Diaoyu Islands

China to ‘lose out’ by missing Tokyo IMF, Lagarde says

PUBLISHED : Thursday, 11 October, 2012, 12:01pm
UPDATED : Thursday, 29 August, 2013, 4:13am

China will “lose out” by not sending its top two finance officials to important global economic meetings in Japan this week, IMF chief Christine Lagarde said on Thursday.

Lagarde called on Beijing and Tokyo – embroiled in a heated dispute over an East China Sea island chain – to settle their row quickly, adding that “countries in this region are very important for the global economy”.

“We have a lot of substantive issues to discuss, great debates, great seminars organised. I think they lose out by not attending the meeting,” she said of China’s finance minister and central bank chief who are both absent.

China has not given official reasons for the no-shows at the annual meetings of the International Monetary Fund and the World Bank, but Foreign Minister Yang Jiechi said: “The arrangement of the delegation for the meeting was completely appropriate.”

Yang made the brief comment in response to a reporter’s question during a joint press appearance in Beijing with German Foreign Minister Guido Westerwelle after the two held talks on their bilateral relations. Yang gave no further comment on the issue.

The pull-outs come amid simmering tensions over Japanese-controlled islets and 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 IMF said.

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.

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

Commentators have pointed to the move as China showing its displeasure with Japan as the region’s two largest economies squabble over islets called Senkaku by Tokyo and Diaoyu in China.

The uninhabited chain is located in rich fishing waters and believed to sit atop mineral deposits.

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.

On Thursday, Lagarde said friendly relations were “beneficial” for Asia-Pacific growth and the global economy.

“All economic players and partners in this region are very critical for the global economy,” she said.

On a lighter note, the IMF chief said the two Chinese officials would miss out on seeing Japan’s spectacular autumn foliage.

“[China] will be missing a great meeting because Tokyo is at its best, the colours are beautiful, the trees have the most beautiful colours you could think of,” she said in response to questions about the dispute.

When asked about Japan and South Korea’s decision to end a currency swap agreement, which came against the backdrop of a separate territorial row, Lagarde again called for diplomacy.

“We would hope... that longstanding differences concerning territorial matters could be resolved smoothly so that economic co-operation can take over and contribute to the stability of the world and to this part of the world.”

Japanese finance minister Koriki Jojima and his South Korean counterpart Bahk Jae-wan are due to hold talks later Thursday.