Chinese Foreign Minister Yang Jiechi on Thursday said the lower-level delegations that China sent to Tokyo for the annual meetings of the International Monetary Fund and World Bank were "completely appropriate", given current tense China-Japan relations over the Diaoyu Islands territorial row.

Yang made the remarks while meeting with German Foreign Minister Guido Westerwelle on the one-month anniversary of a major diplomatic standoff between Asia's largest economic powers. Japan on Sept 11 finalized an illegal "purchase" of the islands, which have belonged to China for centuries.

Observers have warned that the territorial dispute's growing effect on bilateral trade and Japan's domestic economy will not be reversed unless Tokyo takes necessary steps to correct its mistake. IMF Chief Christine Lagarde said on Thursday that China will "lose out" by not sending its top two finance officials to the global economic talks this week. She also called on Beijing and Tokyo to settle the row quickly, as "countries in this region are very important for the global economy".