2016 Third G20 Fiance Ministers and Central Bank Governors Meeting, lasting for 2 days from July 23rd to 24th, successfully concluded in Chengdu. China’s Fiance Minister Lou Jiwei and Governor of People’s Bank of China Zhou Xiaochuan jointly presided over the meeting. The meeting mainly discussed the current global economic situation, “strong, sustainable, and balanced growth framework”, international financial architecture, investment and infrastructure, reforms on financial departments, international tax cooperation, green finance, climate funds, anti-terrorist financing and other issues, approved the main achievements under these issues, released relevant communiques, and made sound preparations in financial part for G20 Leaders Summit held in Hangzhou.

　　Committing to taking further steps to revitalize global trade and enhance investment

　　The meeting thought that The global economic recovery continued but remained weaker than desirable. The global economic environment was challenging and downside risks persisted. Britain’s leaving EU referendum increases the uncertainty of global economy. the outcome of the referendum on the UK’s membership of the EU adds to the uncertainty in the global economy. Members of the G20 were well positioned to proactively address the potential economic and financial consequences stemming from the UK referendum and hoped that Britain could be close partner of the EU. The meeting has pointed out that they were taking actions to foster confidence and support growth, using all policy tools, monetary, fiscal and structural, individually and collectively to achieve goal of strong, sustainable, balanced and inclusive growth. The meeting also proposed that monetary policies will continue to support economic activities and ensure prices stable. The meeting emphasized not only the key role of structural reform but also the equally important role of financial strategies in achieving common economic growth. The meeting committed to consult closely on exchange markets and reaffirmed previous exchange rate commitments, including that we will refrain from competitive devaluations and it would not target our exchange rates for competitive purposes. All forms of protectionism will be resisted.

　　The meeting approved G20 agenda on deepening structural reform. Based on the nine priority areas of structural reforms agreed in April, the meeting has developed and agreed upon a set of guiding principles and agreed upon a set of indicators which would be further enhanced over time to help monitor and assess efforts and progress with structural reforms and challenges. The meeting has made further progress towards the implementation of growth strategies, and updated growth strategies and an accountability report on progress against growth ambition would be finalized before the Hangzhou Summit. The meeting has promised to take further measures to revitalize global trade and list investment, devoted on reducing excessive imbalance, and achieved greater inclusiveness in pursuing economic growth.

　　The meeting welcomed the commitments made in the “Joint Declaration of Aspirations on Actions to Support Infrastructure Investment” by 11 Multilateral Development Banks (MDBs), announced to launch the Global Infrastructure Connectivity Alliance, approved the G20/OECD Guidance Note on Diversification of Financial Instruments for Infrastructure and SMEs. The meeting supported the effective implementation of the G20/OECD Principles of Corporate Governance and G20/OECD High-level Principles on SME Financing.

　　The meeting approved the recommendations towards further strengthening the international financial architecture (IFA) developed by the IFA Working Group, promised to strengthen the construction of global financing security net with International Monetary Fund (IMF) as core, and welcomed  the upcoming CMIM-IMF joint test run to be held in Chieng Mai. The meeting hoped to finish IMF's 15th General Review of Quotas, including a new quota formula, by the 2017 Annual Meetings, and supported that the World Bank Group (WBG) to implement its shareholding review according to the agreed roadmap and timeframe. The meeting supported the continuous efforts of enlisting strengthened contract parts into sovereign bonds. The meeting supported support the Paris Club’s discussion of a range of sovereign debt issues, the ongoing work of the Paris Club, as the principal international forum for restructuring official bilateral debt, towards the broader inclusion of emerging creditors,  supported Paris Club to continue to absorb more emerging creditor countries, welcomed China’s regular participation in Paris Club meetings and intention to play a more constructive role, including further discussions on potential membership, and supported the examination of the broader use of the Special Drawing Rights (SDR).

　　The meeting pointed out that recent market turbulence and uncertainty have once again highlighted the importance of building an open and resilient financial system, and committed to finalizing remaining critical elements of the regulatory framework and the timely, full and consistent implementation of the agreed financial reforms. The meeting welcomed the undergoing work of the international organizations to take stock of international experiences with macroprudential frameworks and tools. The meeting approved the G20 High-level Principles for Digital Financial Inclusion, the updated version of the G20 Financial Inclusion Indicators, and the implementation framework of the G20 Action Plan on SME Financing. The meeting called upon relevant countries and regions to commit to implementing BEPS and jointing the framework on an equal footing, endorsed the proposals made by the OECD working with G20 members on the objective criteria to identify non-cooperative jurisdictions with respect to tax transparency, recognized the importance of pro-growth tax policies and tax certainty, and required OECD and IMF to continue working on the issues of pro-growth tax policies and tax certainty. The meeting condemned, in the strongest possible terms, the recent terrorist attacks, reaffirmed solidarity and resolve in the fight against terrorism in all its forms and wherever it occurs, and tackled all sources, techniques and channels of terrorist financing. The meeting recognized that, in order to support environmentally sustainable growth globally, it was necessary to scale up green financing. The meeting welcomed the G20 Green Finance Synthesis Report submitted by the Green Finance Study Group (GFSG), and welcomed the voluntary options developed by the GFSG to enhance the ability of the financial system. The meeting welcomed the Climate Finance Study Group's (CFSG) Report on “Promoting Efficient and Transparent Provision and Mobilization of Climate Finance to Enhance Ambition of Mitigation and Adaptation Actions”, and indicated to working on climate finance in 2017 under the working arrangement of next year’s G20 Presidency, in consultation with other members, with the objective to contribute to the discussions held under the United Nations Framework Convention on Climate Change (UNFCCC).

　　China's economy was still the “driving power” and “stable anchor” of world economy

　　Minister Lou Jiwei pointed out that despite recent international events had not conducted huge impact on international financial markets, global economy remained dim. Low economic growth had been new normal globally and resulted to multiple problems which would intensify economic and social contradictions. In this situation, the G20 countries was well necessary to extend cooperation, reiterate the consensus reached on Shanghai G20 meeting, and continue to adopt all policy tools, including fiscal policies, monetary policies and structural reforms, and so on to enhance confidence and boost economic growth. Firstly, demand management policy was still critical. The marginal monetary policies were declining and we should implement more pro-growth fiscal policies. Countries with fiscal space should intensify fiscal spending. Secondly, we should resort to structural reform to tackle with low economic growth. Developed economies should continue to improve labor market flexibility to lift investment and productivity. While emerging economies should strengthen economic resilience, conduct deregulation, boost competition, and enhance the reform of the financial sectors. Thirdly, we should continue to support economic globalization, resist all forms of protectionism, and utilize restrictive trade measures with restrain. Fourthly, relevant countries should actively deal with actual challenges. We hoped that Britain and the EU could actively build a close partnership, send positive signals, and stabilize the market expectation for its economic outlook.

　　Minister Lou Jiwei indicated that China's GDP increased by 6.7% with all main indicators in line with expectations. China had achieved important progress in structural adjustments and China's economic growth quality was continuously improved. Service sectors accounted for 54.1% of the total GDP. Final consumption contributed 73.4% to China's GDP. Contribution rate of domestic demands to GDP increased by 110.4%. Energy consumption per unit GDP decreased by 5.2%. Especially, China's employment remained basically stable with the newly created jobs of 7.17 million. China's economy was still the “driving power” and “stable anchor” of world economy. China’s GDP accounted for approximately 30% among the global GDP. It was expected that China's GDP contribution rate would maintain a higher level.

　　Minister Lou Jiwei pointed out that G20 countries had made new achievements in structural reform with a reform framework basically established which would provide policy reference and measure methods for G20 countries to deepen structural reform, and improve the coordination and effectiveness for all reform action. Next, G20 countries would continuously adjust the framework for structural reform in order to promote strong, sustainable and balanced economic growth.

　　China would continue to improve the renminbi exchange rate formation mechanism
　　
　　Governor Zhou Xiaochuan indicated that China had overall achieved a stable performance while at the same time securing progress in its economic and social development in the first half years of 2016. China's economic growth stayed within reasonable range with stable prices and employment. After the releasing of the outcome of the referendum on the UK’s membership of the EU, China's economy would faced with more complicated international situation. Chinese government would maintain the stability and continuity of macroeconomic policies and spare no efforts on promoting supply-side reform, which would be the must way for solving structural problems including overcapacity and so on. After an adjustment period, market participants had a deeper understanding of the renminbi exchange rate formation mechanism. Currently, the renminbi exchange rate had maintained basically stable against a basket of currencies. Market confidence on the renminbi had been further stabilized. In the future, China would continue to improve the renminbi exchange rate formation mechanism based on market demands and adjusted in accordance with a basket of currencies, enhance the rules and transparency for these policies, and strengthen the communication with the market.

　　Governor Zhou Xiaochuan indicated that since the resumption of International Financial Architecture Working Group, all work had been achieved remarkable progress. G20 countries should continue to promote the IMF's 15th General Review of Quotas and list the sharing of emerging markets and developing countries. We should support the continued effort to incorporate the enhanced contractual clauses into sovereign bonds, welcome Paris Club towards the border inclusion of more emerging creditors, call on regional finance to extend cooperation with IMF, and call for further work regarding the IMF’s leading toolkit. Meanwhile, we should enlarge the coverage of SDR. People’s Bank of China issued currency reserves, the balance of payments, and international investment position data based on SDR as report currencies, and was studying the possibility of releasing SDR bonds.

　　Governor Zhou Xiaochuan emphasized that reform on financial sectors had yielded impressive progress and the stability of global financial system had been effectively enhanced. G20 should devote to building a more open, strong and resilient financial system, including enhancing the reform on global financial sectors, summarizing and extracting international experiences with macroprudential frameworks and tools, and strengthen the supervision on financial market infrastructure. He also pointed out that G20 meeting had achieved positive progress in digital financial inclusion and financial inclusion indicators. In the future, we should strive to promote the development of digital financial inclusion and benefit all people with the economic growth results.

　　Governor Zhou Xiaochuan introduced that initial achievements and reports had been made by the Green Finance Study Group. G20 countries could study how to gather more resources through financial innovation, knowledge sharing and capacity construction, risk analysis, international cooperation and so on based on their own different situation, and provide more beneficial references for global green fiance development.