Joint Statement of the Third Sino-German High-Level Finance Dialogue

On October 1, 2023, Chinese Vice Premier He Lifeng and German Finance Minister Lindner co-chaired the Third China-Germany High-Level Finance Dialogue (hereinafter referred to as the Dialogue) in Frankfurt, Germany, according to the Ministry of Finance website. High-level officials from both sides attended the dialogue. The two sides reaffirmed that this dialogue mechanism is an important platform for bilateral communication and policy coordination between China and Germany on strategic, overall and long-term issues in the financial field. The two sides are committed to strengthening macroeconomic policy coordination through multilateral and bilateral channels, jointly promoting world economic recovery and sustainable development, and maintaining global financial stability. The two sides agreed to strengthen cooperation in the financial field and expand the opening of the two-way market on the basis of fair competition. The two sides are committed to jointly promoting the improvement of international economic governance, opposing trade protectionism, and supporting a rules-based, non-discriminatory, fair, open, inclusive, just, sustainable and transparent multilateral trading system with the WTO at its core.

During the dialogue, the two sides reached the following consensus:

1. The global economic outlook is still affected by multiple linkage risks and structural risks. In light of this, and in the context of generational challenges such as the transition to carbon neutrality, the two sides commit to work to enhance global confidence and promote strong, sustainable, balanced and inclusive growth of the world economy, including through targeted monetary, fiscal, financial, and structural policies and sustained multilateral and bilateral macro policy cooperation, to promote economic growth, ensure smooth supply chains, improve productivity, support the transition, reduce inequality, and maintain macroeconomic and financial stability and price stability.

2. The two sides commit to oppose trade protectionism and promote an open world economy and a rules-based, non-discriminatory, fair, open, inclusive, just, sustainable and transparent multilateral trading system with the WTO at its core.

3. The two sides commit to work together to promote world economic recovery and sustainable development and maintain global financial stability. The two sides support the role of the G20 as the main forum for international economic cooperation. The two sides support the outcomes of the recently concluded G20 Leaders' Summit, commit to implementing the consensus of the G20 Leaders' Summit, the Finance Ministers and Central Bank Governors' Meetings, and jointly promote the G20 to strengthen solidarity and cooperation in the fields of macroeconomic policy coordination, structural reform, sustainable development, climate finance, international financial architecture and digital economy, and work together to address global economic and development challenges.

4. The two sides reaffirmed the importance of effective, comprehensive and systematic addressing the debt vulnerability of low- and middle-income countries. The two sides will work with other G20 members to uphold all the commitments in the Common Framework for Follow-up Debt Treatment under the Debt Relief Initiative agreed on 13 November 2020, including the commitments in the second and last paragraphs, and strive to implement the Common Framework in a predictable, timely, orderly and coordinated manner. The two sides welcome the joint efforts of all stakeholders, including private sector creditors, to continue to promote debt transparency, and look forward to enhanced information sharing between the IMF and the World Bank on macroeconomic forecasts and debt sustainability assessments in the early stages of the debt restructuring process.

5. The two sides commit to maintain strong cooperation with the International Monetary Fund (IMF). Both sides support a strong, quota-based, and adequately resourced IMF that plays a central role in the global financial safety net. The two sides support the IMF's timely completion of the 16th General Review of Quotas to ensure the primacy of quotas in IMF resources and reflect the relative position of member countries in the world economy. We call on countries, especially those that have not yet participated, to provide further voluntary subsidies and loan commitments to the Poverty Reduction and Growth Trust (PRGT) ahead of the 2023 IMF/World Bank Annual Meeting in Marrakech to meet the financing needs of the first phase of the PRGT. The two sides support the implementation of the G20 Sustainable Finance Roadmap.

6. The two sides will strengthen coordination and all-round cooperation under the framework of the Asian Infrastructure Investment Bank (AIIB), jointly support AIIB to achieve sustainable and stable operations in accordance with international standards, and integrate into the international framework to better support members to achieve sustainable development.

7. The two sides will continue to strengthen international development cooperation, jointly promote the implementation of the United Nations Sustainable Development Goals (SDGs) and the 2030 Agenda for Sustainable Development, and commit to take further actions at the domestic and international levels to implement the 2030 Agenda for Sustainable Development and promote stronger, greener, healthier and more inclusive global development.

8. The two sides will continue to maintain close cooperation to jointly address and combat cross-border tax evasion, strengthen communication and cooperation in the implementation of the G20/Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting Action Plan, and improve tax certainty. The two sides welcome the significant progress made in the outcome statement of the OECD/G20 Framework for Base Erosion and Profit Shifting (CEP) in July 2023 to address the tax challenges of digitizing the economy, as well as the text of the multilateral convention on the redistribution of taxing rights (Pillar 1 Amount A) and other elements. The two sides noted the steps taken by countries to implement the Global Anti-Base Erosion Rule as a common approach, as well as the results achieved in the area of taxable rules and multilateral instruments to facilitate their implementation. The two sides call on countries implementing global anti-base erosion rules to strengthen coordination, avoid double taxation, and minimize the burden of corporate compliance. The two sides commit to assist low-income countries in strengthening their collection and administration capacity building in a number of ways, particularly with regard to the need for coordinated efforts to effectively implement the two-pillar international tax package. Both sides will continue to support the G20 commitment to tax transparency and automatic exchange of tax information.

9. The two sides agreed that economic cooperation is beneficial to China and Germany, and strengthening bilateral economic relations is conducive to complementing each other's advantages. The two sides commit to work together to expand two-way market access and deepen sustainable trade and investment cooperation on the basis of fair competition.

10. The two sides will jointly host the Sino-German Dialogue Forum on Fiscal Cooperation in Beijing in 2024 to review the course and achievements of Sino-German financial cooperation over the past 40 years. We encourage relevant departments of China and Germany to actively participate in the forum and make positive contributions to bilateral cooperation on global issues such as climate change and biodiversity conservation.

11. The two sides agreed to continue cooperation under the Policy Research Cooperation Mechanism of the two Ministries of Finance and pledged to further strengthen expert exchanges on key topics such as demographic change and fiscal sustainability frameworks.

12. The two sides agreed to further strengthen regulatory cooperation in the banking and insurance sectors, and the competent authorities of the two sides agreed to actively communicate on the signing of memorandums of understanding on regulatory cooperation in the insurance sector. The two sides acknowledged the importance of insurance institutions' participation in enhancing financial inclusion, financial resilience and addressing demographic change in both countries. The two sides commit to process the license applications of foreign and joint venture banks and insurance companies in a timely manner and ensure a level playing field for them. China welcomes eligible German insurance companies to apply for operating licenses in their professional fields.

13. The two sides support CEINEX in its role as an important platform for promoting Sino-German and EU-China financial cooperation, and are willing to jointly support CEINEX in expanding its business, including listing China A-share index futures options, and increasing efforts to assess the required permits in a timely manner.

14. The two sides welcome the possibility of issuing and listing Global Depositary Receipts (GDRs) and Chinese Depositary Receipts (CDRs), and will increase their efforts to support more enterprises to issue GDRs and CDRs and continuously improve the level of interconnection between the Chinese and German capital markets.

15. The German side welcomes the achievements made by China in optimizing the regulatory environment for foreign banks in China in recent years. The two sides agreed to conduct a dialogue between the competent authorities of the two countries on the necessary conditions for exemption from the regulatory requirements for the subsidiation of Chinese bank branches in Germany. China continues to express its willingness to encourage at least one China-based bank to open a subsidiary in Germany (Frankfurt) as its European headquarters.

16.The two sides welcomed the important progress made in the areas of green finance and sustainable financing, in particular during the Chinese and German Presidency of the G20. The two sides will continue to work under the framework of the Green Finance Cooperation Network (NGFS) between central banks and supervisors to encourage financial institutions to conduct environmental risk analysis. The two sides agreed to increase support for bilateral and global cooperation on green and sustainable finance, which will help mobilize the financing needed for climate action, nature conservation and the achievement of the United Nations Sustainable Development Goals. The two sides support the further development and wider application of the Common Taxonomy (CGT) developed by the EU-China Working Group on the International Platform for Sustainable Finance Taxonomy, including facilitating the issuance of financial products for cross-border transactions consistent with the Common Taxonomy. The two sides will support sustainable finance capacity building efforts, including the launch of the Capacity Building for Sustainable Investment (CASI) Coalition for emerging market and developing economies, and the work of the International Sustainability Standards Board (ISSB) in promoting the adoption of sustainability reporting standards by financial market participants in both countries and globally.

17. The two sides welcomed the strengthening of cooperation in the field of sustainable finance, including green bonds and environmental, social and governance (ESG). The two sides agreed to strengthen exchanges and cooperation among each other's green bond market participants, encourage innovative practices, enrich investment channels and promote market development, including strengthening green bond information disclosure.

18. The two sides reaffirmed their interest in fruitful cooperation between the People's Bank of China two central banks and Deutsche Bundesbank, signed the Memorandum of Understanding on Cooperation during the Second Sino-German High-Level Financial Dialogue in 2019, and welcomed the strengthening of cooperation between the two central banks and the promotion of the implementation of the memorandum of understanding, especially in the exchange of economic and financial situations, central banking, technical assistance and personnel training.

19. The two sides commit to fully implement the Financial Action Task Force (FATF) standards globally, agree to strengthen anti-money laundering and counter-terrorist financing cooperation under FATF and other multilateral frameworks, support each other, provide advice and exchange of experience in the fifth round of FATF mutual assessment, and maintain timely communication on bilateral anti-money laundering and counter-terrorist financing matters. The two sides will work together to promote cooperation and information exchange in the field of financial intelligence between the two countries under an appropriate legal framework. The two sides look forward to further exploring ways to strengthen cooperation, including daily consultations and working visits.

20. The two sides agreed to strengthen exchanges in the field of digital finance on topics such as the development of central bank digital currency.

21. The two sides encourage qualified financial institutions to invest in each other's markets. The two sides agreed to strengthen investment cooperation, actively promote domestic enterprises to invest in each other's markets, and reduce obstacles to two-way investment.

22. The two sides agreed to strengthen communication and cooperation in the field of securities, futures and derivatives markets, support exchanges and cooperation between Chinese and German securities and futures regulatory authorities under multilateral and bilateral frameworks, and create favorable conditions for jointly responding to global economic and financial challenges and deepening cooperation.

23. The two sides welcome and encourage qualified German business entities to actively participate in China's interbank market, including issuing panda bonds, investing in RMB bonds, using RMB bonds as collateral, and participating in China's interbank foreign exchange market.

24. The two sides support German financial institutions in carrying out RMB business and related financial services, and facilitate cross-border trade and investment of enterprises. The two sides support the lifting of bilateral restrictions and potential obstacles to cross-border transactions, and support RMB clearing banks in meeting the RMB business needs of local financial institutions and enterprises.

25. The two sides are willing to continue to promote financial infrastructure connectivity and welcome cooperation between financial infrastructure and financial institutions of the two countries.