China finance chiefs to skip Japan IMF meetings

Posted on October 10, 2012

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TOKYO — Two of China’s top economic officials will boycott IMF and World Bank meetings in Japan, officials said Wednesday, as a territorial row between Tokyo and Beijing spills over into financial diplomacy.

The pull-out of the country’s finance minister and central bank chief comes as world leaders look to China to help reinvigorate faltering global growth amid fears of a worldwide slowdown.

People’s Bank of China Governor Zhou Xiaochuan had been due to deliver a lecture on Sunday, the centrepiece of the final day of the annual conference. He will now send his deputy, the International Monetary Fund said.

Two of China’s most senior finance officials are to skip International Monetary Fund meetings in Tokyo (AFP/File, Saul Loeb)

“We were informed two days ago that Governor Zhou’s schedule might require him to cancel his lecture in Tokyo,” a Fund spokesman said.

“It has now been confirmed that his deputy Yi Gang will represent him at the IMF-World Bank Annual Meetings and will deliver his Per Jacobsson Lecture.”

The World Bank said it had been told the Chinese delegation would be led by the vice finance minister rather than Finance Minister Xie Xuren.

Japanese Foreign Minister Koichiro Gemba said the news of their absence from such important international forums was “very disappointing.”

“I don’t think it will be a plus for China when you think about how the international community may interpret such action,” he added, according to Kyodo News.

China’s state-run Xinhua news agency reported the Chinese delegation to the IMF and World Bank meetings “will be led by Yi Gang, vice governor of the People’s Bank of China, and Zhu Guangyao, vice minister of finance”.

Its report Tuesday did not mention Zhou or Xie but an official from the central bank confirmed that Zhou would not be in Tokyo.

“Yi Gang, the deputy governor, went to Tokyo, but Zhou Xiaochuan, the governor didn’t,” he told AFP. Asked about possible reasons, he said: “Zhou has a tight schedule and he doesn’t have time.”

Tokyo and Beijing are at loggerheads over a Japan-administered island chain that both countries claim.

The dispute, which has rumbled for decades, flared in August and September with landings by nationalists from both sides and the subsequent nationalisation of the islands by Tokyo.

Several private Chinese banks were also reported to be limiting or cancelling their participation in events linked to the IMF and World Bank meetings, which began on Tuesday and will run until Sunday.

China is seeking a bigger say in world affairs, commensurate with its growing financial clout, but commentators have said actions like this undermine that ambition.

“China may rightly demand a seat at the head table, but what signal does it send when they go off in a huff over these types of issues?” Fraser Howie, who has written on China’s financial system, said last week.

“Such boycotts are pointless. They only harm China and make China out to be an unstable and unreliable partner.”

But Hideo Ohashi, who specialises in Asian economic affairs at Tokyo’s Senshu University, cautioned against reading too much into the move.

“I think it is a temporary measure in keeping with China’s decision to stop sending people to Japan,” he said.

“(The financial authorities) cannot make their own moves until the Chinese Communist Party makes decisions at its congress due to open on November 8.

“As a result, China may be seen by everybody else as a country which acts strangely. But with its presence so huge, China’s existence cannot be dismissed and it may be pardoned to some extent for doing such a thing.”

Despite a two-way trade relationship worth well in excess of $300 billion a year, ties between Tokyo and Beijing are often rocky.

Sometimes-violent protests hit Chinese cities in September in the wake of Tokyo’s purchase of three of the islands, known as the Senkakus in Japan and the Diaoyus in China.

Japanese businesses and diplomatic missions were targeted by mobs, with some factories and shops shuttering their operations.

Japan’s top three automakers said Tuesday their sales in China plunged in September, with Toyota reporting they had shifted half as many vehicles as in the same month last year.

AFP

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Posted in: Economy, Politics