From the perspective of global supply chain, Zong said that we will strengthen communication and coordination with economic and trade partners, give priority to ensuring the recovery of production and supply of leading enterprises and key links with prominent influence in global supply chain, and maintain the stability of global supply chain.
Zhou Shijian, a senior researcher at the China US relations research center of Tsinghua University, told the first financial reporter that restoring Chinas production and consumption capacity plays an important role in boosting world economic growth and reducing the impact of the epidemic on the industrial chain of other countries. At present, Chinas measures are the embodiment of Chinas being a responsible big country.
The foreign investment law and its implementing regulations shall be implemented from the beginning of this year. It is noteworthy that Ren Hongbin, Assistant Minister of Commerce, said at the press conference of the new China Development Office on the 24th that he would reduce the negative list of foreign investment access of the whole country and the pilot free trade zone.
Zong Changqing said at the conference that since this year, the national development and Reform Commission and the Ministry of Commerce, together with relevant departments, have launched the revision of the new negative list of foreign investment access for the whole country and the free trade zone. In the next step, the Ministry of Commerce will strengthen coordination and linkage, speed up the pace of work, publish and implement the two negative lists as soon as possible in accordance with the procedures, further expand the field of foreign market access, and provide more investment opportunities for foreign investors.
Reduce the burden of foreign trade enterprises
Li Xingqian, director of the foreign trade department of the Ministry of Commerce, said at the conference that China is an important link in the global supply chain of many multinational companies. The impact of the epidemic on the supply chain in the field of foreign trade mainly occurs at the level of production supporting, and product integration encounters temporary difficulties. This kind of influence is local, limited and completely controllable.
Li Xingqian said that China has the worlds largest manufacturing system with the most complete categories and supporting facilities, and the advantages of a complete industrial chain are irreplaceable. The development of Chinas foreign trade is resilient, with great room for innovation. The long-term trend of improving will not change, nor will Chinas position in the global industrial chain and supply chain change. With the implementation of policies related to stabilizing foreign trade, greater benefits will be released to the industrial chain in the field of foreign trade.
In order to restore the order of production and operation of foreign trade in an orderly manner, the Ministry of Commerce will highlight four policy focus points to solve the current problems: first, timely and sufficient export tax rebate, effectively reduce the cost of enterprises and reduce the burden of enterprises. Second, expand foreign trade credit to meet the demand of trade financing. For enterprises with market and order, we should make full use of the loan to ensure the performance of the contract. We should give priority to ensuring the foreign trade capital chain to unblock the industrial chain and supply chain. Third, we will effectively expand the coverage of short-term export credit insurance, promote a reasonable reduction in rates, and effectively serve the overall development of foreign trade. Fourth, we should strengthen our foreign work, coordinate relevant countries to see the impact of the epidemic scientifically and rationally, and do not take excessive trade restrictions.
Zhou Shijian told the first financial reporter that it is crucial to reduce the export cost for foreign trade enterprises. The second is to expand foreign trade credit, said Zhou Shijian: now running enterprises, one key is capital, the other is labor. After expanding the loan, the enterprise has the fund to expand the input, but also can expand the recruitment, which is a favorable measure.
Zhou Shijian also told first finance and economics that we should make a high affirmation on measures such as lowering the RMB exchange rate, exempting the toll and reducing the logistics cost, which is crucial to reducing the burden of foreign trade enterprises. Zhou Shijian explained that the exchange rate of the US dollar against the RMB was adjusted from 6.86 yuan on January 21 to 7.02 yuan on February 21, which is the embodiment of the economic law and is also conducive to reducing the export burden of foreign trade enterprises. On the one hand, the exchange rate is the embodiment of the economic situation. The domestic economy is affected by the epidemic situation, so the devaluation of RMB is a normal phenomenon. On the other hand, the U.S. dollar has unexpectedly strengthened in the past month, and the exchange rates of many countries against the U.S. dollar have depreciated.
Zhou Shijian told the first financial reporter that Chinas current economic volume is not the same as that of 2003, and its gross domestic product (GDP) is 10 times that of the outbreak of SARS. China has also become one of the two locomotives driving world economic growth. Therefore, Chinas current measures to restore production are not only meaningful for its own economic development, but also play an important role in promoting world economic growth. It is the role of a responsible big country.
Recently, the new coronavirus began to spread around the world. The number of confirmed cases in South Korea, Iran, Italy and other countries increased sharply, and the industrial chain was also impacted to varying degrees. Zhou Shijian believes that Chinas best job is to achieve win-win cooperation. Chinas high operating rate requires more auto parts.. After the resumption of production, the economy has also recovered, and peoples consumption capacity has risen, which can play a huge role in pulling the world forward.
Zhou Shijian explained that China is already the second largest importer in the world. In 2018, the total import volume is 84% of that of the United States, while this figure was only 17% in 2000. Therefore, Chinas recovery of consumption capacity plays an important role in the world.
Chinas scale is hard to replicate
At present, these measures have begun to achieve results. For example, Shanghai has increased its support for key foreign-funded enterprises. The monitoring results of 840 key foreign-funded enterprises show that as of February 25, the return rate has exceeded 99%; the organizational strength of Shanghai municipal government, starting from February 25, will spend half a month visiting 720 regional headquarters and key foreign-funded enterprises of multinational companies in Shanghai to solve difficulties and problems on the spot. Guangdong Province has played the role of direct transportation mechanism for provincial governors to contact multinational companies, strengthened coordination services from four aspects of logistics, labor, raw materials, prevention and control materials, and actively responded to the difficulties and demands of 40 multinational enterprises and relevant chambers of Commerce, including Wal Mart, LG, Danone, Cargill, and Dongli. At present, relevant problems have been coordinated and solved, and BASF and other large foreign-funded projects have resumed construction.
A number of investigations and studies have shown that the fundamentals of Chinas long-term economic growth have not changed, the comprehensive competitive advantage of absorbing foreign investment has not changed, the confidence and strategy of most multinational companies to invest in China have not changed, they are still optimistic about the long-term development prospects of Chinas market, and some are continuing to increase investment in China.
According to a recent survey conducted by the American Chamber of Commerce in China, 55% of the surveyed enterprises believe that it is too early to judge the impact of the epidemic on the business strategy of 3-5 years; 34% believe that it will not. According to a survey report released on the 27th by the European Chamber of Commerce in China, 54% of enterprises do not think that their performance in 2020 is bound to decline.
At a press conference held jointly by the European Chamber of Commerce of China and the German Chamber of Commerce on the 27th, Joerg wutke, President of the European Chamber of Commerce of China, said that the crisis challenges the future business model of EU enterprises, but EU enterprises recognize that China is a competitive economy, so they will not consider leaving China as an option. Without a second China, its as simple as that, said woodke
With the exception of Japan, the economies around China are very small. Therefore, if you move to another country, it will greatly increase the difficulty of logistics chain. Our real problem is that Chinas scale is hard to replicate. Chinas growth accounts for 50% to 60% of global growth, he explained. For me, the biggest risk is not in China.
Take multiple measures to support foreign enterprises
Zong Changqing said that in the next step, the Ministry of Commerce will, in accordance with the decision-making and deployment of the CPC Central Committee on stabilizing the basic board of foreign investment, further strengthen the service and support to foreign-funded enterprises by taking multiple measures simultaneously under the premise of doing a good job in epidemic prevention and control.
Woodke believes that the Chinese government has provided a considerable toolbox to address the impact of the epidemic. After weeks of fighting the virus, the government is shifting its focus to economic development. Especially this week, you can see a lot of action. Said woodock.
The Chinese government has temporarily reduced taxes, which is what we hope to see. It has also provided social insurance, increased short-term credit, expanded loan support, logistics assistance, lower storage costs for state-owned facilities, lower fees for state-owned utility companies, reduced administrative costs, etc., Mr woodke said
As for the role of the two negative lists of the current epidemic, Zhou Shijian told the first financial reporter: everyone knows that the epidemic is not always possible. Now academician Zhong Nanshan predicted that the epidemic situation would be basically controllable by the end of April. The negative list allows foreign investment to come in more easily and provides them with more favorable conditions, which is to encourage investment.