JAPAN-CHINA-KOREA TRILATERAL SUMMIT FOCUSES ON

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 003416 SIPDIS TREASURY FOR IA FOSTER, WINSHIP, DOHNER E.O. 12958: DECL: 12/15/2018 TAGS: ECON EFIN PARM CH KS KN JA SUBJECT: JAPAN-CHINA-KOREA TRILATERAL SUMMIT FOCUSES ON FINANCIAL CRISIS AND REGIONAL COOPERATION Classified By: Ambassador J. Thomas Schieffer; reasons 1.4 (b/d) ¶1. (U) Japanese Prime Minister Taro Aso hosted Chinese Premier Wen Jiabao and South Korean President Lee Myung Bak at a one-day summit in Dazaifu, Fukuoka on December 13. The three leaders issued joint statements that focused on "future-oriented comprehensive cooperation" in economic, political, and social arenas. Specifically, discussions centered on increasing regional financial cooperation to address the financial crisis, enhancing coordination in dealing with North Korea, strengthening cooperation in the fields of energy and environmental protection, and strengthening joint efforts in disaster management and preparation, among other issues. The three leaders decided to hold annual tripartite summits, with China hosting the next meeting in 2009. ¶2. (C) While the Leaders of Japan, China, and Korea have held tripartite meetings a reported eight times since 1999, they all took place on the margins of broader multilateral meetings. This meeting is the first time the three leaders came together expressly for a set of stand-alone discussions. While the meeting had been long-scheduled with a broad-based agenda, the onset of the global financial crisis resulted in a strong focus on regional economic cooperation. ¶3. (C) The three leaders released a two-page "Joint Statement on the International Finance and Economy" (sic) where they acknowledged global expectations that Asia "play a role as 'the center of world economic growth.'" Specifically, they: -- Welcomed the announcements made the previous day by the countries' central banks to increase their bilateral swap lines. The Bank of Japan and the Bank of Korea expanded an existing $3 bn (equivalent) yen-won bilateral swap to $20 bn through April 2009. The People's Bank of China and the Bank of Korea also agreed on a three-year RMB-won swap of up to 38 trillion won ($28 bn). (Note: Japanese Ministry of Finance (MOF) officials told FINATT that the initiative to expand the swap line had come from Korea, and that there never had been any discussion of expanding an existing $3 billion yen-RMB swap between Japan and China. According to MOF, the statement by the central banks went out a day earlier to avoid any slight to their independence. End Note.) -- Reiterated their commitment to work with ASEAN members to expedite the multilateralization of the Chiang Mai Initiative of bilateral swap arrangements, of which the swaps between Japan, China, and Korea are part. -- Welcomed that the three countries' Central Bank Governors would meet annually, with the People's Bank of China hosting in 2009. --Called for early agreement on the Fifth General Capital Increase of the Asian Development Bank. ¶4. (C) On North Korea, the three leaders shared their regret that Six-Party Talks had failed to codify a verification protocol on North Korea's nuclear declaration and stressed the importance of strengthened coordination on next steps. Aso also sought Chinese and South Korean backing in Japan's efforts to settle the longstanding stalemate over North Korea's abductions of Japanese citizens; Wen and Lee reportedly expressed their understanding of Japan's position. ¶5. (C) In discussions on disaster prevention, all sides agreed to enhance information sharing on projects, lessons learned, and new technologies. Mindful of this year's Sichuan earthquake, the three leaders called for stronger disaster management at the national, local, and community levels. They also agreed to hold annual trilateral disaster prevention meetings involving field experts and heads of government agencies; Japan would host the first meeting next year. ¶6. (C) In discussions on strengthening cooperation in energy TOKYO 00003416 002 OF 002 and environmental protection, the three agreed to launch an East Asia Climate Partnership to achieve economic growth and combat climate change. Environment Ministers will meet annually at the Tripartite Environmental Ministers, Meeting (TEMM) to assess progress and prepare collective measures to address energy, climate and environmental issues. ¶7. (C) Aso appeared to raise longstanding bilateral concerns in separate talks with each leader before the three party summit. Aso broached territorial claims and food safety with Chinese Premier Wen, according to several Japanese press reports. Aso protested the December 8 Chinese ship incursions into Japanese waters around the Senkaku Islands and warned about the potential adverse effects on bilateral ties. He also expressed hope in advancing talks on joint gas field development in the disputed East China Sea. SCHIEFFER