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China to be part of IMF fundraising

By Song Shengxia (Global Times)

08:08, April 23, 2012

China said over the weekend that it will not be absent from the International Monetary Fund's (IMF) effort to increase funds, and urged the IMF members to speed up the review of a quota reform plan which would give developing economies more say in the fund's operations.

"Regarding increasing resources for the IMF on the basis of a consensus in the international community, China will not be absent from the effort," said a statement posted by the People's Bank of China (PBC) on its website Saturday, summarizing Chinese speeches at an IMF spring meeting in Washington.

China hopes the fund could urge its members to complete the review of the membership quota reform plan agreed to in 2010 as soon as possible and ensure its completion before the fund's annual meeting in October, the statement said.

The statement did not specify how much China might contribute.

IMF announced Friday that the fund had raised fresh money from various economies amounting to more than $430 billion, as part of efforts to shield the global economy from the eurozone debt crisis.

Members ranging from developed economies such as Japan and Australia to emerging economies such as Brazil, Russia and India have already pledged to increase contributions to the fund.

The US, the fund's largest shareholder, declined earlier this month to provide fresh funds.

Contributions from the IMF members are usually attached to the voting power, known as membership quotas, that they could gain at the fund.

In 2010, the IMF's Executive Board passed a quota reform plan, which if completed could raise China's quota to 6.39 percent from 3.72 percent now, giving it a greater say at the fund.

Such a plan usually requires approval from the governments of members. The US, holding 17 percent of the quota, has so far delayed its decision.

"The US, the closest ally to the EU, chose to stay away without contributing a dime to the fund's new fundraising effort to help the EU in need," Zhou Shijian, a senior researcher at the Institute of Sino-US Relations at Tsinghua University, told the Global Times yesterday.

"China can't be an international Lei Fei (a Chinese soldier in the 1960s who is known for devoting money selflessly to help the needy) indefinitely. We should exert more pressure on the fund or developed economies including the US to give China the matched voting power," he said.

"The US prefers to keep the existing formulas because it is reluctant to redistribute the voting power which will affect its interests," said Song Guoliang, a finance professor at University of International Business and Economics.

"But the IMF's existing quota formulas could not meet today's situation as the economic power, influence and contribution of its members have changed radically in recent years," he said.

IMF quotas are assigned based on GDP, openness, and economic viability. China surpassed Japan to become the world's second largest economy in 2011.

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