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INTERNATIONAL > East Asia & Pacific

Japan, China announce revival of currency swap pact

  • October 26, 2018
  • , Jiji Press , 1:30 p.m.
  • English Press

Beijing, Oct. 26 (Jiji Press) — The Japanese and Chinese governments announced Friday that the two Asian countries will reinstate their currency swap arrangement after a four-year hiatus.

Japan and China also agreed to set up dialogue between their industry ministers to hold consultations on industrial policies, they said.

The announcements came as Japanese Prime Minister Shinzo Abe and Chinese Premier Li Keqiang held talks in Beijing.

A new currency swap pact was concluded between the Bank of Japan and the People’s Bank of China. The accord will allow yen to be swapped for yuan and vice versa in times of a financial crisis, to keep the financial system stable.

The amount of funds covered by the arrangement was not made public but is believed to have been set at up to 3 trillion yen, 10 times larger than the amount under the previous pact.

The previous pact, concluded in 2002, expired in 2013 amid a deterioration in the bilateral relations due to tensions over the Japanese-administered Senkaku Islands in the East China Sea.

With momentum gathering for improvement in the relations, Tokyo and Beijing agreed to study reviving the currency pact when Premier Li visited Japan in May.

The Japanese and Chinese central banks also exchanged memorandums of understanding to exchange information on the establishment in Japan of a yuan clearinghouse, which settles the Chinese currency-denominated transactions outside China.

The dialogue between the industry ministers will be held between Japan’s Ministry of Economy, Trade and Industry and China’s Ministry of Industry and Information Technology on a regular basis.

The two countries will also start dialogue for cooperation in innovation with a view to pushing ahead with cooperation in the fields of technological innovation and intellectual property rights.

At the innovation dialogue, Japan will be represented by the Foreign Ministry and the industry ministry and the Chinese side by the National Development and Reform Commission and the Ministry of Commerce.

Moreover, the two governments agreed to work together in securities markets to promptly allow Japanese exchange-traded funds to be listed in China and Chinese ETFs in Japan, among other things.

Japan and China concluded an arrangement to mutually expedite and simplify customs clearance procedures.

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