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Ministers agree on infrastructure development

By Zheng Yangpeng | China Daily | Updated: 2015-06-08 07:46

Analysts say trust is essential for progress on tackling range of economic issues

China and Japan inched a tentative step closer as finance ministers from the two countries met for the first time in more than three years over the weekend and agreed to work together where they can to facilitate infrastructure development in Asia.

The two countries will "promote infrastructure development in Asia, including through coordination with development financial institutions, on the basis of common interests", according to a joint statement released by Chinese Finance Minister Lou Jiwei and his counterpart Taro Aso after their meeting on Saturday.

The regular finance ministers' meeting was launched in March 2006. It was last held in April 2012 in Tokyo, but a territorial dispute in the East China Sea flared up six months later, after which bilateral relations sunk to a historic low and the dialogue was suspended.

Both countries are ratcheting up commitment to Asia's infrastructure funding, in separate orbits.

China is leading an effort to build the $100 billion Asian Infrastructure Investment Bank, which Japan has so far not decided to join. Last month, Japanese Prime Minister Shinzo Abe announced a plan to offer $110 billion over a five-year period to fund "high-quality" infrastructure projects.

Taro Aso, also Japan's deputy prime minister, had briefed Lou about Japan's plan, and told reporters that China understands what Japan is trying to do. Aso said he welcomed Beijing's initiative in establishing the AIIB to cope with fast-growing demand for infrastructure financing in the region.

While Lou said the door is still open for Japan to join the AIIB, Japan maintains a cautious stance, raising questions over the institution's ability to ensure transparency and fairness in management.

The emphasis on cooperation through multilateral institutions such as the Asian Development Bank, instead of AIIB, signaled a reduced possibility that Japan will eventually join the initiative.

Japanese lawmakers in the ruling Liberal Democratic Party recommended last week that Abe should be cautious about joining the multilateral lender.

"The AIIB issue is a 'litmus test' for China-Japan relations. So far Japan is still showing wariness over the issue," said Pang Zhongpeng, a researcher with the Japan Studies Center at the Chinese Academy of Social Sciences.

Pang said the finance dialogue was only made possible after top leaders from the two countries met in November. But the two countries are just "edging a bit closer, with much reservation".

On Friday, Aso met with Chinese Vice Premier Zhang Gaoli and agreed with him that the two countries would "continue dialogue at various levels and strengthen our relations of trust".

The two sides agreed to hold the sixth and next round of the China-Japan Finance Dialogue in Tokyo next year.

Lou said China looks to cooperate with Japan on a range of economic issues, such as budget management, social security, coping with an aging society, tax and public debt management, as well as cooperation on the global stage.

But analysts said these are only possible if political relations become normalized. "Political mutual trust is vital. Without it, everything is in vain," Pang said.

That trust faces a critical test on Aug 15 when Abe is due to give an address to commemorate the 70th anniversary of the end of World War II.

"The world, including China, will be closely watching to see whether he will include the words of 'aggression', 'colonial rule' and 'apologize' into the address," Pang said. "If he doesn't, that will be a huge dampener to bilateral relations."

zhengyangpeng@chinadaily.com.cn

 

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