Sliding Japan economy ratchets up pressure at APEC

Sliding Japan economy ratchets up pressure at APEC

SUZHOU, China (Reuters): Top Asia-Pacific officials struggling
to send a strong policy signal to global markets were dealt
another blow on Friday as data confirmed Japan's economy --
already a drag on the region -- was still floundering.

APEC deputy finance ministers and central bankers are holding
talks in the eastern Chinese city of Suzhou to hammer out an
agenda for a weekend meeting of finance ministers which they hope
will produce tools to combat the slump in the global economy.

The mood of the Asia Pacific Economic Cooperation financial
forum has been dampened by the sluggish U.S. economy and global
high-tech slump which have crimped Asian exports, driving
Singapore into recession and Hong Kong and Japan to its brink.

"It would be a lie if we said sentiment was good," said one
Asian delegate.

The one bright spot at the APEC forum on Friday could turn out
to be a bilateral meeting on the sidelines of the event between
Chinese Finance Minister Xiang Huaicheng and his Taiwan
counterpart Yen Ching-Chang.

That meeting, scheduled for 6 p.m. (5 p.m. Jakarta time),
would be the highest level contact between the two political
rivals since a key government advisory panel in Taipei called
last month for a decades-old ban on direct trade links to be
dropped.

Taiwan's foreign minister, however, has played down the
meeting as a matter of APEC protocol.

Deputies were expected to wind up talks by midday on a draft
declaration for finance ministers that China's Vice Finance
Minister Jin Liqun, chairing the meeting, has said would "give a
very strong signal to international markets".

"Overall, I can say the ministerial statement would reflect
the concerted efforts and the consensus by ministers to help
promote regional growth and development," Jin told reporters.

In addition to the global slump, the talks have focused on
corporate governance, the development of Asian debt markets,
electronic finance and a report calling for better transparency
from credit rating agencies.

The last was put forward by a committee chaired by the
Philippines which has studied rating agencies and their
methodologies since the 1997 economic crisis saw some Asian
ratings plunge and caused volatile swings in capital flows.

The aim was not to ask agencies to upgrade any APEC economy,
but for them to make clear how they evaluate economies and
companies and what weightings different factors get, so investors
can use the ratings better, said an Asian delegate.

The 21 economies span the spectrum from the world's biggest
economies in the United States and Japan to crisis-ridden
Indonesia and impoverished Papua New Guinea. South American
economies are suffering from Argentina's debt crisis.

Analysts are skeptical the diverse grouping can overcome its
differences, especially in the face of dire economic conditions.
Tokyo's latest growth data -- labeled as severe by Finance
Minister Masajuro Shiokawa -- simply added to their burden.