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Sunday, Nov. 7, 2010

Chinese, Russian finance chiefs snub APEC meeting in Kyoto


Staff writer

KYOTO — Just days before the leaders of the Asia-Pacific Economic Forum gather in Yokohama, Japan's worsening relations with two of the bloc's members threatened to overshadow the APEC finance ministers' summit in Kyoto on Friday and Saturday.

Neither the Chinese nor Russian finance minister showed up, with Beijing and Moscow sending vice ministers instead.

Their absence was seen as a rebuke to Japan over recent events related to long-standing territorial disputes, and some at the meeting were left wondering whether the absence of the Chinese minister in particular will affect the scheduled visit of President Hu Jintao to the APEC leaders' summit on Nov. 13 and 14.

Anger in Beijing over the capture and detention of a Chinese fishing boat captain in September near the Senkaku Islands in the East China Sea, controlled by Japan but claimed by China, continues to poison relations between the two countries.

The leak on YouTube of a video showing the collisions between the trawler and Japan Coast Guard vessels further stoked China's displeasure Friday, and was a distraction for both Tokyo and other APEC members who arrived in Kyoto the same day to discuss foreign exchange rates, balance of trade problems and other financial issues rather than regional politics.

Meanwhile, tensions between Japan and Russia rose after President Dmitry Medvedev's visit earlier in the week to Kunashiri Island, one of the Russian-held islands off Hokkaido claimed by Japan. In response, Japan recalled its ambassador to Moscow.

However, in an apparent gesture of good will, Medvedev wrote Prime Minister Naoto Kan later in the week thanking him for his invitation to the leaders' summit in Yokohama.

Japan was hoping to use the Kyoto meeting as a venue to work with China to reaffirm economic and financial ties that, along with the United States, dominate trade in the APEC bloc. China is now Japan's largest trading partner, with bilateral trade totaling nearly ¥12.6 trillion in the first half of this year. China and Japan are also the world's largest holders of foreign reserves.

Trade and financial relations with China are especially crucial for the Kansai region, as China and Asia account for well over half of the area's exports. An estimated 80 percent of all Chinese tourists visiting Japan also arrive or depart from Kansai International Airport.

Osaka Gov. Toru Hashimoto, who returned Monday from a trip to Shanghai, told reporters it is up to the domestic business and financial sectors to ensure relations between Japan and China are not damaged by politics.

"Relations between China and Japan are now bad. But my message to China was on the importance of private sector and economic ties between our two countries," said Hashimoto, who has visited China numerous times during his 2 1/2 years as governor.

Japan's trade with Russia is much smaller, totaling about $14 billion so far this year.

Bilateral meetings were scheduled Saturday between Finance Minister Yoshihiko Noda and nine other finance chiefs, including U.S. Treasury Secretary Timothy Geithner and South Korean Strategy and Finance Minister Yoon Jeung Hyun. However, Noda was not scheduled to meet with the Chinese and Russian vice ministers.



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