and led international cooperation on green finance. we have taken the lead in advancing related tasks on g20 sustainable finance. the pboc and the united states department of the treasury co - chaired the g20 sustainable finance working group and led the development of the g20 sustainable finance roadmap in 2021, which has become an important guideline for mobilizing market funds to address climate change at the international level. in 2022, we took the lead in formulating the g20 framework for transition finance, which was adopted at the g20 bali summit in november last year and became a guide for all parties to establish a system of transition finance. we have published a common ground taxonomy - climate change mitigation ( cgt ) with relevant departments of the european commission. as the understanding of green transition varies across countries, strengthened consultation is needed to gradually accelerate mutual recognition and the trading of green financial products and green pricing in the global market. over the past three years, the pboc and relevant european agencies have continued to harmonize the standards of green finance between china and europe, and jointly published the cgt in 2021 and an updated version in june 2022. the latest version of cgt is 80 percent aligned with the european version. many domestic and foreign financial institutions have issued green bonds and green loans with reference to the cgt, which is highly recognized by the market. we have strengthened international cooperation on green finance under multilateral mechanisms such as the central banks and supervisors network for greening the financial system ( ngfs ) and the international platform on sustainable finance ( ipsf ). we have worked together to build a green " belt and road ". in 2019, under the guidance of the pboc, the green finance committee ( gfc ) of the china society for finance and banking jointly launched the green investment principles for the belt and road ( gip ) with the city of london, as well as many chinese and foreign financial institutions, to help developing countries build up their green finance capacities and improve their resilience to climate change. in recent years, under the centralized and unified leadership of the cpc central committee, the cpc shanghai municipal committee and shanghai municipal people's government have made remarkable progress in the building of an international financial center. shanghai's roles as an rmb asset allocation center, a financial risk management center, a fintech center, a high - quality business environment center, and a financial talent development center have been further enhanced. shanghai is home to

shoulder responsibility for each other between generations is less strong. fourth, demographic factor and stage of development. as indicated by the life cycle hypothesis by frank modigliani, as the share of working age population increases, household savings will increase accordingly. when we look at the phase of economic growth, in times of exceptionally high economic growth, most of the incremental income will be saved, resulting in an unusually high savings ratio. therefore, it is understandable that china has a high savings ratio, as both conditions apply in china ’ s situation. a comparison between japan and the u. s. can also serve to demonstrate the contribution of these factors in determining savings ratio. similar to the u. s., japan is a developed country with high per capita income. the social security system in the two countries each has its own weaknesses. however, japan ’ s savings ratio is much higher than that in the u. s. this can be largely ascribed to cultural elements, family value and demographic feature in japan, which are fairly similar to those in other east asian countries. some believe savings ratio is more closely related to the adequacy of social security system, arguing that an inadequate social security system leads to high savings ratio. though intuitive, this argument lacks adequate statistical and empirical support. it is based on the assumption that human behaviors are rational and people increase their savings for future healthcare and pension needs. this assumption, however, does not necessarily stand. the central provident fund ( cpf ) system in malaysia and singapore that requires mandatory savings has been established under the exact opposite assumption that people do not always behave rationally. high savings ratio in oil - producing countries has its natural reasons. endowed with rich oil resources that far exceed their normal consumption demand, oil - producing countries naturally accumulate their wealth in the form of savings. chart 4 shows that trade surplus in oil - producing countries has been much larger than in east asian countries since 2000. the elementary textbooks on economics always start with “ supply and demand and prices ”, which lead the readers to believe that certain prices, for instance, exchange rate or interest rate, determine the behavior of savings and consumption. however, things are much more complicated than what the textbook tells us. the level of savings ratio is influenced by a large number of factors, and it is over simplistic to conclude that the savings ratio can be meaningfully adjusted by adjusting nominal exchange rate. factors such as national tradition, culture, family features, demographic structure and social