The United States and China have recently finalized new accords to bolster collaboration on financial stability, as validated by the People’s Bank of China (PBOC) on Monday. These accords emerged from a meeting of the U.S.-China Financial Working Group held in Shanghai last Thursday and Friday.
The discussions were spearheaded by Brent Neiman, Deputy Under Secretary for International Finance at the U.S. Treasury Department, alongside Xuan Changneng, Deputy Governor of the PBOC. Delegates from significant financial bodies like the Federal Reserve, the U.S. Securities and Exchange Commission, the National Financial Regulatory Administration, and the China Securities Regulatory Commission were also in attendance.
The PBOC described the conversations as professional, pragmatic, open, and productive, concentrating on vital subjects such as capital markets, cross-border payments, and monetary policy. These talks were especially important following China’s recent Third Plenary Meeting, which set the foundation for further economic and financial reforms.
A notable result of the meeting was the exchange of contact directories to address financial distress or risk incidents, intended to enable swift communication between the two countries during potential financial emergencies. Technical specialists from both sides evaluated the strength of each nation’s systematically important banks and financial institutions, in addition to the advancements in climate risk stress assessments.
These gatherings occurred amid rising volatility in China’s government bond market, which saw increased instability earlier in the month attributed to reported PBOC intervention. Nevertheless, PBOC Governor Pan Gongsheng indicated on Thursday that financial risks, including those related to local government debt, have diminished since that time.
Moreover, U.S. and Chinese financial entities held their first roundtable discussion under the working group’s framework, examining prospects for collaboration and the finance sector’s role in fostering sustainable growth.
The economic and financial working groups were established by U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng in September 2023, with the goal of encouraging consistent dialogue between U.S. Treasury officials and their counterparts at the Ministry of Finance and the PBOC, thereby strengthening bilateral financial collaboration.
These accords and dialogues mark a significant progress in promoting financial stability and cooperation between the two largest economies in the world.
Image Source: Studio Romantic / Shutterstock
