China, Japan vie for East Asia financial surveillance post+

SINGAPORE, Dec. 11 Kyodo -
China and Japan are locked in a fierce tussle for the job to lead East Asia's
first financial surveillance office which will run a multi-billion dollar
currency swap scheme to ward off future regional financial crises, official
sources said this week.
The rivalry between the two Asian economic giants for the post has delayed the
appointment of the first director of the ASEAN-plus-three Macroeconomic
Research Office, or AMRO, which was initially scheduled to be carried out by
the end of this year.
It could also delay the opening of the AMRO office in Singapore in the first
quarter of next year.
The 10 member-countries of the Association of Southeast Asian Nations and their
three partners from East Asia -- Japan, China and South Korea -- are setting up
AMRO to run the $120 billion Chiang Mai Initiative Multilateralization scheme,
which was launched earlier this year.
The AMRO office is expected to monitor economic developments in the region and
also make urgent decisions on the activation of a reserve fund to help defend
regional currencies in times of financial turmoil, so as not to repeat the
1997-1998 Asian economic crisis.
Finance and central bank deputies from the 13 countries were supposed to decide
on the appointment of AMRO's director at their meeting in Xi'an, China, on Nov.
23-24 this year, according to the original schedule. But the meeting hit a
roadblock after Chinese officials attending the meeting opposed Japan's
candidacy.
As a result, a decision on the appointment of the AMRO director is not expected
until the next meeting of the ASEAN-plus-three finance and central bank
deputies in April next year.
Their finance ministers are then expected to announce the appointment of the
director in May next year when they meet on the sidelines of the annual general
meeting of the Asian Development Bank in Hanoi.
The sources said the Japanese candidate is a high-ranking official with a
doctorate from a prestigious foreign university who has experience heading the
international section of Japan's Finance Ministry. Also vying for the post are
candidates from China, South Korea and Thailand.
ASEAN's backing of the Thai candidate is seen as a consolation to Bangkok,
which was edged out by Singapore in its bid to host AMRO earlier this year.
However, the sources said that they expect the race to soon narrow down to a
clash between China and Japan, which wield the most powerful influence in the
region that could sway the consensus among the 13 countries.
''Japan and China are fighting for it, China and Japan are both rivals in the
arena,'' said an ASEAN official on condition of anonymity.
Japan has been pushing strongly for its own candidate this past year and at one
stage had even appeared to gain the support of China, the sources said.
China, after facing strong pressure from the international community on the
revaluation of the yuan and embroiled in a diplomatic spat with Japan, appeared
to change its mind and decided to push for its own candidate, they said.
The head of AMRO is widely expected to come from one of the three East Asian
countries because they are the biggest contributors to the scheme, providing 80
percent of the $120 billion reserve fund.
Japan and China are the top contributors to the Chiang Mai Initiative's swap
scheme, each committing 32 percent of the total $120 billion. However, Japan is
the single biggest contributor as 3.5 percent of China's share comes from Hong
Kong. South Korea is contributing 16 percent.
According to the job description provided by the Jakarta-based ASEAN
Secretariat, the AMRO director, who is expected to serve a three-year term,
will have to ensure efficient economic and financial surveillance of the 13
countries and manage organizational, administrative and financial matters, as
well as provide quarterly updates on the macroeconomic situation of the region.
Earlier this year, the decision to locate AMRO in Singapore was also bogged
down by fierce competition and a decision could only be reached at the last
minute after months of wrangling among Singapore, Malaysia and Thailand to host
AMRO. Singapore was finally chosen to host AMRO.
The sources said the delay has also held back the appointment of the head of
the Credit Guarantee Investment Facility, a trust fund with an initial capital
of $700 million, which the ASEAN-plus-three finance and central bank deputies
agreed to establish earlier this year to provide guarantees for local
currency-denominated bonds issued by companies in the region to promote the
bond markets.
They said the CGIF head's appointment could only be determined after the AMRO
director's post has been settled to give a fair chance to candidates from the
other countries involved.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.
==Kyodo