The Diaoyu Islands are a group of uninhabited islands located roughly due east of mainland China, northeast of Taiwan, west of Okinawa Island, and north of the southwestern end of the Ryukyu Islands. They are currently controlled by Japan, which calls them Senkaku Islands. Both China and Taiwan claim sovereignty over the islands.
World economy can't afford China-Japan dispute, says Lagarde
IMF chief warns bitter Diaoyus/Senkakus quarrel could impact world after mainland banks withdraw from fund's Toyko meeting
International Monetary Fund chief Christine Lagarde has warned China and Japan that the shaky global economy could not afford to have the two nations embroiled in a territorial dispute after Chinese banks withdrew from the fund's annual meeting in Tokyo.
Lagarde sounded the alarm even as Beijing and Tokyo escalated their propaganda war over the control of the Diaoyu Islands, which are known as the Senkakus in Japan. Tokyo vowed to provide an "upfront" response to Beijing's criticism of its attempt to purchase the East China Sea islands.
"Both China and Japan are key economic drivers that do not want to be distracted by territorial division," Lagarde told Japanese media in Washington ahead of the annual meetings of the IMF and the World Bank, to be held in Tokyo next week, Kyodo News reported.
"The current status of the economy and the global economy needs both Japan and China fully engaged," she said.
Financial ties between China and Japan continue to suffer from the territorial dispute, as major Chinese banks, including the "Big Four" state-owned banks, decided not to attend the IMF and World Bank summits next week, even though they had registered representatives for the events.
In another attempt to assert China's claims, three China Marine Surveillance vessels entered waters around the disputed islands again yesterday, the Japanese coastguard said, adding the Chinese vessels ignored warnings to turn back.
Both countries are also expected to attempt to strengthen their sovereignty claims during the three-day Association of Southeast Asian Nations Maritime Forum, which kicked off in Manila yesterday.
Zhou Yongsheng, a Japanese affairs expert at the China Foreign Affairs University, expected the East China Sea disputes would become a focus of the expanded Asean meeting. Vietnam and the Philippines, which have similar disputes with China over South China Sea islands, may join Japan in a show of solidarity, Zhou said.
Meanwhile, both Beijing and Japan expanded propaganda campaigns in an attempt to sway international opinion in their favour. The Chinese embassy in Islamabad purchased a full-page advertisement in English-language Daily Times on Tuesday celebrating Beijing's ties to Pakistan and asserting its ownership over the Diaoyus.
The message from Ambassador Liu Jian accused the Japanese of stealing the disputed islands, and criticised the US for transferring administrative rights over the islands to Japan in the early 1970s.
Yasuhisa Kawamura, Japan's deputy mission chief in New York, also wrote a commentary published online by The New York Times on Tuesday, attempting to rebut claims mentioned in an earlier op-ed by a Taiwanese scholar that the islands were exchanged as a "booty of war" between the two countries, Kyodo news agency reported. Taipei also claims the island.
Kyodo said Tokyo has made plans to step up its publicity campaign arguing that China's sovereignty claims are groundless.