To The Moon

TMTPost --  China and U.S. hold a high-level meeting to strengthen cooperation amid the financial stress exaggerated by the U.S. Federal Reserve’s elevated interest rates.

Credit：the People's Bank of China

The China-US Financial Working Group (FWG) held a meeting in Shanghai from August 15 to 16 to discuss a range of issues related to the financial policies of both countries, its fifth meeting since establishment last November, according to a statement of China's central bank, the People's Bank of China (PBOC). This is FWG’s fifth meeting since its establishment last November and the first one in four months. The previous meeting as well as the first round in China was held shortly after U.S. Treasury Secretary Janet Yellen wrapped up a high-stakes six-day visit to China in April.

The two-day FWG meeting was co-chaired by Xuan Changneng, deputy governor of the PBOC and Brent Neiman, deputy under secretary for international finance at the U.S. Department of the Treasury, and attendants include officials from China's National Financial Regulatory Administration, China Securities Regulatory Commission, the U.S. Federal Reserve and the U.S. Securities and Exchange Commission (SEC), PBOC said in the statement released on Monday.

The two sides had professional, pragmatic, candid and constructive communication on a range of financial policy topics of mutual interest, including the broader strategy of further deepening comprehensive reforms as discussed at the third plenary session of the 20th Central Committee of the Communist Party of China, according to PBOC. It said the discussions also covered the economic and financial situation, monetary policies, financial stability and regulation, securities and capital markets, cross-border payments and data, international financial governance, financial technology, sustainable finance, as well as anti-money laundering and counter-terrorism financing.

During the meeting, a group of technical experts presented a report on various topics, including disposal mechanisms for global systemically important banks (G-SIBs), operational resilience of financial institutions, climate risk stress testing, and supervision of cross-border financial services, according to the PBOC.

The statement noted achievements of the meeting. One of them is that the PBOC and the U.S. Department of the Treasury signed an exchange of letters to enhance cooperation on financial stability. They also exchanged lists of financial stability contacts to ensure timely and unobstructed communication between their financial regulatory authorities during financial stress incidents and operational risks of financial institutions, thereby reducing uncertainty.

The U.S. Treasury Department also disclosed the department and the PBOC exchanged letters in in support of coordination during times of financial stress to strengthen appropriate information sharing and reduce overall uncertainty between the two agencies regarding crisis management and recovery and resolution frameworks. The two sides also exchanged key points of contact to make it easier to quickly coordinate in instances of financial stress or operational resilience issues, the U.S. Treasury added.

The PBOC said China and U.S. financial institutions also held their first roundtable meeting under the framework of the FWG. Focusing on sustainable finance, participating members shared their experiences and practices and exchanged views on potential cooperation opportunities. The U.S. Treasury confirmed a roundtable of private Chinese and U.S. firms was held to exchange views on a range of topics related to climate financing, including transition planning and carbon markets.

The PBOC raised its concerns on issues regarding to the U.S. finance to the Treasury Department, the PBOC statement said, adding both sides agreed to continue regular meetings.

With a predictable cooperation framework and smooth communication channels, Beijing and Washington can quickly communicate to avoid misunderstandings and respond to common challenges once some financial stress events take place, commented Yuyuan Tantian, a social media influencer affiliated with state broadcaster China Central Television (CCTV).