Japan says financial dialogue with China 'extremely good'

Japanese Finance Minister Taro Aso said on Friday that the current round of financial dialogue with China was “extremely good”, and that both sides agreed to maintain cooperation in macro-economic policies and measures.

The Chinese side was “cordial”, Aso, who is also Japan’s deputy prime minister, told reporters in Beijing, following the China-Japan Finance Dialogue.

Japan hopes bilateral financial cooperation, including resumption of currency swap arrangements, will pave the way for a meeting between Prime Minister Shinzo Abe and Chinese President Xi Jinping later this year in Beijing.

The dialogue follows a meeting between Abe and Premier Li Keqiang in May in which China agreed to sign a currency swap deal with Japan and grant Japanese investors for the first time an investment quota under the Renminbi Qualified Foreign Institutional Investors (RQFII) programme.

The RQFII programme was set up in 2011 to allow overseas financial institutions to use offshore yuan to purchase securities in mainland China including stocks, bonds and money market instruments.

The dialogue was the seventh of its kind, with the last one held in May 2017. “The mood was extremely good,” Aso said.

The exchange took place against a backdrop of intensifying Sino-U.S. trade frictions that have raised concerns about protectionism and its impact on the global economy.

China and Japan agreed to uphold a multilateral trading system that is based on free market rules, Aso said.

When asked by reporters if there is a contradiction in that China itself is a closed economy with restrictions on foreign companies and investors, Aso said it is also matter of keeping one’s promises.

“There’s no question about that. Their restrictions and our restrictions are different in meaning. What’s important this time is that we got their word into the agreement that they will work (to create an economy that’s based on free and open rules),” Aso said.

“We can say you did say it was important to (honour trade systems). We can continue to negotiate based on those words (of promise).”