MOFCOM Rep Answers Questions on Trade Disputes, New Zealand Milk, Bribery Probes and Shanghai’s Free Trade Zone

August 9, 2013 Posted by China Briefing Reading Time: 4 minutes

Aug. 9 – This week, a spokesman for China’s Ministry of Commerce (MOFCOM), Shen Danyang, was interviewed by several media outlets in regard to recent hot issues concerning China’s economy and trade situation. Below is a translation of some of the key questions asked, and the subsequent answers provided.

Q: How does the agreement reached on the trade dispute over photovoltaic products between China and the European Union affect China’s export of photovoltaic products to the EU? Also, what is the next step for China with regard to the potential issues on dumping and subsidies for wine and polysilicon exports from the EU to China?

A: The European Commission approved the China-EU Price Undertaking Agreement on August 2. The Agreement was announced on August 3, and it was officially implemented on August 6. All enterprises looking to join the Price Undertaking Agreement will be exempted from anti-dumping taxes; enterprises that choose not to join the Agreement are subject to anti-dumping taxes at the tax rates specified in the announcement.

MOFCOM welcomes the Price Undertaking Agreement, and we think that a proper resolution for the photovoltaic case mutually benefits both China and the EU since it could help Chinese enterprises keep reasonable market shares in the export of photovoltaic products to the EU, and also satisfies the needs of EU-based customers.

The anti-dumping and anti-subsidy probes on wine and polysilicon are still currently under investigation. MOFCOM makes our decisions based on legitimate investigations. Meanwhile, we are willing to see parties from both the EU and China search for a better resolution through dialogue and increased cooperation.

Q: What comments does MOFCOM have on the news that China recently discovered clostridium botulinum in imported dairy products from New Zealand-based dairy enterprises and the subsequent complete stop of milk powder imports from New Zealand? Is this true?

A: According to both the Chinese and New Zealand governments, we have preliminarily determined that dairy products produced by Fonterra that have been imported by four different Chinese importers are possibly polluted by clostridium botulinum.

MOFCOM and the General Administration of Quality Supervision, Inspection and Quarantine of China (AQSIQ) have requested that New Zealand take practical action to prevent the polluted products from harming the health of consumers in China and to also further enhance the inspection and quarantine of dairy products exported to China. At the same time, we have ordered all the importers to recall products that could have been polluted. Please pay attention to future AQSIQ updates.

Q: According to the original plan as reported, relevant regulations regarding the Shanghai Free Trade Zone should have been released in late July. Why did the Chinese government postpone the promulgation of these regulations?

A: The executive meeting of the State Council on July 3 discussed and approved the General Plan of the Shanghai FTZ in principle. However, at the meeting, it was noted that further revisions and improvements to the General Plan were necessary. Currently, the General Plan is being further revised in accordance with the relevant procedures. It will not be long until it is officially approved and released.

Q: The second round of China, Japan, and Korea FTA negotiations were completed last Friday in Shanghai. What progress was made? What is the next step?

A: All three parties have discussed the issues of trade of goods and services, rule of origin, trade remedies, customs procedures, technical barriers to trade, sanitary and phytosanitary measures, competition policies, intellectual property rights and E-commerce related matters.

The third round of negotiations will start at the end of this year.

Q: It is reported that China’s Administration of Industry and Commerce initiated investigations on two large foreign-invested pharmaceutical companies, Sanofi and Eli Lilly, since the GlaxoSmithKline scandal broke out. Are these investigations specifically targeting foreign-invested enterprises (FIEs)?

A: There is no basis for such a comment. As we all know, most FIEs in China have a high sense of legal consciousness and operate legitimately. FIEs have also become an important element of China’s economy.

It is each enterprise’s responsibility to conduct business lawfully in China. Once an enterprise breaks the law, no matter if it is an FIE or a domestic enterprise, they should bear the corresponding legal responsibility.

I hereby reiterate that China is always open to foreign investors. The policy of the Chinese government on actively attracting foreign capital has not, and will not, be changed. China has also further shown its determination to improve the environment for foreign investments and to create fair opportunities by investigating or prosecuting such cases. We believe that these actions will only increase the confidence of multinational companies in their China investments, not the opposite.

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