China, Japan Renew Currency Swap Agreement

China and Japan have renewed a currency-swap agreement originally signed as part of the 2001 region-wide Chiang Mai agreement to head off a repeat of Asia's 1997/98 financial crisis.

The agreement was signed on Thursday during a visit to Tokyo by People's Bank of China Governor Zhou Xiaochuan, the central bank said in a statement on its Web site (www.pbc.gov.cn).

Under the Chiang Mai accord, named after the northern Thai resort town where it was signed, regional central banks agreed to make hard currency available to fend off speculative attacks of the sort that toppled the Thai baht, Indonesian rupiah and South Korean won a decade ago.

None of the swaps has ever been activated.

But the PBOC said the Sino-Japanese swap line, first signed in 2002 for a two-way total of $6 billion, had played "an important role in strengthening regional financial cooperation in East Asia, maintaining regional financial market stability and promoting East Asian economic development".

Zhou and Bank of Japan Governor Toshihiko Fukui also exchanged views on recent economic and financial developments in the two countries, global financial problems and other topics of mutual interest, according to the statement.