Pro-spending Nakagawa named Japan's new finance minister

Japan's new Prime Minister Taro Aso on Wednesday named Shoichi Nakagawa, a former trade minister who favours public spending to boost the economy, as his finance minister.

Nakagawa, like Aso an outspoken conservative, takes over at a crucial time for Asia's largest economy, which is teetering on the brink of recession.

Aso "told me to give firm support to Japan as the country faces a very severe situation," Nakagawa, 55, said Wednesday.

Nakagawa, who has previously served as farm minister and trade minister, says he agrees with Aso on the need to shore up the economy in the face of slowing global growth and escalating financial market turmoil. But he also insists the government will keep up its economic reform efforts.

"In the face of this emergency, I vowed with Mr Aso that we will invigorate the Japanese economy by making full use of all sorts of policies," he wrote in a recent newspaper column.

"Some people label us as free-spenders or old-guard cronies as we say we are not hesitant on fiscal spending," he said. "But we do not intend to backtrack on reforms.

Aso also re-appointed Kaoru Yosano, a staunch proponent of fiscal reform and a rival for the premiership, as minister for economic and fiscal policy.

Nakagawa joined the Industrial Bank of Japan in 1978 upon graduating from the elite University of Tokyo. He spent five years at the bank, which is now part of Mizuho Financial Group.

But he was shunned by outgoing prime minister Yasuo Fukuda, known for his efforts to reconcile with China.

Nakagawa has triggered controversy with strong criticism of China and calls for Japan -- the only nation to have suffered an atomic attack -- to consider developing nuclear weapons.

He is also known for being pro-Taiwan, admiring independence-minded former president Lee Teng-hui -- something else likely to irk Beijing, which regards the island as part of Chinese territory.