China official says spat with Japan derails free trade talks

BEIJING Thu Sep 27, 2012 12:17pm EDT

Japan's Prime Minister Yoshihiko Noda addresses a news conference in New York September 26, 2012. Japan has sovereignty over the islands at the heart of a dispute with China and therefore will not compromise on ownership, Noda said on Wednesday. REUTERS/Andrew Burton

Japan's Prime Minister Yoshihiko Noda addresses a news conference in New York September 26, 2012. Japan has sovereignty over the islands at the heart of a dispute with China and therefore will not compromise on ownership, Noda said on Wednesday.

Credit: Reuters/Andrew Burton

BEIJING (Reuters) - A festering territorial dispute between China and Japan has derailed talks for a free trade zone involving the two countries and South Korea, an adviser to China's central bank said on Thursday.

Sino-Japanese ties are at their lowest in decades amid a row over a series of islands in the East China Sea, waters believed to be rich in natural gas deposits, with neither side backing down on its claim of sovereignty.

Violent protests broke out across China last week after the Japanese government bought two of the islands, known as the Diaoyu in Chinese and the Senkaku in Japan. Tokyo also has a dispute over other islands with South Korea.

"We hope the suspension is temporary," Chen Yulu, a professor at China's Renmin University and an adviser to the monetary policy committee of the People's Bank of China, said of the free trade zone talks. "It will be a big loss for Asia if the process is terminated."

Chen was speaking on the sidelines of a central banking conference involving representatives of all three nations.

Despite the tension, Japanese and Chinese officials met on Thursday to mark 40 years of diplomatic relations, but the head of the Japanese side said he came "with a heavy heart".

What was meant to be a high-level celebration of normalized relations was instead a stiff acknowledgement that the world's second- and third-largest economies remain neighbors with a long history of cooperation.

"Today I have come to Beijing with a number of people who have worked hard over a long time on relations with China," former Japanese Foreign Minister Yohei Kono told Jia Qinglin, a senior Chinese leader, in Beijing's Great Hall of the People.

"The conditions are rather different from when I met Your Excellency in the spring, and I come this time with a heavy heart."

Jia, the Communist Party's fourth-ranked official, called the Japanese visitors "old friends of the Chinese people".

(Reporting by Terril Yue Jones and Kevin Yao; Editing by Nick Macfie)

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Comments (4)
totherepublic wrote:
So just why the h—, if we provide China with their largest market, should a spat with an small Island Nation effect our trade relations with them. We have what (everything) we need. Lets use it. We can make anything we want. Put our people back to work. The World needs US. We do NOT need them. We only have to hold back on one industry and it would bring the entire world to the bargining table to meet OUR demands. FOOD! And kick the UN out of here!

Sep 27, 2012 10:23am EDT  --  Report as abuse
BCerentano wrote:
@totherepublic….

Amen. AmericanBoycott.com shares your views.

Sep 27, 2012 11:15am EDT  --  Report as abuse
Pterosaur wrote:
There is no such things as a free lunch. On average, free trades are good in the long run. And some negative impacts are unavoidable.

We have benefitted already tremendously from free trade. Without, we would be paying everything 3 times if not 10 times more. Even most importantly, if it’s not free trade, we won’t have access to cheap money.

This being said, those, who are left behind and couldn’t benefitted from the free trade within a nation, should be taken care of by that nation to convert them to the new world paradim. No point to complain and be jealous.

Sep 27, 2012 2:21pm EDT  --  Report as abuse
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