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China, Russia strengthen financial ties

Chen Jia
Updated: Aug 24,2019 09:12 AM    China Daily

China and Russia have agreed to strengthen cooperation in the financial sector, particularly in the bond market, with an aim of jointly supporting global economic growth following a high-level bilateral financial dialogue that ended this week.

"Russia will actively consider the issuance of yuan-denominated bonds on the Moscow Exchange," said a statement on the website of the Chinese Ministry of Finance late on Aug 22.

China would also encourage domestic investors to invest in bonds issued by Russia, in line with the existing framework of laws and regulations, it said.

Further cooperation measures are expected by the two sides to facilitate the access of investors from both countries to each other's bond market, said the statement issued after the 8th China-Russia Financial Dialogue held in Moscow on Aug 22.

It was the first joint statement since the China-Russia bilateral financial dialogue started in 2006, according to the Ministry of Finance. Chinese Finance Minister Liu Kun and Anton Siluanov, first deputy prime minister and finance minister of the Russian Federation, co-chaired the dialogue.

Liu suggested the two countries strengthen macroeconomic policy communication and coordination, supporting each other on significant global financial issues and exploring new areas for cooperation, including fiscal and tax policies.

" (China and Russia) can take effective macroeconomic policies, accelerate structural reforms and enhance macroeconomic policy communication and coordination, jointly support multilateralism and the free trade system, aiming to promote stable and healthy development of the global economy," Liu was quoted as saying in the statement.

The two sides reaffirmed their commitment to deepen bilateral economic and financial relations. The delegates also agreed to strengthen communication and cooperation on economic and financial issues of mutual interest.

Financial officials from the two countries reached consensus during the dialogue to support the membership expansion of the Shanghai-based New Development Bank, a multilateral institution established by Brazil, Russia, India, China and South Africa, known collectively as the BRICS countries.

They expect major progress on this matter to be achieved before the 11th BRICS Summit to be held in November.

As two founding members of the NDB, China and Russia support the bank's expansion to facilitate infrastructure development and address insufficient infrastructure investments in key sectors of the member countries, the statement said.

Financial cooperation between China and Russia will focus on cross-border capital investment and financing, which will also promote the yuan's cross-border usage in Russia beyond the areas of trade and service, Zhou Hai and Li Yanling, two officials from the Harbin branch of the People's Bank of China, wrote in an article in the magazine China Finance.

The publication is managed by the PBOC, the country's central bank.

Over the past few years, the PBOC has strengthened interbank, settlements and payments cooperation with the Russian Federation. Banks from the two countries started currency spot transactions in December, 2010. Under the scheme, the yuan can be directly exchanged to rouble, bypassing the US dollar in international trades.

Harbin Bank, a Chinese commercial bank, and Sberbank, the largest lender in Russia, jointly established the China-Russia Financial Council in 2015, providing financial support for China-Russia projects and serving cross-border financial activities.