IMF and World Bank meetings show China's rising influence

15:13, April 27, 2010      

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Backgrounder: Timeline of developing countries' rise in the IMF

The spring meeting of the World Bank and the International Monetary Fund (IMF) revealed signs of China's greater influence in the world economy and marked a major breakthrough in the shift of voting power from developed countries to developing countries.

The meeting also was significant in two other important respects: it showed Asia is playing a significant role in leading the global economic recovery and that each country should cooperate in light of economic uncertainty.

China's voice significantly louder in World Bank

The Development Committee under the World Bank approved the voting power reform plan on April 25. This plan shifts 3 percent of the voting power from developed countries to developing countries, and the developing countries' combined share of voting power will increase from 44 percent to 47 percent. China's voting power in the World Bank will increase to more than 4 percent from nearly 3 percent, making it the third largest shareholder behind only the United States and Japan. China was previously the sixth largest.

In February 2010, the IMF appointed Zhu Min, deputy governor of the People's Bank of China, as the Special Adviser to the IMF chief. Many scholars believe this move implied another rise in the voice and representation of developing countries in global financial institutions after World Bank President Robert Zoellick appointed Justin Lin the chief economist of the World Bank.

Chinese Finance Minister Xie Xuren said the reform approved at the meeting is the first reform in the history of the World Bank that aims to enhance the representation and governance power of developing countries. It marks the stronger economic power and higher international positions of developing countries, sets terrific precedents and will further advance the share reform of the World Bank. Zoellick also said he was proud that the reform has reflected China's increased influence in the world economy.

Li Yiping, an economics professor at Renmin University, said, "As China is becoming increasingly rich, China has a higher position in the international community and a greater voice in international institutions such as the World Bank. However, China will shoulder heavier responsibilities because more shares mean more capital contribution."

Li added that China's outstanding performance during the global financial crisis has won the country the trust of the world. The rise in China's international position was a result of China's excellent performance. Meanwhile, this has posed higher requirements for China. The responsibility China will shoulder should match its position as the third largest shareholder.

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