US-China financial working group seek to ‘strengthen’ cooperation in times of stress

Senior finance officials from China and the United States agreed to carry out timely communication in times of financial stress to reduce uncertainty during a two-day meeting in Shanghai last week.

On Monday, the People’s Bank of China said the fifth meeting of the Financial Working Group held “professional, pragmatic, candid and constructive” talks on Thursday and Friday.

The central bank said the two sides signed an agreement to “strengthen” financial stability cooperation and exchanged lists of contacts, aiming to “enable the financial management departments of both sides to maintain timely and smooth communication channels” when financial institutions are facing operational risks and in times of financial stress events.

The working group was co-chaired deputy central bank governor Xuan Changneng and Brent Neiman, the assistant secretary for international finance at the US Department of the Treasury.

On Saturday, in a post on X, the social media site formally known as Twitter, Neiman confirmed he was “Just back from the 5th meeting of the US-China Financial Working Group in Shanghai”.

It was also attended by officials from the National Financial Regulatory and Administration and the China Securities Regulatory Commission, as well as the US Federal Reserve and the US Securities and Exchange Commission, the statement added.

They also communicated over the economic and financial situation, monetary policies in China and the US, financial stability and supervision, securities and capital markets, as well as cross-border payments and data.

International financial governance, financial technology, sustainable finance, anti-money-laundering and counterterrorist financing were also discussed, according to the statement.

The first financial institution round table was also held during the two-day meeting, which involved Chinese and American financial institutions, and focused on sustainable finance, sharing respective experiences and practices, and exchanging views on potential cooperation opportunities, it added.

A “technical expert group” also presented a report on a resolution mechanism for each global systemically important bank, the operational resilience of financial institutions, climate risk stress testing and supervision on cross-border payments and settlement.

The US side had intended to discuss financial stability, issues related to cross-border data, lending, payments and private sector efforts to advance transition finance, according to Neiman, The New York Times reported at the start of last week.

He had also said the conversations with China would include concrete steps to improve communication in the event of financial stress

Although communication between China and the US have improved over the past year, the economic relationship remains fraught over disagreements, including over industrial policy and advanced technology investments.