April 9, 2012

Japan, China to Discuss Raising IMF Contributions

Move follows EU decision to increase bailout fund

Japan and China will hold talks over whether to increase their contributions to the International Monetary Fund (IMF), according to the Japanese finance minister.

Reuters reported Saturday that the finance minister, Jun Azumi, said the talks would be held in advance of the G20 finance leaders' meeting in Washington this month. He made the announcement after meeting with Finance Minister Xie Xuren of China.

It is expected by the European Union that G20 officials will come to an agreement to increase contributions to the IMF now that it has been agreed to increase the capacity of the European bailout fund. However, Azumi said neither Japan nor China had yet decided whether to boost their own contributions to the IMF in the wake of the fund action.

"Europe's problem has eased from a critical situation seen last year but it is not a situation where we can be optimistic," he was quoted saying. "We need to watch the situation cautiously. As for contributions to the IMF, we will hold high-level talks towards the G20 meeting in Washington."

Azumi also said that Japan's economy would be able to reach its real growth rate goal of approximately 2% in the current fiscal year, and that Asia would lead the way in the global economy in 2012. Neither Japan nor China is suffering economically to the extent of European nations mired in debt and struggling with austerity measures that are slowing growth or sending them into recession.

"It is Asia's economy that has to lead the global economy. Especially, the economies in Japan and China need to achieve steady improvement," he was quoted saying. "The nation's domestic demand is improving considerably thanks to reconstruction demand. There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad."

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