China shuns IMF to defy West economic rules, analysts say
China’s top level boycott of the Annual Meetings of the International Monetary Fund and the World Bank in Japan signifies Beijing’s gesture of defiance against the West’s economic rules, economists say.
While finance chiefs from the IMF’s 188 member countries, including top global financial figures such as US Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schaeuble and representatives from non-governmental organizations, attended the Tokyo meetings, the Chinese finance minister and central bank chief both stayed at home and sent their deputies instead.
IMF Managing Director Christine Lagarde censured Beijing’s top-level absence.
However, Chinese Foreign Minister Yang Jiechi sufficed to tell the press in Beijing, “The arrangement of the delegation for the meeting was completely appropriate.”
“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.”
In a report to a key IMF advisory committee, China’s Deputy Central Bank Governor Yi Gang argued that the US and Japan’s failure to tackle their fiscal problems was a key element behind the global economic downturn.
“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.
Meanwhile, Western observers say China’s top-level stay-away from the summit is a result of the spat with Japan over the disputed islands in the East China Sea.
The islands, known as Diaoyu in China and Senkaku in Japan, have been the topic of a long-running row between Beijing and Tokyo.