China to contribute $38.4b to Asia reserves pool

China will contribute US$38.4 billion to a US$120 billion foreign-exchange reserve pool created by Asian nations to help offset financial problems in the region, state media reported. Details relating to the pool, which was conceived two years ago, were finalized in Bali on Sunday at a meeting of the finance ministers from China, Japan, South Korea and the 10-member Association of Southeast Asian Nations (ASEAN). Japan will match China’s US$38.4 billion and South Korea will put in US$19.2 billion, with ASEAN members contributing the remaining 20% of the fund. The fund, which was originally going to be worth US$80 billion, is intended to address short-term liquidity difficulties. The ministers also endorsed the establishment of the Credit Guarantee and Investment Mechanism (CGIM) as a trust fund of the Asian Development Bank. It will have an initial capital of US$500 million.