China/Japan dispute over Islands affecting IMF Summit

Chinese bank governor withdraws from IMF summit in Japan amid islands row


Zhou Xiaochuan had been due to deliver a keynote closing lecture but will not now attend meeting

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  Reuters in Tokyo
  
• guardian.co.uk, Wednesday 10 October 2012 07.15 BST
  

Zhou Xiaochuan, China's central bank governor. Photograph: Jason Lee/Reuters

China's central bank governor has pulled out of the IMF's upcoming meeting in Japan in an apparent snub to the hosts over disputed islands in the East China Sea.

The International Monetary Fund confirmed that Zhou Xiaochuan would not be attending the meeting, where he had been due to deliver a keynote closing lecture.

Relations between China and Japan have deteroriated over their competing claims to sovereignty of the archipelago known as the Senkaku islands in Japan and the Diaoyu islands in China.

"We were informed two days ago that Governor Zhou's schedule might require him to cancel his lecture in Tokyo," an IMF spokeswoman said. "It has now been confirmed that his deputy Yi Gang will represent him."

A Japanese government official said Zhou's absence would be "regrettable". "At all events Japan-China economic relationship is very important and Japan will continue to communicate with China from a broader standpoint," the official said.

There have been violent protests and calls for boycotts of Japanese products in China over the islands row. Japanese carmakers including Toyota have reported a fall in sales in the world's biggest car market.

According to Chinese protocol, only the most senior official would usually lead the delegation to an IMF meeting. Instead, the governor's place will be taken by Yi Gang, deputy head of the People's Bank of China, and Zhu Guangyao, deputy minister for finance .

The disputed islands are located near rich fishing grounds and potentially huge oil and gas reserves. Taiwan also asserts its sovereignty over the chain.

Japan is scheduled to host the IMF and World Bank annual meetings for the first time in nearly half a century. About 20,000 people are expected to attend the event, making it one of the world's largest international conferences.

China's state-owned banks Industrial and Commercial Bank of China (ICBC), Bank of China, China Construction Bank and Agricultural Bank of China are also staying away from the IMF and World Bank meetings.

Tokyo and Beijing have traded increasingly sharp words in the dispute, which has seen both countries send patrol boats to waters near the disputed islands, raising concerns that an unintended collision or other incident could escalate into a broader clash.

The Japanese prime minister, Yoshihiko Noda, declared in late September that his country would not compromise on the islands, saying they were "an inherent part of our territory in light of history and also under international law". Chinese state media has said the islands have been China's "sacred territory since ancient times".

In September Japan bought the islands from their private owner to stop a nationalist politician getting in first.