MOFCOM : Ministry of Commerce By Ari Herzog April 27, 2006 Suffolk University

Birth in March 2003 Born to eliminate redundancy MOFTEC (formerly MOFERT) + SETC + SDPC = MOFCOM

Born to eliminate redundancy

MOFTEC (formerly MOFERT)

+

SETC

+

SDPC

=

MOFCOM

Departments/offices General Affairs Office Personnel, Education and Labor Department Policy Research Office Law Department Planning and Finance Department Asian Affairs Department Northwest Asian and African Affairs Department Europe Department America and Oceania Department Taiwan, Hong Kong and Macao Office International Economic and Trade Relations Department WTO Department Foreign Trade Department Machinery and Electric Equipment Import and Export Department Scientific Development and Technological Trade Department Market System Department Commerce Reform and Development Department Market Operations Regulation Office Foreign Investment Department External Aid Department External Economic Cooperation Department Import and Export Fair Trade Bureau Industrial Damage Investigation Bureau Information Technology Department Foreign Affairs Department

General Affairs Office

Personnel, Education and Labor Department

Policy Research Office

Law Department

Planning and Finance Department

Asian Affairs Department

Northwest Asian and African Affairs Department

Europe Department

America and Oceania Department

Taiwan, Hong Kong and Macao Office

International Economic and Trade Relations Department

WTO Department

Foreign Trade Department

Machinery and Electric Equipment Import and Export Department

Scientific Development and Technological Trade Department

Market System Department

Commerce Reform and Development Department

Market Operations Regulation Office

Foreign Investment Department

External Aid Department

External Economic Cooperation Department

Import and Export Fair Trade Bureau

Industrial Damage Investigation Bureau

Information Technology Department

Foreign Affairs Department

Responsibilities Formulates and coordinates guidelines, laws, policies, regulations, plans, strategies, and administration of domestic and international trade and international economic cooperation foreign investment foreign government loans and assistance programs overseas projects technology trade with foreign countries tariffs, taxation, exchange rates, credit, and pricing economic relations with Taiwan, HK, and Macau

Formulates and coordinates guidelines, laws, policies, regulations, plans, strategies, and administration of domestic and international trade and international economic cooperation

foreign investment

foreign government loans and assistance programs

overseas projects

technology trade with foreign countries

tariffs, taxation, exchange rates, credit, and pricing

economic relations with Taiwan, HK, and Macau

Ministers

January 2006: FDI in China FDI up 11% in Jan 2006, from Jan 2005 $4.55 billion USD HK, British VI, Germany led investment 15 EU countries grew by 70.8%, US by 19.7% 3,044 new foreign firms set up shop 14.5% decrease

FDI up 11% in Jan 2006, from Jan 2005

$4.55 billion USD

HK, British VI, Germany led investment

15 EU countries grew by 70.8%, US by 19.7%

3,044 new foreign firms set up shop

14.5% decrease

Future investments PricewaterhouseCoopers survey of CEOs in Jan 2006 55% to invest in China now through 2009 75% want to win Chinese customers 48% want to decrease labor costs

PricewaterhouseCoopers survey of CEOs in Jan 2006

55% to invest in China now through 2009

75% want to win Chinese customers

48% want to decrease labor costs

Potential tax rate change Today, domestic firms pay income tax rates of 33%, foreign firms taxed at 15% National People’s Congress to discuss in 2006 to unify the rates. Also, plans for future tax breaks.

Today, domestic firms pay income tax rates of 33%, foreign firms taxed at 15%

National People’s Congress to discuss in 2006 to unify the rates.

Also, plans for future tax breaks.

China support of key export brands 2003: 65% market share for top 10 brands of 80 consumer products 80% market share for top home appliance brands 20% of export enterprises had own brands; < 10% of total exports Lack of IPR in tech firms Source: Hong Kong Trade Development Council website - www.tdctrade.com/alert/cba-e0507a-3.htm

2003: 65% market share for top 10 brands of 80 consumer products

80% market share for top home appliance brands

20% of export enterprises had own brands; < 10% of total exports

Lack of IPR in tech firms

190 domestic export brands fostered in 2005-2006: includes Haier, Gree, Xoceco, Galanz, Jialing, Huawei, ZTE, Ordos and Threegun 71 from mechanical and electrical industry 55 from textile industry 40 from light industry, arts and crafts 10 from food, native produce and animal by-product industry 7 from metals, minerals and chemicals industry 7 from pharmaceutical and health food industry

190 domestic export brands fostered in 2005-2006: includes Haier, Gree, Xoceco, Galanz, Jialing, Huawei, ZTE, Ordos and Threegun

71 from mechanical and electrical industry

55 from textile industry

40 from light industry, arts and crafts

10 from food, native produce and animal by-product industry

7 from metals, minerals and chemicals industry

7 from pharmaceutical and health food industry

WTO: China #1 exporter by 2011 2005 world trade volume was > $10,000 billion USD, 13% increase over 2004 Largest export increase by Russia (37%), China (28%), and Brazil (23%) Top 3 goods export countries were Germany, US, and China WTO prediction that China would take the place of Germany as the largest goods exporter in 2007 if China maintained 30% export increases WTO prediction that China would be #1 goods exporter by 2010 at latest Source: Network Center of MOFCOM, 4/20/06

2005 world trade volume was > $10,000 billion USD, 13% increase over 2004

Largest export increase by Russia (37%), China (28%), and Brazil (23%)

Top 3 goods export countries were Germany, US, and China

WTO prediction that China would take the place of Germany as the largest goods exporter in 2007 if China maintained 30% export increases

WTO prediction that China would be #1 goods exporter by 2010 at latest

MOFCOM Online Resources China Commodity Net http://ccne.mofcom.gov.cn/ Allows free searches for info of 600,000 Chinese enterprises and 2.2 million products World Importers Net http://win.mofcom.gov.cn/en/ Free. Promotes intl trade by allowing Chinese and foreign firms to upload pics and descs of products to buy/sell Bizmatching http://bizmatching.mofcom.gov.cn/en/ Invest in China http://www.fdi.gov.cn/main/indexen.htm MOFCOM’s US Commercial Counselor (at Embassy) http://us2.mofcom.gov.cn/

China Commodity Net http://ccne.mofcom.gov.cn/

Allows free searches for info of 600,000 Chinese enterprises and 2.2 million products

World Importers Net http://win.mofcom.gov.cn/en/

Free. Promotes intl trade by allowing Chinese and foreign firms to upload pics and descs of products to buy/sell

Bizmatching http://bizmatching.mofcom.gov.cn/en/

Invest in China http://www.fdi.gov.cn/main/indexen.htm

MOFCOM’s US Commercial Counselor (at Embassy) http://us2.mofcom.gov.cn/