Dear friends from the Press,

Welcome to the press conference of today. My name is ShenDanyang, spokesman of the Ministry of Commerce. I am very glad to meet you all again and make a briefing on China’s business performance in January - October this year, and answer your questions.

I. Operation in Domestic Market

Domestic consumer market showed a steady upward trend. According to NBS statistics, retail sales of consumer goods in October this year amounted to 1.8934 trillion yuan, with an increase of14.5% as compared with that of the same period of previous year, setting a record high in seven months and kept rising consecutively in three months. Retail sales of consumer goods from January to October amounted to 16.8356 trillion yuan, up by 14.1% as compared with that of the same period of previous year. The actual growth was 11.8%, price fluctuation excluded, and 0.3 percentage point faster compared with that of the same period of previous year.

1. urban consumption saw a slightly rise. Retail sales of consumer goods in October in urban areas rose 14.5%, 0.3 percentage point faster than that of previous month, and the growth rate was 1.4 percentage points faster than that of the lowest in July and August.

2. Sales by medium-and-large sized circulation enterprises rose slightly. Sales value of 3,000 key retailers monitored by MOFCOM was up by 8.5% year on year in October and 0.5 percentage point faster than that of the previous month. Sales value of businesses above designated size was up by 14.8%, 0.3 percentage point faster than that of total retail sales ofconsumer goods.

3. Sales of upgraded commodities increased slightly. In the 3,000 key retailers monitored by MOFCOM sales value of automobile, furniture and building materials was up by9.9%, 7.6% and 10.5% respectivelyin October,. Growth rate was 3.8, 3.2 and 4.0 percentage points faster than that of the previous month. Salves value of home-appliances was up by 2% and kept rising for three months in a run.

4. Prices of farm produce as food fell slightly. According to the monitoring of MOFCOM, prices of farm produce as food in October in 36 medium-and-large cities saw a slightly drop.The wholesale prices of vegetables were down by 8.6% as compared with that of the previous month, of which, Chinese cabbage, white radish, lettuce, cabbage and rape were all rose more than 20%. The wholesale price of egg was down by 2.2%. The prices of oil, grain and meat rose slightly, of which pork, peanut oil and small package of wheat flour were up by 1.2%, 0.6 and 0.4% respectively. Affected by cold weatherandrainhail, the prices of farm produce as food began to rise. The whole sale prices of vegetables and fruit in last week (November 12-18) were up by 3.8% and 0.5%, of which, bitter gourd, cucumber, and eggplant rose 9.9%, 9.2% and 8.3% respectively as compared with that of the previous week. The price of pork began to rise and saw an increase of 0.1% as compared with that of the previous week.

II. Foreign Trade

According to Customs statistics, China’s imports and exports from January to October this yearare of US$3.16157 trillion, with a year on year increase of 6.3%. Among that, exports amounted to US$1.6709 billion, up by 7.8%; and imports amounted to US$ 1.49067 billion, up by 4.6%. Trade surplus was US$180.2 billion, up by 45.6%. The main features of foreign trade are as follows:

1. Trade with U.S., ASEAN and other important trade partners was steadily up while trade with EU and Japan fell. China-U.S. trade in the first 10 months rose 9.1%, China-ASEAN trade was up by 9.4% and bilateral trade of China-Russia, China-South Africa and China-Brazil were up by 13.4%, 34.9% and 3.5% respectively. Bilateral trade of China-EU and China-Japan was down by 3.0 % and 2.1% respectively.The proportionofemerging marketsinChina’stotal foreign trade increased while that of developed countries dropped 1.7 percentage points.

2. Export by the central and western China remain robust while that in eastern China increased. From January to October, exports by central and western region were up by20.5% and 43.6%. export of Chongqing was up by 1.4 times year-on-year and that of Anhui, Henan and Sichuan was up by 67.9%, 54.1% and 40.2% respectively. export by eastern region was up by 4.8%, 0.5 percentage point higher than that of in the first three quarters, and that of Guangdong, Fujian, Jiangsu, Zhejiang and Shandong rose 7.5%, 7.1%, 4.1%, 4.4% and 1.4% respectively, which were all lower than the national growth.The proportion of exports and imports by the central and western China in China’s total foreign trade was up by 1.3 percentage points, and the exports by the central and western China rose 2 percentage points.

3. Exports and imports ingeneral trade grow steady while that of processing trade slowed down. The exports and imports of China’s general trade from January to October this year was US$ 1.65563 trillion, up by 5.5%. Among that, exports amounted to US$811.40 billion, up by 8.5%; imports registered US$844.23 billion, up by 2.7%.The exports and imports of China’s processing trade was US$1.09853 trillion, with a year-on-year increase of 2.5%, among that, exports registeredUS$705.23 billion, up by 3.0% while imports amounted to US$393.29 billion, up by 1.6%.

4. Exports of mechanic and electronic products grew steady while that of labor-intensive products increased. Exports of mechanic and electronic products from January to October registered US$957.38 billion, up by 8.5%, 0.7 percentage points higher than that of the total exports.Total export oftextile, clothing, furniture, shoes, luggage, plastic products and toys rose by 8.3%. Exports of mechanic and electronic products in October rose 10.2%, 1.9 percentage points higher than that of in the first three quarters. Export of 7 labor-intensive products rose 20.7%, 13.7 percentage points higher than that of in the first three quarters.

III. Foreign investment

From January to October, 20,021 foreign-invested enterprises were newly approved, down by 10.5% year on year; realized FDI reached US$ 91.74 billion, down by 3.45% year on year. In October, 1,996 foreign-invested enterprises were approved in China, up by 1.8% year on year; realized FDI amounted to US$8.31 billion, down by 0.24% year on year (excluding the statistics of banks, securities and insurances). The main features of foreign investment are as follows:

1. Realized FDI in service sector increased slightly year-on-year with real estate factor deducted. From January to October, realized FDI in service sector registered US$43.72 billion, down by 1.8% year and year, taking up 47.7% of the total national amount. Among that, realized FDI in real estate fell by 6.14% and that in service sector rose by 2.1% with real estate factor deducted. The figures in public health, social security and welfare industry, and information transmission, computer service and software industry etc. rose rapidly on year-on-year basis, up by 151.8% and 29.1% respectively. The figures in agriculture, forestry, animal husbandry, and fishery sectors reached US1.46 billion, down by 3.6% year on year, accounting for 1.6% of the total national amount. The figures in manufacturing sector, US$40.41 billion, down by 7.3% year on year, taking up 44.1% of the total national amount. Among that, realized FDI in several industries such as communication equipment manufacturing, transportation equipment manufacturing and general equipment manufacturing rose rapidly.

2. U.S. investment to China started to increase. Realized FDI from the U.S. reached US$2.7 billion, up by 5.3% year on year (down by 0.63% in January-September period), and that from ten countries/regions in Asia (Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea) amounted to US$78.03 billion, down by 4.7% year on year, among which, investment from Japan reached US$6.08 billion, up by 10.9% year on year; Singapore, US$5.6 billion, up 17.7% year on year; and South Korea, US$2.52 billion, up 15.1% year on year. Realized FDI from the E.U. 27 countries registered US$5.24 billion, down by 5% year on year, among which, investments from Germany, Netherlands and Switzerland rose rapidly with the growth rates of 28.1%, 51.2% and 75.8% respectively.

3. Realized FDI in the central and western China maintained rapid growth. From January to October, realized FDI in the central China reached US$7.78 billion, up by 19.4% year on year, accounting for 8.5% of the total national amount; the figures in the western China, US$7.15 billion, up 6.8% year on year, accounting for 7.8% of the total national amount; the figures in the eastern China, US$76.81 billion, down 6.1% year on year, taking up 83.7% of the total national amount.

IV. Investment and economic cooperation overseas

1. Direct investment overseas. From January to October, Chinese investors had directly invested in 3,254 overseas companies in 126 countries and regions, and total direct investments in non-financial sectors reached US$58.17 billion, up by 25.8% year on year.

Investments in Hong Kong, ASEAN, the U.S., Russia and Japan achieved double-digit growth of 42.6%, 31.2%, 16%, 31.9% and 15.2% respectively. Direct investment in the E.U. reached US$1.58 billion, down by 20.9% over the same period of last year; that in Australia, US$1.36 billion, down 28.7% over the same period of last year. Outward direct investment from regions was active, reaching US$19.73 billion, taking up 33.9% of the total national amount, up by 35.1% year on year. Among that, Guangdong, Shandong, Jiangsu, Liaoning and Zhejiang took the lead in regional investment overseas.

2. Contracted projects overseas. From January to October, the accomplished turnover of China's contracted projects overseas amounted to US$87.06 billion, up by 14.4% year on year, and value of newly-signed contracts was US$110.95 billion, up by 6.1% year on year. In October, the realized turnover, US$11.04 billion, up by 46.1% year on year. The new projects each with a contract value above US$50 million numbered 403 (an increase of 45 over the same period of last year), amounting to US$87.07 billion, accounting for 78.5% of the total value of new contacts, up by 6.5% year on year. Among that, the projects each with a contract value above US$100 million numbered 231, an increase of 39 over the same period of last year.

By the end of October 2012, total contract value of the projects overseas reached US$952.6 billion with the realized turnover of US$626.1 billion.

3. Labor service cooperation overseas. From January to October, all kinds of laborers sent abroad reached 353 thousand, with a decrease of three thousand over the same period of last year. Among that, laborers sent abroad for contracted projects reached 181 thousand and that for labor cooperation projects numbered 172 thousand. By the end of October, all laborers sent overseas totaled 880 thousand, an increase of 66 thousand over the same period of last year.

V. Commercial Achievements since 16th CPC National Congress

Since 16th CPC National Congress, all commercial departments have focused on transformation of development mode, insisted on the combination of expanding domestic demand and stabilizing external demand, coordinated international and domestic markets and two resources, and push forward the scientific development of the business.

1. domestic trade achieve new development; China's retail sales of social consumer goods in 2011 amounted to 18.4 trillion yuan, 3.8 times compared with that of in 2002 and with an annual increase of 16.1%. China’s circulation network system has been steadily and significantly improved. The efficiency and the level of circulation raised, as well as the consumer environment continues to be improved, the upgrading of consumption structure speeded up, the stimulating role played in consumption on economic growth further enhanced.

2. foreign trade step forward to a new level. China's imports and exports in 2001 totaled $ 3.6 trillion, 5.9 times than that of in 2002. China has become the biggest exporter of world trade in goods and the second major importer in three consecutive years. Trade in services and service outsourcings develop rapidly, the trade structure has been further optimized, and development mode of foreign trade has been speed up.

3. utilization of foreign capital and overall efficiency has improved significantly; more than 738,000 foreign-funded enterprises have been established till the end of 2011, with actual use of foreign funded of US$ 1.2 trillion, 2.2 times than that of in 2002 and rank the second of the world. The absorption in foreign service industry and high-tech industry increase significantly; distribution of foreign fund has been improved significantly; foreign spillover effect is markedly enhanced, increasingly prominent contribution has been made to the economic and social development, and the absorption of foreign capital advantage has been further consolidated.

4. foreign investment and cooperation develops leaps and bounds; China's foreign direct investment in 2011 amounted to US$ 74.65 billion, 27.6 times than that of in 2002, with an annual increase of 26.9%. The fields of foreign direct investment are expanding and global industrial layout is gradually optimized. The capability and international competitiveness of enterprises going global continues to increase. Promoting of policies of foreign investment and cooperation and management service system has been improving.

5. a new situation of foreign economic and trade relations is created; As to now, there are more than 160 established bilateral trade and economic cooperation mechanisms, with 10 signed FTA and 6 on talk agreements. China would fully implement its WTO commitments; deeply participate in the governance of the global economy. The influence and voice in the international economic system is further raised.

Shen Danyang: That's all for the briefing. And now I will take your questions.

International Business Daily: I have two questions. First, the report of 18th Party Congress has proposed new requirements for comprehensively improving China’s open economy and accelerating the transformation of economic development mode. How will the Ministry of Commerce implement it? The second question, the report set the target of improving the open economy so that it promotes mutual benefit and is diversified, balanced, secure and efficient. How to interpret the requirements for “diversified and balanced” economy?

Shen Danyang: As for the first question, we have organized all MOFCOM officials to study the documents of the 18th Party Congress immediately after the congress was concluded. All the officials will carefully study the documents and implement the decisions, especially the part on commercial work. We will work hard to grasp the spirit of the new requirements on comprehensively improving China’s open economy and moving faster to change the way the export-oriented economy grows, including speeding up the establishment of a long-term mechanism to expand consumer demand and domestic market, and improving the modern market system. We will steadily push forward our work in all aspects.

Recently, MOFCOM will hold the enlarged meeting of the Ministry’s CPC Leadership Group and the National Commercial Work Conference, which will center on studying and implementing the spirit of the 18th Party Congress, and form the new roadmap on commercial development. I hope our friends from the press could give special attention to these meetings. We will focus on such key issues as invigorating distribution and expanding consumption, ensuring stable and smooth market development, promoting the steady growth of foreign trade, increasing the efficiency and benefits of using foreign investment, supporting enterprises to accelerate "going global", and coordinating the work on multi- and bilateral as well as regional and sub-regional opening up and cooperation.

You just mentioned that the 18th Party Congress report has put forward a new target of improving the open economy so that it promotes mutual benefit and is diversified, balanced, secure and efficient. In my opinion, “diversified and balanced” means focusing on coordination to achieve diversified and balanced development during China’s opening up. For example, while further opening up the manufacturing sector, we will also open up services and agricultural sector. While expanding exports and attracting foreign investment, we will at the same time attach importance to imports and outbound investment. While consolidating traditional market in the developed countries, we will meanwhile explore the market of developing countries. While promoting China’s general trade, we will try to increase the added value of processing trade. While strengthening independent innovation, we will further participate in global labor division. While accelerating the opening up of the coastal region, we will work hard on the opening up of inland and border areas. In short, it is necessary to make the open economy more balanced, coordinated and sustainable. Thank you.

CCTV: Zhejiang Aokang Group received a ruling from EU High Court on November 19, which decided in favor of Aokang in the anti-dumping case against the EU, what’s your comment on it?

Shen Danyang: Of course the ruling will play a positive role, which, in my opinion, is demonstrated in three respects: Firstly, it clarifies what is right and what is wrong. The European Court of Justice ruled that the European Commission did not give a fair treatment to Chinese enterprises in its anti-dumping investigations, which the European Commission had refused to admit. The Chinese enterprises believe that the European Commission was unfair, unjust and discriminatory in the anti-dumping investigations against Chinese companies, however, the European Commission did not admit that. Now the ruling could clarify what is right and what is wrong. Secondly, it gives a warning. The ruling restrains the European Commission from abusing anti-dumping measures and its discretion, warning the European Commission that it must exercise its administrative powers impartially in accordance with the law on such issues as law application in market economy treatment, instead of abusing its right. Thirdly, it sets a good example. The ruling has boosted the confidence of Chinese enterprises to safeguard their rights and interests through legal channels. Some Chinese enterprises do not dare to take the trade remedy cases to the local courts like the courts in the EU to safeguard their rights and interests. Aokang’s victory has set a very good example. Thank you.

China Radio International: I have two questions: First, the target set originally for China's foreign trade growth is about 10%, but judging from the current situation, it seems to be very hard to reach, as China’s foreign trade growth was only 6.2% over the past few months. Could you please make a forecast of the foreign trade situation in 2012? Second, you just mentioned that China’s paid-in foreign investment was down by 3.45% year-on-year in 2012, while China's direct outbound investment reached a year-on-year growth of 25.8&. There is a very huge gap, and I would like to know what these figures indicate? Thank you.

Shen Danyang: Regarding the first question, Minister Chen Deming already answered it in the joint press conference during the 18th Party Congress. The global economic situation has been severe and complicated since 2012, with many uncertainties. One of the most formidable factors is the weak external demand. I noticed in the statistics released by EU last week that the Euro-zone economy saw a negative growth of 0.1% in the third quarter of 2012, which means negative growth for two quarters in a row. Two consecutive quarters of negative growth is usually considered a recession. US, EU, ASEAN and Japan are the four largest trading partners of China. This year the US and ASEAN are doing OK, while EU and Japan are not in good shape. China’s exports to the latter two declined significantly, with export to the EU shrinking and that to Japan enjoying little growth. Therefore, the overall growth of China’s foreign trade is slow. According to Chinese Customs statistics, China's foreign trade growth was only 6.3% from January to October, with export growth of 7.8%. It is indeed very difficult to achieve the target growth rate of 10% this year, and it is hard to predict the growth rate for the whole year. Although some research institutions and economists have made forecasts recently, and officials from MOFCOM have also conducted analysis and researches in internal meetings, it is too early to have a definitive answer. In short, we try our best to maintain the steady growth of foreign trade, and increase China’s share in global trade.

And I’d like to add that China's foreign trade still achieved remarkable growth in 2012 compared with other major economies and global trade. Besides maintaining a 6.3% of trade growth rate and a 7.8% of export growth rate, China has achieved significant results in accelerating the transformation of the economic growth mode and structural adjustment. In particular, the share of China's foreign trade in the world might continue to grow in 2012 compared with the 10.4% growth rate in 2011. This does not come easily.

China Daily: Can you brief on the progress of China-Japan-Korea FTA? It is reported before that the FTA negotiations would be launched. In addition, China has actively implemented FTA strategy in recent years, so is there any successful experiences, and what is the next plan? Thank you.

Shen Danyang: First I will talk about China's implementation of the FTA strategy, particularly its impact on China’s foreign trade development. At present, China has 18 FTA partners, including 15 countries and Taiwan, Hong Kong and Macao. The 15 countries are ten ASEAN countries and Pakistan, New Zealand, Chile, Peru and Costa Rica. The implementation of the FTA strategy has greatly promoted trade with these partners, which accounts for 24% of China's total trade. China's foreign trade has developed rapidly since these free trade agreements were signed. For example, China-Chile trade increased to US$ 14.7 billion in 2007 immediately after bilateral FTA came into effect in October 2006, registering an increase of 67%. China-ASEAN bilateral trade reached US$ 362.8 billion in 2011, soaring by 70% as compared with that of 2009. China exports to ASEAN grew by more than 60%, and China imports increased by over 80%. ASEAN has surpassed Japan to become China's third largest trading partner as I mentioned earlier.

In 2011, imports and exports between China and the ten ASEAN countries, Pakistan, New Zealand, Chile, Peru and Costa Rica were about US$ 410 billion, with a year-on-year growth of 25%, 2.8 percentage points higher than China's overall trade growth rate. The growth rate of China's exports to the said 15 partners was 4 percentage points higher than the overall export growth rate. Exports to the FTA partners have maintained such a growth momentum since 2012.

Implementation of the FTA strategy has also improved the trade mix in China and its partners. China’s exports of traditional labor-intensive products, electric and mechanical products and high-tech products to FTA partners saw a rapid growth. China’s imports of energy resources and raw materials from the 15 FTA partners also saw a rapid growth, which has eased the pressure on domestic resources and environment. In addition, developing free trade area has pushed forward the FTA partners to recognize China's full market economy status, and significantly reduced bilateral economic and trade frictions.

2012 is the 10th year since China began to implement the FTA strategy, and we believe that implementing the FTA strategy is an effective way for China to improve opening up, expand and deepen common interests with FTA partners, achieve mutual benefits and win-win, and promote development, reform and innovation through opening up. In the future, we will safeguard the multilateral trading system, while accelerate the implementation of the FTA strategy following the direction pointed out in the report of the 18th Party Congress.

About China-Japan-Korea free trade area, in May 2012, the leaders of the three countries reached a consensus in Beijing that FTA negotiations would be initiated within the year. After that, the working groups of the three countries have had consultations and made all the necessary preparations. Currently, the East Asia Summit meetings are being held in Cambodia, and Premier Wen and Commerce Minister Chen Deming have both attended the meetings. You can watch today’s news to find out whether the announcement on launching FTA negotiations will be made according to schedule, and who will make the announcement. Thank you.

21st Century Business Herald: I have two questions: First, we noticed that MOFCOM released a series of announcements on anti-dumping cases against the EU, the US or Japan on its website. I remember that Minister Chen Deming said in the interview during the 18th National Congress of CPC that we had won many trade remedy cases against the EU and US at the WTO, but had not talked much about it. Can you take this opportunity to brief on the outcomes of trade disputes in recent years? Second, about plasticizer in the Chinese liquor baijiu, MOFCOM has a tracing system for baijiu. If the plasticizer problem or other similar problems do exist, what role will the tracing system play? Thank you.

Shen Danyang: In the joint press conference during the 18th National Congress of CPC, Minister Chen said that we had won cases against the EU and the US, we just had not talked about it. Now I will talk about it briefly. In dealing with trade disputes, we have many measures. In terms of starting a lawsuit (Minister Chen mainly referred to the cases in which China is the plaintiff), we mainly use two ways to safeguard national interests and the interests of the Chinese industries. The first is WTO dispute settlement mechanism. If an agreement is not reached in bilateral trade consultation or some countries abuse trade remedy measures for protectionism, we will bring a case to the WTO. The second way is we support Chinese companies to challenge unfair measures through the legal procedures of the country or the region that started the trade remedy investigations. The case about Aokang Shoes Co., Ltd. we just mentioned is an example of the second way.

In terms of WTO dispute settlement mechanism, over the past 11 years since China’s entry into the WTO, we have brought 11 cases against the US and the EU’s trade remedy measures imposed on China to the WTO. By now, 8 cases already have final rulings, and China won most of them. I will give three examples: First, in the case about four anti-dumping and countervailing measures taken by the US against China, the WTO Appellate Body clarified the meaning of “public bodies” and “double remedies”, and ruled that the US anti-dumping and countervailing measures imposed on China were inconsistent with WTO rules. Firstly, it ruled that Chinese State-owned enterprises can not be arbitrarily classified as public bodies. Secondly, it ruled against double remedies. The US usually imposes double remedies in its anti-dumping and countervailing duties. The WTO Appellate Body ruled that the above two conducts of the US are inconsistent with the WTO rules, thus the US had to revise the related domestic laws.

Second, in China’s complaint against the U.S. ban on imports of Chinese poultry, the WTO Panel fully supported China’s claims, ruling that the US legislation of restricting poultry import from China was inconsistent with WTO rules, and the US was forced to terminate related laws.

Third, in China’s complaint against EU’s anti-dumping measures on China’s fasteners, the WTO Appellate Body ruled that the clauses in the EU Basic Anti-dumping Regulation on individual duty was in violation of the WTO rules. The EU also had to revise its anti-dumping laws, lower the anti-dumping duty imposed on our fastener products, and agree to re-examine other 52 anti-dumping measures against China.

Shen Danyang: The second way is China supports Chinese companies to file lawsuits in the country that starts trade remedy investigations, and we have received many favorable rulings. I just mentioned that on November 15, the European Court of Justice ruled that Zhejiang Aokang Shoes Co., Ltd. won the case about EU’s anti-dumping measures against shoes imports from China. This is another big victory for Chinese companies over the past years in challenging unfair and unreasonable conducts in EU trade remedy investigations by resorting to EU’s own legal procedures. In this February and July, the EU Court of Justice (ECJ) ruled in favor of Chinese companies in the cases of four Chinese companies against EU’s anti-dumping measures on Chinese leather shoes and Zhejiang Xinan Chemical Industrial Group Co. Ltd against EU’s anti-dumping measures on glyphosate imports.

As China’s share in global trade and global exports increases, there will be a lot of trade frictions in the future. MOFCOM takes these frictions seriously, but considers them to be normal. On the one hand, MOFCOM opposes all trade protectionist behaviors, and hopes related countries could refrain from abusing trade remedy measures on Chinese products. On the other hand, we will continue to resort to legal means under the WTO framework to firmly safeguard the lawful interests of the state and the Chinese industries.

As to the baijiu tracing system you mentioned, MOFCOM has been establishing food safety tracing systems since the year before last. Currently there are only pilot projects in major cities, which have been quite successful. Through such a tracing system, we can find out the source of the problematic food or link of distribution. Of course, tracing system needs the collaboration of many parties and many areas. I cannot say the tracing systems are perfect, as they are only pilot projects, including the system for baijiu. I will tell you more when I have further information.

China CCTV-2 Economic channel: We can see the total foreign investment in China declined, but the US investment in China increased. I would like to know whether the increase is real investment or hot money. Thank you.

Shen Danyang: US investment to China has been increasing for the last few months, not just recently. When we analyze foreign investment to China or China’s outward investment, we should look at a relatively long period, as one or two months’ statistics can not actually reflect the situation. Sometimes, because of a big project, for instance, when the US investment in the Shanghai Disneyland project was in place a few months ago, a big increase occurred. Foreign-invested projects sometimes involve a large amount of capital up to several or tens of billions of US dollars, which will dramatically increase total foreign investment in a short period. It’s the same with outward investment. If you look closely at the statistics, you can find China’s investment to the EU declined this year, but that of last year increased, which is mainly because of one big project in Luxemburg last year. Actually this year China’s investment to Germany grew by 110% and that to many European countries such as Britain and Belgium increased by a large margin.

We are confident that China’s foreign investment inflow will continue to grow. It is in a stage of adjustment at present, and will restore momentum of growth in the future. Thank you.

CNS: I have two questions: First, President Obama was recently re-elected as President. What is the trend in China-US trade frictions after the election? What expectation does China have on China-US trade and economic relations? Second, Premier Wen Jiabao is attending the East Asia Summit meetings in Cambodia, and ASEAN is China’s largest FTA partner. Can you brief the main characteristics of China-ASEAN trade and economic cooperation and the plans for cooperation in the next stage? Thank you.

Shen Danyang: About China-US economic relations, Minister Chen already explained clearly at the joint press conference during the 18th National Congress of CPC. About the remarks made by US politicians during the election, we will wait to see whether they will do what they say and what measures they will take. Some critics say we should not take election remarks seriously. If it is true, I think there would be less China-US trade frictions. President Obama was successfully re-elected as President on November 6, and Minister Chen offered congratulations to him during the interview. As to China-US trade and economic relations, Minister Chen put forward three hopes when answering reporters’ questions. In short, we hope under the leadership of President Obama, America can move in the same direction with China, develop bilateral trade and economic relations in the principle of mutual respect and mutual benefit, discuss and address trade problems through cooperation and dialogue, and refrain from politicizing trade and economic relations, so as to promote the stable and healthy development of bilateral trade and economic relations.

I will briefly respond to your question on China-ASEAN trade and economic cooperation. China-ASEAN free trade area was completely established on January 1st of 2010, and China and ASEAN trade and economic relations have entered a new development period featuring multi-dimensional, wide-ranged and multi-tiered cooperation. In recent years, bilateral trade has been developing fast, bilateral investment has been increasing, project contracting cooperation has made remarkable achievements, and cooperation on connectivity has entered a new stage.

In terms of bilateral trade, in the past 20 years, the average annual growth of bilateral trade between China and ASEAN reached 20%. China has been ASEAN’s largest trading partner for three consecutive years, and ASEAN is China’s third largest trading partner. From January to October, total import and export between China and ASEAN was US$323.9 billion, up by 9.4% year on year, 3.1 percentage points higher than the growth of China’s total trade in the same period last year. Among that, China’s export to ASEAN grew by a remarkable 19.4%. In terms of bilateral investment, by the end of October, non-financial direct investment from Chinese companies to ASEAN countries reached US$18.5 billion. Since 2006, Chinese companies have established 5 overseas trade and economic cooperation zones in Cambodia, Thailand, Vietnam and Indonesia. There are two kinds of investors in such projects. The first kind is the companies that have established the zones, as the investment in building the zones mainly come from companies; and the second kind is the companies that have set up operations the zones. By the end of September, the first kind of companies invested US$420 million, and the 95 companies in the second category invested US$570 million. These investors have made an output of US$1.6 billion, and created jobs for 8,300 people. Currently, China is negotiating with Malaysia and Laos on jointly constructing the Malaysia-China Kuantan Industrial Park (MCKIP) and Laos Vientiane Comprehensive Development Zone.

ASEAN enterprises are also enthusiastic about investing in China. Till the end of September this year, actual investment of ASEAN countries in China totaled US$ 75.7 billion, with more than 365,000 projects. ASEAN countries have contributed to China's economic development and also strengthened themselves. In the area of contracted engineering projects, by the end of this October, Chinese enterprises had invested nearly US$ 140 billion, with a turnover of US$91.75 billion. ASEAN has become one of the most important markets for China in this field. In the area of connectivity cooperation, in the 14th China - ASEAN Summit last year, Premier Wen proposed establishing a China - ASEAN Committee on Connectivity Cooperation, which was endorsed by the ASEAN leaders. In September this year, the Chinese Working Committee of the China-ASEAN Committee on Connectivity Cooperation was formally established. It is led by the Ministry of Commerce and its members include the relevant departments of the State Council, as well as local government of Guangxi, Yunnan, and other border provinces. Mr. Chen Jian, Vice Minister of Commerce, led a delegation on November 7 to Indonesia and co-chaired the China - ASEAN Connectivity Cooperation Committee meeting. The two sides agreed to convene the meeting routinely or as necessary, and agreed upon the mechanism, responsibilities and objectives of the Committee. After the meeting, connectivity cooperation between China and ASEAN has entered a new stage. These facts show that economic and trade cooperation between China and ASEAN is developing soundly and enjoys broad prospects. Thank you for your question.

Reuters: Firstly, in April this year, a scandal of Wal-Mart in Mexico was exposed. The company tried to expand their local outlet through bribery. Wal-Mart headquarters said that such investigations are also carried out in China, Brazil and India. I am wondering whether the Ministry of Commerce has paid any attention to this matter, and will the Chinese judiciary be involved in the investigation? My second question is about RMB appreciation. The exchange rate reached a new high last Thursday since the RMB exchange reform. In the last few days RMB appreciation has slowed down but still broke the record high. As external demand is still weak, will the currency appreciation impose big pressure on Chinese export enterprises? What do you think of the trend in the future? Thank you.

Shen Danyang: As for the appreciation of RMB, the RMB exchange rate is now based on market supply and demand, and cannot be influenced by MOFCOM or even PBOC. So I have no comment on the RMB exchange rate. And I have heard about the Wal-mart case, but have very little information. MOFCOM is following this issue.

Market News International: I have two questions. Firstly, Minister Chen Deming said when interviewed by reporters during the 18th Party Congress that to achieve the foreign trade objectives for this year is difficult, but the share of China’s foreign trade in global market is increasing. Can you tell us more about it? Secondly, what are the big changes in the development of processing trade and trade of mechanical and electrical products this year?

Shen Danyang: As for the first question, I have already mentioned before. Two factors support the growth of China’s share in global foreign trade. Firstly, the growth rate of China’s foreign trade is significantly faster than other major trading economies and China's foreign trade grows significantly faster than global trade. If both growth rates are significantly "faster", it’s logically sound that the China’s share in the world will increase. How much is the growth rate of global trade this year? WTO estimates that growth in world trade this year probably is only 2.5%, and China’s growth rate is expected to reach at least 7%, if not 10%, which is much higher than the global growth rate. Secondly, in other major economies, the growth rate of import and export in the U.S. from January to September was 4.4%, and that of Japan 2.9%. Total trade in Germany and Italy from January to September dropped by 5% and 9.5% respectively. In the emerging countries, Russia and Brazil saw an increase of 3.5% and 0.56%, while South Africa was down by 1%. By comparing and analyzing these data, we can know that China's share in global foreign trade would continue to grow even though there are still two months to go.

On export of mechanical and electrical products, I have given you many data on structural adjustment of trade, but I have not provided specific data on the changes in the exports of mechanical and electrical products and high-tech products. Here I would like to tell you some figures or a few highlights: Firstly, growth rate of export of electric and mechanical products has been constantly higher than the average growth rate of foreign trade since the beginning of this year. From January to October, export of electric and mechanical products rose by 8.5% a year on year, 0.7 percentage point higher than that of China’s total foreign trade. Secondly, export of certain mechanical and electrical products grew by a large margin. For example, export of locomotives almost doubled in value. In the first three quarters of this year, China exported nearly 12,000 locomotives, up by 75.2%. The total value was US$ 2.37 billion, up by 97%. Exports of integrated circuits doubled for three consecutive months. Exports of integrated circuits from January to October rose 22.6% in volume, reaching 92.8 billion, and 53% in value, reaching US$ 39.68 billion. Growth rate in August, September and October was even faster, all exceeding 100 percent. Thirdly, imports of machinery and electronic products rose steadily. In the first 10 months of this year, imports of machinery and electronic products were up by 3.1%, 1.5 percentage points lower than that of foreign trade. However imports have kept rising for five consecutive months, with the growth rate in the past four months higher than that of overall trade, reaching 10% and 7.5% in September and October respectively. Fourthly, import and export of high-tech products continued to rise, taking up a larger proportion in China’s foreign trade compared with last year. Import and export of high-tech products from January to October rose by 7.2%, accounting for 28.1% of China’s total import and export, 0.3 percentage point higher than that of the previous year. Lastly, total processing trade set a record high. Import in processing trade began to rise from September, indicating a good momentum for the last two months. Judging from September and October, import in processing trade is picking up, rising by 5.3% and 7.3% respectively. Some people think that the export might still be weak, but the data indicate exports in the last two months, in particular, export in processing trade would grow rapidly.

Shen Danyang: That concludes the Press Conference today. Thank you!