Finance
US and China sign agreement to cooperate on financial stability
A bank employee counts Chinese renminbi (RMB) or yuan notes next to US dollar bills at a Kasikorn bank in Bangkok, Thailand, January 26, 2023.
Athit Perawongmetha | Reuters
BEIJING – The US and China signed agreements last week for work together on financial stabilityThis is evident from figures from the People’s Bank of China on Monday.
The agreement was part of a meeting of the US-China Financial Working Group in Shanghai on Thursday and Friday. Brent Neiman, deputy secretary of state for international finance at the Ministry of Finance, and Xuan Changneng, deputy PBOC governor, co-lead the working group.
The two sides also exchanged a list of people to contact in case of financial stress or risk events, the PBOC readout said. A readout from the Treasury Department was not available early Monday afternoon Beijing time.
Representatives from the Federal Reserve, the U.S. Securities and Exchange Commission, the National Financial Regulatory Administration and the China Securities Regulatory Commission were also present, the PBOC said.
The readout described the conversation as “professional, pragmatic, candid and constructive,” according to a CNBC translation of the Chinese statement. Topics discussed included capital markets, cross-border payments and monetary policies of the two countries, especially in the context of China’s recently concluded Third Plenum, the PBOC readout said.
Technical experts reported on each country’s systematically important global banks, financial institutions’ operational resilience, and climate risk stress tests.
China’s government bond market saw increased volatility earlier this month following a report of PBOC intervention. Central Bank Governor Pan Gongsheng said via state media on Thursday that China’s financial risks have declined, including due to local government debt.
Last week, U.S. and Chinese financial institutions also met at their first roundtable meeting under the working group, the PBOC said, without giving specific names. The institutions shared potential collaboration opportunities and discussed how financing could contribute to sustainable growth.
US Treasury Secretary Janet Yellen and Chinese Vice Prime Minister He Lifeng launched economic and financial working groups in September 2023 which would see Ministry of Finance officials meet regularly at deputy ministerial level with the Ministry of Finance and the PBOC respectively.
