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China Rules Out Xi-Abe G-20 Meeting Amid Island Dispute

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Aug. 27 (Bloomberg) -- A senior Chinese diplomat said Japan is paying “lip service” to the idea of resolving a territorial dispute and ruled out a meeting between the two countries’ leaders at a Group of 20 summit next month.

Japan’s “provocative moves” show it’s not serious about improving ties, Vice Foreign Minister Li Baodong said today. Hours after he spoke, Japan’s finance minister vowed to increase the budget for his country’s naval forces, citing the territorial spat.

“Under these circumstances, there is no basis for talks,” Li said at a briefing in Beijing on President Xi Jinping’s trip to the G-20 meeting in Russia, which Japanese Prime Minister Shinzo Abe will also attend. “The Japanese side should stop paying lip service to the issue.”

Li’s remarks reflect the lack of progress in a dispute over an uninhabited island chain -- known as Senkaku in Japanese and Diaoyu in Chinese -- that has damaged trade and diplomatic ties. Japan’s government bought three of the five islands from their private owner last September, sparking protests across China. China’s exports to Japan fell 2 percent in July from a year earlier, the sixth straight decline.

Abe said he wanted to exchange views on regional stability with the leaders of both China and South Korea, public broadcaster NHK reported, citing comments Abe made yesterday during a visit to Kuwait.

Coast Guard

Three Chinese Coast Guard vessels briefly entered Japanese waters today near the disputed islands, Japan’s Coast Guard said in a statement. Similar incidents took place earlier this month.

Japan’s naval forces will get more money even as other government departments face cuts, Finance Minister Taro Aso said during a speech in Yokohama today.

“The Maritime Self-Defense Forces will protect the Senkakus,” Aso said. “If you are not prepared to fight, then you can’t protect your own nation.”

To contact Bloomberg News staff for this story: Michael Forsythe in Hong Kong at mforsythe@bloomberg.net; Xin Zhou in Beijing at xzhou68@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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