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.
Kehinde Sanni spends his days smoothing out dents and repainting scratched bumpers in a modest autobody shop in Lagos. He has never left Nigeria, yet he speaks glowingly of Burkina Faso military leader Ibrahim Traore. “Nigeria needs someone like Ibrahim Traore of Burkina Faso. He is doing well for his country,” Sanni said. His admiration is shaped by a steady stream of viral videos, memes and social media posts — many misleading or outright false — portraying Traore as a fearless reformer who defied Western powers and reclaimed his country’s dignity. The Burkinabe strongman swept into power following a coup in September 2022
TRUMP EFFECT: The win capped one of the most dramatic turnarounds in Canadian political history after the Conservatives had led the Liberals by more than 20 points Canadian Prime Minister Mark Carney yesterday pledged to win US President Donald Trump’s trade war after winning Canada’s election and leading his Liberal Party to another term in power. Following a campaign dominated by Trump’s tariffs and annexation threats, Carney promised to chart “a new path forward” in a world “fundamentally changed” by a US that is newly hostile to free trade. “We are over the shock of the American betrayal, but we should never forget the lessons,” said Carney, who led the central banks of Canada and the UK before entering politics earlier this year. “We will win this trade war and
‘FRAGMENTING’: British politics have for a long time been dominated by the Labor Party and the Tories, but polls suggest that Reform now poses a significant challenge Hard-right upstarts Reform UK snatched a parliamentary seat from British Prime Minister Keir Starmer’s Labor Party yesterday in local elections that dealt a blow to the UK’s two establishment parties. Reform, led by anti-immigrant firebrand Nigel Farage, won the by-election in Runcorn and Helsby in northwest England by just six votes, as it picked up gains in other localities, including one mayoralty. The group’s strong showing continues momentum it built up at last year’s general election and appears to confirm a trend that the UK is entering an era of multi-party politics. “For the movement, for the party it’s a very, very big
‘BODIES EVERYWHERE’: The incident occurred at a Filipino festival celebrating an anti-colonial leader, with the driver described as a ‘lone suspect’ known to police Canadian police arrested a man on Saturday after a car plowed into a street party in the western Canadian city of Vancouver, killing a number of people. Authorities said the incident happened shortly after 8pm in Vancouver’s Sunset on Fraser neighborhood as members of the Filipino community gathered to celebrate Lapu Lapu Day. The festival, which commemorates a Filipino anti-colonial leader from the 16th century, falls this year on the weekend before Canada’s election. A 30-year-old local man was arrested at the scene, Vancouver police wrote on X. The driver was a “lone suspect” known to police, a police spokesperson told journalists at the
RSS