supply, 55,000 tons of frozen pork from central reserves have been put on the market since the Spring Festival. The fifth batch of 20,000 tons is being launched this afternoon, and the pork will be launched later depending on the situation of the epidemic.

2. The total supply of daily necessities in Hubei and Wuhan is sufficient with generally stable operation, and the direct supply in residential communities is constantly improving. On March 3, inventories of rice, flour, oil, meat, egg, milk, and vegetables in key retail enterprises in Hubei and Wuhan were significantly increased compared with that at the end of January, and the number of days available for market sales increased greatly. Wuhan Baishazhou and Sijimei wholesale markets traded more than 4,200 tons of vegetables and have over 9,300 tons of stocks, which are significantly higher than that at the end of January. The nine-province joint supply guarantee mechanism continues to support the market supply of daily necessities in Hubei and Wuhan. Since January 23, 44,000 tons of daily necessities have been transferred to Hubei, including nearly 36,000 tons of fruits and vegetables, 5,468 tons of rice and flour and 537 tons of convenience food.
  
Wuhan has continued to improve measures to guarantee supply in residential communities to meet the need of upgraded lockdown. First, increasing sales channels to ensure market supply. We have organized group purchase in residential communities, orders on e-commerce platforms, and direct distribution of agricultural-related enterprises. We also promoted the optimization of package categories and order selection services. On March 3, the number of group purchase orders in commercial supermarkets reached 245,800, and the number of e-commerce platforms increased to 41, with the order volume reaching 417,000. 71 agricultural-related enterprises delivered 130,400 fresh food orders to residential communities. Second, enhancing the ability of end distribution. We have organized buses and postal delivery vehicles to strengthen transportation capacity, and mobilized party members, cadres, property management of residential communities, volunteers to increase manpower, so as to alleviate the shortage of vehicles and manpower, and address delivery for the last 100 meters. Third, increasing the launch of meat and vegetables for the benefit of the people. The Wuhan Municipal Government has increased the supply of bargain-price vegetable packages, which are 10 yuan for 5 kilograms, from 60,000-80,000 packages to 200,000 packages per day. Subsidy policies for the cold chain logistics to deliver cold fresh meat were implemented and the bargain-price packages of frozen pork from the government reserves were launched. On March 4, more than 200 tons of reserve pork were put onto the market, with a significant increase from the previous day. Fourth, guaranteeing the basic livelihood of special groups. The cadres and volunteers in residential communities were organized to provide on-site drug purchase services for patients and the disabled, and distribute bargain-price vegetable packages and charity vegetable packages to households enjoying the minimum living guarantee once every three days on average.

3. The market supply of daily necessities in Beijing is generally abundant, and the prices are basically stable. On March 4, the prices of rice and flour in Beijing Grain and Oil Wholesale Market remained unchanged from the end of January, and the price of edible oil fell by 0.2%. The prices of pork and beef in Xinfadi Wholesale Market rose by 6.4% and 1.2% respectively compared with those at the end of January, and the price of mutton fell by 2.8%. The price of chicken dropped by 9.4%, and the price of eggs increased by 1.4%. The volume of vegetables sold on market increased by 2.9% compared with that at the end of January, and the average wholesale price fell by 3.7%. In the supermarkets around 67 neighborhoods of 13 districts in Beijing, stocks of daily necessities are sufficient, with stable prices, smooth customer flow, and normal business order. 

Beijing has taken effective measures on inventory, terminals, and delivery, to ensure supply. First, to enlarge inventory reserves. Beijing has ensured municipal and district government reserves and commercial reserves of large-scale commercial enterprises, determined the safety lines and bottom lines in terms of categories, quantities and days for usage of reserves, and supplemented and expanded reserves in time based on weather, traffic, and people flow. Second, to strengthen the terminal supply guarantee mechanism. Beijing has closely monitored the sales and inventory changes of terminal necessities such as supermarkets, built up the "four lines of defense" at the municipality-, district-, enterprise-, and store-levels, and established a "point-to-point" replenishment mechanism to ensure "sufficient goods and staff". Third, to unblock the channels for production, supply and marketing. Beijing has strengthened communication and coordination, facilitated vehicles carrying materials from other cities and towns to enter Beijing, coordinated with transportation departments to increase delivery vehicles for supermarkets, established an emergency transportation contact mechanism, and unblocked delivery chain.

4. As the weather becomes warmer, affected by factors such as increasing volume on the market, poor transportation for harvest, and decline in consumer demand of agencies with collective canteens such as catering companies and schools, local agricultural products such as lettuce, lotus root, green peppers, water chestnuts, citrus and eggs in Hubei, Hainan, Jiangsu, and Guangxi have been unsalable recently. In this regard, the Ministry of Commerce has printed and issued circulars, deployed matchmaking between production and sales, guided wholesale markets, retail enterprises, e-commerce platforms, and logistics companies to actively participate in sales, organized and established production and sales service platforms, and unblocked the channels for agricultural products to "go out of villages and into cities". Over 13,000 tons of unsalable agricultural products have been sold through the platforms. 

Local commercial departments have actively adopted measures. They have broadened sales channels through farmer-supermarket matchmaking, farmer-wholesale market matchmaking, e-commerce poverty alleviation, and “purchasing instead of donations”. They have developed online matchmaking platforms for the production and marketing of agricultural products, or set up sales network through third party platforms such as WeChat and Weibo, and organized associations and enterprises to establish information release platforms to expand publicity and promote sales.

5. As the prevention and control of novel coronavirus pneumonia has gradually showed a sound trend, recently the operation of the national consumer market has seen positive changes, and market sales have rallied from the bottom. According to the monitoring by the Ministry of Commerce, in late February, the average daily sales of 1,000 monitored retail enterprises increased by 5.6% compared with that in mid-February. This is a positive growth since the consecutive negative growth month on month in late January. More specifically, the demand for automobiles increased and the rebound in growth was more obvious, with a month-on-month increase of 14.8%; the demand for communication equipment and home appliances increased by 11.7% and 11.1% month on month respectively. 

The reasons for the rebound in sales since late February, according to our analysis, come from three aspects. First, positive results have been achieved in the prevention and control of the epidemic, and residents' panic has been eased. Second, enterprises accelerated the resumption of work and operations. Workers gradually come back, and the order of production and living is being rapidly resumed. Third, part of the consumption that was suppressed by the epidemic in the early stage began to be gradually released. In the later period, as the epidemic is gradually and effectively curbed, and the production and living order is further restored, market sales will further rise steadily

Thank you!

[Gao Feng]: Thanks for Mr. Wang Bin’s introduction. Next, we will move onto the Q&A session and I would like to take your questions.

Phoenix TV: As the epidemic spreads to more countries, how does MOFCOM assess its impact on foreign trade, especially on import and export with Japan and Korea? Furthermore, for foreign trade firms, what support policies will be introduced?

Li Xingqian: As an important link in the international industrial chain, China has extremely close connections with the rest of the world on the economic and trade front. As the epidemic spreads to many countries around the world, it will bring some pressure on the growth of global economy and trade. It will also have a certain impact on China. Among these countries, Japan and Korea are China’s major trading partners. The three countries share complementary in trade structure and deep integration in industrial chains. Since the outbreak of the epidemic, firms of the three countries have actively strengthened cooperation to mitigate the impact on the industrial chain. The governments and peoples of the three countries have demonstrated a neighborly friendship of mutual assistance and solidarity. We believe that after the epidemic is overcome through our concerted efforts, the three countries will unleash greater potential for trade cooperation.
  
Going forward, under the strong leadership of the Chinese government, MOFCOM will step up policy support to keep foreign trade stable, focusing on four policy pivots: The first is financial support through expanding foreign trade credit to meet trade financing needs, supporting firms that have markets and orders to effectively honor their contracts, and smoothing the industrial chain and the supply chain by giving priority to securing capital chain for foreign trade. The second is insurance support through further expanding the short-term coverage of export credit insurance, and facilitating a reasonable decline in insurance rates to effectively serve the overall development of foreign trade. The third is fiscal and taxation support through further improving the export tax rebate policy, and effectively reducing business costs to lower the burden on firms. The fourth is to promote unimpeded trade, strengthen communication and coordination with trading partners, facilitate enhanced cooperation among WTO members, remove unnecessary trade restrictions, create a favorable international trading environment, and jointly maintain the stable and sound development of the global supply chain.
  
Thank you!

Bloomberg: The import and export data of China for January and February are about to be released. It is generally expected that both import and export will have negative growth. Based on what MOFCOM has learnt, how is the performance of import and export in January and February? Now that the epidemic is spreading in many other countries of the world, it may affect external demand. How does MOFCOM see this issue, and what are the measures?

Li Xingqian: Since the outbreak of the epidemic, MOFCOM has been directing the efforts by the national commerce system to constantly monitor foreign trade operations, and receiving timely information concerning the difficulties and pain points facing foreign trade enterprises in order to introduce targeted measures to help them. Based on information from the local authorities and industries, in addition to common problems in relation with the resumption of work and transportation, foreign trade enterprises also face such external difficulties as difficulty in receiving orders, difficulty in executing contracts, impeded international logistics, and rising trade barriers. The situation is more severe as far as foreign trade is concerned. Every year there would be some fluctuations in imports and exports in the first quarter due to the impact of the Spring Festival. This year, coupled with the epidemic factor, fluctuations in imports and exports are inevitable. However, the impact is short-term and temporary. China’s foreign trade remains highly resilient and competitive, and Chinese firms’ ability to innovate and explore markets is also strong. The long-term positive trend of foreign trade development has not changed.
  
In order to minimize the impact of the epidemic on foreign trade, MOFCOM, in conjunction with various local departments, has intensively promulgated policies to keep foreign trade stable, and adopted such comprehensive measures as fiscal and financial support as well as export credit guarantee to support foreign trade enterprises to resume work and production expeditiously and to protect the market and secure orders. At present, the resumption of work and production has accelerated significantly. The key foreign trade companies in Zhejiang and Tianjin have resumed work 100%, and the resumption rates in Guangdong, Jiangsu, Shanghai, Shandong, and Chongqing have exceeded 70%. The leading role of major foreign trade provinces is prominent. As the various policies and measures to stabilize foreign trade begin to take effect, and with the smooth resumption of work and production in various localities, we are seeing a positive momentum for the recovery of import and export growth across the country.
  
We have also noticed that relevant international organizations have recently lowered their forecasts for world economic growth this year. The WTO’s first-quarter Goods Trade Barometer (95.5) is lower than the benchmark value. As global trade will remain weak in the first quarter, there will be some external demand pressure. We believe that the demand structure of the international market is relatively stable, and the producer and consumer demand is rigid. In the event of public emergencies, it is normal to have a certain degree of fluctuations. But overall, trade growth is within a reasonable range.
  
Going forward, MOFCOM will thoroughly implement the decisions and deployment of the CPC central committee and central government, make every effort to keep foreign trade stable, increase the tools in the policy toolbox, assist firms in a more targeted way, developed a diversified international market exposure, support the rapid development of new foreign trade formats, provide support for leading enterprises to resume work and production, maintain the stability of global supply chains, and contribute to the sound development of global trade.
  
Thank you!

CBN: Since late February, there’s been a rising trend of the spread of COVID-19 beyond China. Japan, South Korea, the EU and the US are all major trading partners of China. Will the global spread of the epidemic exert huge influence on external demand and thus affect China’s exports, particularly intermediary products?

Recently, the WHO has raised the global risk level of COVID-19 to “highest” as the virus spreads globally. It is concerning in the international community that the epidemic might impose full-scale and long-standing impacts on global economy. As a result, the global capital market has been on the decline for several days in a row, and the IMF and OECD have cut their forecasts for global economic growth for 2020.

Currently, China is watching closely the development of COVID-19. We have noted that some of China’s important trading partners have been affected by the epidemic, disrupting the normal functioning of global industrial chains. The supply chains of multinational companies have borne the brunt. Since interests of countries around the world are now deeply intertwined with each other, only by uniting together to fight against the virus, can we truly safeguard the common interests of all countries. China will work with relevant countries to combat the epidemic, share with them our experience in epidemic prevention, coordinate prevention and control measures, and promote multilateral and bilateral trade and economic practical cooperation on the basis of ensuring public health security.

In the context of economic globalization, countries are working with each other, drawing on respective competitive edges, and forming interlinked industrial chains and supply chains. As things stand, COVID-19 has certain impacts on the global market demand, which is mainly reflected by restricted people-to-people exchanges and impeded international logistics. The international trade of goods, especially intermediary products is more susceptible to the virus, but the impacts are temporary and basically manageable.

Thank you!

Shanghai Securities News: It is reported that China, Japan and South Korea will join hands to fight the virus and jointly maintain the stability of the industrial chains and supply chains. What measures have been taken to keep the industrial chains stable? How will China strengthen cooperation with Japan and South Korea in the future?

力。
China, Japan and South Korea are good neighbors facing each other across the sea. Culturally and historically connected, we are important trade and economic partners with each other. Since the inception of China-Japan-ROK cooperation mechanism 20 years ago, fruitful results have been yielded in trade and economic cooperation. Trade, investment and people-to-people exchanges between the three countries have been expanded rapidly. Economic integration and regional integration have made great strides, and the influence of our three countries in southeast Asia and the world has been stronger. Being in different positions of the global value chain, we are highly complementary in terms of economy, and closed linked with each other in the industrial chains and supply chains. All of these make us major drivers for economic development within the region and the world at large.

Since the COVID-19 outbreak, MOFCOM has adopted a series of measures to maintain the stability of the industrial chains and supply chains for foreign trade. We have issued the “Notice on Promoting Orderly Work and Production Resumption for Companies in the Field of Commerce on the Basis of Epidemic Prevention”, introduced 20 policies aimed to “stabilize foreign trade, foreign investment and promote consumption” to tackle the outbreak, guided companies to prevent the epidemic in parallel with resuming work and production in an orderly manner, timely put forward preferential policies for companies and helped them pull through. Meanwhile, for all types of companies including Japanese and Korean companies, we have taken targeted measures to help them resolve their real problems and return to work as soon as possible.

With the spread of the virus, as three major economies of east Asia, China, Japan and South Korea play important roles in the economic growth, prosperity and stability of the region and the world. MOFOCM will continue to make good use of the China-Japan-ROK Economic and Trade Ministers’ Meeting and the Senior Economic Officials Meeting between the three countries to push forward all-dimensional regional trade and economic cooperation, fully leverage our complementary strengths in different industries, enhance trade and investment cooperation, explore practical cooperation, speed up negotiations on China-Japan-ROK FTZ and jointly advance the RCEP to be signed and come into force by the end of this year as scheduled. Through further lowering trade barriers, we would help companies cut costs, enhance their resistance to risks, and make positive contributions to eradicating the adverse impacts of the epidemic and promoting economic development of the three countries and the region.

Thank you!

Reuters: Recently, sustained overseas outbreaks and spread of COVID-19 have increased the downward pressure on the global economy. How will China cope with risks to trade-related industrial chains if external demand further declines?

Li Xingqian: To date, 76 countries and regions outside China have reported confirmed COVID-19 cases. The sustained spread in many countries and regions will exert an unavoidable impact on the global economy and global industrial and supply chains. MOFCOM has been following and studying the impact on and challenges to global trade and taken a series of policies and measures to offset the fallout. We will introduce targeted measures to ensure the stable and smooth functioning of industrial and supply chains.
  
First, we will continue to push for the coordinated resumption of work and production of upstream and downstream enterprises. We will guide local commerce authorities in providing targeted assistance. Starting form helping leading enterprises, we will push for the coordinated resumption of work and production of key, leading and supporting enterprises in order to improve the systemic synergy in restoring the function of industrial chains. At the same time, we will step up efforts to smooth logistics and improve transport capacity so as to ensure unimpeded trade logistics.
  
Second, we will step up fiscal and financial support. We will fully implement support policies such as those related to export tax rebates, export credit insurance and export credit loans to substantially lower enterprises’ costs.
  
Third, we will improve the industrial and supply chains of foreign trade. We will build national centers for foreign trade transformation and upgrade and let key sectors and leading enterprises lead upstream and downstream enterprises on the industrial chain in fully restoring production capacity. We will build trade platforms and international marketing service systems to facilitate the smooth functioning of domestic and overseas supply chains. We will foster new forms and models of trade and help to further optimize industrial and supply chains.
  
China is an important link on global industrial and supply chains. The COVID-19 outbreak is a global challenge. China has made sound progress in its fight against the outbreak and accumulated valuable experience. We will work more closely with our trading partners, share experience, provide help, jointly cope with the outbreak and maintain smooth trade to safeguard the environment for stable development of global industrial and supply chains.

Thank you.

21st Century Business Herald: Some countries have imposed a series of import restrictions on such Chinese goods as agricultural produce and food. Some have imposed a number of export control measures on goods like masks, protective suits and disinfectant. What is MOFCOM’s comment on these measures?

Li Xingqian: Since the outbreak began, the Chinese government and people have made every effort to fight against the epidemic and taken the most comprehensive, rigorous and thoroughgoing prevention and control measures. We are gradually seeing the effect of our work. We have the confidence, capacity and determination to defeat the epidemic. The WHO has highly commended our efforts and underlined that it did not recommend travel or trade restrictions.
  
Recently, out of concern over the spread of the epidemic or their own need for prevention and control, a few countries have imposed restrictions on importing live animal or animal products from China, or on exporting supplies such as masks, protective suits and disinfectant to China. These restrictions have exerted some negative impact on us. We understand the practices and response of relevant countries. To jointly cope with the global public health crisis brought by the epidemic, we will strengthen communication and coordination with our trading partners and report the latest developments and relevant response measures. We hope that countries imposing restrictions respect the opinions of WHO experts, continue to fully understand and support China, adopt an objective and rational perspective on the impact of the outbreak and refrain from excessive trade restrictions to create an enabling environment for bilateral trade and economic cooperation as usual.
  
Thank you.

South China Morning Post: Recently, foreign media outlets reported that China had banned the export of medical masks and raw materials needed to produce medical masks due to the outbreak, as a result of which other countries and regions were faced with a shortage of masks. What is MOFCOM’s comment on the report? Statistics show that China’s mask production capacity has exceeded 100 million masks per day. As the epidemic spreads around the world, does China have surplus capacity to support Japan, South Korea, Europe and the US in meeting their demand for masks and other protective supplies?

Li Xingqian: As a major mask producer in the world, China has been exporting masks for medical and everyday use to foreign countries for years. Each year, China exported over 70% of its mask output. The Chinese government has not imposed any trade restriction on masks, which are freely-traded products. Since the outbreak began, MOFCOM, as China’s foreign trade authority, has never issued any ban on exporting masks and the raw materials needed to produce masks. Enterprises can trade masks according to market principles.
  
Right now, sustained progress has been made in China’s epidemic prevention and control. At the same time, however, Hubei province and the city of Wuhan are still faced with complex challenges in epidemic response, and there are non-negligible risks that the epidemic might come back to haunt other regions. China has rapidly improved its mask production capacity and output, which has greatly narrowed the gap between supply and demand, but the demand for masks is still high and a major gap still exists as a large number of companies resume work and production. The epidemic is ruthless, but we humans are not. We fully understand the pressure and difficulties facing other countries in their fight against the outbreak. We are more than willing to deepen international cooperation and join hands with other countries to meet mankind’s common challenge. In our epidemic prevention and control earlier, many countries reached out helping hands. While overcoming our own difficulties, we are willing to provide assistance in our capacity to help other countries meet their demand for medical supplies such as masks and support their epidemic response.
  
Thank you.

Market News International: Will the outbreak overseas further delay resumption of production? Korea and Japan are the largest and the third largest source of China’s imports respectively who supply over 50% of electronic material to China. What can manufacturers do to respond?

Li Xingqian: Since February 10, Chinese foreign trade companies have sped up the process of business resumption under the joint efforts of local governments and relevant ministries. The resumption rate keeps rising across the country. Many provinces and cities have seen over 50% of foreign trade companies back to work. Trade powerhouse provinces play a remarkable role in driving the resumption of business while important foreign trade companies are restoring production capacity at a quicker pace. Businesses are at a critical juncture of getting business back on its feet. The overall mitigation of the disease in China provides a favorable condition for resumption of work and production.
  
In the context of closely-linked global industrial chains and supply chains, it is inevitable to see such resumption of business will be affected to some extent as the disease continues to spread overseas, especially in our major trading partners such as Japan and Korea. A major concern of enterprises is the potential challenge in upstream and downstream supply chains. According to our monitor, Covid-19 has little notable impact on electronics industry and companies, which show steady increase in the export of relevant products.
  
Next, we will keep a close eye on the disease overseas, assess the impact on the resumption of work in foreign trade sector, help companies speed up resumption of production and enhance the capacity of delivery so as to restore normal production capacity as soon as possible. We will value and facilitate business cooperation both upstream and downstream to guarantee the stability of industrial chains and achieve common development of all businesses.

Thank you!

Gao Feng: In the interest of time, we will take the last question.

Economic Daily: March and April are supposed to see sharp increase in export orders. What measures should be taken by international traders in China to retain orders and market and stabilize global supply chain? Thank you.

Li Xingqian: Since the outbreak began, trade flows between China and the rest of the world have been hampered. The biggest challenge to exporters is to retain orders and market and fulfill contracts. The outbreak has a systemic impact that needs to be countered by all parties from the government, producers to suppliers.
  
Business is the most creative social unit amid difficulties and pressure. MOFCOM has been following the response of major companies in large foreign trade provinces and found several best practices to share with all the foreign trade producers. First, arrange for workers to return to factories as soon as possible based on different regions and levels of risks and with safe means of transport; intensify production and plant management with strict and science-based control measures; get back to full operation swiftly; strive to deliver the existing orders in a timely and quality manner and retain market share with strong production capacity. Second, reach out to old clients, communicate and explain to them the real situation of the outbreak and the state of play of the producers, so that they remain objective and confident in the cooperation, and match producers, suppliers and distributors in a seamless manner. Third, make the best use of instant messaging tools, online fairs and trading platforms, and trade promotion channels of business associations and chambers at home and abroad, project the image of quality Chinese brands and products, reach out to overseas suppliers proactively, and expand into online design and customized services.
 
While businesses try to tap into and diversify international markets with their strengths, the government needs to improve business environment and facilitation services to break the bottlenecks that strain businesses. The Chinese government has introduced large-scale tax and fee cuts across the board to ease cost burdens and tide international trading companies over the difficulties. In foreign trade, we are pushing for the delivery of five services: first, unblock the transport arteries with full speed, guide local commerce departments to provide anti-virus supplies to facilitate the production of foreign trade manufacturers, support them in restarting operation and getting back as many workers as possible. Second, inject extra credit into foreign trade to meet the financing demand, support companies with market and orders in fulfilling contracts efficiently; expand the coverage of short-term export credit insurance, reduce charges and rate to a reasonable level in line with the bigger picture of foreign trade. Third, step up communication and coordination with major trading partners. Inform them of latest situation and measures, push for related countries to lift unnecessary trade restrictions as soon as possible. Fourth, encourage businesses to create new business models and forms, such as increase export through new channels of cross-border e-commerce and overseas warehouses, promote integrated development of market purchase trade and cross-border e-commerce. Fifth, provide legal consultancy to overseas business and improve information release, commercial legal services and other public services.

Gao Feng: This is the end of today’s press conference. We will respond to other questions through other channels later. Thanks to the two speakers and friends from the press. Thank you.