The finance ministers and central bank governors of Japan, China and South Korea issued a joint statement calling for deeper financial cooperation after meeting on May 3. Amid growing uncertainty over the global economic outlook, they affirmed that they will step up cooperation to enhance the effectiveness of international mechanisms so they can be well-equipped for a currency crisis.
The joint statement points out that the global economy “continues to grow moderately and growth is not consistent. Downward risks and uncertainty still linger over its outlook.” With an eye on capital outflow from China and other emerging economies, the statement stresses that the three countries will “carefully monitor risks that cause capital flow fluctuations and step up trilateral collaboration.”
To be specific, the three countries agreed that they will clarify requirements for the “Chiang Mai Initiative,” a currency swap agreement, to be put in place in preparation for an emergency. (Abridged)