South Korea, China and Japan have agreed to hold a finance minister meeting in Yokohama, Japan, on May 5. All eyes are on whether South Korea will be able to have the two-party talks with China over the retaliation for the U.S. Terminal High Altitude Area Defense (THAAD) system and the three countries will reach an agreement on how far each country will support the Chiang Mai Initiative Multilateralisation (CMIM), a multilateral currency swap arrangement among the ten members of the Association of Southeast Asian Nations (ASEAN), South Korea, China and Japan.
According to the Ministry of Strategy & Finance (MOSF) on April 6, South Korea, China and Japan agreed to hold the finance minister meeting in Yokohama, Japan, on May 5 at the official meeting of finance ministers of the ASEAN+3 countries and central bank governors in Cebu of the Philippines. This is the first gathering of the three countries’ finance ministers since the ASEAN+3 countries finance ministers and central bank governors meeting held in Frankfurt, Germany, in May last year.
An official from the MOSF said, “It is meaningful in that it is the gathering of the economic heads of South Korea, China and Japan at the moment when the three countries have the estranged relationship.” In particular, it remains to be seen whether South Korea can make up with China, which continuously takes economic retaliatory steps over the deployment of the THAAD system in South Korea through the two-party talks.
In addition, attention is focused on whether the three countries will reach an agreement on expanding individual supports for the CMIM. The CIMI with the total size of US$ 240 billion is the currency swap that supports liquidity in case of financial crisis. However, many experts said that the amount of money that can be used under the agreement of the countries should be increased from the current 30 percent to 40 percent. Finance ministers of the ASEAN+3 countries and central bank governors discussed the issue at the latest meeting but failed to reach an agreement. Accordingly, the issue will be discussed again at the finance minister meeting next month.