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Japan, U.S. must talk with China over Asian investment bank: IMF chief

July 29, 2014

Holding dialogue with China over its plan to set up a new infrastructure bank will help quell concerns Japan and the United States have regarding Beijing's initiative, International Monetary Fund Managing Director Christine Lagarde said Tuesday.

Lagarde told a group of reporters that Tokyo and Washington should "talk and cooperate" with Beijing about the planned establishment of the China-initiated "Asia Infrastructure Investment Bank."

Her remarks come amid Japanese and U.S. concerns that China could use the bank to expand its political clout and violate rules of the global financial system.

Lagarde said she sees the initiative as "obviously for the purpose of financing infrastructure."

"There has to be cooperation between the various players" in building a new entity, she said. "What we are learning from all the exercise of multilateral surveillance, spillover work, is that people have to work together."

She noted as an example how the IMF helped when Brazil, Russia, India, China and South Africa -- the so-called BRICS major emerging economies -- were at the planning stage of creating a mechanism whereby they could swap foreign currency.

Lagarde said she also plans to discuss ways to push for more women to be active in the workforce when she visits Japan in September to attend an international conference of female leaders in Tokyo modeled after the annual World Economic Forum in Davos, Switzerland.

The first female leader of the Washington-based organization said Prime Minister Shinzo Abe "has taken the right action to bet on women in Japan," pushing for more female participation in society, and urged the Japanese government to "allocate the right budget" to childcare centers.

Abe has set a goal of raising the proportion of women in leading positions to at least 30 percent by 2020.

Turning to Ukraine, Lagarde said the IMF will consider reviewing its aid package to the country if fighting between Ukrainian forces and pro-Russia rebels is prolonged.

At the moment, the IMF has no plans to provide additional aid.

In March, the IMF reached a staff-level agreement with Ukraine on a stand-by arrangement worth up to $18 billion to help the cash-strapped country out of its economic quagmire.

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Source: Japan Economic Newswire

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