WASHINGTON - As the Special Representatives of President Barack Obama and President Xi Jinping, U.S. Treasury Secretary Jacob J. Lew and Chinese Vice Premier Wang Yang led the seventh meeting of the Economic Track of the U.S.-China Strategic and Economic Dialogue (S&ED) on June 23-24 in Washington, D.C. They were joined by a high-level delegation of Cabinet members, ministers, agency heads, and senior officials from both countries.
The United States and China recognize the continued expansion in the bilateral economic relationship and the significant potential for further growth in U.S.-China trade and investment, especially as China deepens its comprehensive economic reforms and further integrates into the global financial and economic system and as the U.S. economy continues to strengthen. Participants pledged to continue to work to deliver concrete progress for the people of both countries.
In this round, the United States and China emphasized the importance of full implementation of the commitments pledged by both countries in previous Strategic and Economic Dialogues. The United States and China announced further concrete measures to support strong domestic and global growth, promote open trade and investment, and enhance and foster financial market stability and reform. The United States and China discussed the international financial architecture, including the importance of economic policy cooperation, international rules, global economic governance, and financial market stability and reform. The United States and China committed to maintain frank and candid communication on strategic economic issues and laid the groundwork for President Xi’s state visit to the United States in September.
I. Strengthening Economic Policy Cooperation
Since the sixth meeting of the S&ED in July 2014, the United States and China have taken significant actions to strengthen growth and promote job creation in both countries; to continue to support a durable global recovery; to ensure that their domestic growth supports strong, sustainable, and balanced global growth; and to explore opportunities for further economic cooperation.
· Consistent with the reforms set out in the Third Party Plenum of the 18th CPC Central Committee and China’s G-20 commitments, China is to continue market-oriented exchange rate reform, increase exchange rate flexibility, and move more rapidly toward a more market-oriented exchange rate system. The United States notes the real effective appreciation of the renminbi (RMB) and welcomes the apparent reduction in foreign exchange intervention since the last S&ED. China commits to intervene only when necessitated by disorderly market conditions, and to actively consider additional measures to transition to a market-oriented exchange rate.
· Consistent with its statutory mandate, the U.S. Federal Open Market Committee (FOMC) seeks to foster maximum employment and price stability. To the extent that it is consistent with achieving those objectives, the FOMC is expected to normalize monetary policy, particularly by raising the federal funds rate, and to conduct policy in a transparent and, to the extent possible, predictable manner. The Federal Reserve is sensitive to the effects of its polices on the international financial system. A key goal of the Federal Reserve is to maintain financial stability both domestically and internationally.
· To achieve stable and sustainable growth of the Chinese economy based on domestic demand and a more balanced consumption-investment relationship, China commits to take significant steps to increase household wealth and income, promote a strong, sustainable and more balanced pattern of growth, and to ensure that all economic entities under all forms of ownership have equal access to factors of production according to law. China is to: 1) Accelerate the establishment of a more fair and sustainable social security system that guarantees basic needs, achieves universal coverage of social security by 2020, and coordinates rural and urban social protection schemes. 2) By 2017, implement a unified real estate registration system, and set up an effectively operating platform for managing real estate registrations. The unified urban-rural construction land market is to be gradually established. China commits to allow rural collectively owned profit-oriented construction land to be sold, leased and appraised as shares, on the premise that it conforms to planning and land use control, and ensure that it can enter the market with the same rights and at the same prices as state-owned land. 3) To preserve market order and the effectiveness of macroeconomic policies, ministries and local governments are to comply with laws and regulations as well as their respective management authority when making new preferential policies.
· China commits to advance market-based interest rates by further increasing flexibility for financial institutions to set interest rates so as to let the market play a decisive role in the allocation of financial resources. The United States welcomes China’s introduction of negotiable Certificates of Deposit (CDs) to individual investors and enterprises.
· The United States is committed to promoting a strong, sustainable and more balanced pattern of growth characterized by higher investment and national saving. The Obama Administration’s FY 2016 Budget resolves to achieve this objective by promoting fiscal sustainability and through investments in education and training that promote labor force participation, such as two years of free community college for responsible students, making permanent the American Opportunity Tax Credit for college, and expanding paid sick and family leave; public infrastructure investment and policies that encourage public-private investment in infrastructure, including reauthorizing surface transportation funding at $478 billion over six years, permanently creating the America Fast Forward Bond (AFFB) program, permanently establishing the Qualified Public Infrastructure Bond (QPIB) program, and exempting foreign pension funds from application of the Foreign Investment in Real Property Tax Act (FIRPTA); tax relief to support middle class and working families; policies to spur the development of new technology, such as enhancing and making permanent the Research and Experimentation tax credit; and policies to increase employer-based and individual saving for retirement, including through incentives to encourage automatic enrollment in Individual Retirement Accounts.
· The United States recognizes the importance of predictability in the budget process as well as for the path of federal finances more generally and is committed to putting the U.S. government’s finances on a sustainable path over the medium term, while promoting strong, sustainable and more balanced growth. The Administration’s FY 2016 Budget is expected to trim the federal budget deficit to 2.5 percent of GDP in the latter half of the 10-year budget period. The Administration expects to achieve this goal by replacing sequestration with well-targeted spending cuts and loophole closers, and obtaining an additional $1.8 trillion in deficit reduction, partly through reforms to the tax code, including eliminating a provision known as stepped-up basis that allows wealthy households to avoid taxes on capital gains, raising the top capital gains and dividend rate for high-income households to 28 percent, and reforming financial sector taxation to make it more costly for highly-leveraged financial firms to finance their activities with excessive borrowing. Deficit reduction is also expected to be achieved by immigration reform as well as reforms to health programs including initiatives to promote efficient care among Medicare providers and to support the Affordable Care Act, which is already providing health insurance coverage for millions of Americans.
· The United States and China commit to enhance communication on local government financing.
· China is to list and publicly disclose state capital operation budget (SCOB) expenditures to the item level according to their functional classification, as required by the newly amended Budget Law and related regulations. In 2015 and subsequent years, China is to also guide local authorities to improve their SCOBS. China is to increase the proportion of state-owned capital income that is turned over to public finance to 30 percent by 2020, to be used to ensure and improve people’s livelihood.
II. Promoting Open Trade and Investment
The United States and China underscored the importance of fostering an open, transparent, and non-discriminatory environment for trade and investment, recognizing that doing so is critical to economic growth and job creation in both countries and in the global economy. The United States and China committed to take the following measures to enhance our bilateral trade and investment relationship, to support an open and fair environment, and create greater opportunities for U.S. and Chinese companies and workers.
· The United States and China reaffirm that the Bilateral Investment Treaty (BIT) negotiation is a top priority in bilateral economic relations, and commend the progress of the negotiations to date. The two sides recognize that the exchange of negative list offers in the 19th round is an important milestone of the BIT negotiation. The two sides commit to intensify the negotiation and exchange improved negative list offers in early September, reflecting the two sides' shared commitment to open investment environments. Both sides are to continue to push the negotiation forward with a view to reaching a mutually-beneficial and high-standard treaty.
· Both China and the United States recognize the importance of information security related to ICT products, services or technologies (products) in the commercial and trade spheres. To enhance policy transparency, both sides affirm to solicit and take into account opinions from domestic and foreign parties in accordance with their respective laws before issuing regulations for such ICT products. The two sides are to keep open and continued communication on this issue.
China and the United States attach great importance to the information security of banking sector networks, risk management of banking information systems, and information security and protection of banking customers. Both sides recognize competition is essential to ensuring access to high-quality products in the banking sector.
Both sides commit to communicate and consult on generally applicable ICT regulations in the commercial banking sector. Both sides commit to 1) provide transparency for such banking ICT regulations, including by publicly soliciting and taking into account comments from foreign and domestic parties on draft regulations before being published in final form, and 2) ensure that such banking ICT regulations are nondiscriminatory and do not impose nationality-based conditions or restrictions on the purchase, sale, or use of such products by commercial enterprises.
· The United States reiterated its commitment to encourage and facilitate export of commercial high technology items, to China for civilian end users and for civilian end uses. Both sides reiterated their commitments to continue detailed and in-depth discussion of the export control issues of mutual interest within the U.S.-China High Technology and Strategic Trade Working Group.
· Building on China’s commitments regarding Anti-Monopoly Law (AML) enforcement in the 2014 U.S.-China Joint Commission on Commerce and Trade (JCCT), China commits that the intermediate people’s court in the locality of the antimonopoly enforcement body issuing the administrative decision under the AML would have jurisdiction over the administrative appeal regarding that decision; provided that when such decision involves intellectual property rights, and the issuing authority is located in Beijing, Shanghai or Guangzhou, the intellectual property (IP) court in that municipality would have jurisdiction over the administrative appeal. China confirms that all parties to AML proceedings are entitled to seek administrative reconsideration in accordance with the same Chinese law and procedures. The department in charge of legal work under the administrative organs that performs the function of administrative reconsideration in each of Ministry of Commerce (MOFCOM), National Development and Reform Commission (NDRC), and State Administration for Industry and Commerce (SAIC) are to hold a meeting with the United States to discuss their administrative reconsideration procedures. The relevant department in MOFCOM would be the Department of Treaty and Law, in SAIC the Department of Law, and in NDRC, the Department of Laws and Regulations.
· The policies published by the Chinese government on the development of strategic emerging industries, including industry development promotion guidelines and associated national and sub-national industry development investment funds, are applicable to, and made available, on an equal basis to foreign-invested enterprises. China commits to enhance policy transparency, in this area, by soliciting public comments on drafts of the aforementioned measures that are legally binding.
· Industrial Cooperation: (1) Cooperation in the integrated circuit industry: China and the United States are to enhance exchange and dialogue regarding the integrated circuit industry. The two sides recognize the importance of business-to-business R&D collaboration, on the basis of fairness and non-discrimination, in the global integrated circuit innovation system. The two sides also recognize that transparency is important to creating a level playing field and fostering an environment that facilitates the in-depth cooperation between enterprises of the two countries. (2) Cooperation in new materials industry: China and the United States are to strengthen exchanges and explore cooperation about the new materials industry, including potential approaches to the design and application of new materials, and multilateral international standards development.
· China and the United States affirm the importance of transparency in the development and issuance of regulatory measures, including Normative Documents, to enhance predictability for market participants and promote confidence in our economies.
The United States appreciates China's efforts to improve the management of Normative Documents, including through the strict implementation of a legal review mechanism for Normative Documents. The United States also welcomes China's 2015 amendments of its Legislation Law and Administrative Litigation Law, as well as the State Council's relevant documents, which provide that: administrative organs are not to take administrative action impairing the lawful rights and interests or adding to the obligations of citizens, legal persons and other organizations without a basis in law or regulation; when initiating an administrative lawsuit, a citizen, legal person or other organization may require the court to review a relevant Normative Document simultaneously; if a court finds a normative document is illegal, the Normative Document is not to be used as a basis for determining that an administrative action is lawful; and no administrative license or administrative penalty is to be set in a Normative Document. China confirms that Normative Documents with a direct influence on the rights and obligations of citizens, legal persons, or other organizations must be published in final form, according to law.
China is to discuss with the United States ways to develop a short-term solution to address problems arising from the issuance of Normative Documents with a direct influence on the rights and obligations of citizens, legal persons, or other organizations, including by discussing topics such as seeking public opinions.
China welcomes the United States' continued commitment to identify outdated and duplicative regulations and take action to modify or eliminate them where possible. The Administration has made significant progress to achieve significant savings and reduction in paperwork burdens.
· The United States and China note the key involvement of then-Vice President Xi and Vice President Biden in negotiating and finalizing the Memorandum of Understanding between the People’s Republic of China and the United States of America Regarding Films for Theatrical Release (MOU), which was initialed on February 18, 2012, and formally signed on April 25, 2012. In implementing its commitments under the MOU, China is to ensure that (a) the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) takes immediate steps to actively promote reform in the distribution of imported flat-fee films through the licensing of additional distributors, (b) Chinese enterprises can apply to SAPPRFT for licenses to distribute imported flat-fee films, (c) any application received by SAPPRFT is to be approved as long as the applicant satisfies applicable requirements, which must be non-discretionary and non-discriminatory, and (d) licensed distributors are to be able to contract directly with foreign flat-fee film producers or their authorized representatives, without SAPPRFT, China Film Group or any other state-owned enterprise directly or indirectly influencing the negotiation, terms, amount of compensation, or execution of any distribution contract between licensed distributors and U.S. flat-fee film producers or their authorized representatives. The United States and China confirm that any Chinese enterprise licensed by SAPPRFT to distribute films in China has the right to choose whether to contract or partner with another distributor to distribute imported flat-fee films or to distribute those films on its own, independently of any China Film Group company or any other state-owned enterprise.
· The United States reaffirms its commitment to upholding open and non-discriminatory principles identified by the Organization for Economic Cooperation and Development in its June 2008 Declaration on Sovereign Wealth Funds and Recipient Country Policies. China reaffirms its commitment to follow the generally accepted principles and practices of Sovereign Wealth Funds (SWFs).
· China and the United States are to further enhance communication and exchanges between governments and businesses of both countries about investment in their respective infrastructure sectors, and to discuss mutually beneficial, market-based cooperation models. China and the United States express support for cooperation on infrastructure investment in their countries that is based on best practices for infrastructure investment.
· The two sides welcome economic and trade cooperation between Chinese provinces and cities and U.S. states, cities, and counties through mechanisms such as the Trade and Investment Cooperation Joint Working Groups established between Chinese provinces and cities and the U.S. states of California, Iowa, and Texas, and the city of Chicago. The two sides are encouraged by the important role the Working Groups seek to play in promoting U.S.-China sub-national economic and trade and investment cooperation and strengthening bilateral economic ties and welcome the establishment of similar mechanisms and endeavors to foster conditions for closer economic and trade interaction between their sub-national governments.
· Building on the U.S. and Chinese commitment at the 2014 S&ED to combat the illegal actions to manufacture, distribute, and export counterfeit and substandard active pharmaceutical ingredients (APIs) and APIs used for counterfeit and substandard products, both China and the United States continue to undertake efforts to protect supply chain integrity and to ensure patient access to safe and high-quality medicines. Regarding the regulation of API manufacturers, China and the United States commit to continue expert-level discussions and cooperation with relevant ministries. The United States commits to continue to review its authority to exclude from consideration the import of bulk chemicals from firms that are not registered with the China Food and Drug Administration, and both the United States and China commit to continue to exchange views on user fee programs. To facilitate exchange between the two countries, China commits to share the draft regulatory and enforcement framework developed by the Multi-Ministerial Work Mechanism to enact regulatory oversight of the manufacturers of bulk chemicals that can be used as APIs. China is in the process of revising the Drug Administration Law (DAL) and commits to develop and seriously consider amendments to the DAL requiring regulatory control of the manufacturers of bulk chemicals that can be used as APIs (“bulk chemicals”), including “export only” producers and distributors. The revised DAL is to be published in draft form for public comments according to China’s domestic laws and regulation and international obligations and China is to take into account comments by the United States Government and other stakeholders.
· Both sides committed to establish practical cooperation and exchange on IT application in agriculture, precision agriculture and agriculture data management.
· The Civil Aviation Administration of China (CAAC) and Federal Aviation Administration (FAA) commit to cooperate, further strengthen dialogue and communication, and enhance mutual understanding and trust, to work towards reciprocal recognition of bilateral airworthiness on transport category airplanes for the mutual benefit of the United States and China.
· The United States and China are to continue exchanges and dialogue and share experiences regarding technology import and export license agreement issues, including the extent to which private parties are allowed to determine technology import and export licensing terms under respective laws and regulations. In consideration of China’s rapidly evolving technological needs and its emphasis on market reforms, China is to conduct research on relevant articles of the Regulations on Administration of Import and Export of Technology. MOFCOM is to convene a joint seminar with the United States in the first quarter of 2016.
· The United States and China recognize that copyright piracy and trademark counterfeiting on the Internet has become a global hazard, and it is necessary to conduct cross-border communication and cooperation and crack down on such crimes. China is to continue to place the special program on combating piracy and counterfeiting on Internet high on its 2015 agenda, to further tighten oversight, and take stern actions against crimes in this area. The United States and China commit to continuing to work through the Joint Liaison Group to identify, investigate and prosecute criminal IP offenses, including those committed on the Internet.
· The United States confirms its commitment to continue to objectively, fairly, and in good faith evaluate the efforts made by the Chinese government and Chinese entities for protecting and enforcing intellectual property rights in its Special 301 Report and Notorious Markets List.
· The United States and China reaffirm their 2014 JCCT IPR/Patent Protection commitment to incentivize future innovation and economic growth in both countries in support of creating positive conditions for innovation, including by strengthening cooperation to protect innovators from bad faith litigations.
· The United States welcomes China's issuance of the Notification on Translation of Trade-related Departmental Rules by the State Council General Office in March 2015, which provides for the publication of English translations of trade-related departmental rules. China takes note of the concerns of the United States with regard to timely publication of translations of trade-related administrative regulations, and China is to study these concerns.
· China and the United States welcome foreign investment in their countries and recognize the important role that investment by their enterprises can play in third countries. When such enterprises engage in responsible business conduct, it can have a range of benefits to both home and host countries. With that in mind, the two governments welcome their enterprises, when investing abroad, to participate in international initiatives, and follow best practices on responsible business conduct, as appropriate.
III. Fostering Financial Stability and Reform
Both sides recognized the importance of strong, stable financial systems to achieve sustainable and balanced growth. Both sides committed to undertake the following measures to support further reforms and enhance supervision in their respective financial sectors, promote bilateral cooperation, and enhance cooperation under the Financial Stability Board and other multilateral frameworks, so as to support global financial stability.
· To further the Third Plenum’s goals of broadening direct financing channels for the real economy, developing a deep and efficient bond market, and strengthening links between domestic and international markets, China commits to enhance participation of foreign financial services firms and investors in its capital markets, including by:
o Gradually expanding the business scope of securities companies with foreign equity participation.
o Allowing qualified foreign financial institutions to set up joint venture securities companies in the Shanghai Pilot Free Trade Zone, with foreign shareholding no more than 49% and the domestic shareholders not limited to securities companies.
o Allowing qualified foreign brokers to establish futures companies in Shanghai Pilot Free Trade Zone in accordance with domestic laws and regulations, and trade specific domestic futures products for foreign traders.
o Allowing qualified, locally-incorporated, wholly foreign-owned or joint venture private fund management institutions to engage in private security fund management business, including secondary market trading of securities according to domestic regulations.
o Establishing a program that is to allow foreign investors to participate in the interbank bond markets, with an aggregate investment limit but without individual institution or jurisdiction quotas or limits, in line with China’s policy of managed capital account liberalization.
o Establishing a program that is to allow foreign investors to participate in the listed bond markets, through free trade accounts in the Shanghai Pilot Free Trade Zone.
o Allowing qualified, locally-incorporated U.S. and foreign-invested banks to obtain licenses to be bond market settlement agents and licenses for underwriting, on the same basis as domestic financial institutions.
o Allowing foreign-invested credit rating agencies to issue ratings on local government bonds.
· Both sides recognize the evolving interconnectedness between both the securities and futures markets of the United States and China, respectively, and the resulting importance of cooperation and information sharing in the regulation and supervision of those markets and market participants. Both sides commit to share technical expertise and to enhance regulatory and supervisory cooperation and information sharing. This may include joint efforts to establish an information sharing mechanism regarding China concept companies whereby the SEC seeks to notify the CSRC after a China concept company registers with the SEC and becomes a publicly listed company.
· With respect for each other’s sovereignty and laws, the United States and China commit to strengthening cross-border cooperation on the oversight of the audits of public companies. The two sides are to work together to conduct a pilot inspection program aiming at establishing a cooperation mechanism of audit oversight to protect investors and promote public trust in each country’s capital markets. Both sides are to explore effective ways of cooperation, and to build experience that could support reliance in the future.
· The United States and China are to continue to implement their Over-the-Counter (OTC) derivative reforms, consistent with the G-20 statement, which include the following: reporting of all OTC derivatives contracts; trading of standardized OTC derivatives contracts on exchanges or electronic platforms, where appropriate, centrally clearing standardized OTC derivatives contracts, and higher capital and margin requirements for non-centrally cleared derivatives transactions. The U.S. Commodity Futures Trading Commission (CFTC), the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) commit to strengthen information sharing and regulatory cooperation of OTC derivatives market reform, and to consider grant of appropriate regulatory relief to central counterparties (CCPs) that are held to domestic rules and regulations that are consistent with international standards, including the Principles for Financial Market Infrastructures established by the Committee on Payments and Market Infrastructure (CPMI) and the International Organization of Securities Commissions (IOSCO).
· The United States welcomes China’s implementation of Deposit Insurance Regulations of People’s Republic of China since May 1, 2015. Consistent with its G-20 commitment, with the formal setup of its deposit insurance scheme, China has developed a resolution framework for deposit-taking institutions, and is continuously improving implementation details to achieve full consistency with the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions. The United States and China commit to increase cooperation in the area of financial statistics to monitor systemic risk by enhancing technical cooperation between the U.S. Office of Financial Research and the People’s Bank of China (PBOC). China is making technical preparations to provide data to the Bank for International Settlements’ (BIS’s) International Banking Statistics and is to consider regular reporting of this data.
· Drawing on international practice, there are active deliberations among Chinese authorities to develop a framework for consolidated supervision of financial groups that own banks and other financial and/or non-financial firms, such as by considering legislation for financial holding companies.
· The United States applies the Volcker Rule through implementing regulations that, consistent with the intent of the statute, address concerns about the impact on foreign banking entities. The United States remains willing to meet with interested parties, including Chinese entities, to discuss implementation of the Volcker Rule.
· The United States and China welcome enhanced cooperation on measures to protect the financial system, and to effectively apply the Financial Action Task Force (FATF) Recommendations on combating money laundering and the financing of terrorism and proliferation. The two countries also commit to regular, robust working- and senior-level engagements to enhance bilateral efforts to jointly tackle and contain threats posed by emerging terrorist financing to the international financial system. Both countries further commit to strengthen bilateral regulatory, supervisory and law enforcement cooperation, and improve information sharing on new payment methods and online banking. To further expand the scope of cooperation, the two sides commit to jointly engage their respective financial sectors in selected bilateral meetings in order to share anti-money laundering and combating terrorist financing best practices.
· The United States and China welcome cooperation between the China Foreign Exchange Trade System and the Chicago Mercantile Exchange to promote the connection of each other’s financial market infrastructure and products through cooperation programs. In this regard, the United States and China support efforts to enhance the linkages between their financial markets.
IV. Enhancing Global Cooperation and International Standards
The United States and China committed to enhance cooperation, including under the G-20, APEC, and other multilateral frameworks. Recognizing the importance of international standards governing trade and finance that reflect the evolving global economic system, the two sides commit to take the following concrete steps to deepen their cooperation in this area, and continuously improve the international economic governance.
· China and the United States reaffirm their cooperation in the G-20, and support the G-20 as the premier forum for international economic cooperation. Both sides support the G-20 Antalya Summit’s theme “Collective Action for Inclusive and Robust Growth”, and emphasis on implementing commitments made at previous G-20 Summits. Both sides commit to work together with other G-20 members to strengthen macroeconomic policy cooperation, maintain an open world economy, safeguard global financial stability, improve global energy cooperation, and promote infrastructure investment. The two sides are committed to delivering positive outcomes for the Antalya Summit across a number of areas, including on financial regulatory cooperation and international tax issues, and to make substantive progress towards delivering on our 2009 G-20 commitment to phase out inefficient fossil fuel subsidies. The United States actively supports China assuming the presidency of the G-20 in 2016 and looks forward to advancing the G-20 agenda.
· Climate Finance: The United States and China note that in the context of the meaningful mitigation actions and transparency on implementation, developed countries have committed to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. The United States and China recognize that the Green Climate Fund (GCF), which is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC), is the main dedicated multilateral fund for climate finance. We are determined to work constructively together, along with other Parties to the UNFCCC, to ensure the effective operation of the GCF.
· Respecting the willingness of the recipient countries, China and the United States commit to development finance cooperation in third countries through the World Bank and other multilateral development institutions.
· The United States welcomes China’s commitment to release economic data following the IMF’s Special Data Dissemination Standard (SDDS) by the end of the year and welcomes China’s continued efforts to enhance transparency. China recognizes the importance to successful RMB internationalization of meeting the transparency standards of other major reserve currencies. The United States supports China’s efforts to implement further financial and capital market reforms. The United States has already stated, including at previous Strategic & Economic Dialogues, that it supports China making the reforms that would lead to the inclusion of the RMB in the Special Drawing Rights (SDR) basket. Both sides commit to respect the IMF’s procedures and process in the upcoming SDR review, and to enhance their communication on this issue.
· China and the United States commit to strengthen their cooperation in the International Monetary Fund (IMF), and continue to improve the IMF’s quota and governance structure. The United States commits to implement the 2010 IMF quota and governance reforms as soon as possible and reaffirms that the distribution of quotas should continue to shift toward dynamic emerging markets and developing countries to better reflect the relative weights of IMF members in the world economy. China and the United States affirm the efforts of the IMF Executive Board to pursue an interim solution, which aims to converge quota shares to the extent possible to the levels decided under the 14th review. However, the interim solution should not constitute or be seen in any way as a substitute for the 2010 IMF reforms. China and the U.S. are to support IMF Executive Board’s work on the 15th Review of Quotas, including a new quota formula, using the 14th Review as basis.
· The United States and China welcome the progress that has been made by the International Working Group on Export Credits (IWG) in negotiating new international guidelines for official export credit support, including beginning work on horizontal guidelines at its next meeting later this year. Given the start of this new horizontal guideline phase of the IWG’s work, the United States and China commit to strengthen IWG internal communications among all IWG members to advance steadily the IWG process. The United States and China reaffirm their support for: (1) IWG guideline coverage that includes official export credit support provided by or on behalf of a government, and (2) new horizontal international guidelines on official export credit support that promote international trade, and that, taking into account varying national interests and situations, are consistent with international best practices.
· The United States and China recognize that they play an important role in leading the shift towards clean energy solutions. The United States and China commit to discussing the role that public financing can play in reducing greenhouse gas (GHG) emissions, as well as the role that development finance institutions can play in accelerating the transition to low-carbon solutions. Both countries consider that their bilateral investments in other countries, as well as investments from international financial institutions and new development institutions, should support low-carbon technologies and climate resilience. Both countries therefore are to use public resources to finance and encourage the transition toward low-carbon technologies as a priority for projects domestically and abroad.
· The United States and China reaffirm their commitment to rationalizing and phasing out inefficient fossil fuel subsidies that encourage wasteful consumption. The United States and China are currently undergoing fossil fuel subsidy peer reviews under the G-20 process. The two sides reaffirm their commitment to complete the peer reviews by the end of the year and to publish the results and brief them to interested parties. Both sides commit to encourage other countries to undergo fossil fuel subsidy peer reviews.
· The United States and China recognize President Xi’s November 2014 announcement to regularly publish data on China’s strategic government (non-commercial) oil reserves. Therefore, the United States and China reaffirm their commitment to engage in closer information sharing and cooperation to ensure the smooth functioning of global energy markets. As part of this commitment, senior officials from the U.S. Department of Energy and China’s National Bureau of Statistics commit to meet this year to engage in planning for a substance-focused workshop that is to concentrate on data collection efforts. The U.S. Department of Energy’s (DOE) Office of Petroleum Reserves and China’s National Energy Administration’s (NEA) National Oil Reserves Office, which have engaged in two technical workshops under the 2014 Memorandum of Understanding on Strategic Petroleum Reserves (SPR) cooperation, commit to prepare for future exchanges through efforts at the working level. In light of the significance of this relationship, both sides commit to ensure high-level representation at future meetings. The United States and China also decided to further strengthen information exchanges and communication, and to expand cooperation in oil inventory policies and management.
· Both the United States and China support the objective of one single set of high quality global accounting standards and reiterate their commitment to convergence on high quality accounting standards. Both sides commit to continue their efforts to ensure consistent application of and to strengthen communication and cooperation on accounting standards. Both sides also welcome the other’s continued involvement in international efforts to develop a single set of high quality global accounting standards.
· China and the United States are committed to working with other Asia-Pacific Economic Cooperation (APEC) economies to promote Asia-Pacific regional economic growth and prosperity. We applaud the significant progress made at the 2014 APEC Economic Leaders' Meeting (AELM), and are committed to implementing its outcomes, and making even greater contributions to regional and global economic growth in the years ahead, including through working to ensure productive outcomes in the Philippines 2015 APEC host year. We commit to continuing to collaborate in joint efforts with related parties to advance regional integration, enhance regional connectivity, and build an open economy in the Asia-Pacific region. Through our joint sustained efforts, we are to work with other economies to implement the Beijing Roadmap for APEC’s contribution to the realization of the Free Trade Area of the Asia Pacific (FTAAP), including undertaking and completing the Collective Strategic Study on Issues Related to the Realization of the FTAAP by the (AELM) in 2016. We are committed to implementing the Beijing Declaration on Fighting Corruption, and enhancing cooperation in the APEC Network of Anti-Corruption and Law Enforcement Agencies (ACT-NET). In the APEC Finance Ministers’ Process, we support development of the Cebu Action Plan focusing on promoting financial integration and resiliency, fiscal transparency, and infrastructure development and financing.
· China and the U.S. commit to strengthening communication and coordination, working together to finalize development of “Post-Bali” Work Program by the end of July, 2015, and striving to conclude the Doha Round negotiation by the end of this year. Additionally, China and the United States commit to exchange perspectives on shared opportunities to engage in outreach and encourage other WTO Members to ratify the Trade Facilitation Agreement so that it can enter into force by the 10th Ministerial Conference in Nairobi, Kenya. In order to help facilitate strengthened communication and coordination on these matters, the United States and China commit to strengthen bilateral communication on these matters through the regular convening of Director General-level meetings led by the Office of the U.S. Trade Representative on the U.S. side and the Ministry of Commerce on the Chinese side.
I. Participants in the Economic Track of the Seventh Strategic and Economic Dialogue
· Jacob J. Lew, Secretary of the Treasury
· Penny Pritzker, Secretary of Commerce
· Ernest Moniz, Secretary of Energy
· Michael Froman, U.S. Trade Representative
· Max Baucus, U.S. Ambassador to China
· Janet L. Yellen, Chair of the Federal Reserve
· Jason Furman, Chairman of the Council of Economic Advisors
· John P. Holdren, Director of the Office of Science and Technology Policy
· Fred P. Hochberg, Chairman and President of the U.S. Export-Import Bank
· Krysta Harden, Deputy Secretary of Agriculture
· D. Nathan Sheets, Under Secretary of the Treasury for International Economic Affairs
· Catherine Novelli, Under Secretary of State for Economic Growth, Energy, and the Environment
· Leocadia I. Zak, Director of the U.S. Trade and Development Agency
· Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation
· Timothy Massad, Chairman of the Commodity Futures Trading Commission
· James R. Doty, Chairman of the Public Company Accounting Oversight Board
· Paul Leder, Director of the Office of International Affairs, Securities and Exchange Commission
· Michael McRaith, Director of the Federal Insurance Office, Department of the Treasury
· Adam Hamm, Insurance Commissioner, North Dakota
· Wang Yang, Vice Premier
· Lou Jiwei, Minister of Finance
· Wan Gang, Minister of Science and Technology
· Gao Hucheng, Minister of Commerce
· Zhou Xiaochuan, Governor of the People’s Bank of China
· Zhang Yesui, Executive Vice Minister of Foreign Affairs
· Nur Bekri, Administrator of the National Energy Administration
· Cui Tiankai, Ambassador to the United States of America
· Jiang Zelin, Vice Secretary-General of the State Council
· Wang Xiaotao, Vice Chairman of the National Development and Reform Commission
· Liu Lihua, Vice Minister of Industry and Information Technology
· Zhu Guangyao, Vice Minister of Finance
· Chen Xiaohua, Vice Minister of Agriculture
· Wang Weibin, Vice Chairman of the State Assets Supervision and Administration Commission
· Gan Zangchun, Vice Minister, Legislative Affairs Office of the State Council
· Huang Shouhong, Deputy Director of the Research Office of State Council
· Wang Zhaoxing, Vice Chairman of the China Banking Regulatory Commission
· Chen Wenhui, Vice Chairman of the China Insurance Regulatory Commission
· Hu Xiaolian, Chairman and President of the Export-Import Bank of China
II. Institutional Arrangements
The United States and China commit to continue to pursue economic cooperation through a range of additional dialogues and initiatives with the aim of enhancing the bilateral relationship and strengthening the global economy. These include:
· Cooperation between the U.S. Department of Labor and the Ministry of Human Resources and Social Security of China
· Cooperation between the U.S. Department of Labor and China’s State Administration of Work Safety
· Cooperation between the U.S. Department of Labor and China National Coal Association
· Exchange and Cooperation between Financial Self-Regulatory Organizations
· Financial Consumer Protection
· Anti-Counterfeiting Currency Cooperation and Communication
· Regulatory Cooperation on Anti-Money Laundering and Combating Terrorism Financing
· Bilateral Banking Supervisors’ Conference
· Insurance Cooperation
· Technical Cooperation on Standards
· Select Reverse Trade Mission Program
· Cooperation on China-U.S. Technical Exchange and Cooperation of Trade Statistics
· Cooperation on Rules of Origin
· U.S.-China Innovation Dialogue
· U.S.-China SME Cooperation
· Transparency Dialogue
· Exchange and Cooperation on Rural and Agricultural Development Strategies
· U.S.-China Transportation Forum
· Energy Pricing and Supervision Exchanges and Cooperation
· Traditional Chinese Medicine Cooperation
· U.S.-China Aviation Cooperation Program
· National Cargo Security Program Mutual Recognition
· Improvement of Flight Operational Efficiency
· China Food and Drug Administration Study Tour
· Continuing to Actively Implement U.S.-China Framework Agreement on Intellectual Property Rights (IPR) Cooperation
· Joint Liaison Group Intellectual Property Criminal Law Enforcement Cooperation
· Cooperation on Customs Enforcement of Intellectual Property Rights
· Cooperation on Enforcement of Intellectual Property Rights between China Customs and U.S. Customs and Border Protection