Chen Deming Talks About Trade Pformation: Balancing Trade Can Not Simply Export Pressure

In the past ten years, China has not been swept away by global trade competition, but has continued to share the "WTO dividend".

During the "12th Five-Year" period, China's economy needs to find new impetus, and trade pformation is also at a critical moment.

There is a broad signature hall in the foreign affairs building of China's Ministry of Commerce, No. 2 East Chang'an Avenue, Beijing.

After the new year's day in 2011, Chen Deming, Minister of Commerce of China, talked about China's trade changes and structural pformation in the past ten years. He is confident, steady and astute.

Ten years ago, it was also here that China and the United States agreed on China's accession to the World Trade Organization (WTO).

The 13 - year marathon negotiations reached the end of the day, and China crossed the biggest obstacle from developed countries.

In November 10th of that year, at the Fourth Ministerial Conference of WTO in Doha, China was approved to become its 143rd member.

In the past ten years, China has not been swept away by global trade competition. Instead, it has continued to share the "WTO dividend" and deeply integrated into the world economic chain. It has become the largest trading country in the world and the second largest importer in the world.

In the past ten years, WTO has also profoundly changed China's fierce competition at home and abroad, pushing the resources from the low efficiency sector to the high-income sector, increasing the productivity curve, and promoting China's internal reform.

WTO director general Rami therefore commented: "in general, China's performance is A+."

However, ten years later, some people thought that the "WTO dividend" had been exhausted, and the export mode relying on cheap land, resources and manpower prices had been difficult to continue.

Chen Deming is extremely concerned about this.

After the financial crisis in 2008, the pressure of international economic rebalancing increased sharply.

Trade experts predict that the world will bid farewell to the "golden age" of the huge increase in trade flows. Even if global market demand is restored, "Shan is not the mountain, Liang is not the beam".

Meanwhile, the cost of some emerging economies is lower than that of China, which is bound to replace some of China's exports. The challenge of China's trade pformation comes unexpectedly at the most prosperous stage.

Standing in the opening year of "12th Five-Year", Chen Deming thought that China's economy needed to find new impetus, and the pformation of trade also reached a critical moment.

To this end, the recently convened National Conference on business affairs put forward that the Ministry of Commerce will foster new growth momentum in the two major demands of both inside and outside China, integrate new development advantages in two internal and external resources, and expand new development space in two markets.

The Ministry of Commerce, established in 2003, is not a simple flop before the Ministry of foreign trade and economic cooperation and the Ministry of internal trade, but carries the important mission of coordinating internal and external trade and promoting industrial integration. After seven years running in, it has become a model of China's "big ministry" reform.

As a leader, Chen Deming has been shuttling between two international and domestic markets since he became minister in December 2007.

He is the head of the central ministries and commissions with the highest frequency of going abroad. He is a frequent visitor accompanied by the president and Premier of the State Council, and has promoted and witnessed nearly all the international trade and investment negotiations or contracts in recent years.

At the same time, he also maintained his habit of working in places like Jiangsu and Shaanxi, and was willing to take time to understand all kinds of first-hand information such as circulation channels, market supply and so on.

Looking ahead to the second ten years after China's accession to the WTO, Chen Deming, 62, said that he is currently focusing on three things: balance between internal and external needs, equal emphasis on imports and exports, and "bringing in" and "going out" simultaneously.

Stabilizing external demand and expanding domestic demand

Finance and Economics: you came into contact with the global financial crisis shortly after taking office in late 2007. During that time, we all said that there was a ministry in Chang'an Avenue, and every night was brightly lit. Is this your building?

Chen Deming: Yes.

But in retrospect, the financial crisis may be a blessing, and life is much more experienced.

I remember that in the fourth quarter of 2008, China's exports began to decline rapidly. By January 2009, exports dropped by 30%. Many export oriented enterprises were closed down, and about about 20000000 migrant workers returned home. We then thought about how to make foreign trade not too bad, trade frictions less, and migrant workers returning home less.

The building was brightly lit at night, and many times it was designed to cope with the sharp increase in trade frictions.

The financial crisis has raised protectionism. In 2009, 43% of the global friction was directed against China.

To deal with a case of trade friction, it is necessary to prepare hundreds of documents, which can not be resolved bilaterally and hand over to multilateral international trade institutions, and deal with it through the dispute settlement mechanism of WTO.

Finance and Economics: in 2008, foreign experts predicted that once China's exports fell, it would be difficult to restore its vitality in 35 years. However, in the four quarter of 2009, China's exports rebounded gradually. How did this V reversal happen?

Chen Deming: in response to the crisis, the CPC Central Committee and the State Council promulgated a package plan to adjust the export tax rebate seven times, increase the amount of credit guarantee, do everything possible to stabilize external demand, protect the market and maintain share. Since the fourth quarter of 2009, China's exports have started the V reversal you mentioned.

In particular, we have intensified our efforts to develop new markets, increased our leeway, and increased the proportion of exports to Europe, the United States and Japan from 48.7% to 54.3%.

In 2010, the total import and export volume was close to US $3 trillion, up by more than 30% over the same period last year.

Compared with the end of "fifteen", China's exports ranked first in the world in third place, accounting for 7.3% of global share to 10%, and imports rose from second to second in the world.

Some western countries often say that China is the world's largest exporter, but I often remind them not to forget that China is also the second largest importer in the world.

Finance and Economics: in the financial crisis, some analysts think that the degree of dependence on foreign trade is too high and the external risks are increased. How to treat the status and role of foreign trade and economic cooperation in the whole national economy?

Chen Deming: internationally, the ratio between foreign trade and GDP is used as a dependence on foreign trade.

In this calculation method, the denominator GDP is an added value, and the foreign trade volume of the molecule is the paction value, and the economic connotation is not corresponding.

Therefore, we can not simply equate the degree of dependence on foreign trade to the dependence of the national economy on foreign trade, nor equal to the degree of risk.

Reviewing the course of reform and opening up for more than 30 years, the important contribution of foreign trade to China's economy is self-evident.

In the past 30 years, the annual average contribution rate of exports to China's economic growth has reached 20%.

At present, the number of foreign direct employment exceeds 80 million, of which 60% comes from the rural labor force, and the indirect employment population exceeds 100 million.

This importance is also reflected in the import side. By introducing advanced equipment, technology and management experience, we have greatly improved productivity and management level and eased resource constraints.

For example, importing agricultural products, to a certain extent, is to import scarce cultivated land resources and water resources in China.

There are 6 billion 600 million people in the world. In addition to the large market of 5 billion 300 million people in China, the per capita GDP and purchasing power of more than 40% people are far beyond our country. The scale of some emerging markets is also expanding rapidly, and the vast international market is still an important support for our economic development.

The financial crisis has caused setbacks in the process of economic globalization, and has also had a certain impact on China's economic operation.

However, the general trend of economic globalization will not change. All countries in the world must adapt to this trend, seek advantages and avoid disadvantages, and strive for the initiative instead of avoiding withdrawal.

After the financial crisis, the market competition will become more intense. All countries are actively adjusting and grasping their new advantages. We must also have a sense of urgency and strive for a more favorable position.

We are faced with the question of whether we should continue to expand the issue of foreign trade, but how to promote structural adjustment, foster new advantages, enhance the quality of foreign trade development and improve efficiency.

This is also the main task of China's foreign trade development during the "12th Five-Year" period.

Invigorate circulation and help expand consumption

Finance and Economics: it is argued that China will enter the era of consumption leadership during the "12th Five-Year" period, and expand domestic demand as an important goal of the second reform.

At the national business conference held recently, you spent a lot of time on how to expand domestic demand, especially expand consumption, and how to achieve this goal.

Chen Deming: expanding domestic demand, especially household consumption, is a strategic decision made by the Central Committee to focus on adjusting the internal and external needs structure and enhancing the autonomy of economic development.

In 2011, the Ministry of Commerce will continue to focus on expanding consumption, and strive to build a long-term mechanism for invigorating circulation and expanding consumption during the period of "12th Five-Year".

In the process of dealing with the financial crisis, the country has issued a series of policies to encourage consumption by household appliances to the countryside and the old change. In the past few years, the effect is very significant, the immediate consumption has been expanded and the industrial development has been promoted.

For example, in 2010, the total sales of home appliances to home appliances were 77 million 180 thousand, and the sales volume was 173 billion 230 million yuan, respectively 1.3 times and 1.7 times the same period.

In the past, many people in the countryside did not use computers, washing machines and refrigerators, and now they have the ability to purchase them.

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We should further comb out and perfect these policies and measures, and encourage better combination of civilization, economy, green and low-carbon consumption mode.

Expanding consumption depends on many factors. First, we need to continuously increase the income of urban and rural residents and improve the social security system.

The duty of the Ministry of commerce is to make contributions to expand consumption through grasping the circulation links under these preconditions.

We should speed up the improvement of urban and rural circulation and service system, vigorously improve the rural consumption environment, and take service consumption as an important point to expand urban residents' consumption and structure upgrading.

In addition, we need to upgrade the level of information circulation, develop new formats such as credit consumption and e-commerce, and create a convenient and safe consumption environment, so that the masses can easily consume and rest assured consumption.

Finance and Economics: Recently, the price problem has become more prominent. How to ensure the steady supply of the market in 2011 and avoid a sharp fall in prices?

Chen Deming: I believe that under the situation of higher price pressure and tight supply of some agricultural products, ensuring supply plays an important role in stabilizing inflation expectations and suppressing speculation.

The Ministry of commerce system should give full play to its advantages, and do a good job in monitoring market operations, storing merchandise, dispatching p regional pportation and adjusting import and export.

The Ministry of Commerce has nearly 2.9 monitoring enterprises in the national market. The monitoring covers a range of daily necessities, important production materials and key circulation enterprises. The emergency commodity database has more than 1600 key enterprises, involving 58 emergency commodity varieties.

We will further enhance the level of market monitoring and early warning, publish authoritative information in a timely manner, and guide social expectations.

The business department is revising the Interim Measures for the emergency management of life necessities for emergencies, refine the contingency plan system, and establish an emergency commodity dispatching mechanism, so as to ensure that the key moment is adjusted and used.

We are also considering increasing the reserve scale of necessities such as meat and sugar, appropriately increasing the types of important commodity reserves, expanding imports of domestic scarce goods and enriching the central reserve.

The Ministry of commerce is also ready to continue to increase the intensity of "agricultural super docking", which not only ensures food safety, but also increases farmers' income.

Through the way of order farming, farmers can have a good idea. Supermarkets can also establish their own brands, and control quality and reduce circulation from products, prices, packaging and other processes.

In this way, farmers' incomes can be raised, but the retail prices of agricultural products will be reduced.

At present, the proportion of "agricultural super docking" in China's large and medium-sized supermarkets is only about 15%, with great potential.

Balanced trade can not simply export pressure.

Caijing: you mentioned that after the financial crisis, the international market competition is more intense. So how should we cultivate the new advantages of China's foreign trade?

Chen Deming: Since reform and opening up, we have relied on abundant labor resources, strong industrial matching and processing and manufacturing capabilities, forming the traditional competitive advantage of foreign trade development.

But as domestic factor costs rise, traditional advantages are gradually weakening.

Relying on the low demographic dividend, land resources and price to support export competitiveness has been difficult to sustain.

While consolidating and developing traditional advantages, we should accelerate the development of new international competitive advantages with technology, brand, quality and service as the core.

First, we should enhance brand awareness, encourage enterprises to rent brands, buy brands, create brands, and support enterprises to obtain international certification.

Two, we should continue to implement the strategy of revitalizing trade through science and technology, support the export of electromechanical and high-tech products, promote the internationalization of new strategic emerging industries such as new energy, and seize the commanding heights of international competition in the future.

Three, we should continue to carry out the pilot pformation and upgrading of processing trade, strengthen the construction of key trade areas for processing trade pfer, encourage processing trade to extend to the high end of the industrial chain, centralization to the areas of customs supervision, pfer to the central and western regions, and extend the trade value-added chain.

The four is to encourage enterprises to establish an overseas marketing network, explore the establishment of an overseas marketing promotion center, strengthen the docking with local sales network, and do well in the design and after-sale service.

It is to encourage enterprises to walk towards the "Smiling Curve" at the two ends, do research and development and marketing well, not just simple foundry production.

At the same time, we should also focus on promoting the synchronous development of service trade and goods trade, stabilizing and expanding traditional services such as tourism and pportation, and vigorously supporting key areas such as technology, culture, Chinese medicine and software, as well as new service exports such as information services, trade circulation and finance.

Finance and Economics: the National Conference on business affairs put forward that in 2011, China will optimize import structure, expand import scale, and play an import role in macroeconomic balance and economic restructuring.

What specific measures will be taken in this year's import?

Chen Deming: the idea of emphasizing "export swap" is really not suitable for the new situation.

I think you will also notice that over the past few years, we have put import in a more important position.

For China, by importing, it can make up for the shortage of domestic resources, introduce advanced technology and equipment, introduce competition, realize the optimal allocation of resources, pform capital into productive forces, and raise production efficiency and technology level.

For the world, China's expansion of imports is becoming an important driving force for world economic growth.

We are now the largest trading partner and the largest export destination of Japan, South Korea, ASEAN, Australia, Brazil, South Africa and other countries and regions. The EU's largest trading partner and second major export destinations, the second largest trading partners and the third largest export destinations in the United States, China is the most important market in many countries.

We will improve the import credit, import credit insurance and other promotion policies, further simplify the import management measures, support the expansion of imports, and promote trade balance.

Specifically, we should expand the import of advanced technology and equipment and key parts and promote technological pformation of enterprises.

We should further expand the import channels of bulk commodities such as grain and cotton, and facilitate enterprises to organize imports in a timely manner according to the changes in domestic and foreign markets, so as to ease domestic supply pressure.

Import exhibitions will be held to enhance the import promotion function of major exhibitions such as Canton Fair.

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At the same time, we will continue to push the developed countries to relax control over our high-tech export. Some countries continue to impose strict export controls on China's continuation of the Cold War mentality, and accuse China of a large surplus. It is unfair to discuss trade balance when we want to buy less and trade distorts.

China's trade is developing in a more balanced way. In 2009, the trade surplus declined by 100 billion US dollars, a decrease of 34% and a further 6.4% decline in 2010.

We will continue to expand foreign investment and increase foreign aid, and work together to make China's balance of payments more balanced.

The multilateral trading system has not failed.

Finance and Economics: as you mentioned just now, the trade frictions in recent years have been continuous. It seems that the deterioration of the global trade environment is inevitable. Is it evident that the Doha Round negotiations are blocked?

Chen Deming: during the financial crisis, various forms of trade protectionism were heated up and trade restrictions were increased, which really disrupted the normal international trade order.

However, we can see that the multilateral trading system has played an effective role in restraining the spread of trade protectionism.

Therefore, several G20 summit have proposed to promote the Doha Round negotiations.

The Seoul summit also considered 2011 a window of opportunity for negotiations.

At present, WTO is actively promoting the negotiation process, has launched a series of intensive negotiations and consultations, and the pace of negotiations has accelerated. The next few months are particularly important for achieving the goal of ending negotiations.

China has always been an active supporter of the Doha Round negotiations. We hope that the negotiations will reach an all round balance at the early stage on the basis of compliance with the mandate and results.

Finance and Economics: for some time, East Asian and other export dependent economies are committed to strengthening free trade and investment cooperation in a small or regional scope.

Will regional economic integration impede economic and trade globalization? Does bilateral trade staggered trade agreements mean the failure of the global trade system and the break-up of the trade chain?

Chen Deming: in fact, it is precisely because the Doha round talks are blocked that many countries have negotiated bilateral and regional free trade agreements.

At present, there are more than 100 FTA agreements in the world.

Since 2010, ASEAN and

In the absence of multilateral negotiations,

We are building 14 free trade zones with 27 continents and five continents, and we have signed ten free trade agreements.

In 2010, our FTA with ASEAN has been completed.

ASEAN has a population of more than 500 million, and we have 1 billion 300 million, plus 1 billion 900 million people, which is the most populous FTA in the world.

At present, China has become the largest trading partner of ASEAN. In 2010, our country was right.

This year, we will continue to make great efforts and make great efforts to push forward the strategy of the free trade area.

We should do a good job of "10+1" and do "10+3" to promote the process of economic integration in East Asia.

In addition, China and Switzerland's FTA negotiations are about to start, and we will also strive to start negotiations with the FTA of South Korea.

Using foreign capital and foreign investment simultaneously

Finance and Economics: since 2010, some foreign enterprises believe that China's investment environment is becoming tighter and tighter. Whether the historical mission of foreign investment in China has been completed and whether the prospects of foreign investment in China are optimistic?

Chen Deming: in recent years, foreign companies have been worried about whether China will attach importance to and welcome foreign investment as before. Will the investment environment deteriorate? This is a misunderstanding of China's investment policy, which is unnecessary.

We have reiterated that China will always open its doors to foreign investment enterprises and treat foreign investment enterprises in China equally.

In the first half of 2010, the State Council promulgated the "opinions on further improving the utilization of foreign capital". According to this guidance document, the Ministry of Commerce has done a lot of work in industrial policy, regional guidance, laws and regulations.

In 2011, we will pay close attention to the revision of the guidance catalogue for foreign investment industries, and encourage foreign investment in the fields of high technology, green, low carbon and modern agriculture, and expand the opening up of productive services and medical, educational, tourism and other fields.

The State Council has decided to gradually abolish the restrictions on the stock ratio of foreign-funded medical institutions, conduct pilot projects in foreign-funded medical institutions, and put the examination and approval authority of joint ventures and cooperative medical institutions under provincial authorities.

The Chinese government also responds responsibly to some issues concerning foreign-invested enterprises.

For example, the protection of intellectual property rights is being carried out in China. We are carrying out special actions against intellectual property rights and manufacturing counterfeit and shoddy commodities. We have resolutely investigated and dealt with a number of major cases with serious and bad effects.

Of course, strengthening the protection of intellectual property rights is also an urgent need for China's own development.

Globally, China's absorption of foreign capital took the lead out of the shadow of crisis. By November 2010, the monthly data of China's actual use of foreign capital had been growing for 16 consecutive months, and the annual absorption of foreign capital is expected to exceed 100 billion US dollars.

Surveys conducted by international organizations such as the China World Trade Center conference show that China has always been one of the most attractive investment hosts in the world.

"Finance and economics": some domestic scholars have suggested that China is not short of funds now, and there is no shortage of technology through independent innovation. There is no need to "see" foreign capital as before. What do you think?

Chen Deming: China's foreign exchange reserves have exceeded 2 trillion and 600 billion US dollars. Why should we continue to attract foreign investment? The answer is that the introduction of foreign capital is not only because of "money", but because in an inclusive pluralistic world, China needs not only the products and markets brought by foreign capital, but also the management experience, advanced technology and cultural ideas of foreign countries.

Capital flows from developed countries to China, we are more quickly involved in the global division of labor.

Compared with the beginning of reform and opening up, we should pay more attention to improving the level of foreign capital utilization, pay more attention to the introduction of advanced technology, management experience and talent and intellectual resources, and further play the competitive effect, demonstration effect and technology spillover effect of foreign capital, so as to realize the pformation of attracting foreign capital from mainly relying on factor cost and policy advantage to relying mainly on market and soft environment advantages.

Finance and Economics: China has become a net exporter since 1994. From the perspective of economic history, all net exporters will become capital exporting countries.

Will China change from "global producer" to "exporter of capital"?

We should seize the historical opportunity and build a new cooperation mechanism and cooperation platform from the realization of cross-border investment and utilization of international resources, mastering advanced technology, and establishing a virtuous circle of overseas marketing network, so as to promote enterprises to carry out foreign investment cooperation in an active and orderly manner.

The main body of "going global" is enterprises. The improvement of Chinese enterprises' international operation ability is a long-term process. We need to constantly train talents, build networks and accumulate experience. Enterprises should not only have a keen sense of catching international market opportunities, but also keep calm at all times and enhance risk prevention awareness of overseas investment.

The government will increase policy support and service support to enterprises, strengthen mutual coordination of foreign investment policies and fiscal, monetary and industrial policies, and study ways and means to broaden the effective use of foreign exchange reserves and the cross-border flow of RMB, and support enterprises to accelerate the pace of "going out".

We will further promote the construction of public service platform, cultivate intermediary service agencies for foreign investment and cooperation, vigorously carry out training of pnational management personnel, improve investment promotion and protection mechanism, promote relevant countries to improve investment environment, and safeguard the legitimate rights and interests of overseas enterprises, institutions and personnel.

The Ministry of Commerce has more than 200 business counselors overseas. These institutions will also provide better services for enterprises to "go out". First, all kinds of information services, so that enterprises can reduce blindness and reduce failure rate.

Finance and Economics: ten years ago, in this signing hall, China signed an important agreement with the US and the EU on China's accession to the WTO. This year is China's accession to WTO 10th anniversary. How do you evaluate the ten years? What is the outlook for the next ten years?

Chen Deming: I remember when China joined the world trade organization, many domestic voices were worried about "wolf coming." but ten years ago, we did not worry about the problem.

On the contrary, these ten years can be regarded as the best period for China's development.

The Chinese people are particularly diligent and self reliant. External pressure can make us excite super competitive power and will not inspire such strength in the "closed door" situation.

I hope to sum up the achievements and shortcomings in the past ten years, and jointly plan a new round of strategic layout of opening up, and put forward new major initiatives.

China's opening to the outside world is unwavering. We must continue to raise the level of opening up to the outside world with courage and determination as we did ten years ago, and truly promote development through opening up, promote reform and promote innovation.