It comes as the Chinese market is experiencing volatility and losing foreign investors.
The U.S. Treasury Department and the People’s Bank of China (PBOC) have agreed to cooperate in “times of financial stress” to share information and coordinate on crisis management, said the U.S. Treasury on Aug. 19.
This was the fifth meeting between the parties since they launched the joint Financial Working Group last September, aimed at establishing a regular and structured communications channel spearheaded by Treasury Secretary Janet Yellen.
Xuan Changneng, deputy governor of the People’s Bank of China, and Brent Neiman, assistant secretary of the U.S. Treasury, met on Aug. 15 and Aug. 16.
According to the Treasury readout, the parties exchanged key points of contact regarding financial crisis management and will follow up to hold additional technical exercises.
The parties discussed issues such as countering money laundering, international financial institutions, cross-border payments and data, and climate and sustainability issues.
According to statements published in Chinese state-run media, the parties were concerned with financial instability due to regulatory changes.
U.S. lawmakers have recently called for greater scrutiny of Chinese goods and services in the consumer market. TikTok, Temu, and other Chinese e-retailers have come under fire for a lack of transparency regarding data collection and labor issues, such as disclosing whether they are taking measures to avoid using forced labor in goods sold to the United States.
Meanwhile, China has set new restrictions on the export of critical minerals used in technology manufacturing of electric vehicles and military weapons, tightening its hold on the supply chain.
This all comes as the Chinese market is experiencing volatility and losing foreign investors.
Also on Aug. 19, the Chinese stock exchange stopped releasing daily and real-time data on foreign equity moving into China. The data will instead be available on a quarterly basis.
This means investors will no longer have access to a key market indicator.
Chinese regulators earlier this year already hinted at this latest move, which comes as China is set to experience its first annual outflow since Bloomberg began tracking purchases in 2016.
Last week, U.S. index provider MSCI Inc. removed 60 Chinese companies in the third large-scale culling this year, just days after the Chinese State Administration of Foreign Exchange released quarterly data showing it was the second quarter ever in which foreign investors pulled more money out of China than they put in since the department began collecting this data in 1998.
In the first two months of this year, China saw foreign investment shrink 20 percent year-on-year.
Chinese officials sought to downplay the dropoff in foreign investment but, in March, rolled out a plan to increase foreign investment access in manufacturing, telecommunications, medical care, finance, and technology. In addition, Beijing invited American executives like CEOs of Blackstone, FedEx, and Qualcomm to the China Development Forum in the same month.