Published October 10, 2012
TOKYO – China's central bank governor and finance minister won't be attending IMF and World Bank annual meetings in Tokyo this week, a Japanese official said Wednesday — cancelations that come as the two Asian giants remain at odds over a cluster of tiny islands both claim.
The International Monetary Fund confirmed that People's Bank of China Gov. Zhou Xiaochuan, who was scheduled to give the event's closing speech on Sunday, wouldn't be coming to Tokyo, citing scheduling problems. The IMF said his deputy, Yi Gang, will represent him at the meeting and will deliver Sunday's lecture.
The IMF couldn't confirm that Finance Minister Xie Xuren had also cancelled his trip. China's central bank and Finance Ministry did not respond to requests for comment.
The Japanese finance ministry official who confirmed the no-shows wouldn't provide a reason. He requested anonymity due to the sensitivity of the matter.
The dispute over the uninhabited islands in the East China Sea has triggered widespread protests in China and attacks on Japanese-owned factories and stores, and also appears to be spilling over into the economic arena, threatening a shaky economic recovery in Japan after last year's tsunami and nuclear disasters.
Sales of Japanese cars in China plunged in September, with Toyota saying its sales of new vehicles there fell 49 percent from a year earlier to 44,100 vehicles. Honda's sales sank 41 percent to 33,931 vehicles.
Tokyo controls the rocky outcroppings, surrounded by potentially large undersea natural gas fields and rich fishing grounds, but China and Taiwan also claim them.
Toyota Motor Corp. and Honda Motor Co. dealerships were burned down in one Chinese city last month after Tokyo decided to nationalize the islets, called Senkaku in Japanese and Diaoyu in Chinese. The purchase from the islands private Japanese owners was meant to block a potentially more inflammatory plan by Tokyo's nationalistic governor to buy and develop them. The move nonetheless angered China, which warned of "serious consequences" and has sent marine surveillance ships near the islands in recent weeks.
China is Japan's biggest trading partner, and economists warn that the dispute could erode Japan's economic growth. Thousands of Chinese tourists have cancelled trips to Japan.
China, with its growing middle class, was one of the emerging markets that Japanese companies were counting on to boost sales amid a long stagnation in their domestic market and sluggish global growth.