Japan, China to hold finance talks amid concerns on protectionism, North Korea
South Korean Finance Minister Yoo Il-ho (L) talks with Bank of Japan Governor Haruhiko Kuroda before their trilateral finance ministers and central bank governors' meeting with China, on the sideline of Asian Development Bank (ADB)'s annual general meeting in Yokohama, south of Tokyo, Japan May 5, 2017. Reuters

Japan and China will hold their first bilateral financial talks in two years on Saturday, officials said. The two will discuss risks to Asia's economic outlook, such as the protectionist policies advocated by United States President Donald Trump and tension over North Korea.

Chinese Finance Minister Xiao Jie missed the trilateral meeting with his Japanese and South Korean counterparts on Friday due to an emergency domestic meeting. But, this time he has flown in for the bilateral dialogue just to dispel speculations leading to diplomatic implications about his absence.

During the dialogue, Xiao and Japanese Finance Minister Taro Aso are scheduled to discuss issues ranging from North Korea's nuclear and missile programme to the two countries' economic outlook and financial cooperation. It will be held on the sidelines of the Asian Development Bank's annual meeting in Yokohama, eastern Japan.

The Japanese Finance Ministry officials said senior finance officials from both countries will also hold a separate round of talks.

Relations between Japan and China have been strained over territorial rows and Japan's occupation of parts of China in World War Two. However, recently leaders have been seeking to mend ties through dialogue.

China's increasing presence in infrastructure finance has alarmed some Japanese policymakers, who worry that Beijing's new development bank, the Asian Infrastructure Investment Bank (AIIB), may overshadow the Japan-backed ADB.

Both Japan and China have agreed on the need to respect free trade and it is extremely crucial to Asia's trade-dependent economies.

In Friday's trilateral meeting, the finance officials from Japan, China and South Korea agreed to resist all forms of protectionism. They have also agreed to take stronger stand than G20 major economies against the protectionist policies advocated by Trump.

China has positioned itself as a supporter of free trade in the wake of Trump's calls to put America's interests first and pull out of multilateral trade agreements.

Japan has taken a more accommodative stance toward Washington's argument that trade must not just be free but fair.