China calls for ‘critical’ IMF reforms to mirror economic prowess, a collective Asian voice
- People’s Bank of China governor Pan Gongsheng tells the Boao Forum for Asia on Wednesday that established international institutions are in need of reform
- He also appealed to central bank officials from Indonesia, Singapore and Mongolia to dovetail efforts to reflect the weight of Asian countries and emerging markets
China’s central bank chief has reaffirmed Beijing’s desire to have more of a say in the international financial system to match its economic prowess, while also calling for a regional monetary mechanism and enhanced bilateral cooperation.
People’s Bank of China governor Pan Gongsheng told the Boao Forum for Asia on Wednesday that established international institutions like the International Monetary Fund (IMF) need to be reformed in terms of their quotas and voting power to better mirror the weight a specific economy carries.
A day earlier, IMF managing director Kristalina Georgieva had visited China’s central bank in Beijing, during which she discussed IMF quota reforms with Pan.
China holds 6.09 per cent voting power in the Washington-based fund, far lower than the 16.5 per cent share held by the United States, which effectively gives it veto power, with major decisions at the IMF requiring 85 per cent to be in favour for a motion to be approved.
The quota reform is critical to the IMF’s governance representation and legitimacy
The quota is far lower than China’s share in the global economic output, which stands at about 18 per cent.
“The quota reform is critical to the IMF’s governance representation and legitimacy,” Pan told a panel on Asian financial stability.
The fund concluded its latest round of quota reviews in December, but no decision has been made about any adjusted distribution.