China Will Lose Out By Tokyo IMF Boycott: Lagarde

October 11, 2012Asia Pacificby EW News Desk Team

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China will only stand to “lose out” by boycotting this week’s global economic meetings in Tokyo, said International Monetary Fund Managing Director Christine Lagarde today.

Lagarde made the comments today, after two senior Chinese financial officials cancelled their trip to Tokyo amid a territorial dispute with Japan.

Tokyo is host to a series of global economic meetings held this week, including the IMF, the World Bank as well as the G7.

However, diplomatic tensions have glared between the two Asian neighbours over a cluster of seemingly worthless islands in the East China Sea. The Islands, controlled by Japan but claimed by China, are believed to rich in oil and gas deposits.

Related News: Senior Chinese Government Advisor Calls For ‘Economic Attack’ On Japan

People's Bank of China Governor Zhou Xiaochuan, who was scheduled to give the IMF meeting’s closing speech on Sunday, will not be attending. His deputy will represent him in the meeting and deliver the speech.

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.

Related News: Chinese Banks Snub IMF, World Bank Meetings To Be Held In Tokyo: WSJ

China has not provided official reasons for the no-shows at the joint-meetings of the International Monetary Fund and the World Bank, but its protest is clearly understood.

Lagarde said Chinese officials who boycott the meetings will “lose out” and added:

We hope that differences, however longstanding, can be resolved harmoniously and expeditiously so that from an economic point of view co-operation can continue ... since we are all very closely interconnected.

Lagarde also stressed that economies in Asia are critical to global growth, and hoped that disputes between countries in the region can be resolved for the good of economic co-operation in Asia and the rest of the world.

Japanese auto sales in China plunged last month, and tens of thousands of Chinese tourists have cancelled trips to Japan, which is depending on China as a source of growth amid the global slowdown.

The dispute is also an economic negative for China. Before tensions escalated, China's economy was already slowing and grew at its slowest rate in three years in the second quarter.

Related News: China-Japan Territorial Dispute Hurts $340bn Trade Ties

Related Story: The China-Japan Rivalry Renewed: Will Asia's Geopolitical Balance Shift Once Again?