There is no doubt that the row over a group of tiny islands in the East China Sea has sealed the deterioration in relations between China and Japan. The diplomatic spat over the Diaoyu/Senkaku islands, which sparked violent protests, with Japanese flags and factories burned, stunned Tokyo, and caused Japanese companies to consider scrapping investment plans in China. Why open a new factory, they ask, just for it to be firebombed or defaced while an acquiescent administration turns a blind eye?

Until recently the "one-plus-one" investment policy (for every factory built in Japan, companies also had to build one overseas) benefited China. But now insiders say firms will look to support growth in Indonesia, the Philippines or newly open Burma.

For the International Monetary Fund, which has taken its annual meeting to the Japanese capital for the first time since 1964, the dispute is one of many linked to slowing growth and a rise in protectionism.

This week's meeting was scheduled for Cairo, until the Arab spring made the region look too unstable for a gathering of finance ministers and global institutions. But with Chinese frigates circling the disputed islands and pleas for calm going unheeded, Tokyo's political situation is closer to Cairo's than the IMF expected.

China's leaders are undoubtedly under pressure. Growth has slowed from more than 10% to less than 8% over the past two years, but its rising population means that growth of between 6% and 7% is needed just to keep pace. In March, Beijing cut its growth target for the whole of 2012 to 7.5%. As any student of politics knows, a foreign dispute distracts attention from failing economic policies.

But opting for a short-term boost in domestic popularity over a deterioration in long-term relations with foreign investors looks to be a huge mistake by the Beijing authorities. And the IMF understands that this local dispute has much wider ramifications: after all, Japan is the world's third-largest economy and China, its second-biggest, accounts for about a fifth of the world's total economic output. Any slowdown is going to hamper a global recovery.

The Americans have already put the brakes on expansion in China, in reaction to general corruption and to the growing threat from intellectual property theft. European companies have also backed off, preferring to send in high-value goods made at home.

Japan's economy is not in great shape either. This year, colossal spending on imported gas and oil will send the balance of payments into reverse for only the second time in three decades. The yen is at a historic high against the dollar, making Japanese products expensive abroad, and the political situation remains unstable, with the Democratic party government able to push through a VAT rise only on a promise of early elections.

And let's not forget the eurozone crisis. That continues to provide plenty of food for thought for IMF officials, given the failure to deal with Spain's financial black hole and growing public unrest among southern Europe's increasingly desperate citizens.

Yet it is the Japan/China dispute that is worrying them most. Japan believes the Chinese are wilfully making trouble: it has stressed that it bought the islands earlier this year to keep them out of the hands of the mayor of Tokyo, a Boris Johnson-style character with a populist enmity towards the Chinese community in Japan.

Maybe Beijing thinks it can go it alone without Japanese investment. It would be wrong, and the decision could have implications for us all.

Have women had their quota of being kept down?

What does it take to get more women into the boardroom? Compulsory quotas? This is always presented as the nuclear option and women who have managed to bust through the glass ceiling are by and large against them.

Last week, announcing her decision to leave Financial Times owner Pearson after 15 years in charge, Dame Marjorie Scardino said: "I thought, in 1997, that by the time I left Pearson, things would be different in terms of the number of chief executives and board members who are women. It's not really too different and, for that, I'm sorry."

It had been hoped that Scardino, the first woman to run a FTSE 100 company, would be the first of many, but there have never been more than five female FTSE 100 bosses at any one time. Yet Scardino rejected quotas: "You should choose people on the basis of their abilities. Not on the basis of things they can't do anything about."

But doesn't the under-representation of women in the City – they still occupy fewer than one in five FTSE 100 boardroom seats – suggest their "abilities" are being overlooked?

Last year, a government inquiry led by Lord Davies of Abersoch set a target of 25% female representation on FTSE boards by 2015. Companies were told to act or face eventual quotas. There was a flurry of appointments of women to FTSE boards, but a worrying proportion of them were in part-time, non-executive roles.

Last month Royal Mail's Canadian boss, Moya Greene, told a conference that the pace of change in this country was "glacial". When she started in the Canadian civil service, no woman taking a senior role could be married. Progress came thanks to quotas. "Unless you have quotas and live by them," she said, "you won't see change."

Strong stuff. But the government is fighting an EU move to impose a 40% female quota for large company boards, arguing that national schemes should be given a chance. At what point should women start to lose patience? After all, 15 years is a long time.

For BAE and EADS, two into three won't go

So much for Tom Enders's and Ian King's vision that an EADS/BAE Systems combo would be a depoliticised company. For the past week, all the debate has been about how great a slice of the shares the French and German governments will retain, or at least control. "A lot" seems to be the short answer – maybe 9% each. By contrast, it is envisaged that the UK would rub along with only a golden share to protect national security and act as a veto on a change of control. Former chancellor Alistair Darling doesn't like the smell of it.

"We will be taken to the cleaners," he told the FT. "I don't see how you could have a large new company like this with the French and German governments having large direct and indirect stakes and we have none."

Darling is right. It is relatively easy to accept that BAE, in the face of shrinking defence budgets, needs to do something. The logic of a grand European defence-and-aerospace company is also sound. But a three-way alliance will work only if all three sponsoring governments have equal standing. Any other arrangement invites years of squabbling over jobs and investment and accusations of political interference. The two chief executives want a business that operates "in a normal commercial manner and which confers the same rights on all shareholders, large and small". That won't happen if two governments, but not the third, have large shareholdings.