Cooperation between the US and China ensures more stable corporate finance – FM.nl

In a step towards closer cooperation, China and the US have agreed to appoint contact persons responsible for managing future “financial stress events”. The decision was taken during the Financial Action Task Force meeting held in Shanghai on August 15 and 16, 2024. It was the result of heated discussions following US Treasury Secretary Janet Yellen’s visit to China earlier this year. This was reported by ANP.

• China and the US are strengthening financial cooperation
• Contact designated persons for emergency situations
• Despite cooperation, geopolitical tensions persist

The main objective of these new agreements is to help both countries communicate quickly and efficiently during financial crisis situations. By exchanging contact lists, countries aim to reduce uncertainty and ensure the stability of their financial institutions. This is especially important at a time of increasing global economic uncertainties, particularly the recent volatility in financial markets.

Sustainable funding

In addition to addressing financial risks, the two sides also discussed sustainable financing. This topic has become increasingly important in the context of global climate change and the need for investments in green technologies. The two countries plan to hold further discussions on topics such as anti-money laundering measures and the role of their financial institutions in sustainable development. [Artikel gaat verder na de volgende alinea]

Geopolitical tensions continue

Despite these positive steps in financial cooperation, geopolitical tensions between the US and China remain high. The US has raised tariffs on Chinese goods this year, targeting strategic sectors such as chips, electric vehicles and steel. Additionally, many Chinese companies are blacklisted by the US due to national security concerns. These tensions make recent cooperation on financial stability all the more significant.

Cooperation

Both countries have agreed to continue their talks, with meetings scheduled at the spring meetings of the World Bank and IMF in April 2024. These meetings are expected to provide further direction for bilateral economic cooperation and help in addressing the prevailing challenges in the global economy.

Increased stability and predictability

Companies, especially multinationals and financial institutions, are likely to enjoy increased stability and predictability in their business operations. Improved communication channels between China and the U.S. would allow potential financial shocks or crises to be resolved more quickly, reducing market volatility. This will mean that companies will experience less unexpected fluctuations in exchange rates, interest rates and other financial indicators, which will be useful for their planning and risk management. [Artikel gaat verder na de volgende advertentie]

Better access to information and response time

Businesses will also benefit from faster access to information and improved response time to financial stress events. The exchange of contacts and direct communication channels between US and Chinese officials will lead to quicker warnings and better coordinated responses to impending financial risks. This will enable companies to take timely action to reduce their risks.

Greater focus on sustainable funding

The emphasis on sustainable financing discussed by the Finance Working Group means that companies working on green technologies and sustainable projects can expect more support and financing options. This is in line with the global trend towards ESG (Environmental, Social and Governance) investments, where companies that commit to sustainability are increasingly sought after by investors and financial institutions.