Wang, Azumi agree to help IMF assist ailing eurozone

Kyodo

Japan and China said they were ready Sunday to back the International Monetary Fund’s efforts to resolve Europe’s debt crisis and agreed to coordinate their positions on responding to its call for more eurozone aid from member countries.

Finance Minister Jun Azumi and Chinese Vice Premier Wang Qishan also agreed to boost cooperation by facilitating Japan’s purchase of Chinese government bonds and encouraging the private sector to use both the yen and yuan rather than the dollar to settle bilateral trade when their financial authorities hold their first meeting Monday in Beijing.

Azumi and Wang, who is in charge of macroeconomic and financial affairs, met in the Chinese capital ahead of a meeting of finance chiefs from the Group of 20 industrialized and emerging economies to be held from Feb. 25 to 26 in Mexico, where financial assistance for the eurozone will top the agenda.

“Japan and China are prepared to support the IMF’s important role in addressing the European sovereign debt crisis on the basis of further efforts by the European Union and euro area members and in cooperation with the G-20 and IMF members,” the Finance Ministry said in a press statement issued after the talks.

Azumi also said he expects the IMF to request that countries such as the United States, Japan and China play their part in contributing to the Washington-based lender’s efforts to address the eurozone debt crisis.

“We agreed to ensure good coordination between Japan and China so as to take joint action and better respond to a request from the IMF,” he told reporters.

Azumi, however, indicated that the world’s third- and second-largest economies, respectively, did not go as far as to discuss the specific sizes of their contributions, and only said they “will consult whenever necessary and act in cooperation.”

Wang called for increased communication and cooperation with Japan in financial affairs amid concern about a slowdown in the world economy propelled by Europe’s debt woes.

“As finance ministers and central bank governors around the world are getting busier, communication and cooperation between China and Japan are increasingly important,” Wang told Japanese Finance Minister Jun Azumi as they began talks in Beijing.

China and Japan, the world’s second- and third-largest economies, respectively, “want to send a message that (they) will cooperate and make contribution” via the International Monetary Fund to assisting Europe, a senior Japanese Finance Ministry official told reporters, before the Azumi-Wang talks.

Along with the potential impact of a deeper European recession on Asia, the two financial leaders also agreed to step up efforts to allow their companies to settle trade in yen and yuan rather than through the currency of a third country.