China’s top level boycott of global financial meetings in Japan last week is a sign of things to come, analysts say, as an economically emboldened Beijing shows struggling Western nations it does not need to play by their rules.
With global growth slowing, many in the developed world are looking to Beijing to pick up the slack, and the annual meetings of the IMF and World Bank seemed a good place to press the point.
However, while Tokyo was graced with global financial luminaries such as Timothy Geithner from the US and Wolfgang Schaeuble from Germany, China’s finance minister and central bank chief both stayed at home.
Photo: AFP
Beijing gave no official reason for sending their deputies, with Chinese Foreign Minister Yang Jiechi (楊潔篪) telling reporters in Beijing only that “the arrangement of the delegation for the meeting was completely appropriate.”
Observers say China’s stay-away was the result of a spat with Japan over disputed islands, and points to Beijing’s calculated willingness to use its financial muscle to make a political point.
“China made this decision by precisely weighing the disadvantages of the no-shows against the advantages of its presence,” said Yoshikiyo Shimamine, executive chief economist at Dai-Ichi Life Research Institute in Tokyo.
“It was an example of how China won’t always act within the Western-dominated framework and doesn’t see any contradiction between such absences and its responsibility as a major power,” he said.
LOSING OUT
IMF Managing Director Christine Lagarde rapped Beijing, saying it would “lose out” by not showing up, while World Bank President Jim Yong Kim urged the two countries to sort out their differences for the good of the global economy.
China — whose predicted growth of 7.8 percent this year is slower than the blistering pace of the last few years, but still leaps and bounds ahead of the West — merely shrugged.
In his report to a key committee that advises the IMF board, Deputy Governor of the People’s Bank of China Yi Gang (易綱) said the failure by Washington and Tokyo to fix their fiscal problems was the reason the global economy was struggling.
“Uncertainties related to fiscal sustainability weigh on sentiment and confidence, negatively affecting consumption, investment, and hiring decisions,” Yi said.
“The slow recovery in these major advanced economies poses costly spillover effects to the rest of the world,” he added.
While Chinese officials did take part in a number of meetings and seminars, their absence at a Japan-chaired lenders’ gathering on Myanmar was noted, with Tokyo saying it was “disappointing.”
Japanese politicians repeatedly urged Beijing to look at relations “from a broader standpoint.”
The dispute over Tokyo-controlled islands known as the Senkakus in Japan and the Diaoyus (釣魚) in China flared in August and last month with landings by nationalists from both sides and the subsequent nationalization of the three of the islands in the archipelago by Japan.
Taiwan also claims the islands and refers to them as the Diaoyutais (釣魚台).
PLUNGING SALES
Street protests erupted in China, alongside consumer boycotts of Japanese goods, as reports emerged that firms were finding their China operations hampered by sudden extra red tape.
Japan’s big three automakers — Toyota, Nissan and Honda — reported plunging sales, while airlines said tens of thousands of bookings had been canceled.
Figures released in China this week showed trade with Japan slumped 1.8 percent to US$248 billion for the year’s first three quarters, although the customs bureau made no link with the row.
Analysts say Beijing is likely to continue to conflate bilateral political issues with multilateral financial ones.
Yoshinobu Yamamoto, honorary professor of international politics at the University of Tokyo, said at a time when the world needed China to be paying attention, it was focused instead on the sovereignty spat.
“The move was intended to expose Japan to international pressure to solve the spat with China,” he said.
“For Beijing, the top priority is national governance. For the sake of this objective, China is likely to take similar action in the future,” he added.
However, some argue that China’s behavior is self-defeating because it will make it seem like a less attractive place to do business.
Some Japanese insurance firms have reportedly stopped offering coverage against riots for companies operating in China and manufacturers are said to be looking anew at third countries as a base for operations.
Shimamine said Beijing runs the risk of cutting its nose off to spite its face.
“China’s policy of putting weight on politics has given the impression that China has risks and is not an easy country to deal with,” he said.
Far from the violence ravaging Haiti, a market on the border with the Dominican Republic has maintained a welcome degree of normal everyday life. At the Dajabon border gate, a wave of Haitians press forward, eager to shop at the twice-weekly market about 200km from Haiti’s capital, Port-au-Prince. They are drawn by the market’s offerings — food, clothing, toys and even used appliances — items not always readily available in Haiti. However, with gang violence bad and growing ever worse in Haiti, the Dominican government has reinforced the usual military presence at the border and placed soldiers on alert. While the market continues to
An image of a dancer balancing on the words “China Before Communism” looms over Parisian commuters catching the morning metro, signaling the annual return of Shen Yun, a controversial spectacle of traditional Chinese dance mixed with vehement criticism of Beijing and conservative rhetoric. The Shen Yun Performing Arts company has slipped the beliefs of a spiritual movement called Falun Gong in between its technicolored visuals and leaping dancers since 2006, with advertising for the show so ubiquitous that it has become an Internet meme. Founded in 1992, Falun Gong claims nearly 100 million followers and has been subject to “persistent persecution” in
ONLINE VITRIOL: While Mo Yan faces a lawsuit, bottled water company Nongfu Spring and Tsinghua University are being attacked amid a rise in nationalist fervor At first glance, a Nobel prize winning author, a bottle of green tea and Beijing’s Tsinghua University have little in common, but in recent weeks they have been dubbed by China’s nationalist netizens as the “three new evils” in the fight to defend the country’s valor in cyberspace. Last month, a patriotic blogger called Wu Wanzheng filed a lawsuit against China’s only Nobel prize-winning author, Mo Yan (莫言), accusing him of discrediting the Communist army and glorifying Japanese soldiers in his fictional works set during the Japanese invasion of China. Wu, who posts online under the pseudonym “Truth-Telling Mao Xinghuo,” is seeking
‘SURPRISES’: The militants claim to have successfully tested a missile capable of reaching Mach 8 and vowed to strike ships heading toward the Cape of Good Hope Yemen’s Houthi rebels claim to have a new, hypersonic missile in their arsenal, Russia’s state media reported on Thursday, potentially raising the stakes in their attacks on shipping in the Red Sea and surrounding waterways against the backdrop of Israel’s war with Hamas in the Gaza Strip. The report by the state-run RIA Novosti news agency cited an unidentified official, but provided no evidence for the claim. It comes as Moscow maintains an aggressively counter-Western foreign policy amid its grinding war on Ukraine. However, the Houthis have for weeks hinted about “surprises” they plan for the battles at sea to counter the