Full text of the 2016 China-U.S. Strategic and Economic Dialogue Economic Fact Sheet from the U.S. Department of Treasury:
June 6-7, Chinese Vice Premier Wang Yang and U.S. Treasury Secretary Jacob J. Lew led the eighth meeting of the Economic Track of the U.S.-China Strategic and Economic Dialogue (S&ED VIII) in Beijing, China. As the Special Representatives of President Xi Jinping and President Barack Obama, Secretary Lew and Vice Premier Wang led discussions with a high-level delegation of Cabinet members, ministers, agency heads, and senior officials from both countries.
As the world’s two largest economies, the United States and China share a mutual interest in each other’s economic prosperity, and recognize that enhanced cooperation on the diverse set of issues encompassed in the S&ED is crucial for the health of the broader global economy. During the eighth meeting of the S&ED, the two sides pledged to implement fully S&ED commitments, including those from the previous seven dialogues. The United States and China announced further concrete measures to support strong domestic and global growth, promote open trade and investment, and enhance and foster financial market stability and reform. The two sides also discussed international economic issues including the G20 financial-track agenda, persistent risks facing their respective domestic economies and the global economy, the necessary policy tools for addressing those risks, and global economic governance.
What is the S&ED and why is it important?Everything you wanted to know abou the U.S.-China Strategic and Economic Dialogue taking place in Washington D.C. July 22-24, 2015.
The United States and China remain committed to candid and open dialogue on key economic issues as the relationship between the two countries continues to grow.
I. Strengthening Economic Policy Cooperation
• The United States and China jointly reaffirm commitments on exchange rate made during the Shanghai and Washington G20 Finance Ministers and Central Bank Governors Meeting in 2016, including to refrain from competitive devaluation and not to target exchange rates for competitive purposes. Consistent with the reforms set out in the Third Plenum of the 18th CPC Central Committee, China is to continue market-oriented exchange rate reform, allowing for two-way flexibility. China stresses that there is no basis for a sustained depreciation of the RMB.
• Consistent with its statutory mandate, the U.S. Federal Open Market Committee (FOMC) seeks to foster maximum employment and price stability. To the extent that it is consistent with achieving those objectives, the FOMC is expected to normalize monetary policy, particularly by raising the federal funds rate, and to conduct policy in a transparent and, to the extent possible, predictable manner. The Federal Reserve is sensitive to the effects of its policies on the international financial system. A key goal of the Federal Reserve is to maintain financial stability both domestically and internationally.
• China is to continuously deepen reform, promote economic structural adjustments, and expand domestic demand by increasing household consumption, increasing the service sector’s proportion of the economy, and ensuring investment is high quality and driven by the private sector. The United States acknowledges the substantial commitments China has made on economic structural reform and progress achieved so far. During the 13th five-year plan period from 2016-2020, China is to carry out the following structural reforms:
o Better align local government incentives to support household demand by providing central support for re-employment of laid-off workers and by improving the local tax regime to build a revenue system aligned with local expenditure responsibilities;
o Build a more equitable and sustainable social security system, based on actuarial balances and viable funding mechanisms. Appropriately lower social insurance contribution rates. Realize nationwide portability of basic old-age insurance benefits to meet the needs of labor mobility. Raise the level of basic public services, and improve a nationwide basic medical insurance system covering all urban and rural residents;
o Liberalize the prices of commodities and services in the competitive parts of sectors, including electricity, petroleum, natural gas, transport, post and telecommunications, and municipal public utilities;
o Expand coverage by the state capital operation budget (SCOB) to include more SOEs. According to the Budget Law of the People’s Republic of China and relevant regulations regarding government information publicity, China is to publish relevant information on SCOB, including the use to which funds have been applied. China is to establish a transparent SCOB system that covers all state-owned enterprises at central, provincial, and local levels of responsibility.
o In the short-term, China stands ready to complement these reforms and has adopted more proactive fiscal policies to expand domestic demand. China is to fully expand the pilot program of replacement of business tax with VAT, and reduce or remove administrative fees in an effort to reduce burdens for businesses and consumers and boost the development of the service sector.
• The United States remains committed to promoting a strong, sustainable, and more balanced pattern of economic growth characterized by higher domestic investment and national saving. To this end, the Administration’s FY2017 Budget includes several initiatives to foster increased labor force participation rate and productivity. Recognizing that there exists a gap between the supply of infrastructure assets and the demand for these assets, and acknowledging the important role that increased infrastructure investment plays in raising potential economic growth and competitiveness, the United States commits to examining and improving its public utility regulation frameworks. The United States recognizes the importance of predictability in the budget process and the impact budget uncertainty can have on the U.S. and global economies and is committed to putting U.S. government finances on a sustainable path over the medium term. From FY 2017-2026, the Administration’s proposed budget would raise $3.4 trillion in new revenues and includes a net reduction in outlays after accounting for spending proposals of $200 billion.
• Given the United States’ and China’s impact on and integration with the global economy, both sides commit to clearly communicating respective economic policies. To aid in assessing the extent of rebalancing toward consumption and services that is taking place, China commits to: 1) continue to improve its quarterly GDP accounting by expenditure approach and release the data to the public when appropriate; and 2) work toward publicizing a more inclusive monthly indicator of service sector activity and release the data to the public in the near future. China is to continue to improve its quarterly Government Financial Statistics (GFS) to meet the requirement of the G20 Data Gap Initiative (DGI). The United States and China support the G20’s efforts to monitor and analyze capital flows, including identifying risks. We welcome the IMF’s ongoing work to review countries’ experiences and policies in dealing with capital flows and identifying emerging issues.
Recognizing the progress China has made in making available energy data and statistics to the global community, including its recent discussion with the International Energy Agency to improve data exchanges, China commits to continuing to enhance the coverage, accuracy and timeliness of its submissions to the International Energy Forum’s Joint Organizations Data Initiative, promoting statistical capacity building constantly to enhance the integrality and reliability of the energy data, and exploring the idea of developing an energy information exchange technical working group. China commits to making available more complete, reliable, and detailed publications of energy statistics on a more frequent basis, including for SPR at bilateral forums.
The United States welcomes China’s efforts to begin providing international banking statistics data to the Bank for International Settlements (BIS). China is continuing its efforts to resolve those technical problems associated with the collection of comprehensive International Banking Statistics (IBS) data consistent with BIS publication.
The United States and China recognize the central importance of transparent regulatory processes and availability of comprehensive and reliable information on regulatory activity in promoting sound and efficient financial markets. In this regard, both sides affirm the importance of transparency in the development and issuance of regulatory measures, including Normative Documents, to enhance predictability for market participants. Subject to specific exceptions, Chinese financial regulatory authorities are to continue to publish administrative regulations and departmental rules impacting the rights and obligations of foreign financial institutions in advance for a public comment period of normally at least 30 days from date of publication.
The U.S.–China Strategic and Economic Dialogue (S&ED) is a high-level dialogue for the United States and China to discuss a wide range of bilateral, regio
II. Promoting Open Trade and Investment
• The United States and China recognize that the structural problems including excess capacity in some industries, exacerbated by a weak global economic recovery and depressed market demand, have caused a negative impact on trade and workers. Both sides recognize that subsidies and other types of support from governments or government-sponsored institutions can cause market distortions and contribute to global excess capacity and therefore require attention. The two sides commit to enhance communication and cooperation, and are committed to take effective steps to address the challenges so as to enhance market function and encourage adjustment.
The United States and China recognize that excess capacity in steel and other industries is a global issue which requires collective responses. The United States and China support ongoing international efforts aimed at identifying effective government policies for addressing global excess capacity and structural adjustment, and achieving greater transparency on industry developments to promote market-driven responses.
The United States acknowledges and supports China’s continuing efforts to reduce excess capacity and supports China’s pursuit of further reforms to foster an environment in which the market plays a decisive role in allocating resources. Both sides recognize that decisive actions to rein in excess capacity would help to lower greenhouse gas emissions and to fulfill climate change commitments.
The United States acknowledges China’s State Council’s recently announced plans to close 100 to 150 million metric tons of steel capacity, and to strictly prohibit the expansion of crude steelmaking capacity over the next five years.
In line with China’s supply-side structural reform agenda, China is to undertake further steps to ensure market forces are not constrained, so that its steel industry develops a stronger market orientation to enhance efficiency, and, in doing so, progressively reduces excess capacity. China is to give full play to the role of market mechanisms, adopt appropriate policy measures, and resolve excess capacity of challenged industries such as steel through rule of law and market-oriented approaches.
The United States and China are to ensure that no central government plans, policies, directives, guidelines, lending or subsidization targets the net expansion of steel capacity. To address unemployment caused by capacity reduction, the Chinese government has decided to establish a 100 billion RMB earmarked funds to provide incentives and grants to local governments and central enterprises for structural adjustment of industrial enterprises, mainly by supporting the resettlement and benefits of laid-off workers. The United States welcomes China’s ongoing actions and plans to ensure that central government fiscal incentives for local governments align with its objective of reducing excess steel capacity.
China is to adopt measures to strictly contain steel capacity expansion, reduce net steel capacity, eliminate outdated steel capacity, and urge the exit of steel production capacity that fall short of environment, energy consumption, quality or safety requirement standards according to laws and regulations. China is to actively and appropriately dispose of “zombie enterprises” through restructuring, debt restructuring, bankruptcy and liquidation.
The United States and China are to participate in the global community’s actions to address global excess capacity, including both by participating at the OECD Steel Committee meeting scheduled for September 8-9, 2016, and by discussing the feasibility of forming a global steel forum, which is envisioned to serve as a cooperative platform for dialogue and information-sharing on global capacity developments and on policies and support measures taken by governments.
The United States is to share with China, through a JCCT U.S.-China Steel Dialogue meeting, historical experiences and lessons learned in connection with the transformation of U.S. cities and regions that have confronted economic structural adjustment in excess capacity situations.
The United States and China are to maintain communication and share information on issues relating to excess capacity.
• The United States and China commit, in the ongoing Bilateral Investment Treaty (BIT) negotiations, to exchange revised and improved negative list offers by mid-June, reflecting the two sides’ shared commitment to the objectives of non-discrimination, transparency, and open and liberalized investment regimes. The two sides are to push the BIT negotiations forward expeditiously with a view toward reaching a mutually beneficial and high-standard treaty that effectively facilitates and enables market access and market operation.
• The U.S. reiterated its commitment to encourage and facilitate export of commercial high technology items to China for civilian end-users and for civilian end-uses. Both sides reiterated their commitments to continue detailed and in-depth discussion of export control issues of mutual interest within the U.S.-China High Technology and Strategic Trade Working Group.
• Both countries commit that generally applicable measures to enhance information and communication technology cybersecurity in commercial sectors (ICT cybersecurity regulations) should be consistent with WTO agreements, be narrowly tailored, take into account international norms, be nondiscriminatory, and not impose nationality-based conditions or restrictions on the purchase, sale or use of ICT products by commercial enterprises unnecessarily. The two sides commit that ICT cybersecurity measures generally applicable to the commercial sector are not to unnecessarily limit or prevent commercial sales opportunities for foreign suppliers of ICT products or services. Both countries affirm that access to a full range of global technology solutions ordinarily strengthens the cybersecurity of commercial enterprises.
• China and the United States commit to further improve their approval processes for the products of agricultural biotechnology. China is to revise the Regulations on the Safety Evaluation of Agricultural GMOs (Decree 8) and related measures. China’s revisions are to be consistent with the outcomes on the administration of agricultural biotechnology agreed in September 2015 at the U.S.-China Leaders’ Meeting. China is to review applications of agricultural biotechnology products in a timely, ongoing and science-based manner, and complete final approvals in line with the relevant laws and regulations upon the completion of assessments by the National Biosafety Committee. The United States commits to prepare a study on the global impact of asynchronous approvals on sustainability, trade and innovation, and present it to the Chinese side by October 2016. The United States and China are to meet to jointly discuss the full range of agricultural biotechnology policy matters by the end of 2016.
• The United States commits to implementing the consensus reached at the previous S&ED and has initiated the internal regulatory process with regard to China’s poultry export to the United States, with the aim to realize the export of cooked poultry of Chinese origin to the United States as soon as possible.
• China and the United States welcome opportunities to discuss mutually beneficial collaboration and cooperation in the field of agricultural science and technology research between our two governments, and where appropriate and only with prior consensus between the two governments in partnership with private and academic entities.
• China and the United States commit in principle to encourage industry to discuss mutually beneficial science and technology research, specifically: technical exchange in precision agriculture technologies, sharing experiences concerning the development of precision agriculture to promote modern agriculture in both nations.
• China and the United States commit in principle to strengthening cooperation in agricultural processing via USDA-MOA funded mechanisms such as the Scientific Cooperation Exchange Program.
• Recognizing the important role of infrastructure investment in promoting economic growth, the United States and China commit to further strengthen communication and cooperation on infrastructure development.
The United States and China support efforts to promote infrastructure investment, including by increasing commercial investment in infrastructure through Public-Private Partnerships (PPPs) with domestic and foreign investors.
The two sides encourage the dissemination of best practices in the field of infrastructure investment, which is anticipated to spur enterprises of both countries to explore feasible projects and modes of commercial cooperation.
• The United States reiterates its commitments on the Special 301 Report and Notorious Markets List at the 26th Joint Commission on Commerce and Trade in 2015.
• China and the United States affirm the importance of transparency in development and issuance of regulatory measures to enhance predictability and promote market participation. China commits that its industry development related documents treat all enterprises equally. For legally-binding policies and measures associated with the China Manufacturing 2025 Plan and other industry development plans, China commits to publish them for public comment according to the procedures and time limits of relevant Chinese laws, regulations, and policies, and to enhance policy transparency. China’s industry development funds, including national, provincial, and municipal level funds, are to operate in a manner consistent with market-based concepts. China is to publish draft documents governing government-funded industrial development funds in compliance with the relevant regulations and measures of the State Council. The United States and China commit to foster a fair, open, and transparent legal and regulatory environment.
• The U.S. Department of Commerce and China’s Ministry of Industry and Information Technology discussed advanced manufacturing in the United States and China. The two sides exchanged views on the role of public-private partnerships, the U.S. National Network for Manufacturing Innovation, and the China Manufacturing 2025 Plan. The two sides recognize the value of utilizing existing dialogue mechanisms to discuss advanced manufacturing developments and issues in the two countries.
• In order to support Chinese efforts at greater enterprise transparency and accountability, China commits to enhance transparency of enterprise ownership and governance information. To do so, China commits to further develop databases in the provincial Administrations for Industry and Commerce (AICs), to better guide commercial actors by making publicly available to interested parties easily searchable information for no charge, or for a reasonable fee, on the corporate information of enterprises registered and filed with the local AICs in all provinces in China.
• Recognizing the importance of an efficient aviation system to the safe and secure transport of people and goods, and the strategic role that air transport plays in overall economic development, the United States and China held a breakout session on aviation at the 2016 S&ED. The two sides exchanged ideas on the following five areas on the basis of equality and mutual benefits: (i) how to build an integrated, consistent and sustainable national aviation system, including aviation safety oversight, aviation security, air traffic management and airport access; (ii) how to promote management transformation of the national aviation system to meet growing demands on capacity; (iii) how to create institutional mechanisms capable of coordinated, effective and transparent exercise of responsibilities and obligations; (iv) how to support the success of ongoing bilateral airworthiness activities; and (v) next steps for long-term, interagency engagement to build upon the achievements of current U.S.-China cooperative efforts. The two sides intend to enhance their bilateral aviation cooperation to address 21st century air transportation system challenges through appropriate bilateral fora, and noted that a strategic, whole-of-government, interagency approach would be critical to the success of this effort. The two sides intend to take advantage of existing bilateral mechanisms, such as the U.S.-China Aviation Cooperation Program (ACP), to cooperatively address these challenges. As a first step, senior representatives from the two sides intend to meet later this month in Washington to discuss ways to implement plans discussed at the breakout session. The two sides intend to report on progress at the 2017 S&ED.
• The Civil Aviation Administration of China (CAAC) and Federal Aviation Administration (FAA) continue to strengthen cooperation, further dialogue and communication, and enhance mutual understanding and trust, to work towards reciprocal recognition of bilateral airworthiness on transport category airplanes for the mutual benefit of the United States and China.
• The United States and China recognize the important role that the Subnational Trade and Investment Cooperation Joint Working Groups play in facilitating trade and investment. Both sides are to actively implement the Memorandum of Understanding between the Department of Commerce of the United States of America and the Ministry of Commerce of the People’s Republic of China to establish a “Framework to Promote Cooperation at the Subnational Level on Trade and Investment between the United States and China” (MOU), signed by the two governments at the 26th Joint Commission on Commerce and Trade, and continue to promote bilateral subnational trade and investment cooperation. The Chinese Ministry of Commerce and the U.S. Department of Commerce are to provide support as appropriate to trade and investment delegations from both sides and relevant promotion activities under the framework of the MOU.
III. Fostering Financial Stability and Reform
• The United States and China welcome efforts to further develop Renminbi (RMB) currency trading and clearing capacity in the United States, consistent with applicable laws, and to improve access by U.S. institutional investors to Chinese capital markets while deepening China’s financial markets. Both sides stress the importance of maintaining a level playing field between Chinese and foreign financial institutions in RMB trading and clearing services.
o China commits to designate RMB clearing banks in the United States as an additional mechanism to clear RMB alongside correspondent bank relationships.
o The United States welcomes China’s initial extension of a 250 billion RMB Qualified Foreign Institutional Investor (RQFII) quota to the United States, and looks forward to U.S. institutions receiving licenses before the end of 2016. China is to increase the U.S. RQFII quota according to market development and demand.
o The U.S. Department of the Treasury and the People’s Bank of China are to jointly assess, no less than annually, RMB trading and clearing mechanisms in the United States.
• Recognizing the importance of fostering a base of institutional investors to support equity market depth and liquidity, China commits to take measures to support capital market development including the following:
o Recognizing that foreign participation in securities and fund management services can enhance the competitiveness and international influence of the industry, China commits to gradually raise the permitted equity holding of qualified foreign financial institutions in the securities and fund management companies.
o China welcomes qualified wholly foreign-owned enterprises and joint ventures to apply for registration of private fund management entities to engage in private securities fund management business, including secondary market trading of securities, according to domestic regulations. China is to promulgate regulatory and qualification requirements for foreign financial institutions to participate this business.
o The United States welcomes China’s issuance of detailed rules to provide qualified foreign institutional investors direct access to the interbank bond market, including trading of interest rate swaps and bond forwards for hedging purposes. To support foreign participation in China’s interbank bond market, the United States also welcomes China’s decision to issue bond settlement Type A licenses and underwriting licenses to two qualified U.S. financial institutions. China commits to strengthen creditor rights for foreign and domestic investors by clarifying the standards for initiating bankruptcy cases, identifying clear and specific bankruptcy thresholds, and provide automatic stays on proceedings from the date of petition. China commits to simplify the regulation and approval process of QFII and RQFII programs and facilitate cross-border investment.
o The United States and China welcome the updated G20/OECD Principles of Corporate Governance endorsed by G20 Leaders. Both countries commit to support implementation of the Principles and participate in a peer review on the Principles by the Financial Stability Board. CSRC, along with relevant parties, is to strengthen China’s corporate governance code, while enforcing the same standard of disclosure and oversight of all listed companies. China commits to strengthen measures to enforce corporate governance rules and protect the rights of minority shareholders, including by increasing disclosure requirements for related party transactions and facilitating efforts to allow shareholders to bring legal claims against companies for fraud. To facilitate shareholders being able to share in the profits of the corporation, China also commits to improving listed companies’ disclosure of dividend policies.
• China announced that, as a follow-up to the Decision of the State Council on the Administration of Market Access of Bankcard Clearing Institutions, it published the Administrative Rules on Bankcard Clearing Institutions. The Rules established procedures for licensing domestic and foreign suppliers to provide electronic payment services for payment card transactions in China.
• To support capital market development and financial stability, the United States and China commit to the following outcomes:
o In increasingly interconnected global financial markets, the United States and China note the importance of effective communication with the market and information-sharing between financial regulators.
o Both sides express appreciation for the mutual efforts and extensive work undertaken since last year’s S&ED to advance cross-border cooperation on the oversight of the audits of public companies. Building on the results of last year’s S&ED, both sides are to endeavor to begin inspections in the near future and are to continue to explore effective ways of long-term cooperation in this area in order to protect investors and promote public trust in each country’s capital markets.
o The U.S. Securities and Exchange Commission (SEC) and the China Securities Regulatory Commission (CSRC) have instituted regular staff to staff conference calls to facilitate cross-border enforcement cooperation and other information sharing arrangements. Pursuant to its S&ED 2015 commitment, the SEC has established a mechanism for notifying the CSRC of Chinese concept companies after they have registered with the SEC and listed in the United States and the SEC has begun providing such reports to the CSRC on a regular basis. Further, over the past year the SEC and CSRC staff have met in Technical Expertise Exchanges to discuss issues related to market growth and development. The SEC and CSRC look forward to continuing Technical Expertise Exchanges as well as staff-level dialogue to enhance cooperation and information exchange in enforcement and supervision matters including those on China concept companies listed in the U.S.
o China and the United States support the efforts initiated by the U.S. Commodity Futures Trading Commission (CFTC) and the China Securities Regulatory Commission (CSRC) to have more direct and frequent dialogue and cooperation regarding oversight of futures markets, within their respective jurisdictions, in the United States and China. Recognizing that these markets are global in nature, both authorities acknowledge the importance of such cooperation and the value of sharing timely information about general market conditions, market and risk surveillance to the extent permissible by law and regulations, regulatory reform and technological developments such as increased automated trading. The CFTC and CSRC look forward to enhancing cooperation through both formal and informal channels, including phone calls, in-person meetings, and joint workshops.
o The United States and China remain committed to the continued implementation of reforms in the Over-the-Counter (OTC) derivatives market which include the following: central clearing of standardized OTC derivatives contracts; margin and higher capital requirements for non-centrally cleared OTC derivatives transactions; trading of standardized OTC derivatives contracts on exchanges or electronic platforms, where appropriate; and reporting of all OTC derivatives transactions to trade repositories. Both the United States and China welcome central clearing of appropriate OTC derivatives contracts, and are to share further updates with respect to the implementation of clearing mandates and of other areas of financial reform, pursuant to their G20 commitments. The United States also welcomes China’s commitment to fully implement the Principles for Financial Market Infrastructures (PFMI) established by the Commission of Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO), and China’s willingness to be assessed for implementation of the PFMI. In the context of granting appropriate regulatory relief for central counterparties (CCPs), China welcomes the CFTC’s announcement granting no-action relief to Shanghai Clearing House. Moreover, both the United States and China commit to more direct and frequent regulatory cooperation to make progress towards the completion of detailed information sharing arrangements to govern the sharing of information for supervision and oversight of relevant clearing entities. In this context, the United States and China are to take concrete steps to achieve open and reciprocal dialogue between regulatory counterparts.
o With regard to the implementation of Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking Organizations by foreign banks operating in the United States, the United States and China commit to continued communication and dialogue regarding the issues arising from Chinese banks’ implementation of the rule.
o The United States welcomes China’s progress to date in streamlining administrative regulations in the securities markets, and China commits to further simplify administrative and approval procedures for financial products and services while strengthening market supervision and investor protection.
o China is to amend regulatory measures to allow foreign futures exchanges to establish representative offices in China. Foreign boards of trade which are located in China and appropriately registered in the United States are permitted to conduct business in the United States, where consistent with relevant laws and regulations.
o The United States applies the Volcker Rule through implementing regulations. Where interpretive questions arise, including with respect to certain foreign funds, the United States seeks to address such issues in a manner consistent with the intent of the statute. The United States remains willing to meet with interested parties, including Chinese entities, to discuss implementation of the Volcker Rule.
• The United States and China commit to meeting their respective conformance periods for the Financial Stability Board’s total loss¬absorbing capacity (TLAC) standard for global systemically important banks (G¬SIBs). China has established a deposit insurance system and commits to continuously strengthen the implementation of this system to ensure that issues related to problem banks are addressed in a timely manner to minimize adverse effects on the financial system. In line with the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions, China is to accelerate the improvement of regulations and implementation rules on the resolution of commercial banks to ensure that China’s commercial banks can be resolved in an orderly fashion.
• The United States and China welcome the ongoing cooperation among trading platforms, so as to enhance connection of their financial markets and products consistent with their respective laws and requirements.
IV. Enhancing Global Cooperation and Economic Governance
• The United States supports China’s presidency to host a successful G20 Hangzhou Summit in 2016 and looks forward to working closely with China to promote strong, sustainable and balanced growth of the global economy. In supporting the G20 as the premier forum for international economic cooperation, both sides are committed to work with other G20 members to (i) strengthen macroeconomic policy cooperation; (ii) use all policy tools to foster confidence and strengthen growth, use fiscal policy flexibly to strengthen growth, use monetary policy to continue to support economic activity and ensure price stability, consistent with central banks’ mandates, and use structural reform to boost potential growth in the medium term; (iii) explore opportunities arising from innovation; (iv) improve global economic, financial and energy governance; (v) address climate change and bolster clean energy; (vi) contribute to inclusive and sustainable global development through the implementation of the 2030 Agenda for Sustainable Development, both domestically and internationally, and the timely implementation of the Addis Ababa Action Agenda. Both sides are committed to working with other G20 members to make continued progress on these and other issues in the G20 agenda and deliver positive outcomes for the Hangzhou Summit across a number of areas, including phasing out inefficient fossil fuel subsidies by a date certain; continuing discussions and cooperation on climate and energy efficiency, such as improving emissions performance of heavy-duty vehicles and steps to reduce methane emissions; conducting cooperation on epidemic prevention, detection, and response, based on the World Health Organization Joint External Evaluation tool, and combating antimicrobial resistance. Both sides encourage all G20 members to fully implement commitments made at previous G20 Summits.
The United States and China support efforts to improve the orderliness and predictability of sovereign debt restructuring processes, including further promoting the inclusion of enhanced collective action clauses (CACs) and paripassu clause in the contracts of both newly issued and outstanding stock of sovereign bonds, as well as encourage cooperation between creditors and debtors during sovereign debt restructuring.
The United States and China support the G20 Green Finance Study Group (GFSG) to report substantive findings in order to identify challenges and opportunities of increasing green activities in the global financial system. Both countries welcome voluntary actions from their financial institutions and corporate sector to shift financial activities away from environmentally-damaging investments or practices toward more environmentally-friendly ones.
• The United States and China recognize the progress that has been made by the International Working Group on Export Credits (IWG) in negotiating new international guidelines for official export credit support, and look forward to further discussion on the horizontal guidelines at the 11th IWG meeting in July 2016. Both sides commit to continue their bilateral communication and technical exchanges through calls, emails, etc. to strengthen cooperation, and to explore ways to improve the working mechanism of the IWG, including by seeking IWG support on assigning a secretary general and continue with a rotating chair by the 12th IWG meeting. The United States and China also reaffirm the inclusiveness of the IWG in giving equal attention to the opinions of developed and developing countries, in order to make greater progress towards achieving new international guidelines for official export credit support. The United States and China are committed to commenting on existing horizontal text proposals at the 12th IWG meeting, or suggesting alternative horizontal guideline texts applicable to official export credit support provided by or on behalf of a government. Both sides reaffirm that the new international guidelines should, taking into account and respecting varying national interests and development conditions, and consistent with international best practices, help ensure government support that complements commercial export financing, so as to contribute to global trade and broad-based economic growth.
• The United States and China reaffirm the Paris Club’s role as the principal international forum for restructuring official bilateral debt and affirm that the Paris Club should keep pace with the changing landscape of official financing, including by expanding its membership to include emerging creditors. Both countries welcome the Paris Club’s discussion of a range of sovereign debt issues. China intends to keep further communication with the Paris Club and plays a more constructive role, including further discussions on potential membership.
• China and the United States are to pursue development finance cooperation in third countries through the World Bank, the Asian Development Bank and other international financial institutions. The two sides have identified potential opportunities for cooperation in the energy, agriculture and health sectors.
• China and the United States commit to taking concrete steps to implement the commitments they made in September 2015 and March 2016 Joint Statements on Climate Change to use public resources to finance and encourage the transition toward low-carbon technologies as a priority. Both sides are to constructively participate in discussions on the role of public finance in supporting low-carbon technologies and climate resilience, and in reducing GHG emissions. The United States has ended public financing for new conventional coal-fired power plants except in the poorest countries. China is to continue strengthening its green and low-carbon policies and regulations with a view to strictly controlling public investment flowing into projects with high pollution and carbon emissions both domestically and internationally. The United States and China commit to rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption by a date certain, while providing targeted support for the poorest.
• The United States and China note that Chinese and U.S. nongovernmental organizations, and private and public entitiesý are cooperating on green finance, ýbringing together the shared interests of the construction, energy, banking, securities, fund-management and other sectors, including through participation in a 2015 roundtable that launched the development of a Green Building Efficiency Fund.ý
• The United States and China welcome the entry into force of the 2010 quota and governance reforms of the International Monetary Fund (IMF). Both countries call on the IMF’s Executive Board to work expeditiously toward timely completion of the 15th General Review of Quotas, including a new quota formula, by the 2017 Annual Meetings, to further improve the Fund’s governance. Both countries reaffirm that the distribution of quotas should continue to shift towards dynamic emerging markets and developing countries to better reflect the relative weight of IMF members in the world economy.
• The United States supports the IMF’s decision to include Renminbi in the SDR basket. Both countries support the IMF’s examination of the possible broader use of the SDR.
• The United States and China welcome their financial institutions to adopt the Equator Principles on a voluntary basis.
I. Participants in the Economic Track of the Seventh Strategic and Economic Dialogue
• Jacob J. Lew, Secretary of the Treasury
• Max Baucus, U.S. Ambassador to China
• Michael Froman, U.S. Trade Representative
• Elizabeth Sherwood-Randall, Deputy Secretary of Energy
• Jason Furman, Chairman of the Council of Economic Advisors
• John P. Holdren, Director of the Office of Science and Technology Policy
• Stan Fischer, Vice Chair of the Federal Reserve
• D. Nathan Sheets, Under Secretary of the Treasury for International Economic Affairs
• Catherine Novelli, Under Secretary of State for Economic Growth, Energy, and the Environment
• Stefan Selig, Under Secretary of Commerce
• Timothy Massad, Chairman of the Commodity Futures Trading Commission
• Jonathan Cordone, Deputy Under Secretary of Agriculture
• Leocadia I. Zak, Director of the U.S. Trade and Development Agency
• James R. Doty, Chairman of the Public Company Accounting Oversight Board
• Paul Leder, Director of the Office of International Affairs, Securities and Exchange Commission
• Michael McRaith, Director of the Federal Insurance Office, Department of the Treasury
• Angus Tarpley, Associate Director of the Office of Complex Financial Institutions, Federal Deposit Insurance Corporation
• Wang Yang, Vice Premier
• Lou Jiwei, Minister of Finance
• Wan Gang, Minister of Science and Technology
• Gao Hucheng, Minister of Commerce
• Zhou Xiaochuan, Governor of the People’s Bank of China
• Liu He, Director, Office of Central Leading Group on Financial and Economic Affairs
• Liu Shiyu, Chairman, China Securities Regulatory Commission
• Jiang Zelin, Deputy Secretary General, State Council
• Zhang Yesui, Executive Vice Minister of Foreign Affairs
• Lin Nianxiu, Vice Chairman, National Development and Reform Commission
• Zhu Guangyao, Vice Minister of Finance
• Qu Dongyu, Vice Minister of Agriculture
• Yi Gang, Deputy Governor of the People’s Bank of China
• Hu Keming, Deputy Director, State Council Legislative Affairs Office
• Guo Ligen, Vice Chairman of the China Banking Regulatory Commission
• Zhou Yanli, Vice Chairman of the China Insurance Regulatory Commission
• Xu Xianchun, Deputy Director, National Bureau of Statistics
II. Institutional Arrangements
The United States and China commit to continue to pursue economic cooperation through a range of additional dialogues and initiatives with the aim of enhancing the bilateral relationship and strengthening the global economy. These include:
• Think Tank Discussions on Economic Issues
• Exchanges and Cooperation on Macroeconomic Policy
• Fossil Fuel Subsidies Peer Review
• Insurance Cooperation
• International Prudential Insurance Issues
• Bilateral Banking Supervisors’ Conference
• Safeguarding the Financial System from Illicit Finance Threats
• Supervisory Anti-Money Laundering/Countering the Financing of Terrorism Cooperation
• Anti-Counterfeiting Currency Cooperation and Communication
• Cooperation between the Department of Labor of the United States of America and the Ministry of Human Resources and Social Security of China
• U.S.-China Workplace Safety and Health Dialogue
• Cooperation between the Department of Labor of the United States of America and China National Coal Association
• Technical Cooperation on Standards Harmonization
• Cooperation on Technical Exchange and Cooperation of Trade Statistics
• Cooperation on Rules of Origin
• Select Reverse Trade Mission Program
• Small and Medium-sized Enterprises Cooperation
• China Food and Drug Administration Senior Study Tour
• Continued Cooperation on Intellectual Property Rights
• The 7th China-U.S. Innovation Dialogue
• Combating Business Email Compromise Scams
• Cooperation on Customs Enforcement of Intellectual Property Rights
• Cooperation on Inspection and Quarantine
• Traditional Chinese Medicine Cooperation
Source: U.S. Treasury Department.