G20 Gazette: Actively responding to the impact of Brexit to avoid competitive devaluation

G20 Finance Minister and Central Bank Governors' Communique

July 23-24, 2016, Chengdu, China

1. We met in Chengdu to consider efforts to address key economic challenges and the progress made since the beginning of the year. We have worked closely in the spirit of unity and cooperation, and have achieved tangible results on various agendas. These results will be submitted to the Hangzhou Leaders Summit for consideration.

2. The global economy continues to recover, but it is still weaker than expected. At the same time, growth outcomes should be more widely shared within and between countries to promote inclusiveness. The global economic environment is full of challenges, and downside risks persist, highlighted by commodity price volatility and low inflation in many economies. Financial market volatility remains high, and geopolitical conflicts, terrorism and refugee flows continue to complicate the global economic environment. In addition, the results of the Brexit referendum have also increased the uncertainty of the global economy. G20 members are ready to respond positively to the potential economic and financial impact of the UK referendum. In the future, we hope to see the UK as a close partner of the EU.

3. We are taking action to increase confidence and promote growth. In light of recent changes in the situation, we reaffirm our determination to use all and part of our policy instruments, including monetary, fiscal and structural reform policies, to achieve our goals of strong, sustainable, balanced and inclusive growth. Monetary policy will continue to support economic activities, maintain price stability, and be consistent with the central bank's responsibilities, but monetary policy alone cannot achieve balanced growth. While emphasizing the critical role of structural reforms, we also emphasize that fiscal strategies are equally important to promote the achievement of our common growth goals. We are flexible in implementing fiscal policies and implementing more growth-friendly tax policies and public spending, including giving priority to supporting high-quality investments while enhancing economic resilience and ensuring that debt-to-GDP ratios remain sustainable. In addition, we will continue to study the G20 policy measures that are appropriate for each country as needed to support growth and address potential risks, including addressing the vulnerability of the balance sheet. We reiterate that excessive exchange rate fluctuations and disorderly adjustments will affect economic and financial stability. We will discuss the communication closely on the foreign exchange market. We reiterate our previous exchange rate commitments, including avoiding competitive devaluation and not targeting the exchange rate for competitive purposes. We will oppose various forms of protectionism. We will carefully develop and clearly communicate our policy actions in macroeconomic and structural reforms to reduce policy uncertainty, reduce negative spillovers, and increase transparency.

4. With regard to structural reforms, we endorse the “deep structural reform agenda” prepared by the Growth Framework Working Group and appreciate the valuable input provided by the OECD, the International Monetary Fund (IMF) and other relevant international organizations. We note that the choice and design of structural reforms should be consistent with the national economic situation. Based on the nine priority areas of structural reforms identified in April, we have developed a set of guiding principles and agreed. This set of guiding principles will provide members with useful high-level guidance while allowing countries to take care of their specific national circumstances. We also agree on a set of indicators to help monitor and evaluate our efforts and progress and challenges in structural reforms, and we will further strengthen the set of indicators in the future. We are committed to implementing and gradually improving the “deepening the structural reform agenda” and calling on international organizations to continue to provide support. The initial assessment of international organizations and the enhanced peer review show that we have made new progress in implementing the growth strategy, but there is still a lot of work to be done. The rapid and comprehensive implementation of the growth strategy remains critical to supporting economic growth and achieving the common growth ambitions set at the Brisbane Summit. On this basis, in order to redouble our efforts, we are updating our growth strategy to incorporate new and adjusted macroeconomic and structural policy measures and to play the role of mutual support to promote growth. We will complete the growth strategy update before the Hangzhou Summit and complete an accountability report measuring the progress of our growth ambitions. We emphasize that open trade policies and a strong and secure global trading system are important for promoting global economic inclusive growth, and we will take further action to revive global trade and enhance investment. We will also work to reduce excessive imbalances and increase inclusiveness in the pursuit of economic growth.

5. We recognize that the slow global economic recovery and sluggish market demand have exacerbated structural problems, including overcapacity in some industries, which have had a negative impact on trade and workers. We recognize that overcapacity in steel and other industries is a global issue that requires a collective response. We also recognize that subsidies and other types of support provided by government or government-backed institutions can lead to market distortions and global overcapacity issues that require attention. We are committed to strengthening communication and cooperation and are committed to taking effective measures to address these adjustments in order to strengthen market functions and encourage adjustment. The G20 steel-producing economy will participate in the international community's response to global overcapacity issues, including participation in the OECD Steel Committee meeting scheduled for September 8-9, 2016, and discuss the feasibility of setting up a global forum. As a platform for communication and sharing of global capacity dynamics, government policies and support measures.

6. To support our common growth goals and the 2030 Agenda for Sustainable Development, we reaffirm our commitment to advancing the investment agenda and focus on infrastructure development, with equal emphasis on quantity and quality. Multilateral development banks have a unique role in supporting infrastructure investment. We have communicated effectively with multilateral development banks, calling on them to act together to support infrastructure investments and promote private investment. To this end, we welcome the commitments made by 11 multilateral development banks in the “Joint Vision Statement for Supporting Infrastructure Investment Initiatives”, including the declaration of quantifiable targets for high-quality infrastructure projects within their respective mandates, and Limit efforts to improve the quality of infrastructure projects, strengthen project reserves, enhance cooperation between new and old multilateral development banks, enhance the enabling environment for infrastructure investment in developing countries, and mobilize private investment. We emphasize that high-quality infrastructure investments are important to ensure economic efficiency while addressing life cycle costs, safety, resilience to natural disasters, job creation, capacity building, and transfer of knowledge and expertise. The social and environmental impact of good projects is consistent with economic and development strategies. We welcome the response of the multilateral development banks to the G20 multilateral development bank's optimized balance sheet action plan and call for further implementation of the action plan. Strengthening connectivity is an inevitable requirement of the global economy in the 21st century and plays a key role in promoting sustainable development and sharing prosperity. We have established the Global Infrastructure Interconnection Alliance to strengthen the overall synergy and cooperation of various infrastructure interconnection projects. We ask the World Bank to act as the Alliance Secretariat, working with the Global Infrastructure Center (GIH), the OECD, other multilateral development banks, and interested G20 members to support the Alliance's activities. We approved the G20/OECD Infrastructure and SME Financing Tools Diversification Policy Guidance Document and welcomed GIH's completion of the Government and Social Capital Partnership (PPP) Risk Sharing Analysis Report to help developing countries better assess infrastructure. risk. We support the effective implementation of the G20/OECD Corporate Governance Principles and the G20/OECD SME Financing Advanced Principles, in particular the expectation of a peer review of corporate governance under the Financial Stability Board (FSB) for G20/OECD Corporate Governance The evaluation method of the Principles is revised.

7. We support the continued efforts of international organizations to make coordinated and effective responses based on existing and already-initiated mechanisms based on their functions and comparative advantages, for developing countries and middle-income in all regions, income levels. National refugees and their receiving communities provide support. We look forward to taking further steps in the near future. We note that the World Bank is discussing the consideration of establishing a global crisis response platform. We call for the strengthening of humanitarian and development assistance and refugee resettlement, and increase support for refugees and their receiving communities through relevant international organizations.

8. We approved the recommendations of the International Financial Architecture Working Group on improving the international financial architecture. Based on the work of relevant international organizations, we will continue to improve the analysis of capital flows, monitoring and management of risks arising from excessive volatility of capital flows. We expect the IMF to complete its review of country experiences and new issues related to capital flows by the end of the year. We have taken note of the ongoing review of the OECD Capital Flows General Principles. We support the further strengthening of a global financial safety net with a strong, share-based and well-resourced IMF as the core, improve the effectiveness of IMF loan instruments, and further strengthen the IMF and regional financial safety nets based on respecting their respective responsibilities. Effective cooperation between. In this regard, we welcome the forthcoming joint exercise of the Chiang Mai Initiative Multilateralization and the IMF and call on the IMF to do more work on loan instruments. We look forward to completing the 15th total share inspection before the 2017 annual meeting, including the formation of a new share formula. We reiterate that share adjustment should increase the share of dynamic economies to reflect their relative position in the world economy, so the likely outcome is an overall increase in the share of emerging markets and developing countries. We expect the World Bank to implement share review in accordance with the agreed roadmap and timetable with the goal of gradually achieving equal voting rights. We emphasize the importance of promoting effective and sustainable financing practices and will continue to improve the debt restructuring process. We support the continued efforts to incorporate enhanced contract terms into sovereign debt. We support the Paris Club as the main international official bilateral debt restructuring platform, discuss a series of sovereign debt issues, support the Paris Club to continue to absorb more emerging creditor countries, and welcome South Korea to join the Paris Club. We welcome China's regular participation in the Paris Club meeting and China's willingness to play a more constructive role, including further discussion of potential membership issues. We support research to expand the use of SDRs, such as the wider release of financial and statistical data with SDR as the reporting currency, and the possibility of issuing SDR-denominated bonds to enhance resilience. We call on international organizations to work further to support the development of the local currency bond market, including strengthening support for low-income countries. We extend the responsibilities of the International Financial Architecture Working Group to 2017.

9. Recent market turmoil and uncertainty have once again highlighted the importance of establishing an open and risk-resistant financial system. To this end, we continue to commit to the core work remaining in the regulatory framework and to implement the agreed financial reforms in a timely, comprehensive and consistent manner, including Basel III and Total Loss Absorptive Capacity (TLAC) standards, as well as effective cross-border disposal. mechanism. We reiterate our support for the Basel Committee on Banking Supervision (BCBS) to complete the Basel III framework by the end of 2016, while promoting a level playing field while avoiding further substantial increases in the overall capital requirements of the entire banking industry. We expect BCBS to conduct a comprehensive quantitative impact analysis to inform the final design and calibration of the regulatory framework. We will continue to strengthen monitoring the implementation of reforms and their effectiveness to ensure that they meet our overall goals, including any unforeseen major consequences. We look forward to the second annual report of the FSB to be submitted to the leaders during the Hangzhou Summit on the implementation and effectiveness of financial regulatory reforms. We will continue to address the issue of systemic risks in the insurance industry. We welcome the development of Insurance Capital Standards (ICS) for international active insurance institutions. We welcome the joint efforts of the IMF, FSB and BIS to summarize the international experience of macroprudential frameworks and tools to help promote effective macroprudential policies and look forward to the report being released before the Hangzhou Summit. We welcome the FSB's comments on policy recommendations for addressing the fragility of the asset management business structure. We will continue to closely monitor and, where necessary, address new risks and vulnerabilities in the financial system, including those associated with shadow banking, asset management and other market-based financing. In order to properly deal with the reduction of agency business, we look forward to the progress report of the four action plans coordinated by the FSB to be submitted to the Hangzhou Summit. The G20 looks forward to further clarifying the work related to regulatory expectations, including the October Financial Action Task Force (FATF) to discuss agency guidelines. We call on G20 members, the IMF and the World Bank to increase their support for capacity building in countries to help them improve compliance with global anti-money laundering and counter-terrorism financing (AML/CFT) and prudential standards. We encourage members to narrow the gap in the implementation of financial market infrastructure principles and accelerate action on OTC derivatives market reforms. Based on the work plan we have adopted, we expect those comments on the anti-risk ability, recovery plan and disposition of the central counterparty to be released before the Hangzhou Summit. We have adopted the G20 Digital Inclusive Finance Advanced Principles, the G20 Inclusive Financial Indicators System Upgrade, and the G20 SME Financing Action Plan Implementation Framework, developed by Inclusive Financial Global Partners (GPFI). We encourage countries to consider these principles when developing their broader inclusive financial schemes, especially in the area of ​​digital inclusive finance.

10. We welcome the first meeting of the G20/OECD Tax-Based Erosion and Profit Transfer (BEPS) Inclusive Framework in Kyoto, Japan, and in particular the participation of the framework is very broad, which will be a timely, sustained and extensive implementation of the G20/OECD. The BEPS project also plays a key role in addressing the special challenges facing developing countries. We call on all interested countries and jurisdictions that have not yet made a commitment to the BEPS project to commit and participate equally in the framework. We also welcome recent progress in the effective and broad implementation of internationally recognized standards for tax transparency. We reiterate our call for all countries that have not yet made commitments, including all financial centers and jurisdictions, to make immediate commitments, implement automatic intelligence exchange standards by 2018, and sign the Multilateral Tax Administration Mutual Assistance Convention. We support the Global Forum on Tax Transparency and Intelligence Exchange to monitor the implementation of automated information exchange and look forward to receiving its report by the end of this year. We endorse the OECD and G20 members' proposals for objective criteria for identifying non-cooperative jurisdictions in terms of tax transparency. We ask the OECD to report to us on the progress of tax transparency in the region by June 2017, and how the Global Forum on Tax Transparency and Intelligence Exchange will manage the country review process and respond to additional review requests from countries for the OECD in 2017. Before the G20 Leaders Summit in July, prepare a list of jurisdictions that have not yet achieved satisfactory progress in implementing international tax transparency standards. Defensive measures will be considered for the jurisdictions listed. We encourage countries and international organizations to help developing countries strengthen tax capacity building. To this end, we have established new tax cooperation platforms for the IMF, OECD, the United Nations and the World Bank, as well as recommendations for effective technical assistance mechanisms for tax reforms. Express recognition. We look forward to receiving updates on the progress in mid-2017. We support the principles of the Addis Tax Initiative. We recognize that illicit financial flows will have a huge negative impact on national economies and will continue to advance the G20's work in this area.

11. We recognize that tax policy plays an important role in the broader robust, sustainable and balanced growth agenda, and recognizes the important role of a fair and efficient international tax environment in reducing conflicts in the tax system. As highlighted in our discussions at the G20 High-Level Tax Seminar, we value the effectiveness of tax policy instruments in providing supply-side structural reforms that drive innovation-driven and inclusive growth, as well as tax certainty for investment and trade. benefit. To this end, we ask the OECD and the IMF to continue to work on growth tax policies and tax certainty.

12. We reiterate our request to the FATF and the Global Forum on Tax Transparency and Intelligence Exchange to provide preliminary recommendations on how to strengthen the implementation of international transparency standards, including access to beneficial ownership information for legal persons and legal arrangements, and for the exchange of information across borders, before our October meeting.

13. We express our strongest condemnation of the recent terrorist attacks. We reaffirm our commitment to unity and our determination to combat terrorism in all its forms, wherever it occurs. We will address all sources, technologies and channels of terrorist financing. We welcome the FATF's progress in implementing its new comprehensive strategy to combat terrorist financing and call for effective implementation of its operational plan. It is imperative to implement FATF standards quickly and effectively around the world. This requires strengthening the leadership of the FATF and improving the effectiveness of the FATF network and regional institutions similar to the FATF. We call on the FATF to report to us on how to make progress in these areas by March 2017.

14. We recognize the need to expand green investment and financing in order to support global development under environmentally sustainable conditions. We welcome the G20 Green Finance Comprehensive Report submitted by the Green Finance Research Group and the voluntary optional measures initiated by it to enhance the ability of the financial system to mobilize private capital for green investment. Specifically, we believe that we can develop green finance through the following efforts: provide clear strategic policy signals and frameworks, promote the voluntary principles of green finance, expand capacity building learning networks, support the development of local green bond markets, and promote international cooperation to promote Cross-border green bond investments encourage and promote knowledge sharing in environmental and financial risk areas and improve assessment of green financial activities and their impact.

15. We welcome the domestic measures taken by some countries to help the climate change Paris Agreement enter into force as soon as possible, while encouraging other countries to do so. We reiterate our call for the timely implementation of the Paris Agreement on Climate Change, the implementation of the commitments made by developed countries and international organizations on climate finance and the statements made by other countries on climate finance. We welcome the report of the Climate Funds Research Group on “Providing and Mobilizing Climate Funds in an Effective and Transparent Way to Strengthen Mitigation and Adaptation Actions” and noting the “mainstreaming of climate change factors in development assistance and climate finance projects”. Outlook report. Based on the work arrangements established by the G20 presidency next year, we will continue to work on climate finance issues in 2017, with the goal of sharing the expertise, knowledge and experience of the G20 Forum for the United Nations Framework Convention on Climate Change (UNFCCC). The discussion underneath contributed.

16. We reaffirm our commitment to mid-term regulation and the phasing out of inefficient, wasteful fossil fuel subsidies and the need to support the poor. In addition, we encourage all G20 members to consider participating in inefficient peer-reviewed inefficient, waste-fed fossil fuel subsidies. ?

annex

Reports received:

1. IMF monitoring report and background paper on priorities for structural reforms in the G20 countries

2. Report of the Growth Framework Working Group on the G20's deepening structural reform agenda

3. Report of the IMF on the next path to revitalize trade to support growth

4. OECD report on investment progress and policy challenges

5. OECD report on trade progress and policy challenges

6. Joint vision statement of the Multilateral Development Bank to support infrastructure investment initiatives

7. Multilateral Development Bank’s response to the G20 Multilateral Development Bank’s Optimized Balance Sheet Action Plan

8. Global Infrastructure Interconnection Alliance Initiative

9. G20/OECD Policy Guidance Document on Diversification of Infrastructure and SME Financing Tools

10. G20/OECD Support Report on Diversification of Infrastructure Financing Tools

11. G20/OECD Support Report on the Diversity of SME Financing Tools

12. Progress Report on the Implementation of the G20/OECD Corporate Governance Principles by the G20/OECD

13. G20/OECD Progress Report on Developing Effective Approaches to Support the Implementation of the G20/OECD SME Financing High-Level Principles

14. GIH PPP Risk Sharing Analysis Report

15. G20 International Financial Architecture Working Group 2016 Final Report

16. IMF's preliminary report on the role of SDR

17. Letter from the FSB Chairman to the G20 Finance Minister and the Governor of the Central Bank, July 2016

18. IMF-FSB-BIS Elements on Effective Macroprudential Policy: Draft International Experience and Lessons Report

19. BCBS-CPMI-FSB-IOSCO Draft Progress Report on the CCP Joint Work Plan

20. Draft FSB's proposed annual report on the implementation and effectiveness of the G20 financial regulatory reforms submitted to the G20

21. G20 Digital Inclusive Finance Advanced Principles

22. Implementation framework for the G20 SME Financing Action Plan

23. G20 Inclusive Financial Indicators (updated in 2016)

24. Report of the OECD Secretary-General to the G20 Finance Minister

25. G20 Green Finance Comprehensive Report

26. Report of the Climate Funds Research Group on “Providing and Mobilizing Climate Funds in an Effective and Transparent Way to Strengthen Mitigation and Adaptation Actions”

27. The Climate Fund Research Group’s Outlook on “Mainstreaming Climate Change Factors in Development Assistance and Climate Funding Projects”

28. Toolbox on “Promoting effective and transparent provision and mobilization of climate finance” prepared by international organizations at the invitation of the Climate Funds Study Group

29. FATF report on counter-terrorism financing, information sharing, transparency and beneficial ownership

30. IMF-OECD-UN-WBG Joint Report on Enhancing the Effectiveness of External Support in Strengthening Tax Capabilities in Developing Countries

Matters requiring further action:

1. We asked the Growth Framework Working Group to conduct an assessment of the progress of the G20 structural reforms in accordance with the deepening structural reform agenda, requesting the OECD to use the common indicator system and refer to the opinions of other international organizations to help assess the progress of the G20 in the priority areas of structural reform. And face the challenges and draft a technical report.

2. We invite the OECD and the IMF to continue working on the budgetary revenue and expenditure structure to support productivity, inclusiveness and growth.

3. We ask the multilateral development banks to report regularly to us on the progress of the implementation of the “Joint Vision Statement on Supporting Infrastructure Investment Actions”, including mobilizing private investment.

4. We request the Multilateral Development Bank to report again in 2017 on the progress of the Multilateral Development Bank's Action Plan for Optimizing Balance Sheets.

5. We ask the World Bank to contact potential members of the Global Infrastructure Interconnection Alliance to confirm their membership of the Alliance and look forward to the inaugural meeting within one year of our approval of the Global Infrastructure Interconnection Alliance initiative.

6. We asked GIH to work with the multilateral development bank to evaluate internal incentives for mobilizing private funds and report to our deputy in December 2016.

7. We look forward to the work of the IMF's capital flow management, including a reference to the FSB, BIS and IMF summary of national experiences on macroprudential policies.

8. We look forward to the upcoming progress report on the second phase of the data gap initiative, including the final action plan, by the IMF and FSB.

9. We ask the IMF to study and report on the cost and feasibility of incorporating enhanced contract terms into existing sovereign debt.

10. We call on the World Bank and the IMF to offer more options for increased efforts and cooperation to provide targeted technical assistance to debtor countries and the challenges they face to strengthen their debt management capabilities and to G20 Finance Ministers in 2017. And the central bank governor reported.

11. We call for further analysis of state-dependent debt instruments, including technical methods, opportunities and challenges for GDP-linked bonds, and require the IMF to work with interested Member States to report this issue to G20 finance ministers and central bank governors in 2017.

12. We look forward to the IMF's report in January 2017 on how SDR can strengthen the role of the international monetary system.

13. We request the FSB to further monitor and analyze market liquidity conditions in consultation with other standards-setting bodies and international committees, and report on changes in the repurchase market in each country.

14. We asked GPFI to work with relevant organizations to report to us in 2017 on actions taken by countries at the country level to promote digital inclusive finance.

15. We look forward to considering the second phase of the FSB Climate-Related Financial Disclosure Working Group report and recommendations in early 2017, which will then advise on climate-related disclosure.

16. We will continue to work on climate finance issues in 2017, based on the work arrangements established by the G20 presidency next year, with the goal of sharing the expertise, knowledge and experience of the G20 Forum in accordance with the UNFCCC principles, regulations and objectives. Contribute to the discussions under the UNFCCC.

17. We look forward to further discussion on the toolkit for the promotion of effective and transparent provision and mobilization of climate finance prepared by international organizations at the invitation of the Climate Funds Research Group.

18. We will support the ongoing work on antibiotic resistance in the G20, based on the working arrangements of the G20 presidency next year, to explore measures to address potential market failures.

19. We look forward to receiving the G20/OECD report on developing effective ways to support the implementation of the G20/OECD High-Level Principles for SME Finance.

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