Communiqué
G20 Finance Ministers and Central Bank Governors Meeting
26-27 February 2016, Shanghai, China

1. We met in Shanghai to review and address key global
economic challenges and move forward on the policy agenda for the
Hangzhou Summit. The global recovery continues, but it remains uneven and
falls short of our ambition for strong, sustainable and balanced growth.
Downside risks and vulnerabilities have risen, against the backdrop of
volatile capital flows, a large drop of commodity prices, escalated
geopolitical tensions, the shock of a potential UK exit from the European
Union and a large and increasing number of refugees in some regions.
Additionally, there are growing concerns about the risk of further downward
revision in global economic prospects. While recognizing these challenges,
we nevertheless judge that the magnitude of recent market volatility has not
reflected the underlying fundamentals of the global economy. We expect
activity to continue to expand at a moderate pace in most advanced economies,
and growth in key emerging market economies remains strong. However, we
agree that we need to do more to achieve our common objectives for global
growth. We will continue to monitor global economic and financial
developments closely.
2. Over the last several years, the G20 has made important achievements to
strengthen growth, investment and financial stability. We are taking actions to
foster confidence and preserve and strengthen the recovery. We will use all
policy tools – monetary, fiscal and structural – individually and collectively
to achieve these goals. Monetary policies will continue to support economic
activity and ensure price stability, consistent with central banks’
mandates, but monetary policy alone cannot lead to balanced growth. Our
fiscal strategies aim to support the economy and we will use fiscal policy
flexibly to strengthen growth, job creation and confidence, while enhancing
resilience and ensuring debt as a share of GDP is on a sustainable path. We
are also making tax policy and public spending as growth-friendly as possible,
including by prioritizing expenditure in favor of high-quality investment.
We reaffirm the role of mutually-reinforcing macroeconomic and structural
policies to buttress our efforts to achieve strong, sustainable and balanced
growth. Faster progress on structural reforms should bolster potential growth
in the medium term and make our economies more innovative, flexible and
resilient. To enhance our readiness to respond to potential risks, we
will continue to explore policy options that the G20 countries may undertake

1

as necessary to support growth and stability. We reiterate that excess
volatility and disorderly movements in exchange rates can have adverse
implications for economic and financial stability. We will consult closely on
exchange markets. We reaffirm our previous exchange rate commitments,
including that we will refrain from competitive devaluations and we will not
target our exchange rates for competitive purposes. We will resist all forms of
protectionism. We will carefully calibrate and clearly communicate our
macroeconomic and structural policy actions to reduce policy uncertainty,
minimize negative spillovers and promote transparency.
3. We reiterate the importance of raising actual output as well as the essential
role of structural reforms in boosting productivity and potential output. We
will prioritize and put special emphasis in 2016 on the implementation of our
adjusted national Growth Strategies with a view to achieving the objective of
2 percent additional output by 2018. Building on past countryspecific commitments, we are committed to further enhancing the structural
reform agenda, including by developing a set of priorities and guiding
principles as a reference for G20 reform efforts, as well as by creating an
indicator system to further improve assessing and monitoring of the progress
of structural reforms and their adequacy to address structural challenges,
taking into account the diversity of country circumstances. This enhanced
structural reform agenda will be incorporated into the existing work stream
under the Framework for Strong, Sustainable and Balanced Growth. In order
to enhance the efficiency of our efforts, we will combine our investment
strategies with growth strategies and remain committed to their timely and
effective implementation to accomplish our goals. We will review
the combined strategies, including through enhanced peer review, and will
adjust them as necessary to ensure progress towards our collective growth
ambition and our overarching objective of strong, sustainable and balanced
growth. Recognizing the importance of trade and investment for growth and
their recent weakness, we will explore potential policy measures in these
areas, with support of the IOs. We will continue to take steps to promote
greater inclusiveness and reduce excessive global imbalances.
4. We reaffirm our commitment to advancing the investment agenda with focus
on infrastructure both in terms of quantity and quality aspects. We look
forward to the Multilateral Development Banks (MDBs) to present concrete
actions by July to optimize their balance sheets as agreed in Antalya. Given
the unique role of MDBs in promoting infrastructure development
and considering the MDB’s mandate on promoting infrastructure investment
and poverty reduction, as called for in the Addis Ababa Action Agenda, we
encourage MDBs to formulate quantitative ambition for high-quality projects
and take joint actions to demonstrate their commitment to infrastructure
investment to attract new sources of long-term investment financing,
including by catalyzing private sector funding, enhancing cooperation among
existing and new MDBs, promoting multi-partite cooperative co-financing

2

models and supporting works concerning project preparation.
Strengthening connectivity is the key to maximize the positive spillovers of
national infrastructure and create more investment opportunities. We will
launch a global infrastructure connectivity alliance initiative to enhance
the cooperation and synergy of infrastructure programs. We support the
development of a guidance note on recommended policy steps
that could contribute to diversified financing instruments for infrastructure
and SMEs with special attention to equity financing by promoting capital
markets development, engaging institutional investors, encouraging
implementation of G20/OECD corporate governance and SME financing
principles and promoting infrastructure investments as an asset class.
5. A stable and resilient international financial architecture is a key element to
foster strong, sustainable and balanced growth as well as financial stability.
We endorsed the work program of the International Financial Architecture
Working Group (IFAWG) aimed at promoting a smooth functioning and
orderly evolution of the international monetary system (IMS), informed by
the IMF’s stocktaking of the IMS. We welcome the entry-into-effect of the
2010 IMF Quota and Governance reforms. We support the timetable
for completing the IMF’s 15th General Review of Quotas, including a new
quota formula, by the 2017 Annual Meetings, and reaffirm our commitment to
a strong, quota-based and adequately resourced IMF. We support the World
Bank Group (WBG) to implement its shareholding review according to the
agreed roadmap and timeframe, with the objective of achieving equitable
voting power over time. We will continue to promote the orderliness and
predictability of sovereign debt restructuring processes and strengthen debt
sustainability frameworks. Capital flows are a central feature of the
international monetary system. Given the current development in the global
economy, we will better monitor capital flows, including more timely
identification of risks, and take stock of and review policy tools and
frameworks as appropriate to address challenges arising from large and
volatile capital flows, drawing on country experiences. We stress the
importance of an adequate and effective global financial safety net (GFSN)
and look forward to discussing the IMF’s analysis on the GFSN architecture
in April. We welcome the completion of the IMF’s 2015 Review of the
Method of Valuation of the Special Drawing Rights (SDR) and support
further work to examine the possible broader use of the SDR and on
local currency bond market.
6. We remain committed to timely, full and consistent implementation of the
agreed
financial
reforms,
including
the
Basel
III
and
total-loss-absorbing-capacity (TLAC) standard. To this end, we encourage
national authorities to strengthen cross-border cooperation, including in
implementing effective cross-border resolution regimes and over-the-counter
derivatives reforms, and to defer to each other when it is justified, in line with
the St. Petersburg Declaration. We support the work by the Basel Committee

3

to refine elements of Basel III framework to ensure its coherence and
maximize its effectiveness without further significantly increasing
overall capital requirements across the banking sector. We will continue to
monitor and assess reform implementation and effects, including to address
any material unintended consequences, including for emerging market and
developing countries. We support the work underway to improve the
assessment methodology for global systemically important insurers and the
further progress in developing the Insurance Capital Standard according to
the agreed timeline. We strongly encourage implementation of the agreed
CPMI-IOSCO Principles for Financial Market Infrastructures (FMIs), and
further strengthening the regulation and oversight of FMIs. We look forward
to further progress in identifying and addressing gaps related to resilience,
recovery planning and resolvability of central counterparties (CCPs),
including cooperation arrangements for CCPs that are systemic across
multiple jurisdictions. We continue to closely monitor, and if necessary,
address emerging risks and vulnerabilities in the financial system, including
those associated with shadow banking, asset management and other
market-based finance. We welcome the work by the BCBS and IOSCO
on criteria for identifying simple, transparent and comparable securitizations.
We will review holistically changes in market liquidity and impact on market
stability, and we will consider policy measures if necessary. We welcome the
ongoing work by the IOs, as set out in the FSB work plan on the decline
in correspondent banking services, and look forward to accelerated progress
in assessing and addressing this issue as appropriate. We welcome the
planned work by the FSB, IMF and BIS to take stock of experiences and
potential lessons with macro-prudential frameworks and tools, and
report back to us by our meeting in July. We remain committed to strengthen
the financial inclusion agenda. We ask the Global Partnership for Financial
Inclusion (GPFI) to produce a framework for implementing the G20 SME
Finance Action Plan, and explore developing a set of high-level principles on
digital financial inclusion, and improving data collection and indicators.
7. Widespread, consistent and effective implementation of G20/OECD Base
Erosion and Profit Shifting (BEPS) project is critical for a fair and modern
international tax system. We reiterate our commitment to timely
implementation of the BEPS project, and continue to monitor and address
BEPS-related issues in order to ensure tax fairness and a level playing field.
To ensure a consistent global approach, we endorse the inclusive framework
proposed by the OECD for the global implementation of BEPS project and
encourage all relevant and interested non-G20 countries and jurisdictions,
which commit to implement the BEPS project, including developing countries,
to join in the framework on an equal footing. We support that the
specific challenges faced by developing countries in BEPS implementation
should be appropriately addressed under the framework. We
remain committed to implementing the standard for information exchange on
request as well as for Automatic Exchange of Information (AEOI), and call

4

on all financial centers and jurisdictions to do so by 2017 or at the end of
2018. We reiterate our call for all countries to join the Multilateral
Convention on Mutual Administrative Assistance in Tax Matters and look
forward to the progress report by the Global Forum. We welcome the
different existing initiatives aimed at building capacity for developing
economies to their needs on tax issues, including the Addis Tax Initiative, the
Tax Administration Diagnostic Assessment Tool, and the Tax Inspectors
Without Borders. In this connection, China would make its
own contribution by establishing an international tax policy research center
for international tax policy design and research as well as technical assistance
to developing economies. We also welcome the new proposal of developing a
tax platform jointly by the IMF, OECD, UN and WBG, and call on them to
recommend mechanisms to help ensure effective implementation of technical
assistance programs, and recommend how countries can contribute funding
for tax projects and direct technical assistance, and report back with
recommendations at our July meeting. We recognize the role of tax policy in
achieving sustainable economic growth, and will explore this issue further at
the G20 Tax Symposium to be held in July. We recognize the significant
negative impact of illicit financial flows on all our economies, and
we continue to take forward the work of the G20 on this theme.
8. We are resolved to combat decisively terrorist financing. We will intensify
our efforts to tackle all sources, techniques and channels of terrorist financing
and will enhance our cooperation and exchange of information. We call on
all countries to join us in these efforts, including through a swift
implementation of FATF standards and provisions of the UN Security
Council Resolution 2253 in all jurisdictions. We ask the FATF, working with
the relevant IOs, to strengthen its work on identifying and tackling loopholes
and deficiencies that remain in the financial system and ensure that the FATF
standards are effective and comprehensive, and fully implemented. We call
on the FATF to intensify its work on identifying, analyzing and tackling
terrorist financing threats, the sources and methods of funding and the use of
funds.
9. Recognizing the pressing environmental challenges and the importance of
mobilizing green finance, we have established the G20 Green Finance Study
Group (GFSG). We ask the GFSG to identify institutional and market barriers
to green finance, and based on country experiences, develop options on how
to enhance the ability of the financial system to mobilize private capital for
green investment. The GFSG will collaborate with other G20 groups and
other external initiatives as well as with the private sector. We expect the
GFSG to deliver a synthesis report by our July meeting.
10. We welcome the adoption of the Paris Agreement on Climate Change and
the commitments made by developed countries and international
organizations and announcements made by other countries on climate finance,
and call for timely implementation. Developed country Parties shall provide
5

financial resources, including support provided through the Green Climate
Fund, to assist developing country Parties with respect to both mitigation and
adaptation, in continuation of their existing obligations under the United
Nations Framework Convention on Climate Change (UNFCCC). Other
Parties are encouraged to provide or continue to provide such support
voluntarily. We reaffirm our commitment to implementing the 2030 Agenda
for Sustainable Development.
11. We reaffirm our commitment to rationalize and phase out inefficient fossil
fuel subsidies that encourage wasteful consumption, over the medium term,
recognizing the need to support the poor. Further, we encourage all
G20 countries to consider participation in the voluntary peer review of
inefficient fossil fuel subsidy that encourages wasteful consumption.

6

Annex
Reports received
1. IMF G20 Surveillance Note prepared for the February 26-27 Ministerial.
2. Financial Stability Board Chair’s Letter to G20 Finance Ministers and Central
Bank Governors, February 2016.
3. OECD Interim Economic Assessment
4. OECD’s Secretary-General’s tax report
5. Going for Growth report by OECD
6. FATF report to G20 on FATF Counter-Terrorist Financing Initiatives
Issues for further action
1. We request the Framework Working Group (FWG) to further work on the
priorities and guiding principles as well as the proposed structural indicator
system to secure delivery of the Growth Strategies, with an aim to submit
policy papers on both topics for our review, and endorsement if appropriate,
in our next meeting in April. We call on the IMF and the OECD to continue to
provide technical support and further work on the enhanced structural reform
agenda, including updating the policy papers based on the proposals by China,
the IMF and the OECD and members’ feedbacks.
2. We ask the IMF, OECD and WBG to update the assessment of the
implementation of key commitments in our growth strategies, implementation
gaps, as well as of progress towards our collective growth ambition as defined
in Brisbane, to provide technical support to our peer review and report back
to us by our meeting in July.
3. We look forward to a progress report on the implementation of the MDBs’
Action Plan to Optimize Balance Sheets in July.
4. We look forward to a proposal of joint actions led by the WBG, together with
other MDBs, to demonstrate the MDBs’ commitment to infrastructure
development.
5. We look forward to a productive discussion in Singapore in April to promote
global infrastructure connectivity.
6. We look forward to receiving the Global Infrastructure Hub’s (GIH)
knowledge sharing report at our April meeting and to the Hub developing,
in coordination with other IOs involved in PPPs, a knowledge sharing
platform that will help improve global infrastructure connectivity and
institutional capacity of developing economies in delivering bankable

7

infrastructure projects.
7. We look forward to guidance note on recommended policy steps to diversify
financial instruments for infrastructure and SMEs, and attract new sources of
long-term financing including private investment with inputs by the OECD,
and other IOs.
8. We welcome and support the implementation of the related G20/OECD
Corporate Governance and SME financing Principles, and the G20 SME
Finance Action Plan, and look forward to being updated on its progress at our
next meeting, including assessment methodology of corporate governance
principles.
9. We look forward to the report of the IMF and the FSB in the fall of 2016 on
the second phase of the Data Gaps Initiative (DGI-II), including on the
finalized action plans.
10. We look forward to further work on capital flows by the IMF, the BIS, the
OECD, and other IOs and we look forward to their studies and reports.
11. We look forward to the IMF’s report to examine and reflect on the
possible broader use of the SDR by July.
12. We look forward to the report by the IMF, in consultation with other parties,
on the progress in implementing the enhanced collective action and pari
passu clauses and further explore market-based ways to speed up their
incorporation in the outstanding stock of international sovereign debt.
13. We look forward to the FSB’s second annual report on implementation and
effects of regulatory reforms.
14. We ask the FATF to report back to us by our meeting in July on the update of
implementation of its standards by jurisdictions worldwide and of FATF’s
new Strategy on combating terrorist financing, as well as on the follow-up
procedures that have been launched to accelerate implementation in those
jurisdictions where weaknesses have been identified.
15. We ask for a report for our next meeting on the first stage of the work of the
FSB’s task force on climate-related financial disclosures.
16. We request the Climate Finance Study Group (CFSG), based on the outcomes
and towards the objectives of the 21st session of the Conference of the Parties
to the UNFCCC (COP21), to continue its work in the areas as set out in its
2016 Work Program in accordance with the principles, provisions and
objectives of the UNFCCC and report back to us in our July meeting.

8