Key Takeaways:
- The meeting marks the 50th anniversary of China-EU diplomatic ties, with both sides emphasizing stable financial cooperation.
- Li Qiang expressed support for deeper ECB engagement, particularly on global monetary reform and multilateral alignment.
- Lagarde cited the importance of sustained EU-China dialogue amid rising geopolitical risks and trade tensions.
Chinese Premier Li Qiang met with European Central Bank (ECB) President Christine Lagarde in Beijing on June 12 to discuss China-EU financial cooperation and the evolving structure of the global monetary system, according to a readout published by the State Council.
The meeting came amid the 50th anniversary of China-EU diplomatic relations. Li said China supports expanding institutional coordination with the ECB, particularly on international monetary reform and multilateral engagement.
EU Pushes for Deeper Monetary Coordination
According to Li, the Chinese and European economies are highly complementary, and China is willing to enhance market connectivity and industrial coordination to drive mutual development.”
Lagarde said sustained dialogue between the EU and China is essential given current geopolitical uncertainty. She welcomed closer technical cooperation between the ECB and Chinese regulators and pointed to the recent launch of a central bank governor dialogue mechanism.
Lagarde also stated that China’s innovation-driven development is evident, and the ECB looks forward to deepening engagement with China’s financial institutions.
Li referenced China’s recent macroeconomic efforts to stimulate consumption and offset external pressures. He reiterated Beijing’s commitment to opening up its markets and supporting global financial stability.
While the conversation did not yield any new policy declarations, both sides framed the discussion as part of a longer-term strategy to stabilize cross-border capital flows and strengthen communication across monetary authorities.
Lagarde said tariffs and trade wars were detrimental to all sides, calling for broader cooperation to maintain open markets and safeguard institutional channels instead.
China to Strengthen CNY’s Global Position
In addition, the meeting touched on the role of bilateral trade in expanding local currency settlement. Li reiterated that China will continue to broaden access to its markets, which could support greater international usage of the yuan.
China is also assessing offshore digital currency channels to support cross-border use of the yuan. Recent proposals from JD Group economists include issuing yuan-backed stablecoins in Hong Kong to facilitate trade without affecting domestic capital controls.
Through official talks and digital finance pilots, China is testing new ways to expand the yuan’s role in global transactions while managing regulatory boundaries and reducing the reliance on the US dollar.
Local currency use could reduce dependence on intermediary currencies, lower transaction costs, and improve resilience in financial flows during external shocks.
Both sides are studying digital finance tools, and shared priorities in this space could shape how new currency models are integrated globally.
With growing interest in local currency settlements and alternative payment systems, central banks are reassessing the infrastructure that supports cross-border value exchange.
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