The Japan-China Finance Dialogue was held for the first time in about three years in Beijing on Saturday, with the two nations’ finance ministers and other officials in attendance. In the meeting, an accord was reached to push for the improvement of Asia’s infrastructure. The two sides also agreed to hold another round of finance talks in Tokyo next year.
Taro Aso, deputy prime minister and finance minister, stressed at the meeting’s outset that he believes the dialogue “will help advance the strategic and mutually beneficial relationship” between the two countries.
The dialogue had been brought to a halt by tense bilateral relations over the Senkaku Islands and other matters. The resumption of finance talks between Japan and China – despite the host of pending political and security issues between them – should be considered significant.
Regarding the Beijing-led Asian Infrastructure Investment Bank, which has been positioned as a core financial institution for boosting the region’s social overhead capital, Chinese Finance Minister Lou Jiwei said in the meeting that the AIIB “has been welcomed by the international community.”
According to one estimate, Asia requires infrastructure investment worth an annual $800 billion (about ¥100 trillion). There is no denying that such massive funding needs cannot be fully met by existing financing institutions, such as the Asian Development Bank, alone.
The number of participants in the AIIB stands at 57, including European countries. But Japan and the United States have refrained from joining the new investment bank.
During the recent meeting, the Chinese side again called for Japan’s participation, noting that “the door is open.” China is said to be seeking Japan’s membership to enhance the bank’s trustworthiness in the market and gain managerial expertise in running a global financial institution.
China will exert a predominant influence over the bank, as it will hold nearly 30 percent of shares. Thus concerns remain as to whether fairness and transparency in its operations can be ensured.
Is there no fear that lax loan-screening processes will become rampant among funding projects deemed profitable for China? Won’t the institution support development projects that could have harmful effects on the environment or suppress human rights? The building of effective Japan-China cooperative ties for the improvement of Asia’s infrastructure – much less Japan’s participation in the AIIB – is unlikely as long as these anxieties are not dispelled.
In the latest finance talks, the Japanese side explained its plans to offer $110 billion (about ¥14 trillion) to help fund infrastructure projects in Asia over a five-year period through collaboration with the ADB and other channels.
Japan’s idea to foster “high-quality” infrastructure, namely by making use of its advanced technological capabilities to build structures that are more durable and otherwise superior, is right and appropriate. This stance can work as a counterweight to the AIIB. Such an approach should be steadily implemented.
Prior to the finance talks, Aso met with Zhang Gaoli, who tops the list of vice premiers.
In the talks, Zhang avoided dwelling upon issues related to historical perceptions, saying only that he hopes to see Japan “confront history and work to normalize bilateral relations.” It seems China is now placing priority on enhancing cooperation with Japan in the economic sphere.
Does the administration of President Xi Jinping earnestly want to better Japan-China relations? Japan must be extremely careful in this respect.
(From The Yomiuri Shimbun, June 7, 2015)
