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China pulls out IMF and World Bank meetings in Japan


Zhou Xiaochuan, the governor of China’s central bank, has pulled out of the International Monetary Fund and World Bank meetings being held in Japan.

The move comes amid an ongoing territorial dispute between the two countries.

Relations between the two soured after Japan said it had purchased disputed islands in the East China Sea claimed by both Tokyo and Beijing.

China’s four state-owned banks have also skipped the meetings.

Zhou Xiaochuan, the governor of the People’s Bank of China, was scheduled to attend the meetings and deliver a speech at the event.

“We were informed two days ago that Governor Zhou’s schedule might require him to cancel his lecture in Tokyo,” an IMF spokesperson 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.”

Chinese Finance Minister Xie Xuren is also apparently skipping the meetings. Chinese state media said Vice-Minister Zhu Guangyao would attend.

A report on China’s official news agency Xinhua confirmed the make-up of the Chinese central bank delegation.

It also cited unidentified analysts as saying that the four state-owned banks had decided to skip the meetings “because bilateral relations between China and Japan have become strained”.

Japan described the Chinese move as “regrettable”.

The territorial dispute has affected both political and trade ties between the two neighbors.

On Tuesday, Japanese carmakers reported a dramatic drop in sales in China, after recent protests in the country targeting Japanese products and businesses.

Toyota reported a 49% drop in sales in September, while Honda and Nissan’s sales fell 40% and 35% respectively.

Other carmakers such as Mitsubishi Motors and Mazda have also reported a sharp drop in Chinese sales.

The protests had led to various Japanese firms temporarily suspending their operations in China.

Dion Corbett, spokesperson for Toyota, Japan’s biggest carmaker, said the slump in sales meant that its sales targets for China might be “very difficult to achieve”.

The territorial row has rumbled for decades. Both China and Japan claim the islands, called Senkaku in Japan and Diaoyu in China.

Taiwan also claims the islands, which lie in important shipping lanes and fishing grounds, and also close to waters thought to contain natural resources.

This row flared over Japan’s purchase of some of the islands from their private owner – a move prompted by a potentially more provocative plan by right-wing Tokyo Governor Shintaro Ishihara to buy them using public donations and develop them.

Since then both Chinese and Taiwanese vessels have been sailing in and out of what Japan says are its territorial waters around the islands. The US, meanwhile, has called for calm, with US Secretary of State Hillary Clinton urging “cooler heads to prevail”.