Both sides must assume reciprocal obligations in financial services opening
The financial services part of the phase one trade deal, featuring obligations from both sides that are basically reciprocal, has once again testified to China’s efforts to liberalize its financial sector, the People’s Bank of China (PBC), the country’s central bank, said on Thursday.
China-US cooperation in the financial arena outweighs the two countries’ rivalry, the PBC said in a statement posted on its website, noting that the financial services part that both sides agreed on is propitious for improving the competitiveness and resilience of China’s financial system. Both sides “shall work constructively to provide fair, effective, and non-discriminatory market access for each other’s services and services suppliers,” read the agreement text posted Thursday on the Chinese Ministry of Commerce’s website.
The section on financial services, a major focus of the long-awaited deal, includes commitments from both sides regarding banking, credit ratings, electronic payments, financial asset management, insurance, securities, fund management, and futures services.
Under the deal, the obligations of both sides are basically reciprocal. China’s commitments are largely based on its market needs, reflecting and detailing opening-up measures having been taken, according to the PBC statement.
It added that the US has also made commitments to the actual challenges facing Chinese institutions exploring opportunities in the US market over recent years.
The deregulating commitments from China contained in the agreement actually reiterate the nation’s push for financial opening-up, which has been in place for several years, Tang Jianwei, chief researcher at the Bank of Communications’ Financial Research Center, told the Global Times on Thursday.
The nation’s pledge to open up its financial market has gone well beyond the financial services section in the phase one deal, he told the Global Times, adding that the consensus the two sides reached paves the way for China’s financial sector to be more effectively aligned with the global market.
In a separate statement on its website, the PBC provided interpretations of the closely watched section of the deal that involves macroeconomic policies and exchange rates.
The exchange rate section creates a referable paradigm for great powers to negotiate over exchange rate policies and stances in the future.
It serves to enhance communication between China and the US in the arena of exchange rates and would effectively rein in disputes, the Chinese central bank said, stressing that the exchange rate consensus that two countries achieved will help maintain the prudent operations of the international monetary system and foster the longterm and stable development of the global economy.