China in Africa
Annexure III: Ministry of Commerce
A key organ playing a major role in the formulation of Chinese global economic policy is undoubtedly the Ministry of Commerce (MOFCOM), which prior to 2003 was known for many years as the Ministry of Foreign Trade and Economic Cooperation (MOFTEC). The Ministry plays a significant role in forging economic relations between China and other states – and is the primary bureaucratic interface between China the rest of the world as far as two-way trade and investment is concerned.
Under Chen Deming, it leads and defines the international stance of China’s commodity resource base, and has key inputs on investment, technological competition, markets, prices, etc. Influential key figures, with vice-ministerial rank, are Yu Guangzhou, Ms. Ma Xinhong, Gao Hucheng and Yi Xiaozhun.
Yi Xiaozhun is responsible for matters related to the World Trade Organisation (WTO), and also for the Ministry’s extremely relevant Business Intelligence Unit (see below), which also receives inputs from the State Administration for Commerce, under Zhou Bohua.
Comprising a staff of some 1350 people, relevant functions of MOFCOM that impinge on pricing, production, domestic use and the export of raw and processed materials are the following:
- Responsibility, under the guidance of the “Unified State Plan” and in collaboration withentities like the Ministry of State Security (MSS) and allied military entities such as NORINCO in the compilation of short (one year), medium (5 years) and Long term (> 5years) foreign trade plans.
- To organize the construction of export commodity production bases.
- Supervise the management, collection and analysis of data (formal economic statistics, mostly open source) on foreign economic and trade businesses.
- Give guidance to foreign economic and trade enterprises in management and financial accounting.
- Organize inter-governmental economic and trade negotiations; • Establish Joint Committees, under authorization of the State Council, to enter into bilateral governmental economic and trade treaties and agreements on behalf of China;
- Organize and manage China’s trade treaties and agreements;
- Formulate related rules and regulations in the management of foreign economic cooperation and trade.
- Organizing and coordinating the negotiation and signing of foreign government loans, foreign business investments, technology imports and exports (including imports of complete plants); and the examination and approval of agreements and contracts concerning major projects utilizing foreign capital and technology.
- Exercise sectoral management in overseas projects involving contractual construction, labour export and overseas economic cooperation.
- Exercise sectoral management of import/export licenses and export quota system. Examines how sectors exercise the setting up of foreign economic enterprises in China and abroad.
- Supervise the running of China’s commercial offices and economic counselors abroad in embassies and consulates (in conjunction with MSS and the Military Intelligence Department).
- Examine foreign business representations in China.
- Participate in the study and formulation of the overall tariff rate, tariff structure, exchange rates and other regulating measures governing external economic relations.
- Organise research and studies of international economic and trade situations and markets; and to keep abreast of international economic and trade information.
- In accordance with the “Unified State Policy”, provide guidance to organs attached the Ministry as well as to different regions and organs along with organization and
7.5.1. The CCPIT
An important sub-structure of the Ministry is the Chinese Council for the Promotion of International Trade (CCPIT). Ostensibly acting as a promotional investment entity for Chinese investments abroad, is used by MOFCOM’s Business Intelligence Unit (BIU) as a primary instrument for gathering business intelligence against the country’s competitors. This includes foreign pricing strategies, key trade figures, tricks of the trade, production secrets, competitor investment and business plans, etc. It also plays a key role in advising and spearheading Chinese investment forays abroad, including Africa. The CCPIT is directly connected to the Chinese Chamber of International Commerce (CCIC).
It is headed by Wang Jifei (influential in party and business circles), who is supported by Zhang Wei (Vice-Chairman), and Wang Jinghen (Secretary General).
The CCPIT participates in the policy formulation of product prices, especially in what concerns international trade. It has superior knowledge of pricing negotiations abroad and all close and open secrets of international commerce. This is achieved in part via the aggressive use of intelligence gathering sub-units located in MOFCOM which work closely with their counterparts at the Ministry of State Security (MSS) and the PLA’s military intelligence wing.
MOFCOM’s role in international industry negotiations and commercial intelligence gathering is crucial for the country’s oil, coal, steel and related metals producers and it is here that corporate, security and defense bureaucracies find a synergistic interface – a pooling and coordination of resources to give Chinese negotiators a sharper competitive edge over their opponents.