Sino-German Financial Sector Cooperation
The Chinese financial sector is internationally still not fully integrated and was therefore only indirectly hit by the world financial crisis. Nevertheless, there is growing concern about systemic risks of the financial system and its potential negative impact for the real economy among Chinese politicians, the Central Bank, and the three supervisory authorities for banking, insurance and securities. As a member of the G-20, China intends to cooperate – as expressed by Premier Wen and Chancellor Merkel in January 2009 - , especially with Germany to cope with the effects of the global financial crisis. For China it is very important to address the potential domestic systemic risks (e.g. potential housing or equity bubbles, inadequate information of private households on the risks of credit financed investments in property, investments in equities or the purchase of insurance products) and to ensure the stability and transparency of its financial sector. Financial sector instabilities in China would also have negative effects on the world economy and the stability of the global financial system.
The Sino-German Financial Sector Cooperation aims at establishing a dialogue platform and partnership between China and Germany to jointly work on the reform of the global financial architecture. The projects support Chinese decision makers in the People’s Bank of China (PBC) and at regulatory authorities (China Securities Regulatory Commission, China Insurance Regulatory Commission) in their efforts to enhance the soundness and transparency of the Chinese financial system according to the fundamental principles of the G-20 plan of action. In addition, new green finance concepts and instruments shall be developed to finance a low-carbon economy. Moreover, the Sino-German Cooperation contributes to the development of microfinance (provided by Microcredit Companies and the Postal Savings Bank of China) as a strategy to support private sector development in China. As a pilot case for the enhanced soundness and transparency of the Chinese financial system, the Tianjin municipality is supported in its efforts to develop a new financial center in northern China. The Cooperation Programme is financed by the German Federal Ministry of Economic Cooperation and Development, the German Federal Ministry for the Environment, technically supported by the Federal Financial Supervisory Authority (BAFIN) and collaborates with the German Federal Ministry of Finance. In addition, the German private sector is an integral part of the Programme implementation .