Japan, China agree to jointly prod Europe

Kyodo

Japan and China agreed Sunday to act together in calling for efforts by European leaders to address the sovereign debt and banking crisis in the euro area, Japanese officials said.

Finance Minister Jun Azumi and Chinese Vice Premier Wang Qishan also shared the view that the two biggest economies in Asia should strengthen their economic and financial ties, including enhancing recently introduced direct currency trading that bypasses the dollar.

“We agreed on the importance of boosting resources at the International Monetary Fund,” Azumi told reporters after meeting with Wang in Los Cabos, Mexico, where the Group of 20 leaders’ summit will end on Tuesday.

Azumi was referring to the agreement by the G-20 finance chiefs in April to have the group of advanced and emerging economies cooperate on increasing the financial firepower of the IMF, the multilateral lender based in Washington, by over $430 billion to meet future financing demand from members affected by the eurozone crisis, which is having a negative impact on global trade and financial channels.

Japan earlier said it will offer $60 billion to the IMF’s war chest, while China is expected to unveil its own contribution at the summit.

Azumi and Wang, who is in charge of macroeconomic and financial affairs in China, also discussed the recent cooperation between the two countries in international finance, confirming the favorable start earlier this month of direct yen-yuan trading, which helps cut costs in settling bilateral trade.