China banks pull out of IMF Tokyo meet amid island dispute - Xinhua

BEIJING, Oct 8 (Reuters) - China's state-owned banks willnot attend the annual meetings of the IMF and World Bank to beheld in Tokyo starting Tuesday, state news agency Xinhua said onMonday, the latest sign that a territorial dispute has strainedties between Asia's two biggest economies.

The four Chinese lenders that have pulled out ofInternational Monetary Fund-related events are the Industrialand Commercial Bank of China (ICBC) , Bank of China, China Construction Bank andAgricultural Bank of China , Xinhua said.

The Wall Street Journal reported last week that Bank ofCommunications will not attend the events either.

"The banks' decision is further evidence that the unilateralactions by Japan is freezing bilateral relations and nowstarting to weigh on the world's economy," Xinhua cited MeiXinyu, a researcher at the International Trade and EconomicCooperation Institution under China's Ministry of Commerce, assaying.

Japan is scheduled to host the IMF and World Bank annualmeetings for the first time in nearly half a century. About20,000 people are expected to attend the event, making it one ofthe world's largest international conferences.

Sino-Japanese relations deteriorated sharply after Japan inSeptember bought the East China Sea islets that both Tokyo andBeijing claim, sparking anti-Japan protests across the country.

The disputed group of islands, called Senkaku in Japan andDiaoyu in China, are located near rich fishing grounds andpotentially huge oil and gas reserves. Taiwan also asserts itsown sovereignty over the islets.

China has sent its patrol ships into what Japan considersits territorial waters near the islands in recent weeks,prompting Japan to lodge protests against China.

Japan's Toyota Motor Corp , Nissan Motor Coand Honda Motor Co plan to slash production in China byroughly half, the Nikkei newspaper reported on Monday, as thedispute cut sales of Japanese cars in the world's biggest automarket.

(Reporting by Sui-Lee Wee; editing by Ron Askew)

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