Developing Asia to Outperform World Economy
Twenty Three Nations Sign Accord on Asian Highway Network
FTAs Good for Multilateral Process: Asia-Pacific Trade Ministers
Asian Nations Seel Common Cultural Ground
Cambodian PM on Win-Win for ASEAN, East Asia
As Asia Seeks Common Prosperity, China Promises Opportunities for Neighbours
Asean Puch for Priority Integration
IMFWelcomes Asia Bond Initiative
Journalists Mull Asian Integration
Asia, Oceania Banks Plan Local Currency Bond Fund
East Asia Can Rival the West
ADB and SAARC Sign MoU for Cooperation
ARF Senior Officials Meeting in Myanmar
Japanese Ministry Eye Pan Asian Oil Framework
New Round of Japan Thai FTA Talks Begin
Asian Collective Approach on GM Food
ASEAN Finance Ministers Focus on Integration
Japan, China Agree on Regular Meetings including South Korea

 

 

 

 

 

 

 

 

 

Developing Countries to Outperform World Economy

ADB News Release
April 28, 2004

Expanding intraregional trade and strong consumer demand will push economic growth in developing Asia to 6.8% in 2004 making the region the most dynamic growth area in the world, the Asian Development Bank (ADB) says in a major report released today.

In its flagship annual economic publication, Asian Development Outlook (ADO), launched at a press conference in Seoul, the Manila-based ADB says growth in 2003 was better than expected, reaching 6.3% despite uncertainties about the Iraq conflict, high oil prices, the outbreak of severe acute respiratory syndrome (SARS), and a slow recovery in major industrial countries during the first half of the year. The ADO analyzes and forecasts economic trends for each of the 41 developing economies in the Asia and Pacific region.

"Rapid growth in the People's Republic of China (PRC) is the driving force behind expanding intraregional trade," says ADB Chief Economist Ifzal Ali. "The economies of East and Southeast Asia have benefited greatly from the rise in Chinese imports and although PRC growth will likely settle to more sustainable rates in 2004, intraregional trade will continue to boost growth in developing Asia over the next two years."

Besides expanding intraregional trade, the second driver of Asian growth is consumer demand. Consumer spending in 2003 was an important boost for many economies in East and Southeast Asia, in particular PRC, Indonesia, Malaysia, Philippines and Thailand.

In a noteworthy development, similar changes are occurring in South Asia, particularly in India.

"The increasing importance of consumer demand in GDP growth has been supported in most countries by expansionary fiscal policies, and a low interest rate environment associated with accommodative monetary policies," says Mr. Ali.

"An expanding urban middle class and the relatively young age structure of populations are fundamentally changing consumption behavior throughout developing Asia," says Mr. Ali. "Confidence is high in the economic outlook for the region."

The ADO says developing Asia will achieve aggregate GDP growth of 6.7% in 2005. The major economies of People's Republic of China, India, Thailand and Viet Nam will continue to lead the region's growth.

"This dynamic growth will create unique opportunities for developing Asia to expand its fight against poverty, to reduce economic inequality and to implement policy reforms that will attract business investment to help make this growth sustainable," says Mr. Ali.

Potential risks to Asia's bright economic outlook include the threat of terrorism, epidemics such as SARS and avian flu, and imbalances in the recoveries in industrial countries, according to the ADO.

Regional risks include an abrupt slowdown in PRC to contain overheating of investment which could impact negatively on the pace of growth of intraregional trade. In addition, the rapid accumulation of international reserves in the region could lead to unbridled liquidity expansion. This could create the conditions for a new financial crisis.

Intraregional trade and strong consumer demand, accompanied by a pick up in business investment will define the outlook in 2004-2005, the report says.

The special theme chapter of ADO 2004, Foreign Direct Investment in Developing Asia, examines the trends and impacts of this important form of investment in the region as well as identifies reforms needed to attract foreign direct investment.

Economic performance in the next two years is expected to improve in East Asia, Southeast Asia and South Asia, while it is forecast to remain somewhat level in Central Asia and the Pacific. The subregional breakdowns follow:

East Asia: Aggregate GDP expanded by 6.5% in 2003, which was stronger than expected despite SARS and other factors. The prospects for 2004-2005 are bright with average growth expected to increase to 6.9% in 2004, the highest rate in four years, and 6.8% in 2005. Economic conditions varied between economies in the subregion with PRC leading with growth at 9.1%, bolstered by buoyant domestic demand, booming exports and surging foreign direct investment (FDI). PRC will stand out in 2004; and 2005 with growth of 8.3% and 8.2% respectively. In Hong Kong, China; Republic of Korea and Taipei,China domestic demand is expected to pick up as well as export growth for 2004 and 2005.

Southeast Asia: Despite a series of external shocks, aggregate GDP for Southeast Asia expanded by 4.6% in 2003, more than half a percentage point faster than anticipated. GDP is expected to accelerate to 5.7% in 2004, and moderate slightly to 5.4% in 2005. Thailand and Viet Nam, which posted strong and broad-based growth in 2003 are expected to be among subregion's leading economies in 2004 and 2005. Cambodia and Lao People's Democratic Republic remained relatively robust. GDP growth remained moderate in Indonesia and the Philippines. Singapore's economy is expected to recover in 2004 and 2005.

South Asia: GDP growth for the subregion rebounded to a record high of 6.9% in 2003, well above the 5.7% recovery projected. Growth in South Asia is projected to edge up to 7.0% in 2004 and to 6.9% in 2005, with virtually all countries boosting performance. This forecast assumes that the breakthrough cooperative efforts that India and Pakistan started in 2003 to assure peaceful relations are continued and that there is no deterioration in the security situations in Afghanistan, Nepal, and Sri Lanka. India's GDP growth outlook is buoyant while Pakistan will see stronger growth in 2004 and 2005.

Central Asia: GDP growth in 2003 in the six Central Asian republics (CARs) as a group is estimated to have been 8.4%, well above the 5.8% projection made in ADO 2003. In all countries GDP grew by more than had been forecast. GDP growth rate is forecast at 8.1% in 2004 and 8.4% in 2005. The oil and gas sector will continue to drive growth in the three hydrocarbon-producing countries. While some weakening in oil and gas prices is foreseen in 2005, an expansion in production volumes should offset this.

The Pacific: The economic performance of the Pacific subregion in 2003 was generally good, as the aggregate GDP growth of the Pacific was an estimated 2.7%. GDP in the subregion is expected to increase by 2.9% in 2004 and by 2.4% in 2005. All Pacific developing member countries are struggling with fiscal governance and public administration reform issues, the need to create an environment enhancing private sector development, and the necessity to improve local capacity and institution building.

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Twenty Three Nations Sign on Accord on Asian Highway Network
UNESCAP Press Release
April 26, 2004

Exceeding early estimates, 23 Asian countries signed an international agreement for completing a transcontinental network of standardized roadways, at a Shanghai meeting of the UN Economic and Social Commission for Asia and the Pacific (UNESCAP).

"From Tokyo to Tehran, from Singapore to Samarkand, and from points beyond to those in between, the network now spans 32 countries and encompasses more than 140,000 kilometres", United Nations Secretary-General Kofi Annan said in a message delivered to the signing ceremony at the UNESCAP economic summit in Shanghai.

The completed highway will further facilitate border-crossing for people, vehicles and goods, and also impart crucial benefits to landlocked countries, as provided for in a United Nations conference last August in Alamaty, Kazakhstan, the Secretary-General noted. His message was delivered by UNESCAP Executive Secretary Kim Hak-Su to ministerial-level Asian leaders at today's signing ceremony.

Bangkok-based UNESCAP has been negotiating routes and road specifications for the network since 1992. The text of an agreement for upgrading sub-standard stretches and making provisions for new routes was agreed by 32 participating countries in November of 2003. At that time, United Nations officials estimated that 10-15 nations would have completed the necessary approval processes to be ready to sign at the UNESCAP annual meeting in April 2004. Last week, up to 20 signings were projected.

The early show of support for the project "clearly demonstrates the desire and capacity of Asian countries to work together, now and for the future, to achieve common goals", said UNESCAP Executive Secretary Kim.

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FTAs Good for Multilateral Processes: Asia Pacific Trade Ministers
Xinhuanet
April 25, 2004

Following the failure of the WTO ministerial meeting in Cancun, Mexico, due to gaps in agricultural subsidies, trade ministers attending the Boao Forum for Asia annual conference fixed their eyes on free trade areas (FTAs) and regional trade arrangements (RTAs). Jim Sutton, minister for trade negotiations of New Zealand, said regional and bilateral FTAs could serve as "building blocks" rather than stumbling blocks for the multilateral process. He said to find the balance to allow all 148 WTO members to agree to a successful outcome was a pressure for the three-year timeframe of the Doha round. "This is where regional agreements and bilateral FTAs can help support the multilateral process."

Click here to read the full Article: http://news.xinhuanet.com/english/2004-04/25/content_1439193.htm

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Asians Nations Seek Common Cultural Ground
Xinhuanet
April 25, 2004

As the largest continent on the globe with vivid, colorful and diverse cultures among it nations, the Asia continent is becoming increasingly aware to seek common cultural identity on the stage of the world.The growing trend is exemplified by a round table meeting on cultural exchange and cooperation between Asian nations at the 2004 annual conference of the Boao Forum for Asia (BFA). The forum with vivid economic traits for the first time this year initiated such a session on cultural cooperation. Abul Hossain, a member of the Advisory Council of BFA from Bangladesh, said the cultural exchange and cooperation among countries not only bring them closer, but also contribute largely in boosting the economies of respective countries. With nearly 1,000 ethnicities scattered in a vast land area of over 44 million sq km, Asia civilization has long been distinguished as a melting pot of diversified cultures in history, but the continent seldom posed as a whole in culture on the global stage, though there are frequent cultural exchanges and cooperation between nations.

Click here to read the full Article: http://news.xinhuanet.com/english/2004-04/25/content_1439355.htm

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Cambodian PM for Win-win for ASEAN, East Asia

Xinhua net
April 24, 2004

Cambodian Prime Minister Hun Sen Saturday called on Asian countries and regions for efforts to ensure peace, security, stability, sustainable development, shared prosperity and co-existence in a harmonized regional community in the spirit of sharing and solidarity, while marching toward integration and mutually beneficial cooperation.This is the main objective of these countries and regions against the backdrop that the 21st century has brought and will bring about a profound metamorphosis in the political, economic and social fabric and landscape of Southeast Asia and East Asia asa whole, Hun Sen said at the annual conference of the Boao Forum for Asia, which opened here Saturday morning.

Click here to read the full Article: http://news.xinhuanet.com/english/2004-04/24/content_1438172.htm

 

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As Asia Seeks Common Prosperity, China Promises Opportunties for Neighbours
Xinhuanet
April 24, 2004

China Saturday expounded itscommitment to Asian cooperation and economic integration and suggested its neighbors seize the opportunities arising from the country's rapid economic growth. "China's development cannot be achieved in isolation of Asia, and Asia's prosperity also needs China," said Chinese President HuJintao while addressing the annual conference of an influential international forum on Asian development, which opened in China's southernmost island province of Hainan Saturday morning. More than 1,000 political VIPs, government ministers, business leaders and scholars from 35 countries and regions attended the 2004 annual conference of the Boao Forum for Asia (BFA), the thirdof its kind since the non-governmental forum's founding in 2001.

Click here to read the full Article: http://news.xinhuanet.com/english/2004-04/24/content_1438143.htm

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ASEAN Push for Priosity Integration

April 21, 2004
ASEAN Media Statement

The ASEAN Economic (AEM) and Investment (AIA) Ministers jointly held their Retreat in Sentosa, Singapore on 21 April 2004 to review the progress made in the implementation of various initiatives mandated by the Leaders to move towards the ASEAN Economic Community.

Focussing on the integration of 11 priority sectors, the economic ministers tasked the Senior Officials (SEOM) to negotiate and finalize the all the roadmaps for endorsement of the Ministers in September 200.The 10th ASEAN Summit has been targeted for the signing of the legally-binding agreements to implement the measures to integrate the 11 priority sectors. In this direction the Ministers endorsed a general approach for the negotiations and finalization of the roadmaps.

The 11 priority integration sectors and their respective Country Coordinators are Indonesia: wood-based and automotive products; Malaysia: rubber-based products, and textiles and apparels; Myanmar: agro-based products and fisheries; The Philippines: electronics; Singapore: e-ASEAN and healthcare; and Thailand: air travel and tourism.

Another important focus with regard to deepening regional cooperation was the review on the progress made on ASEAN negotiations for FTAs (free trade arrangements) and CEPs (closer economic partnerships) with Dialogue Partners. As per The Strait Times (February 22, 2004), Singapore's Trade and Industry Minister George Yeo told a news conference after the meeting: 'The economic ministers will be recommending to Asean leaders that we should work on the launch of a free trade agreement with Australia and New Zealand.' Australia and New Zealand are currently Dialogue Partners of ASEAN.

The process could be initiated by inviting the leaders of the two countries, which are themselves linked by an FTA known as the Closer Economic Relations grouping, as mentioned previously.

This could auger well for ASEAN’s integration with other countries in Asia, which are associated with it through the ASEAN Regional Forum, thereby leading forward to a larger free trade area with in the Asian continent.

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IMF Welcomes Asia Bond Initiative

IMF Press Release
April 18, 2004

The International Monetary Fund displaying a positive approach towards the Second Asian Bond Fund Initiative welcomed the progress on the development of its second phase. David Burton, Director of the International Monetary Fund's Asia and Pacific Department issued a statement today with reference to the release of a progress report on the development of the second phase of the Asian Bond Fund initiative (ABF2), which will invest in local currency denominated Asian bonds, by the the Executives' Meeting of East Asia and Pacific Central Banks (EMEAP) Group.

Mr Burton said, “The establishment of ABF2 represents another important step in strengthening regional financial cooperation in East Asia and in promoting the development of bond markets. The ABF2 will help to encourage the development of index bond funds in regional markets; it can also be a useful catalyst for the improvement of domestic bond markets and for greater harmonization of bond market infrastructure and legal, regulatory, and tax arrangements across the region,"

The EMEAP Group comprises 11 central banks and monetary authorities in the East Asia and Pacific region, including Australia, China, Hong Kong SAR, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, and Thailand.

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Journalists Mull Asian Integration

The Japan times
April 17, 2004


It was Mahatma Gandhi who said friendship that insists upon agreement on all matters is not worth the name. Journalists from Asia and Europe who took part in a recent symposium here probably walked away sharing this view after four days of discussions on issues that included whether and how cooperation among nations could lead to greater stability and prosperity in a globalizing world. The 2004 EU-Japan-Asia Journalists Conference, co-organized by the Delegation of the European Commission in Japan and the Asia-Europe Foundation, expanded the traditional Japan-Europe forum launched in 1987 to include other parts of Asia. This effectively helped broaden the discussions, which touched on such topics as regional integration and economic development. "The European Union is convinced that a certain amount of integration is necessary" for enhanced intergovernmental cooperation, said Ambassador Bernhard Zepter, head of the Delegation of the European Commission in Japan.

But many participants agreed the EU model was just one option for regional cooperation and need not be the only choice for Asia, should the region decide to pursue stronger bonds.

Click here to read the full Article: http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20040417b4.htm

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Asia, Oceania Central Banks Plan Local Currency Bond Fund
The Japan Times
April 15, 2004

East Asian and Oceanian central banks are set to launch by as early as the end of the year a fund that will invest in Asian currency-denominated government bonds, international financial sources said Wednesday. It will be the second fund established by the 11-member Executives' Meeting of East Asia-Pacific Central Banks to foster local bond markets in the region, the sources said. The second Asian Bond Fund will pool at least $1 billion in foreign reserves of the economies in the region, and will be marked to be the first to invest in local currency-denominated bonds issued by Asian governments or state enterprises, they said.

Click here to read the full Article: http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20040415a2.htm

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East Asia Can Rival the West
Daily Express News, Malaysia
April 14, 2004

East Asia could evolve into a Regional Economic Entity which could rival Europe and the Americas with appropriate regional strategies and policies, said International Trade and Industry Minister Datuk Seri Rafidah Aziz here Tuesday. East Asia, she said could be a vast market, providing various investment and manufacturing options to the region’s investors and entrepreneurs.

Notwithstanding the vast potential for greater economic collaboration within the region, she said that the pace at which regional integration is evolving was still “not fast enough and not comprehensive enough.” Speaking at the opening of the East Asia Business Council meeting, the Minister said initial moves towards East Asian integration was marked by indecisiveness, and constrained by factors other than economic. But the Asean Plus Three process has moved forward efforts to bring about greater economic cooperation, particularly in expanding business collaboration.

Click here to read the full Article: http://www.dailyexpress.com.my/news.cfm?NewsID=26116

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ADB and SAARC Sign MoU on Cooperation
April 12, 2004
ADB News Release

ADB and the South Asian Association for Regional Cooperation (SAARC) today signed a Memorandum of Understanding that aims to strengthen cooperation between the two institutions.The memorandum, signed by ADB Vice-President (Operations 1) Liqun Jin and SAARC Secretary-General Q.A.M.A. Rahim at ADB Headquarters in Manila, will help promote mutually interested regional programs/projects and help establish linkages with other regional initiatives.SAARC was established in 1985 by the heads of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka to accelerate economic growth, social progress, and cultural development in the region collectively. The 12th SAARC Summit held in Islamabad in January adopted the Islamabad Declaration that paved the way for accelerated regional cooperation among the member countries.

"Given the strong commitments of all heads of states of SAARC and continuing improvements in relations between its member countries, entering into an MOU with SAARC will enable ADB to further promote regional cooperation for peace and security, and ultimately poverty reduction," says Mr. Jin.

"Through this, ADB hopes to play a catalytic role in identifying and promoting regional cooperation initiatives in partnership with the SAARC Secretariat."

In line with the memorandum, ADB plans to provide a regional technical assistance in helping the SAARC Secretariat for identification of priority cooperation areas and in realization of the regional cooperation agenda as outlined in the Islamabad Declaration.

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ARF Senior Officials Meeting in Myanmar
Xinhua Net
April 13, 2004

The Intersessional Support Group Meeting of ASEAN Regional Forum (ARF) on confidence-building measures ended here Tuesday, adopting the summary report of the co-chairs. The second annual meeting for the year 2003-04, co-chaired by the Foreign Ministries of Myanmar and China, was attended by foreign and defense officials of 22 ARF members out of 23 including the 10-member Association of Southeast Asian Nations (ASEAN) and its dialogue partners -- China, Japan and South Korea as well as Australia, Canada, the European Union, India, New Zealand, Russia and the United States. At the meeting, the participants exchanged views on the current international and regional security situation and cooperation in non-traditional security aspects as well as future development direction of the ARF.

Click here to read the full Article: http://news.xinhuanet.com/english/2004-04/13/content_1416873.htm

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Japanese Ministry Eyes Pan Asian Oil Framework
The Asahi Shimbun
April 13, 2004

The trade ministry recommended Monday the establishment of a pan-Asian framework to provide member nations with oil during exceptional supply disruptions, officials said. The proposal forms the centerpiece of a Ministry of Economy, Trade and Industry report outlining recommendations for international strategies to secure energy until 2030, submitted the same day to the Advisory Committee for Natural Resources and Energy, an advisory panel to the trade minister. The ministry, noting Asia's quickly escalating energy consumption, suggests there is growing need to create a regional version of the International Energy Agency. The IEA is an organization comprised mainly of Western countries that provide oil to each other when supplies are disrupted due to international conflicts or other extraordinary circumstances.

Asian countries lack an international framework for emergency energy supplies at the regional level.

Click here to read the full Article: http://www.asahi.com/english/business/TKY200404130117.html

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New Round of FTA Thai Talks Begins
The Japan Times
April 8, 2004

Japan and Thailand kicked off a new round of talks to tear down trade barriers between the countries, officials said Wednesday, the latest in a flurry of free-trade negotiations in the region.

Click here to read the full Article: http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20040408b1.htm

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Asian Collective Approach on GM Food

The Financial Express
April 8, 2004

Experts have urged the governments of Asian countries to develop a collective approach and coordination in view of the import regulations for genetically modified (GM) food becoming a contentious issue in global trade. Inaugurating the second conference on biotechnology for Asian development in Capital on Wednesday, deputy chairman of the Planning Commission KC Pant said, “at present there are very few countries where production and import of GM crops are completely legalised. Various WTO committees like committees for sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) are discussing issues like traceability and labelling, equivalence and precautionary principles. I believe that a collective thinking and coordination by Asian countries at these committees and other fora would be fruitful as GM food import has become a contentious issue.”

He said, “several Asian countries have built impressive institutional infrastructure and capability in different areas of applications of biotechnology. These countries can fruitfully cooperate in various ways to exploit their synergies and expertise for mutual benefit.”

Click here to read the full Article: http://www.financialexpress.com/fearchive_frame.php April 8, 2004, Economy

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ASEAN Finance Ministers Focus on Integration
ASEAN Press Release
April 7, 2004

The ASEAN Finance Ministers’ Meeting was held in Singapore on April 7, 2004. In the meeting the Ministers discussed the recent global economic developments, performance of ASEAN economies in 2003 and outlook for this year. They also reviewed the progress of the implementation of the Roadmap for Integration of ASEAN in Finance that was adopted by the ASEAN Leaders in October 2003 and other regional finance cooperation initiatives including customs, insurance, taxes and regional self-help and support mechanisms.

After discussing the recent economic developments, the ministers expected the region to grow faster in 2004 with a projected GDP growth of 5.5 to 5.9 percent.

One of the focus areas of the meeting was to review the road map for ASEAN integration. The ministers accounted for the progress made in the areas of capital market development, capital account liberalization and financial services liberalization. Thereafter, they agreed to set up a task force to explore ways to forge alliances and linkages within the ASEAN securities markets. They also agreed to organize promotional efforts to profile ASEAN better.

On the regional self-help and support front, the ministers announced the successful conclusion of four bilateral swap arrangements (BSAs) under the Chiang Mai the plans to expand to sixteen agreements with a combined size of USD 36.5 billion.

The Ministers also noted the progress made in fostering domestic and regional bond markets under the Asian Bond Markets Initiative (ABMI) in collaboration with our Plus Three partners.

They expressed pleasure with the overall progress achieved towards regional integration, and committed to further strengthen their cooperation to expedite the implementation of significant initiatives such as the Roadmaps, the CMI and the ABMI. They also underscored the importance of continuous efforts to further develop and strengthen the financial markets and to achieve the objectives of regional cooperation towards financial stability and integration

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Japan, China Agree on Regular Meetings Including South Korea
The Japan Times
April 5, 2004

Foreign Minister Yoriko Kawaguchi said Sunday she has agreed with Chinese Foreign Minister Li Zhaoxing to hold regular trilateral dialogue involving China, Japan and South Korea to strengthen cooperation on regional issues. Kawaguchi also said she had meaningful talks with Chinese leaders on bilateral issues, including the dispute over the Senkaku Islands in the East China Sea, and said the countries' failure to arrange reciprocal visits by their leaders does not damage the relationship. Japan and China "basically agreed to hold (trilateral) dialogue other than their talks being held on the sidelines of (meetings of) ASEAN," Kawaguchi told reporters, referring to her talks on Saturday night over dinner with Li. Japan and China hope to hold the trilateral talks once a year, she said.

Click here to read the full Article: http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20040405a1.htm

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