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June 27, 2017

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Spat interrupts free trade zone talks: China official

BEIJING -- 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 Diaoyu in China 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.

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