From CNBC: 2024-08-19 03:42:24

Last week, the U.S. and China signed agreements to cooperate on financial stability during a meeting of the U.S.-China Financial Working Group in Shanghai. Representatives from both countries discussed topics including capital markets, cross-border payments, and monetary policy, aiming to enhance financial resilience and climate risk testing.

China’s government bond market experienced heightened volatility earlier this month, prompting intervention from the People’s Bank of China. Despite this, central bank governor Pan Gongsheng stated that China’s financial risks, including those related to local government debt, have decreased. This follows a recent report of PBOC intervention in the bond market.

In their first roundtable meeting under the newly established framework of the U.S.-China Financial Working Group, financial institutions from both countries discussed potential cooperation opportunities to contribute to sustained growth. The professional and constructive conversation included topics related to systematically important global banks, operational resilience, and climate risk stress testing.

Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng established economic and financial working groups in September 2023 to foster regular meetings at a vice minister level between the U.S. Treasury Department and Chinese Ministry of Finance, as well as the People’s Bank of China. The recent agreements on financial stability mark progress in the ongoing dialogue between the two countries’ financial authorities.

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