24 March 2008

Japan Times: Japan, China agree on shielding Asian economy

The finance ministers of Japan and China agreed Sunday to protect Asia's economy from the slowdown in the United States economy and the global turmoil being caused by the subprime-mortgage crisis, Finance Minister Fukushiro Nukaga said.

"We confirmed that exports from both Japan and China to the United States have declined due to the U.S. deceleration," Nukaga told a press conference after talks with his Chinese counterpart Xie Xuren in Tokyo.

"We agreed to share information and to cooperate to prevent the Asian economy from being negatively affected," Nukaga said after the talks, which were held as part of the one-day Japan-China Finance Dialogue.

The two sides discussed a range of global and regional issues, including global warming, the yuan's exchange rate and regional currency swaps, at the forum.

The meeting took place ahead of Chinese President Hu Jintao's expected visit to Japan in May.

Noting that he said is "crucial for Japan, China and India to lead the global economy now," Nukaga said, "Minister Xie also stressed the importance of bilateral cooperation to tackle challenges in the regional and global economies."

Xie explained that the fundamentals of the Chinese economy are still strong but that Beijing faces threats from rising inflationary pressure, surging crude oil and food prices, and widening economic gaps in various regions, Nukaga said.

Nukaga said he asked China for more efforts to increase the flexibility of its exchange rate.

China said that reform of the yuan is continuing, a Japanese Finance Ministry official later told reporters.

The senior finance officials also exchanged views not only on the global and regional economies, but on their fiscal and customs policies at the second comprehensive dialogue.

The first dialogue was held in March 2006 in Beijing, where the two sides agreed told hold the third dialogue in China next year.

On other topics, Japan and China agreed on the need for all major economies to address climate change.

They also reaffirmed that they will continue efforts to deepen regional financial cooperation, such as creating a multilateral currency swap scheme to avert crises and a regional bond market denominated in local currencies.

They also agreed that the two countries would try to clarify the cause of the Japanese food-poisoning incidents involving frozen dumplings from China.

© Japan Times