A stronger voice
As the global financial crisis continues to take its toll, China has become noticeably more assertive. Premier Wen Jiabao has called on Washington to guarantee the safety of Chinese assets, a move that would have been inconceivable only a year ago. This was followed by a call by Zhou Xiaochuan, governor of the People's Bank of China, for a new reserve currency to replace the dollar. Without mentioning the United States, he pushed for a reserve currency to be created 'that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by credit-based national currencies'.
And now, Vice-Premier Wang Qishan, in an article in The Times of London, has called for developing countries to have a bigger say in how the international financial system is run.
US officials, led by President Barack Obama, dismissed Dr Zhou's call for a new reserve currency as unnecessary. 'I don't believe that there's a need for a global currency,' Mr Obama said. 'The dollar is extraordinarily strong right now.'
It is quite striking to see how times have changed. Instead of Washington demanding that China revalue its currency, it is now Beijing exhorting the US to properly manage the dollar so as to safeguard Chinese investments.
And Chinese officials, who in the past were willing to be lectured by Americans on how to run a free market, have become increasingly assertive, even before the current crisis.
In fact, last year Dr Zhou said in Maryland while attending the US-China strategic economic dialogue that, while China had learned useful lessons in the past from the US, now it was learning from American mistakes. He was referring to the subprime mortgage crisis, which has now developed into a fully fledged financial crisis, with the US economy shrinking while the Chinese economy is still growing, although not as robustly as before.
It was inevitable, as China grew stronger in every sphere, including economically and militarily, that it would want to be treated as an equal by the US and the rest of the international community. And the time has clearly arrived when China is prepared to play a bigger role in the world. The late paramount leader, Deng Xiaoping, advocated a strategy of 'biding our time' but Chinese leaders today evidently feel that the time has come for them to claim a leadership position.
Because Beijing currently holds about US$2 trillion in foreign exchange reserves - the largest amount in the world - many countries have been looking to China for help. For example, at the Asia-Europe Meeting in Beijing in October, European Commission president Jose Manuel Barrosso said: 'We need Asia to be on board and, more particularly, countries like China and India.'
While China and other emerging economies are now expected to bolster the resources of the International Monetary Fund, Mr Wang, in his article, makes it clear that China is ready to play its part but there must be 'a balance between the rights and obligations of the contributing countries' to the IMF. China has already agreed to participate in financing the World Bank.
The very fact that members of the G20 - rather than just the G7 - are meeting in London tomorrow reflects the shift in global economic power. The world's seven industrialised economies - the US, Canada, Japan, Germany, Britain, France and Italy - simply cannot tackle the crisis without the help of the emerging economies, countries like India, Brazil, Russia, Australia and South Africa, as well as China.
But, if the Chinese - and other emerging economies - are expected to play a bigger role, they should also be given a bigger voice. Some changes need to be made. Mr Wang has called for voting reforms at the IMF and other institutions to give developing countries more say. Such reforms are clearly overdue.
At present, the president of the World Bank is always an American, while the head of the IMF is always a European. This can no longer go on. As long as Americans and Europeans were in charge, they could call the tune. But times have changed.
Frank Ching is a Hong Kong-based writer and commentator
