First Financial Dialogue between China and Germany begins

germanychinaDuring Chinese President Xi Jinping’s visit to Germany in March 2014, Chancellor Merkel and President Xi decided to establish the China-Germany High Level Financial Dialogue, to strengthen financial cooperation between China and Germany.The Sino-German Action plan released at the China-Germany Governmental Consultation co-chaired by Chinese Premier Li Keqiang and German Chancellor Angela Merkel in October 2014 announced that the first China-Germany High Level Financial Dialogue would be conducted in Berlin in 2015.The First China-Germany High Level Financial Dialogue was concluded by Chinese Vice Premier Ma Kai and German Federal Finance Minister Wolfgang Schäuble and President of the Deutsche Bundesbank Jens Weidmann on 17 March 2015. A high-level delegation of senior officials from both countries attended the meeting.

Both sides emphasised this Dialogue mechanism as an important platform for bilateral communication and policy coordination on strategic, overarching and long-term issues in financial fields. Both sides specified the key significance of promoting a forward-looking and mutually beneficial China-Germany relationship in the financial area.

The two sides are committed to strengthening macro-economic policy coordination in the G20 context, developing policy dialogue and pragmatic cooperation in fiscal and financial areas, expanding strategic cooperation, and enhancing global collaboration, in a bid to jointly support global economic growth and improve global economic governance. During this dialogue, both sides reached consensus on the following:

  1. Considering the challenges facing the global economy and the fragile recovery, both sides are committed to strengthening economic policy coordination, and in particular to promoting growth, increasing employment, advancing structural reform and maintaining an open and strong world economy.
  2. Both sides agree that the implementation of structural reforms and growth and stability-oriented macro-economic policies are conducive to long-term sustainable economic growth.
  3. The Chinese authorities will continue to coordinate the relations between stabilizing growth, promoting reforms, making structural adjustments, improving people’s livelihood and preventing risks in a comprehensive manner. They will also take the initiative to adapt to the economic “new normal”, and stabilize and improve macroeconomic policy, in order to keep economic growth on a proper track. At the same time, in accordance with the master plan of comprehensively deepening reform, The Chinese government makes great efforts to push forward economic structural adjustment and transformation of the economic development model to ensure the quality and performance of economic growth.
  4. The Federal German government is dedicated to continuing its strategy of sound public finances combined with growth enhancing structural reforms. The German authorities have taken action to boost the quality of public spending and will further enhance it in the future. Fiscal leeway resulting from past consolidation will be used to improve public investment and strengthen education spending. At the same time the Federal German government will stick to its objective of balanced budgets and will be fully compliant with national and European fiscal policy requirements. Furthermore, the German authorities will improve institutional conditions for private investment and public-private-partnerships. This will ensure the preservation of the high quality of Germany’s infrastructure.
  5. China and Germany support the role played by the G20 as the premier forum for international economic cooperation, and will strengthen cooperation within the G20 framework, to promote strong, sustainable and balanced global economic growth, maintain international financial stability, improve global economic governance and establish an open world economy. Both sides are committed to promoting the implementation of the Brisbane Summit Action Plan and the comprehensive growth strategies, which aim to lift collective G20 GDP by at least 2 per cent by 2018. Both sides support the Antalya G20 Summit in its efforts to ensure inclusive and robust growth through domestic and collective action, attach great importance to fulfilling the previous summit commitments and will work together with other G20 members to push for positive outcomes at the Antalya G20 Summit. Germany will actively support China in hosting the G20 summit in 2016.
  6. Both sides confirm their commitment to the G20 peer review for inefficient fossil fuel subsidies, and will participate in the peer review process under the framework of G20.
  7. The two countries encourage their financial institutions to explore innovative ways of SME financing in line with the G20 agenda of promoting productive investments.
  8. Both sides will strengthen bilateral and multilateral cooperation in the area of taxes, to jointly address and fight cross-border tax evasion and tax avoidance, including continuing their cooperation in the Global Forum on Transparency and Exchange of Information for Tax Purposes to promote cooperation in tax transparency and automatic exchange of tax information, and to further strengthen their communication and cooperation under the G20 BEPS Programme. Both sides agree to respect and support each other’s concerns, to jointly promote the establishment of a global tax governance system and establish a well-functioning international tax environment.
  9. Both sides attach great importance to the challenge of demographic change and its dramatic impact on fiscal sustainability and on the development of social systems. Against that background, the two sides will conduct in-depth exchange of views in the spirit of mutual learning.
  10. The German Federal Ministry of Finance and Chinese Ministry of Finance agree to exchange views and conduct cooperation on issues related to budgetary and fiscal management, including but not limited to medium-term fiscal planning and specific practices relating to publicizing the budget.
  11. Both sides welcome and support the development of an offshore RMB market and a local RMB clearing bank in Frankfurt. Both sides welcome German financial institutions using RQFII quota to invest in China’s market. China and Germany welcome financial institutions issuing RMB bonds in Germany. Both sides support the relevant Chinese interbank market intermediaries such as China Foreign Exchange Trading Center, Shanghai Clearing House, and the China Central Depository & Clearing Co. Ltd to take part in the establishment of the European RMB offshore market. Both sides note that the IMF will conduct the review of the SDR basket this year. Both sides agree that the SDR basket composition should continue to reflect the changing role of currencies in the global trading and financial system. The German side supports China’s goal to add the RMB to the SDR currency basket based on existing criteria.
  12. Both sides agree to strengthen cross-border supervisory and oversight cooperation on futures and OTC derivatives market infrastructure, cross-border payment services etc., and launch joint analyses in payment and financial market infrastructure. Both sides are willing to conduct joint analyses on topics such as development and opening-up of securities markets.
  13. Banking regulatory authorities of both countries recognize each other’s supervisory capacity and commit to enhancing communication, cooperation and coordination on bilateral and multilateral platform, including in the area of international regulatory reform.
  14. The People’s Bank of China and the German authorities agree to further strengthen supervisory cooperation and communication in the area of anti-money laundering (AML) and combating the financing of terrorism (CFT).
  15. Both sides agree to move forward on strengthening cross-border enforcement cooperation related to securities and futures markets.
  16. Both sides welcome each other’s banking institutions, in compliance with relevant rules and regulations, setting up establishments or developing business operations in their respective markets. Both sides agree to set up cross-department taskforces to engage in dialogue and consultation with respect to the regulatory treatment of each other’s branches, with a view to enter into an agreement. Both sides welcome enhancing the development of banking institutions in both countries on a mutually beneficial basis.
  17. China and Germany encourage financial institutions in both countries to strengthen communication and deepen cooperation. Both sides support the Shanghai Stock Exchange, the China Financial Futures Exchange and the Deutsche Börse Group’s plan to co-establish a RMB offshore platform to trade financial instruments in Frankfurt.
  18. Both sides welcome the Chinese authorities’ approval of Deutsche Asset&Wealth Management Investment GmbH’s application for RQFII qualification. Both sides will support Chinese securities and futures institutions in cooperating with German institutions to establish and conduct business in Germany, including the development, distribution and portfolio management of RQFII products.
  19. Both sides will maintain their efforts to expand market access for eligible insurance companies.
  20. China welcomes the European Investment Plan and the EU’s Horizon 2020 programme and offers its cooperation. Germany welcomes China’s interest in cooperating with EIB and EFSI with a view to co-financing projects or supporting investment platforms. Both sides will explore the possibility of investment cooperation in third countries in line with the interest of German and Chinese enterprises.
  21. China and Germany agree that the Asia Infrastructure Investment Bank (AIIB) as a new Investment Bank could play an important role to provide funds for infrastructure in Asia. Germany intends to join the AIIB as a prospective founding member. China welcomes this intention.

Source: Bundesfinanzministerium