SCIO briefing on BRICS economic and financial cooperation

Speakers:
Zhou Qiangwu, director general of the International Economics and Finance Institute of the Ministry of Finance;

Ye Fujing, director general of the Institute for International Economic Research of the National Development and Reform Commission

Chairperson:

Hu Kaihong, spokesperson of the State Council Information Office

Date:

August 31, 2017

Hu Kaihong:

Ladies and gentlemen, good morning. Welcome to this press conference. The BRICS summit is going to open shortly in Xiamen. Yesterday, the Foreign Ministry held a press conference, in which Minister Wang Yi made a brief introduction of the forthcoming meeting. As we know, the event has attracted great public attention, so today, we are holding this press conference to introduce the economic and financial cooperation of the BRICS countries. Present here are: Mr. Zhou Qiangwu, director general of the International Economics and Finance Institute of the Ministry of Finance, and Mr. Ye Fujing, director general of the Institute for International Economic Research of the National Development and Reform Commission. They will make an introduction and then answer some of your questions.

Now, let's welcome Mr. Zhou to give his briefing.

Zhou Qiangwu:

Thanks. Good morning!

The BRICS Xiamen summit is just around the corner. Iappreciatethe opportunity offered by the State Council Information Office to meet all of you here today. I'd like to start by sharing with you the achievements made by the BRICS cooperation in the economic sphere, especially in fiscaland financial areas, in the past decade, as well as the outlook for this year's Xiamen summit.

Since the BRICS cooperation mechanism was launched ten years ago, the five member countries have upheld the spirit of openness,inclusiveness, cooperation and win-win results, expanded the fields of cooperation and improved the mechanism of collaboration.

Step by step, the five countries have developed BRICS into a key platform for dialogue among major developing countries as well as global economic governance. The international influence and attraction of BRICS has also increased markedly. Now BRICS holds an overarching leaders' summit annually, coupled with more than 20 ministerial-level dialogues.

In China, over 40 departments are involved in the BRICS cooperation mechanism, in which fiscal and financial cooperation is a major part. BRICS countries have kept strengthening communication and coordination regarding fiscal and financial issues over the years, including the establishment of the New Development Bank more than two years ago. The bank has achieved tangible results in many fields, contributing to the socio-economic development of BRICS countries and the improvement of global governance.

I believe the upcoming Xiamen summit will producerich results in fiscal and financial areas.Now I'd like to introduce to you the expected results and possible highlights.

Since China took over the chairmanship of BRICS earlier this year, we have held two meetings of BRICS finance ministers and central bank governors and a meeting of their deputies, which I believe have laid a solid foundation for the upcoming Xiamen summit.

First, we must promote the economic growth of the BRICS countries and the world. BRICS countries will further strengthen communication and coordination at the macro level, including the use of all policy instruments of fiscal and monetary policy, and structural reform to promote their economic growth. The BRICS are also jointly urging developed countries to adopt responsible macro-economic policies to reduce negative spillover effects. At the same time, we are very clear in our joint opposition to trade protectionism

Second, is to deepen financial cooperation under the G20. At the G20 Hamburg Summit held in July, the BRICS countries also issued a joint statement, which made unique contribution to the success of the G20 summit.

Third, this summit will promote the development of the BRICS Development Bank, or, the New Development Bank. In this regard, if there is time, I will explain it to you further.

Fourth, facing the task of common development, we BRICS countries will work together to promote cooperation in the field of Public-Private Partnership (PPP) to lay a consolidated foundation for cooperation.

Fifth, we will work together on the convergence of accounting standards and the standardizing of audit supervision, with an aim to prepare for the interconnection of the BRICS bond market.

Sixth, we will improve tax cooperation, especially international tax cooperation, so as to improve the seamlessness and effectiveness of policy coordination.

Second, financial cooperation is a key part of cooperation among the BRICS countries. We will promote the improvement of the contingency reserve mechanism, keep fostering thelocal currency bond markets in the BRICS countries, propel the development of financial institutions and the network of financial services among the BRICS countries and intensify communication and collaboration on financial regulation, all of which dovetail nicely with the themes of G20.

We will also push cooperation on currencies, anti-money laundering and anti-terrorist funding. Fruits yielded from the practical cooperation in these areas will not only contribute toglobal economic governance, the economic development of the BRICS countries and the world, but will also elevate the cooperation among the BRICS countries to a new level, laying the foundations for the next ten year of BRICS. Thank you.

Hu Kaihong:

Now the floor is given to Ye.

Ye Fujing:

Mr. Hu, friends from the press, good morning.

BRICS cooperation is one of the most important mechanisms of South-South cooperation. The ninth BRICS Summit is another major diplomatic activity held at home this year after the Belt and Road Forum for International Cooperation.

We know that the current world economic and political situation is undergoing profound changes. Although the global economy is showing signs of moving in the right direction, there are still many uncertainties and destabilizing factors. The supply-side constraints, in particular, have not been fundamentally resolved, thus we have to wait and see whether or not the economy can stride into a new round of growth. Moreover, anti-globalization and protectionism is still rampant.

The open world economy is facing new challenges and risks, and the global governance system needs to be further reformed and improved, therefore, there is still a long way to go to achieve the goal of inclusive and balanced development.

Under these circumstances, the ninth BRICS Summit, themed deepening the partnership and opening up a brighter future, aims to deepen the BRICS partnership to better promote the BRICS development, achieve win-win in emerging markets and developing countries, build an open world economic system, improve global governance and push for solutions to deficits in peace, development and governance.

BRICS cooperation has just stepped into the second "golden decade," having achieved spectacular success in the past ten years. We have been jointly building an open world by being at the forefront of international cooperation, outlining a vision of the future as a booster of global economic development, coping with global challenges by making significant contributions to the long-term stability of the international community, and safeguarding fairness and justice by continuing to lead the reform process of global economic governance.

The Strategy for BRICS Economic Partnerships outlines eight key fields, which have witnessed progress in different phases. For example, in the field of trade and investment, several cooperation agreements have been reached during the 7th Meeting of BRICS Trade Ministers, such as the BRICS service and trade cooperation roadmap, e-commerce cooperation agreement and program on investment facilitation.

In regard to industry, agriculture, technology and innovation, several action plans and consensuses have been reached during the ministerial level meetings in each field. And corresponding cooperation mechanisms have been established.

Considerable progress has been made in connectivity as well as other fields. While noting these achievements, we also see the challenges faced by the BRICS countries, both internal and external.

Internally, in the economic field, the BRICS countries generally face dual pressures of creating steady growth while undertaking structural adjustment, as well as the considerably biggerchallenge of energy transformation. In other sectors, some disputes and misunderstandings still exist. As we are developing countries, various kinds of implicit and explicit barriers also exist in our cooperation and remain to be eliminated.

Externally, the present deep-rooted problems of the world economy have yet to be settled fundamentally; there is no fundamental change in the balance of powers; and the driving force of world economic growth is still insufficient. Moreover, the stubborn determination of some developed countries to maintain their vested interests should not be underestimated, and some unstable factors, especially geopolitical conflicts, are frequent. Therefore, the BRICS countries face a complicated and severe international political and economic environment.

As the next step, we expect the BRICS countries to strengthen their cooperation in six areas and jointly address the challenges facing the organization itself within the context of global development.

Firstly, to strengthen innovative cooperation. We should establish a platform for technology exchange and an innovation alliance to promote joint innovation.

Secondly, to improve openness and cooperation. All parties concerned should work out and implement the roadmap for the economic, trade and investment cooperation before 2020 as soon as possible. On the basis of WTO regulations, we can adopt some reciprocal investment arrangements, including lowering trade barriers, like tariffs, to deliver a batch of pragmatic outcomes at the early stage, then further consider the possibility to establish a BRICS Free Trade Zone.

Thirdly, to further implement the strategy of economic partnership. We can deepen cooperation in eight key sectors, like production capacity cooperation and energy cooperation, and launch some landmark cooperation projects. Learning from the experiences of the G20 Hangzhou Summit, we can also strengthen evaluation and supervision over the implementation of the strategy.

Fourth, to promote the strategic docking mechanism. A brand new opening-up pattern, led by the Belt and Road Initiative, has been taking shape. Under the framework of the BRICS mechanism, we should dock the initiative with the development strategies of all member countries, so as to jointly prioritize sectors such as economy and trade, financial circulation, infrastructure connectivity and people-to-people exchanges.

Fifth, to grasp cooperation opportunities in emerging industries.

Sixth, to expand the range of sectors which benefit from BRICS cooperation.

We believe that the impact of the BRICS mechanism will be more far-reaching; its function positioning will be more accurate; its degree of openness will be much higher; its measures will be more practical; and its cooperation will be more beneficial.

Hu Kaihong:

Now, we move on to the question session. As always, please identify your media outlet before raising questions.