Posted by: coastlinesproject | October 9, 2012

China banks pull out of meetings in Japan.

China Banks Pull Out of Meetings in Japan

By PHRED DVORAKATSUKO FUKASE and DINNY MCMAHON

TOKYO—Japan’s territorial dispute with China appears to be spilling onto the stage of global finance meetings.

Several big Chinese banks say they’ve canceled participation in the high-profile annual meeting of the World Bank and International Monetary Fund to be held in Tokyo next week as well as in the constellation of events taking place alongside. Some of the banks say they’ve also pulled out of another big financial-industry conference scheduled to take place in the western Japanese city of Osaka at the end of the month.

Most of the banks haven’t given a reason for their last-minute no-shows. But the withdrawals come amid an escalating tit-for-tat between China and Japan, whose government recently purchased a set of islands in the East China Sea that are also claimed by China and Taiwan. China has shown its displeasure by canceling some diplomatic events and sending patrol boats into what Japan considers its territorial waters—with one group going through Tuesday. Some Japanese companies have reported falling demand for their goods in China and unusually strict inspections as well as processing delays at Chinese ports.

An official at one bank said the island dispute was likely the reason for the pullout from the meetings.

“Quite frankly, it’s Japan-China relations,” said an official at the Tokyo branch of theAgricultural Bank of China Ltd., 601288.SH +0.41% explaining why the bank was pulling out of both IMF-related events and the Osaka conference, which is sponsored by the Belgium-based Society for Worldwide International Financial Telecommunication, or Swift, a group set up by financial institutions to handle transactions. The bank is still sponsoring and participating in a meeting of the Institute of International Finance—a global association of financial institutions—that is taking place in Tokyo at the same time as the IMF meeting, another official said.

The moves by the Chinese banks are the latest sign that souring relations between Asia’s two biggest economies are starting to affect the broader economic realm, and go beyond regional squabbling. The annual meeting of the IMF and World Bank is the largest single gathering of finance and economic officials, nongovernmental organizations and bankers. Organizers estimate some 20,000 delegates will be in Tokyo for a range of meetings and seminars, taking place Wednesday through Sunday.

China has long sought a more important role in such global forums, even as its dynamic economy has been playing an increasingly significant part in bolstering global growth. But some experts warn that letting bilateral spats spill into key economic and financial areas may be a sign China isn’t quite ready to be at the international leaders’ table.

“The point is really about China being a global player,” said Fraser Howie, a Singapore-based co-author of “Red Capitalism,” a book on China’s financial system. “China may rightly demand a seat at the head table, but what signal does it send when they go off in a huff over these types of issues. Such boycotts are pointless.”

China has argued for more say for emerging markets in the matters of both the IMF and the World Bank.

An official at the Tokyo branch of the Bank of Communications Corp.601328.SH +0.71% —another big Chinese lender—said it had pulled out of IMF-related events, while a Tokyo-based official at the China Construction Bank Corp.601939.SH +1.53% said attendees from China had canceled due to “scheduling problems” but that some Tokyo staffers were planning to go. An official at the Tokyo branch of the Industrial and Commercial Bank of China Ltd. 601398.SH +0.54% said it had pulled out of the Sibos conference, and that nobody was coming from headquarters in China for next week’s events in Tokyo. An official from Bank of ChinaLtd.’s 3988.HK +0.68% Tokyo branch said bankers still hadn’t decided whether to attend the IMF meetings.

Organizers for Sibos, scheduled for Oct. 29-Nov. 1, confirmed that the ICBC, Agricultural Bank of China and Bank of China had officially withdrawn from the exhibition and speaker participation, but overall registrations were still running ahead of target.

A few Chinese speakers appear to have dropped off the IMF and World Bank schedules as well. The latest schedule for a British Broadcasting Corporation-sponsored debate on rescuing the global economy, for instance, leaves out China Investment Corp. President Gao Xiqing, who was originally scheduled to be a panelist. A BBC spokesperson said that Gao Xiqing had “accepted an invitation to join the panel, but has subsequently made the decision not to travel to Japan for the meeting and so will be unable to take part in the debate. We are still in the process of looking for a suitable replacement for Mr. Gao.”

The CIC couldn’t be reached for comment.

“We are aware of the changes in the schedule by some participants in the IMF-World Bank Annual Meetings, but have not been informed why their plans are changing,” said IMF spokesman Jeremy Mark. “It is not unusual for the lineup of speakers to change in advance of the meetings.”

A World Bank spokesman declined to comment on any matters related to shareholder participation.

Read more in Fukushima and Beach Wars; 10,000 Years on a Barrier Beach. See Strawberry Hill press at the top of this page.


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