U.S. and China Strengthen Cooperation to Combat Money Laundering

The U.S. and China collaborate to combat money laundering, a positive step amid escalating tensions, as they seek to maintain financial stability and address areas of common interest and disagreement.

Aqsa Younas Rana
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U.S. and China Strengthen Cooperation to Combat Money Laundering

U.S. and China Strengthen Cooperation to Combat Money Laundering

The United States and China have begun collaborating to address money laundering within their financial systems, finding common ground despite escalating geopolitical and economic tensions between the two nations. During U.S. Treasury Secretary Janet Yellen's recent visit to China, a new agreement was established that will enable regular meetings between Treasury Department officials and their counterparts at the People's Bank of China, the country's central bank. The countries intend to exchange best practices and share information on enforcement actions they are taking, aiming to close loopholes in the financial system.

On April 16, Secretary Yellen met with the Economic Working Group (EWG) and Financial Working Group (FWG) to discuss U.S.-China cooperation on economic and financial matters. The EWG focused on their work on the Intensive Exchange on Balanced Growth in the Domestic and Global Economies, while the FWG discussed a new Joint Treasury People's Bank of China Cooperation and Exchange on Anti-Money Laundering (AML) and upcoming plans for technical exercises on financial stability. Both sides agreed to further discuss economic policies that support balanced growth and China's non-market practices and industrial overcapacity.

The fourth meeting of the China-US Financial Working Group took place in Washington on Tuesday, co-chaired by Xuan Changneng, deputy governor of the People's Bank of China, and Brent Neiman, assistant secretary of the US Department of the Treasury. Officials from various regulatory agencies in both countries attended the meeting and were briefed on the financial regulatory frameworks in the two countries. The two sides discussed topics such as monetary policy, financial stability, financial supervision cooperation, financial markets, cross-border payment and data, sustainable finance, anti-money laundering, countering the financing of terrorism, and financial infrastructure.

Why this matters:In the world's two largest economies, strengthened cooperation between the U.S. and China on combating money laundering is crucial for maintaining global financial stability and preventing illicit financial flows. This collaboration marks a positive step forward in U.S.-China relations, despite ongoing tensions in other areas.

In a statement following the meeting, the U.S. Department of the Treasury said, "The two sides agreed to continue to maintain communication." The meeting comes as part of ongoing efforts by the U.S. and China to deepen economic ties and address areas of common interest, such as protecting financial stability and combating money laundering, while also discussing areas of disagreement, including China's industrial policy practices and their negative spillovers on the global economy.

Key Takeaways

  • U.S. and China agree to collaborate on combating money laundering in their financial systems.
  • New agreement enables regular meetings between U.S. Treasury and China's central bank officials.
  • Officials discussed monetary policy, financial stability, and anti-money laundering efforts.
  • Collaboration marks a positive step in U.S.-China relations despite ongoing tensions.
  • Efforts aim to deepen economic ties and address areas of common interest and disagreement.