Diaoyu Islands

China banks withdraw from IMF-linked events in Tokyo

PUBLISHED : Wednesday, 03 October, 2012, 4:04pm
UPDATED : Thursday, 29 August, 2013, 4:13am

Chinese banks have pulled out of events linked to annual meetings of the International Monetary Fund and World Bank in Japan next week, a report said, as Tokyo and Beijing remain locked in a diplomatic row.

Although many of those apparently planning no-shows gave no specific reason, Dow Jones Newswires said on Tuesday, it is the latest sign that a festering spat over islands in the East China Sea is having a wider impact on bilateral, and now multi-lateral ties.

“Quite frankly, it’s Japan-China relations,” Dow Jones Newswires quoted an official at the Tokyo branch of the Agricultural Bank of China as saying to explain why the bank was pulling out of IMF-related events.

The bank is still sponsoring and participating in a meeting of the Institute of International Finance – a global association of financial institutions – that takes place in Tokyo on the sidelines of the IMF meeting, the report said, citing another anonymous official.

A bank official declined to comment on the report, saying the Tokyo branch was not authorised to speak on the issue.

The Bank of Communications has also pulled out of IMF-related events, Dow Jones reported, adding that China Construction Bank said its China-based officials had scheduling problems that were preventing them from attending.

The Bank of China had not decided if representatives would attend the IMF meetings, it said.

Officials from the banks were not immediately available for comment.

Japan’s vice finance minister Takehiko Nakao said Tokyo had not been officially informed of the boycott, but was aware of the reports.

“It’s very disappointing,” he said, adding the economic relationship between the two countries was very important.

“Political difficulties shouldn’t prevent this kind of exchange between Japan and China taking place,” he said.

Tensions between Beijing and Tokyo remained high this week, with Chinese government ships returning to waters off the Japanese-controlled islands on Tuesday and again on Wednesday.

Last week Japanese and Chinese diplomats clashed at the United Nations in New York over the ownership of the islands known as the Senkakus in Japan and the Diaoyus in China.

China is seeking a bigger say in world affairs, commensurate with its growing financial clout, but commentators say actions such as the withdrawal of its banks from the IMF-linked events 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?” said Fraser Howie, who has written on China’s financial system.

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