10/10/2012, 00.00
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Islands not only reason for China IMF snub

The governor of China's central bank, who was set to deliver the closing lecture at Tokyo IMF meeting, cancelled speech and attendance. Using the diplomatic row over the Diaoyu/Senkaku Islands, Beijing is showing its irritation over the fact that it is not included in a basket of currencies used in world economic transactions.

Tokyo (AsiaNews) - The Governor of China's central bank Zhou Xiaochuan has decided not to attend a meeting of the International Monetary Fund (IMF) scheduled for this week in Tokyo. The row between China and Japan over the Diaoyu/Senkaku Islands in the East China Sea is ostensibly the main reason.

"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." Zhou had been set to deliver a closing keynote lecture on Sunday.

In the weeks leading up to the summit, Japanese authorities tried to be reassuring about the presence of top Chinese officials in Tokyo even though CEOs of Chinese private banks had decided to scale down (or even cancel) their participation.

Japan's reaction was swift. "If he [Zhou] is not coming, it is regrettable that a representative of the Chinese authorities does not participate in this important international meeting in Tokyo. At all events, Japan-China economic relationship is very important and Japan will continue to communicate with China from a broader standpoint," a Japanese government official said.

The group of islands in the East China Sea is at the centre of the row between the two countries. Since August, Tokyo and Beijing have upped the ante over who owns the islands, even though it is unclear how valuable they are.

Increasingly though, it appears that Chinese authorities are using the dispute to fan nationalism at home, including allowing huge street protests to take place, in order to distract the attention of ordinary Chinese from the upcoming party congress, which should sanction the rise of a new leadership.

As for the IMF summit, some analysts believe the islands are the "perfect excuse" for China to skip the summit because of the international organisation's opposition to the inclusion of the yuan in the basket of currencies used in international economic transactions.

Beijing would like to see its currency replace the dollar, but since it directly controls the yuan's value independently of the IMF, its aim is not likely to be satisfied.

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