SCIO briefing on China's commerce development in 2015

Gao Hucheng:

As for the reporter's question, I'll talk about the reasons behind the situation. At the end of 2014, the prediction for the growth of imports and exports in 2015 was not groundless. Why was the target set at around 6 percent? Because foreign trade grew by 3.4 percent in 2014 and international institutions generally believed the economic situation would show a turn for the better in the following year, with an estimated growth rate of 0.2 to 0.5 percentage points. We basically agreed with that. For instance, the oil price falling to US$55 per barrel was thought to have hit bottom by everyone then. Many of the oil producing countries created financial budgets on the basis of US$60 per barrel at least. So it was believed that the price of commodities and energy products would rise gradually. However, as we know, the price of commodities plummeted last year with the oil price declining from 55 to 30 US dollars per barrel. Likewise, the price of commodities such as agricultural, minerals and energy products all fell 20-50 percent. It was a great change.

Another change, at the end of 2014 and the beginning of 2015, a series of unexpected geopolitical factors, such as turmoil in some regions, and epidemics like Ebola and Dengue fever, all had economic influences. The gradual spread of violence and terrorism in some regions also had a severe impact. As for the point, we had noted the daunting and complicated challenges and a lot of uncertainties were lying ahead but the later situation was in fact more difficult to handle than imagined. Even until now, regarding howthe issues will develop and be tackled, no one at present can give a clear answer. Some of them may get resolved effectively and some may keep simmering.

The hard-won achievements of China's foreign trade last year were attributed to several reasons. Firstly, China has a complete industrial system with long industrial chains and advanced support capacity. Secondly, China has great innovation capabilities as enterprises adjusted themselves to enhancement after the financial crisis in 2008. China has world class basic education and advanced higher education and the nation, including each family, makes a lot of investment on education. The essential innovation spirit is a strong competitive edge for China. Thirdly, the development and innovation of emerging businesses and the transition of traditional industries all have positive effects. For instance, the pilot program of cross-border e-commerce in Hangzhou brought about an increased export volume of US$10 billion last year. It is reported that the primary task this year is to promote the pilot program in 12 cities so as to highlight the achievements in innovation. Fourthly, the government is making efforts to create a convenient, efficient and legalized business environment for all enterprises. Through streamlining administration and delegating power to lower levels, sorting out taxes and fees, and improving work efficiency, the government has lowered the burden on enterprises to a great extent. Especially in helping resolve enterprise financing difficulties, all financial institutions reached out their hands to help foreign trade enterprises go global through various means. I believe all those trends will continue this year.

In the interests of time, I will stop here on this question. As the reporter has asked several questions, I'll talk about the "Belt and Road" Initiative of common concern and make an introduction on its implementation and significance.

Being a top-level design for opening-up and economic diplomacy in the new phase, the "Belt and Road" Initiative is a proposal and plan to promote global cooperation, common development and prosperity. The important cooperation initiative proposed by President Xi Jinping employs the historical notion of the "Silk Road" to promote peace, cooperation, openness, inclusiveness, learning from each other, mutual benefit and win-win development, which are the contents of the Silk Road Spirit. What is the essential basis for the initiative? Its implementation is not influenced by ideology, development route, model and level, but it aims to realize mutual benefit and win-win development through exchanges and cooperation in policy, trade, currency, infrastructure, humanity and other aspects under the principle of joint negotiation, construction and sharing. In my opinion, it differs from other proposals in that it is an open and inclusive cooperation initiative. It is set by China to promote global cooperation and win-win development.

Over the past two years, the initiative has drawn responses, keen attention and hot discussion among more and more people. Some globally renowned research institutions have taken up research on its implementation and its influences on global cooperation and development. Until now, over 60 countries have responded to take part in the joint construction. Some countries have exchanged strategies with China and put forward detailed plans. President Xi has said the the Belt and Road Initiative is not a Chinese solo, but a real chorus comprising all countries along the routes. Over the past two years, the construction has made progress with some large-scale projects launched. Western China has moved to the forefront for opening-up under the new situation. The central part of China is now accelerating opening-up and the eastern China has ushered in a new round of industrial and cooperative upgrading period.