Joint Statement signed between the Indian and the Chinese side after the 5th India-China Financial Dialogue- Nov 8, 2011- New Delhi
11/14/2011
Joint Statement
The Fifth India-China Financial Dialogue
New Delhi, 8th November, 2011
In accordance with the MoU on the Launch of the Financial Dialogue between the People’s Republic of China and the Republic of India, signed during Chinese Prime Minister Wen Jiabao’s visit to India in April 2005, the two sides have since successfully held four Financial Dialogues in April 2006, December 2007, January 2009 and September 2010, respectively. The Fifth India-China Financial Dialogue was held on 8th November 2011 in New Delhi.
Both sides exchanged views on the global macro economic situation and policy responses, with specific reference to current risks to the global economy and the role of India and China in the post crisis recovery phase. Both sides had in-depth discussions on G20 issues including reforms in the International Monetary System and the Framework for Strong, Sustainable and Balanced Growth.
Macroeconomic situation and policy responses
The two sides recognised that the global economy is in a critical phase. Global economic growth has weakened and downside risks have heightened due to uncertainty over the sustainability of sovereign debts in some advanced economies.In emerging markets, where growth is relatively stronger, there are clear signs of a slowing as developments in advanced economies begin to weigh on these countries. In the face of these challenges, both sides recognised that strengthening of international policy cooperation is needed at this juncture. While we will take all necessary measures in our respective countries to help maintain growth, we support G20 efforts in this regards and are committed to the Cannes Action Plan for short and medium term policy actions towards strong, sustainable and balanced growth.
Fiscal Reform in both Countries
Both sides shared their experiences in fiscal policy for sustaining growth process. Recognizing the fact that fiscal consolidation anchored on the process of reforms in tax and expenditure is key to sustaining macroeconomic outcomes, Indiais focusing on prudential expenditure management, measures to reallocate resources to priority development sectors, particularly infrastructure, rationalization of tax structure and re-engineering the business processes for providing an enabling environment for better tax compliance. Focusing on accelerating the transformation of economic growth model, China continues with proactive fiscal policy in 2011, and adjusts its intensity, pace and priorities to reasonable extent and at appropriate time to properly handle the relationship between economic growth, structural adjustment and management of inflation expectation, give more emphasis to price stability and further expand domestic demand, in order to ensure the coordinated, sustainable and endogenous development.
India and China in the G20
Both sides exchanged views on the outcomes of the Cannes Summit and underscored the importance of the G20, as the premier forum for international economic cooperation. We recognize the signature effort of the G20 Framework for Strong, Sustainable and Balanced Growth in fostering international macroeconomic policy coordination. Two sides urged the developed economies to adopt responsible macroeconomic policies to handle the issues of debt and financial stability properly, promote investment and create demands. Both sides agreed to strengthen coordination and cooperation in the G20 for the stability and growth of both the countries and the global community.
Commodity Prices
Excessive volatility in commodity prices, particularly those for food and energy, poses risks and challenges for the ongoing recovery of the world economy. We support the international community in strengthening cooperation to ensure stability and strong development of physical market by reducing distortion and further regulate financial market. The international community should work together to increase production capacity, strengthen producer-consumer dialogue to balance supply and demand, and increase support to the developing countries in terms of funding and technologies. The regulation of the derivatives market for commodities should be accordingly strengthened to prevent activities capable of destabilizing markets.
Bilateral Financial Cooperation
Both sides reiterated their commitment to deepening financial cooperation between the two countries with an aim of promoting overall bilateral economic cooperation. Both sides welcomed the enhanced cooperation between regulatory agencies, and committed to creating an enabling environment to promote further cooperation of financial institutions between the two countries. The Chinese side shared its experiences in the area of regulatory oversight schemes for Financial Holding Companies. Two sides also discussed initiatives towards financial inclusion.
India and China committed themselves to enhance the dialogue process to deepen mutual cooperation to achieve practical outcomes and strengthen strategic mutual trust. Both sides agreed to hold the Sixth India-China Financial Dialogue in China in the last quarter of 2012.
Mr. Wang Baoan,
Assistant Minister,
Ministry of Finance
For the Government of the People’s Republic of China
Mr. Alok Sheel,
Joint Secretary (MR),
Department of Economic Affairs,
Ministry of Finance
For the Government of the Republic of India
Source: http://www.indianembassy.org.cn/newsDetails.aspx?NewsId=280&BId=1