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Japan and China to discuss AIIB in June

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Japan and China plan to hold finance discussions in Beijing in June, which could include topics such as the China-led Asian Infrastructure Investment Bank (AIIB), Finance Minister Taro Aso said on Tuesday.

The talks would mark the first bilateral finance dialogue since Prime Minister Shinzo Abe took office in late 2012 as diplomatic relations have been strained between the two countries over the wartime past and territorial disputes in the East China Sea.

Japan and China have held the finance talks four times since their first meeting in 2006, aimed at deepening financial cooperation. Discussions have included senior officials from the international bureau as well as budget, tax and other bureaus.

No specific agenda has been set for the June meeting, but issues including the AIIB, China's yuan and shadow banking are likely be discussed, Aso told reporters after a cabinet meeting.

"China is becoming a major economic power in Asia. There are various issues to discuss between the two countries, such as the yuan, finance and shadow banking," Aso said.

Asked whether the AIIB would be discussed during the meeting, Aso said: "We've told China the same things (concerns) all along but we did not receive responses from them by the end of March ... We would tell them the same if I discuss the AIIB with (Finance Minister) Lou Jiwei."

More than 40 countries have applied to join the AIIB, with the United States and Japan as notable absentees.

Japan shrugged off the March 31 deadline to become a founding member of the Beijing-based institute, arguing that it would attach greater importance to conditions being met to ensure its credible governance, rather than when to join.

Japan is caught between the misgivings about the AIIB expressed by its biggest ally, the United States, Tokyo's rivalry with Beijing, and the desire of some officials and businesses to partner with the rapid growth of China, the world's second-biggest economy.

The next key juncture is seen at the end of June when participants sign the charter of the AIIB.