The 16th session of the China-US joint Economic Committee was held in Washington DC on September 30,2004. In the Joint Statement released after the session, The Chinese side reaffirmed China's commitments to further advance reform and push ahead firmly and steadily to a market-based flexible exchange rate and described the steps the Chinese government has taken to create conditions to establish a more flexible exchange rate.

The following is the full text of the Joint Statement.

At the invitation of US Treasury Secretary John W. Snow, Chinese Finance Minister Jin Renqing led an official delegation to the United States to co-chair the 16th session of the China-US Joint Economic Committee (JEC)), a forum first held in 1980, on September 30,2004. US Federal Reserve Board Chairman Alan Greenspan, People's Bank of China Governor Zhou Xiaochuan, and China Banking Regulatory Commission Chairman Liu Mingkang also participated in the meeting. Both sides noted the importance of the ongoing constructive and substantive high-level dialogue between the two countries involving the key economic policymaking agancies on economic and financial issues. The two sides discussed a range of topics, including macroeconomic policy, financial sector issues and efforts to combat terrorist financing and money laundering.

The two sides discussed the global economic situation and the outlook for their own economies. They noted that strong economic performance in both the United States and China contributed to the fastest rate of growth of the world economy in two decades. They noted with satisfaction the continued favorable outlook for 2005, notwithstanding the risks to the outlook, including those associated with high oil prices. Participants discussed monetary, fiscal, and exchange rate policies to support continued strong growth in both economies. They noted the policy measures taken in China to assure sustained and stable growth. The Chinese affirmed that they would continue to implement market-oriented reforms to promote sustainable, long-term economic growth in China. US officials described the strong US recovery brought about by timely fiscal and monetary policy measures. The budget deficit in 2004 is now projected to be well below earlier forecasts. The US side confirmed the Administration's goal to cut the deficit by half within five years. The US side explained that strong growth and favorable US investment opportunities have led to an expansion of the US current account deficit, but these pressures should diminish as international growth becomes more balanced and widespread. Both sides emphasized the importance of the Doha Round of multilateral trade negotiations, and promised their full effort to bring the Round to a successful conclusion.

Participants undersorced the importance of healthy, competitive and efficient financial markets in assuring that their economies achieve their full frowth potential. Chinese participants described steps being undertaken to strengthen the banking system and to develop domestic capital markets, including recent steps in capital market reform. China reiterated its commitment to further liberalization and opening of its financial services sector. The Chinese side reaffirmed China's commitments to further advance reform and push ahead firmly and steadily to a market-based flexible exchange rate and described the steps the Chinese government has taken to create conditions to establish a more flexible exchange rate. The US side expressed support for continued efforts by the Chinese government to bring about this goal as rapidly as possible. Both sides acknowledged the value of ongoing bilateral discussions on these issues, including the technical cooperation program that had been established as a means to accelerate reforms in the financial market and currency regime.

Both sides pledged to continue their cooperation to counter the financing of terrorism and money laundering on a global basis. Both sides noted the important efforts being made through the Financial Action Task Force (FATF). The United States welcomed China's intent to participate in the inaugural meeting of the Eurasian FATF-sytle regional body on money laundering in October. China affirmed its willingness to be actively involved in an anti-money laundering and anti-terrorist financing regional body and to take the necessary steps to obtain full membership in the FATF. The United States strongly supports China's involvement in anti-money laundering and anti-terrorist financing activities, and its steps to obtain full membership in the FATF.

The two sides discussed US voting policies on MDB loans to China. The US side noted China's view that the United States should support the full range of Chinese MDB projects.

The Chinese side expressed its intentions to join the Inter-American Development Bank(IADB) and reiterated China's willingness to make a greater contribution to the cause of poverty reduction in Lation America and the world at large. The United States supports China's endeavor to join the IADB.

Participants on the US side included representatives from the Treasury, Federal Reserve Board, Council of Economic Advisers, Office of the Comptroller of the Currency, Commodity Futures Trading Commission, Securities and Exchange Commission, and the Department of State.

The Chinese delegation included the Ministry of Finance, People's Bank of China, China Banking Regulatory Commission, Ministry of Foreign Affairs, National Development and Reform Commission and China Securities Regulatory Commission.

Reported By Yong Tang, People's Daily correspondent based in Washington DC