Japan to hold talks with China on IMF contributions

TOKYO Sat Apr 7, 2012 2:29am EDT

Japan's Finance Minister Jun Azumi attends the upper house budget committee session at the parliament in Tokyo March 23, 2012. REUTERS/Issei Kato

Japan's Finance Minister Jun Azumi attends the upper house budget committee session at the parliament in Tokyo March 23, 2012.

Credit: Reuters/Issei Kato

TOKYO (Reuters) - Japanese Finance Minister Jun Azumi said on Saturday Japan would hold high-level talks with China over contributions to the International Monetary Fund to help ease the euro zone debt crisis ahead of a G20 finance leaders' meeting in Washington.

The two nations have not yet decided whether to increase contributions to the IMF after the euro zone expanded its bailout capacity last month, Azumi told reporters after meeting his Chinese counterpart, Xie Xuren.

"Europe's problem has eased from a critical situation seen last year but it is not a situation where we can be optimistic. We need to watch the situation cautiously," Azumi told reporters.

"As for contributions to the IMF, we will hold high level talks towards the G20 meeting in Washington."

The European Union expects G20 leaders to agree to contribute more money to the IMF this month after Europe expanded its own bailout capacity to 700 billion euro from 500 billion.

Azumi also said he wants Japan and China to lead the global economy this year and Japan's economy will be able to achieve its goal of real growth rate of about 2 percent this fiscal year.

"It is Asia's economy that has to lead the global economy. Especially, the economies in Japan and China need to achieve steady improvement," Azumi said.

"The nation's domestic demand is improving considerably thanks to reconstruction demand," he added, referring to Japan. "There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad."

(Alters headline to eliminate direct reference to minister)

(Reporting by Kaori Kaneko; Editing by Ron Popeski)

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Comments (1)
Lending more money to the IMF will not solve the problem. Banks in the EU need to lend more for growth. A recent Wall Street Journal article pointed out what I have written for months: EU banks, corporations, and governments are hoarding cash instead of investing it. Banknotes in vaults cannot have sex with other banknotes to make more banknotes. The money must be invested in small businesses that produce the most new entrepreneurs with ideas and hire people for jobs with paychecks to make products and become customers and taxpayers.

China has invested in businesses in the EU to spur economic growth, and that is the best way to recover from economic and fiscal crises. China is unlikely to reverse its policy to create firewalls in banks because operating expenses and finance charges will devour the walls of cash. Lending for growth has risks, but it is the only way to create more wealth needed for recovery.

Apr 07, 2012 2:55pm EDT  --  Report as abuse
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