The First Korea-China-Japan Trilateral Finance and Central Bank Deputies’ Meeting of this year, along with the ASEAN+3 (Korea, China, and Japan) Finance and Central Bank Deputies’ Meeting, was held via videoconference on April 8. The meeting had originally been scheduled to be held in person in Manila, the Philippines, the co-chair country; however, it was converted to a videoconference following the Philippines’ declaration of a national energy emergency.

At the Trilateral Meeting chaired by Deputy Minister for International Affairs of the Ministry of Finance and Economy Moon Ji-sung, participants shared their assessments of the economic impact of the recent conflict in the Middle East, as well as the current policy responses of their respective governments. Deputy Minister Moon also noted that the Middle East conflict constitutes a common risk for the three countries and proposed that they closely coordinate by sharing their policy responses in real time.

At the subsequent ASEAN+3 Meeting, participants discussed regional economic developments and policy directions, as well as key financial cooperation agenda items, in preparation for the ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting to be held in May.

On economic conditions, the ASEAN+3 Macroeconomic Research Office (AMRO), the Asian Development Bank (ADB), and the International Monetary Fund (IMF) provided an overview of recent economic trends and outlook, as well as key risk factors.

Deputy Minister Moon underscored the importance of regional economic and financial cooperation amid heightened global uncertainty, while also sharing Korea’s policy responses. In particular, he explained that, following the onset of the Middle East conflict, the Korean government has activated an emergency response framework and is actively deploying an optimal policy mix by mobilizing all available policy tools, including the implementation of a price cap on petroleum products and the formulation of a KRW 26.2 trillion supplementary budget without issuing additional government bonds, in order to stabilize prices and supply chains and support vulnerable groups. He also suggested that, despite the prevailing uncertainty, efforts to prepare for the post-Middle East conflict environment should be accelerated, including advancing the transition to a green economy and diversifying supply chains, and emphasized the need for a detailed analysis of the potential impact of supply chain shocks on the regional real economy and financial markets.

Regarding regional financial cooperation, discussions focused on reforming the funding structure of the Chiang Mai Initiative Multilateralization (CMIM) – the region’s financial safety net – with a view to enhancing its effectiveness, including a transition from the current multilateral currency swap arrangement to a paid-in capital mechanism.  

The matters discussed at this Deputies’ Meeting are expected to be finalized at the Trilateral and ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meetings to be held in Samarkand, Uzbekistan, in May.

Please refer to the attached files.