U.S., China sign agreement to cooperate on financial stability

BEIJING — The U.S. and China last week signed agreements for cooperating on financial stability, according to a People’s Bank of China readout Monday.

A Treasury readout described the two sides as “exchanging letters in support of coordination.”

The agreement was part of a meeting of the U.S.-China Financial Working Group in Shanghai on Thursday and Friday. Brent Neiman, deputy under secretary for international finance at the Treasury Department, and Xuan Changneng, deputy PBOC governor, co-lead the working group.

The two sides also exchanged a list of people to contact in the event of financial stress or risk events, the PBOC readout said.

Representatives from the Federal Reserve, U.S. Securities and Exchange Commission, National Financial Regulatory Administration and China Securities Regulatory Commission also attended, 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 the two countries’ monetary policy, especially in the context of China’s recently concluded Third Plenum meeting, the PBOC readout said.

Technical experts reported on each country’s systematically important global banks, financial institutions’ operational resilience and climate risk stress testing.

China’s government bond market saw heighted volatility earlier this month amid a report of PBOC intervention. Central bank governor Pan Gongsheng said Thursday via state media that China’s financial risks have dropped, including from local government debt.

Last week, U.S. and Chinese financial institutions also met in their first roundtable meeting under the framework of the working group, the PBOC said, without providing specific names. The institutions shared potential cooperation opportunities and discussed how finance could contribute to sustained growth.

U.S. 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 a vice minister level with the Ministry of Finance and PBOC, respectively.