- The United States and China recognize that our two economies are closely interconnected, and each country has a strong stake in the economic prosperity of the other. Policies that lay the foundation for strong and sustainable growth in both economies are essential to improving the livelihoods of American and Chinese citizens, as well as countless others around the world. To this end:
o The United States and China commit to use all policy tools – monetary, fiscal and structural – to foster confidence and strengthen growth. Monetary policy will continue to support economic activity and ensure price stability, consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth. Fiscal policy should be used flexibly to strengthen growth, job creation and household demand, and can complement and support the implementation of structural reforms.
o The United States and China jointly reaffirm their G-20 exchange rate commitments, including that they will refrain from competitive devaluations and not target exchange rates for competitive purposes. China will continue an orderly transition to a market-determined exchange rate, enhancing two-way flexibility. China stresses that there is no basis for a sustained depreciation of the RMB. Both sides recognize the importance of clear policy communication.
o The United States welcomes the commitments China has made on economic reform, especially on supply-side structural reform, and progress achieved so far, including efforts to strengthen the fundamental role of domestic consumption in driving China’s economic growth. China commits to steadfastly advance supply-side structural reform, concentrating on cutting excess capacity, reducing inventory, deleveraging, lowering costs, and enhancing support for addressing weaknesses in economic and social development, to support China’s transition to a more sustainable growth path. China commits to balance stable economic growth and structural adjustment, and expand domestic demand by increasing household consumption, increasing the service sector’s proportion of the economy and ensuring investment is high quality and driven by the private sector. China will continue to simplify administrative procedures and transform government functions, press ahead with financial sector reforms to further enable the market to play a decisive role in credit allocation, open further the services sector to competition, and strengthen the social safety net.
o The United States remains committed to promoting strong, sustainable and more balanced growth characterized by higher domestic investment, in particular infrastructure investment, and national savings. At the same time, the Administration continues to prioritize policies geared toward expanding access to education, reforming the immigration system, and improving the labor force participation rate and productivity.
o China’s fiscal policy has played a role in expanding domestic demand and supporting structural reform. Measures have included lowering taxes and fees, establishing a special fund to provide support for laid-off workers, reducing social security contributions of employers in a phased approach, strengthening the management of local government debt to address risks, and addressing shortcomings in economic and social development, including poverty reduction and ecological protection. Going forward, China commits to use proactive fiscal policy to promote structural reforms and expand demand as appropriate.
o The United States recognizes the importance of predictability in the budget process and the impact budget uncertainty can have on the United States and global economies, and is committed to putting U.S. government finances on a sustainable path over the medium term.
o China recognizes that one of the goals of supply-side structural reform is corporate deleveraging, including managing the corresponding challenges for the banking sector. Building on current progress, China is to deepen supply-side structural reforms with a comprehensive strategy, including state-owned enterprise (SOE) reform, giving full play to the role of the market and legal mechanisms, to reduce corporate debt, including SOE debt.
o Acknowledging the sizable impact these reforms will have on China and ultimately on global growth, China reaffirms its commitment to further improve the transparency of economic and financial policies as well as the availability of data on economic activity to better inform regulators, policymakers, firms, and investors worldwide.
- The United States and China recognize that structural problems, including excess capacity in some industries, exacerbated by a weak global economic recovery and depressed market demand, have caused a negative impact on trade and workers. Both countries recognize that excess capacity in steel and other industries is a global issue which requires collective responses. Both sides recognize that subsidies and other types of support from governments or government-sponsored institutions can cause market distortions and contribute to global excess capacity and therefore require attention. The two sides commit to enhance communication and cooperation, and are committed to take effective steps to address the challenges so as to enhance market function and encourage adjustments. In this regard, the United States and China welcome the potential establishment of a Global Forum, with active participation of G-20 members and interested OECD members, as a cooperative platform for dialogue and information-sharing on global capacity developments and on policies and support measures taken by governments, to be facilitated by the OECD Secretariat.
- The United States welcomes China’s supply-side structural reform program, which has cutting excess capacity as one of its key objectives. The United States and China recognize that due to a weak global economic recovery and depressed market demand, the excess capacity of the electrolytic aluminum industry has increased and become a global issue requiring collective response. Both countries are to work together to address the global electrolytic aluminum excess capacity.
- The United States and China recognize the importance of the establishment and improvement of impartial bankruptcy systems and mechanisms. China attaches great importance to resolving excess capacity through the systems and mechanisms relating to mergers and acquisitions; restructuring; and bankruptcy reorganization, bankruptcy settlement, and bankruptcy liquidation, according to its laws. In the process of addressing excess capacity, China is to implement bankruptcy laws by continuing to establish special bankruptcy tribunals, further improving the bankruptcy administrator systems and using modern information tools. The United States and China commit to, starting as early as 2016, conduct regular and ad hoc communication and exchanges regarding the implementation of our respective bankruptcy laws through forums or mutual visits.
- The United States and China remain committed to supporting an inclusive and resilient international economic architecture able to evolve with global realities, challenges and opportunities, including promoting comprehensive cooperation between the existing and new international financial institutions. The United States and China also share a commitment to upholding and further improving the high governance, environmental, and social standards of the existing international financial institutions, as well as in new and future institutions, consistent with the commitments made in September 2015. To this end:
o The United States and China support a strong, quota-based and adequately resourced IMF at the center of the global financial safety net. The United States and China support maintaining the IMF’s current lending capacity. The United States and China welcome that the 2010 IMF quota and governance reform have taken effect and are working towards the completion of the 15th General Review of Quotas by the 2017 Annual Meetings. The United States and China reaffirm that any realignment under the 15th review in quota shares is expected to result in increased shares for dynamic economies in line with their relative positions in the world economy, and hence likely in the share of emerging market and developing countries as a whole.
o The United States supports the IMF’s decision to include the RMB into the SDR currency basket on October 1st. Both countries support examination of the broader use of the SDR and exploring initiatives in this regard, including through broader reporting of accounts and statistics in the SDR and the issuance of SDR-denominated bonds.
o The United States and China reiterate the importance of collaborating on the World Bank’s shareholding review according to the roadmap and timeframe agreed by the World Bank Board of Governors. The United States commends China for its increased pledge to the Asian Development Fund-12 replenishment. The United States welcomes China’s intent to meaningfully increase its contributions to the replenishments of the International Development Association and the African Development Fund in 2016.
o The United States and China are to work together to support economic development in developing countries with the help of international financial institutions.
o The United States and China reaffirm the Paris Club’s role as the principal international forum for restructuring official bilateral debt and its discussion of a range of sovereign debt issues, and affirm that the Paris Club should keep pace with the changing landscape of official financing, including by expanding its membership to include emerging creditors. China will continue to participate in the Paris Club on a regular basis and play a more constructive role, including further discussions on potential membership.
o The United States and China support efforts to incorporate the enhanced contractual clauses into sovereign bonds.
o The United States and China welcome the completion of peer review reports under the G-20 on the fossil fuel subsidies of the United States and China, and applaud the positive impact of completed and expected reforms on efficient fossil fuel use and reducing emissions of greenhouse gases that cause climate change.
- The United States and China affirm that innovation is a critical driver of economic development, job creation, and shared prosperity and that innovation plays a crucial role in developing solutions to domestic, global, and societal challenges. Furthermore, each side recognizes that the ability for the United States and China to trade, do business, and innovate together promotes prosperity for the people of our two nations and contributes to the growth of the global economy.
As partners in the pursuit of these common goals and in view of the increasing importance of U.S.-China collaboration to the bilateral relationship, the United States and China recognize the importance of building and supporting the proper legal, regulatory, and policy frameworks necessary for fostering a healthy innovation ecosystem featuring robust investment in basic science and research and development, strong involvement by enterprises, and transparent policy design and implementation in our respective policies. The United States and China commit that their innovation policies are to be consistent with the principle of non-discrimination. The United States and China affirm the importance of developing and protecting intellectual property, including trade secrets, and commit not to advance generally applicable policies or practices that require the transfer of intellectual property rights or technology as a condition of doing business in their respective markets.
o Both sides recognize the importance of the government’s role in promoting a level playing field for foreign and domestic companies, and the importance of open and competitive markets, including in determining pricing of products and services, to drive innovation.
o The United States and China recognize that the effective and balanced protection of intellectual property rights will be beneficial to promote innovation. Both sides are to continue to communicate and exchange views on relevant policies, such as protecting innovators from bad faith litigations.
o Both countries affirm that access to a full range of global products, services and technology solutions ordinarily promotes the innovativeness and competitiveness of commercial enterprises.
o Recognizing the importance of an interconnected global digital infrastructure, the value of innovative technologies, and technology users’ security concerns, the two sides, consistent with WTO agreements, commit that their respective generally-applicable information and communication technology (ICT) security-related measures in commercial sectors (1) should treat technology in a non-discriminatory manner, (2) are not to unnecessarily limit or prevent commercial sales opportunities for foreign suppliers of ICT products or services, and (3) should be narrowly tailored, take into account international norms, be nondiscriminatory, and not impose nationality-based conditions or restrictions, on the purchase, sale, or use of ICT products by commercial enterprises unnecessarily.
- The United States and China recognize the significant progress of the ongoing Bilateral Investment Treaty (BIT) negotiation toward a high-standard treaty reflecting the shared objectives of non-discrimination, transparency, and open and liberalized investment regimes. The two sides have recently exchanged the third revised and significantly improved negative list offers and made further progress in all aspects of the negotiation. The United States and China commit to further intensify the negotiation with a view to concluding a mutually beneficial and high-standard treaty.
- Both sides highly value the important role the U.S.-China Joint Commission on Commerce and Trade (JCCT) plays in promoting bilateral economic and trade relations and expanding the mutually beneficial cooperation and high-level policy discussion, and commit to continue holding communication and dialogue under the framework of JCCT on the issues of interest to both governments and our stakeholders, work hard to seek solutions that meet both sides’ interests, and work together towards the success of the 27th JCCT.
- Recognizing the important role U.S.-China trade and economic cooperation is playing at the subnational level, the United States and China are to further the implementation of the Memorandum of Understanding (MOU) Between the Department of Commerce of the United States of America and the Ministry of Commerce of the People’s Republic of China to Establish a Framework to Promote Cooperation at the Subnational Level on Trade and Investment between the United States and China signed by the two governments during 26th Joint Commission on Commerce and Trade, strengthen bilateral communication and coordination through China’s Ministry of Commerce, the Chinese Embassy and Consulates General in the United States, U.S. Department of Commerce, the U.S. Embassy and Consulates General in China, and other stakeholders to jointly support, where appropriate, the exchanges of the trade and investment groups and relevant promoting activities under the MOU framework.
- The United States and China commit to promote the dissemination of public-private partnership best practices to their respective subnational government entities and to further strengthen communication and information exchange in the area of public service facilities investment and operation.
- 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 export control issues of mutual interest through the U.S.-China High Technology and Strategic Trade Working Group.
- The United States and China reaffirm the central role of the WTO in today’s global economy, and commit to enhance communication and coordination on WTO issues. Both sides remain committed to advance negotiations on the remaining Doha Development Agenda issues as a matter of priority and are determined to work together to further strengthen the multilateral trading system. Both sides also note that a range of issues, such as those addressed in various regional trade agreements and by the B20, may be of common interest and importance to today’s global economy, and thus may be legitimate issues for discussions in the WTO, without prejudice to respective positions relating to possible negotiations in the future.
- Recognizing the importance of an efficient aviation system to the safe and secure transport of people and goods, and the strategic role that air transport plays in overall economic development, the United States and China commit to take individual and joint steps to address air transport system challenges. U.S.-China aviation cooperation should be based on mutual benefit and the whole-of-government approach established at the June 2016 Strategic and Economic Dialogue. The two sides commit to strengthen exchanges and cooperation on the following areas:
o The two sides acknowledge the importance of safety oversight and economic regulation to the development of air transportation and commit to pursue activities related to new and enhanced cooperation in these areas by civil aviation authorities.
o Building on existing civil aviation cooperation between the United States and China, the two sides commit to conduct exchanges and explore cooperation on priority topics of mutual interest such as enhancing the efficiency of civil aviation and development of general aviation under technical assistance provided by the U.S. Trade & Development Agency.