Trade war shadow over China, Japan dialogue

JAPAN and China agree that a trade war would have serious consequences for the world economy, Japanese Foreign Minister Taro Kono said yesterday, after a high-level economic dialogue between the world’s third- and second-largest economies.

Concern is growing about a trade row between China and the US in which the two nations have threatened each other with tariffs. Japan has been criticised by US President Donald Trump on trade, and been hit with tariffs on steel and aluminium, but it has not yet threatened counter-tariffs.

“We have shared understanding that a trade war, no matter which country has brought it about, would have a very large impact on the prosperity of the international economy,” Kono said after the first such dialogue in more than seven years.

Kono and the Chinese government’s top diplomat, State Councillor Wang Yi, co-chaired the Tokyo meeting. Wang is also foreign minister.

Financial markets have been roiled recently over fears that a full-blown US-China trade war could shatter global trade and economic growth.

Access Trade issues will likely be at the forefront of a summit between Japan’s Prime Minister Shinzo Abe and Trump later this week.

Tokyo is eager to avoid being pushed into talks on a two-way free-trade agreement aimed not only at market access, but at monetary and currency policies.

Kono also said it was possible that Japan will work with China on Beijing’s Belt and Road projects.

“It is quite possible that Japan co-operates with China on various (Belt and Road) projects on a case-by-case basis where international standards are met,” Kono said.

Chinese President Xi Jinping’s Belt and Road Initiative, unveiled in 2013, aims at building a modern-day Silk Road connecting China by land and sea to South-east Asia, Central Asia, the Middle East, Europe and Africa.

Abe and Xi pledged last year to reset the sometimes touchy relationship between Asia’s two largest economic powers.

Wang, who spent eight years in Japan as a diplomat, including three as ambassador, said the changing economic climate presented fresh opportunities.

“After reopening these talks, we’re both at new starting points to future co-operation that will, I hope, lead to fresh economic growth for both nations,” Wang said at the start of the economic dialogue.

Wang is the first Chinese foreign minister to visit Japan in a bilateral context in nine years. He and Kono discussed a range of issues. – Reuters