Japan and China are preparing to hold a meeting of their finance ministers as early as late this month in Beijing, sources with knowledge of the plan said Thursday.
Japanese Finance Minister Taro Aso and his Chinese counterpart Liu Kun are expected to follow up on discussions at last month’s meeting of finance leaders from the Group of 20 major economies, which wrapped up with a joint communique voicing concern over “heightened trade and geopolitical tensions.”
The so-called finance dialogue could serve as a prelude for a summit between Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, which Tokyo hopes to hold in October.
Officials from the Finance Ministry, the Financial Services Agency and the Bank of Japan are expected to join the dialogue, which was last held in May 2017 in Yokohama.
As during previous sessions, senior officials of Asia’s two biggest economies will discuss how to expand financial cooperation. But, if realized, a major topic of the forthcoming meeting may be the impact of trade friction on their economic and fiscal management policies.
The United States and China, the world’s two largest economies, are now embroiled in a trade war, with Washington raising the stakes on Wednesday by announcing it will increase its planned tariffs on $200 billion in Chinese goods from 10 to 25 percent.
The Japanese and Chinese officials will also likely discuss details of a bilateral currency swap line to be used in the event of a financial crisis, which both sides have agreed to resume at an early date.
A previous currency swap deal was not extended and expired in 2013 as bilateral relations soured over a dispute over the sovereignty of a group of small islands in the East China Sea.
As China has agreed to grant Japanese financial institutions a 200 billion yuan ($29 billion) quota to invest in yuan-denominated stocks and bonds, the officials are expected to discuss the specifics of that plan during the dialogue.