Mexican banker has 'fruitful' talks with Beijing

PUBLISHED : Friday, 17 June, 2011, 12:00am
UPDATED : Friday, 17 June, 2011, 12:00am


Mexico's central bank chief said a discussion with Chinese officials about his bid to head the International Monetary Fund was fruitful, but stopped short of saying whether he had received Beijing's support.

Agustin Carstens said the officials did not set any conditions to win their backing, but he pledged to grant emerging markets a stronger voice in the IMF if he gets the job.

The Bank of Mexico's governor met People's Bank of China governor Zhou Xiaochuan , Minister of Finance Xie Xuren and Vice-Premier Wang Qishan during the latest leg of Carstens' tour to solicit support for his candidacy.

'The Chinese authorities are very respectful,' he said. 'They listen very carefully. They express their views very clearly.'

But whether they will back him remained to be seen. 'They are evaluating [the candidates'] characteristics, and once they have finished the evaluation, they will make up their mind,' he said.

Carstens admitted that he trails his rival in the race, French finance minister Christine Lagarde, who has the backing of the European Union.

Carstens has the support of 12 Latin American countries, but he lacks the support of Argentina and Brazil.

Last week Lagarde said she her trip to China had been 'very positive', and she hinted that central banker Zhu Min could play a more important role in the IMF. A report in the Financial News, the mouthpiece of the central bank, said she was the right candidate to lead the IMF.

Emerging markets, including China, have called for an end to the tradition that the IMF top post should be filled by a European. However, the Financial News report said a successful bid by Lagarde would not mean that the calls to end the convention were being ignored, because the international body needed to respond to the current European debt crisis.

Andy Xie, an independent economist in Shanghai, told the Associated Press that China would like to see a leader from emerging markets because these countries 'have their own problems ... but this doesn't change anything as the US and Europe have over 50 per cent of the [voting] share.'

He said the contest was 'a show' and there was no doubt that Lagarde would win. 'For public appearance [the candidates] need to seek some support from emerging economies, but the final outcome, there's no doubt,' he said.

The IMF's executive board will elect a leader on June 30. The position is open because the previous IMF head, Dominique Strauss-Kahn, stepped down after being accused of rape in New York.