The US ambassador to China, Clark T. Randt Jr., decided not have dinner with Chinese officials Wednesday night, apparently in protest over China's recent blacklisting of Credit Suisse First Boston Inc (CSFB). The investment bank angered Beijing by inviting senior Taiwan government officials to speak at conferences it sponsored earlier this year.
The US Embassy in Beijing declined to comment, and a State Department official in Washington would say only that Randt had skipped the dinner, aimed at promoting investment on the mainland, because "it was not convenient."
But other American officials said Randt made his decision after China withdrew an invitation to CSFB, apparently punishing the bank for having invited Taiwan's finance minister, Yen Ching-chang (顏慶章), to give the keynote speech at a conference in Hong Kong in March.
China's move led two other investment banks, Goldman Sachs and Merrill Lynch, to drop plans to sponsor a similar promotional tour of the US.
But the State Department apparently viewed China's latest rebuke as going too far.
"When it had an immediate effect and made Goldman and Merrill both run for cover, that's what made the State Department decide to come up with a response and send a message," said a senior [congressional] staff member on Capitol Hill.
Officials in Washington said China should not go unchallenged if it played politics in the economic arena, particularly as it prepares to join the WTO.
In related news, China banned Matsushita Communication Industrial Co from selling mobile phones for a year because its Panasonic-brand handsets displayed a reference to Taiwan as a sovereign nation.
A one-year ban would prevent Matsushita from expanding in a market that overtook the US in July as the biggest for mobile phones, with almost 121 million subscribers.
"The timing is just bad when the Chinese market is furiously expanding," said Tomohiko Miyazaki, an analyst at Nomura Securities Co in Tokyo.
Meanwhile CSFB has told investors to buy more China stocks and sell their Taiwan shares just a week after Chinese authorities criticized the bank's Taiwan ties.
CSFB upgraded its recommendation on China shares to "neutral" from "underweight," saying stocks there are inexpensive relative to their earnings.
At the same, it lowered its rating on Taiwan to "underweight" from "overweight," citing sliding earnings for Taiwan's technology companies.
It's a "technical call," said Stewart Paterson, the head of non-Japan Asia strategy at CSFB, noting that stocks such as China Mobile (Hong Kong) Ltd (
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