China, US could work together to build better global financial system

NEW YORK - China and the United States could work together to improve the global financial system in order to achieve a stable and sustainable economic development for the world, officials and experts said at a symposium here recently.

As economic integration between the two countries and their influence on the rest of the world grew, the coordination of economic policies between them became much more important, said Chinese Vice Finance Minister Zhu Guangyao at the symposium titled "Building the Financial System of the 21st Century: An Agenda for China and the United States."

The two countries together have a huge impact on the world financial system, said Frank Newman, former US deputy secretary of the Treasury.

"The ability to deal with global financial issues quickly and with cooperation between the two sides is very important," Newman said.

There are three major trends affecting global markets that require careful attention: the transformative financial technology, the strained trading liquidity, and the large scale of market intervention by central banks, said Christopher Giancarlo, commissioner of the US Commodity Futures Trading Commission.

"A successful management of these challenges will determine the health and vibrancy of the global financial markets," said Giancarlo, adding that "The US and China are experiencing different stages of financial developments, but we share the common determination to continue to improve the markets and economies."

The US and China have different interests and experiences, so the mutual understanding of each other is important, said Hal Scott, director of the program on international financial systems at the Law School of Harvard University.

"The cooperation between US and China over economic issues will affect the world. I think we need to strengthen them by a mechanism for further cooperation," he noted.

Newman also suggested that "rather than trying to solve a particular problem, it's more crucial to establish a mechanism so you are ready when you need them."

As a matter of fact, China and the US have made essential progress in building such a "mechanism" for bilateral dialogues in financial issues.

The 7th China-US Strategic and Economic Dialogue (S&ED), held in Washington D.C. in June this year, produced ample outcomes in various economic issues, including the promises of building more open and stable financial sectors in both countries.

Both sides spoke highly of the S&ED dialogue this year, which was widely seen as the groundwork for success of President Xi Jinping's state visit to the United States slated for Sept 22-25.

"The upcoming meeting between the two presidents offers a new opportunity of strategic importance for promoting China-US cooperation. It will facilitate adjustment and improvement of international financial and trade architecture." Zhu said.

"On one hand, China has promised to continue its market-oriented exchange rate reform and increase exchange rate flexibility, so as to let the market play a decisive role in the allocation of resources. On the other, the US has pledged to stay committed to promoting a strong, sustainable and more balanced pattern of growth characterized by higher investment and national savings," said the Chinese vice finance minister.

The US Federal Reserve has promised to foster maximum employment and price stability in accordance with its statutory mandate.