US and China sign agreement on financial stability cooperation

BEIJING — The US and China last week signed agreements on financial stability cooperation, according to a report Monday by the People’s Bank of China.

The agreement was part of a meeting of the US-China Financial Working Group in Shanghai on Thursday and Friday. Brent Neiman, assistant undersecretary for international finance at the Treasury Department, and Xuan Changneng, deputy governor of the PBOC, co-chair the task force.

The two sides also exchanged a list of people to contact in case of financial stress or risk events, the PBOC read out. A Treasury reading was not available early Monday afternoon, Beijing time.

Representatives from the Federal Reserve, the US Securities and Exchange Commission, the National Financial Regulatory Administration and the China Securities Regulatory Commission also attended, the PBOC said.

Reading described the conversation as “professional, pragmatic, sincere and constructive,” according to a CNBC translation of the Chinese statement. Topics discussed included capital markets, cross-border payments and monetary policy of the two countries, particularly in the context of the recently concluded third plenary meeting of China, the PBOC read out.

Technical experts reported on each country’s global systemically important banks, the operational resilience of financial institutions and climate risk stress tests.

China’s government bond market saw increased volatility earlier this month amid a report of PBOC intervention. Central bank governor Pan Gongsheng said through state media on Thursday that China’s financial risks have decreased, including due to local government debt.

Last week, financial institutions from the US and China also met in their first roundtable under the working group, the PBOC said, without providing specific names. Institutions shared potential opportunities for cooperation and discussed how funding could contribute to sustained growth.

US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng launched economic and financial working groups in September 2023 through which Treasury officials would meet regularly at the vice-ministerial level with the Ministry of Finance and the PBOC, respectively.