* G20 financial leaders meet in Ankara on Sept. 4-5

* Japan wants to focus on structural issues in China

* Sees risk of a bigger fallout from China on Europe (Adds quotes, details)

By Tetsushi Kajimoto

TOKYO, Sept 1 (Reuters) - Japanese Finance Minister Taro Aso said on Tuesday it would be beneficial for this week's meeting of the Group of 20 major economies to discuss what is going on in China's economy.

China is Japan's biggest trading partner. China's stock markets have lost nearly 40 percent of their value since mid-June as an economic slowdown rattles investors.

Aso, speaking to reporters after a cabinet meeting, did not specify what he wanted to discuss about China, but said any talks should be frank. The minister and Bank of Japan Governor Haruhiko Kuroda will attend the Sept. 4-5 gathering in Ankara.

"Rather than being swayed just by superficial market moves, I believe it's important to ascertain China's structural issues behind them," Aso said. "I think it's beneficial to hold a frank debate at G20 on what is happening in Chinese economy."

Aso said Japan's economy was unlikely to suffer any immediate shock from China's economic slowdown, but rather the possibility is "becoming extremely high" that Europe would be more affected.

Aso also cited Chinese officials as saying earlier this year that Beijing wanted to tackle structural reform when it chairs next year's G20 summit.

China's economy is slowing just as Japan's economy is steadily improving with rising corporate profits leading to gradual increase in capital spending and wages, Aso added.

(Reporting by Tetsushi Kajimoto; Editing by Chris Gallagher and Miral Fahmy)