Editor's Note: The move toward socialism takes many strange, unexpected twists and turns. - LMB
BEIJING, China (AP) -- China will want a bigger say in any new global financial order emerging from the current economic crisis but will likely move cautiously in contributing to a proposed bailout fund for ailing countries, economists said.
 |
| A man in Beijing eats lunch Wednesday next to last year's forecast of Chinese stock markets. |
British Prime Minister Gordon Brown has called on China and oil-rich Persian Gulf states to fund a major increase to a bailout fund at the International Monetary Fund, the latest call for Beijing to use some of its $1.9 trillion of reserves.
Beijing's leaders have said they are willing to cooperate internationally but have said China's responsibility lies in keeping its economy going by boosting domestic demand.
China has already cut interest rates -- including by just over a quarter point Wednesday -- and economists predict it will take further measures to boost domestic consumption. However, weaker export demand from Western markets means China must remain cautious with its money. The majority of its foreign currency reserves are invested in U.S. Treasury securities, which is also lending support to the U.S. economy.
If China doles out money as part of any kind of international rescue fund, it should get more influence in bodies such at the International Monetary Fund, said Zuo Xiaolei, chief economist with China Galaxy Securities Company.
"They think China is rich by only looking at the $1.9 trillion foreign exchange reserves. But China also has to pay external debts and keep the stability of its own financial safety," she said.
"Let's assume, if China does give money to the IMF, of course China should ask for more rights," she said.
In a speech Tuesday in Moscow, Chinese Premier Wen Jiabao said developing countries should get a bigger voice in international financial institutions and the ability to set rules, though he did not specify which institutions. His comments come as the U.S. hopes China will play an important role in international financial talks at a summit in Washington next month.
"The right of emerging and developing countries to know what's going on, have a voice, and the right to set rules should be improved," he said, according to a transcript on the Foreign Ministry's Web site.
Wen called for the establishment of a new international financial order because of the financial crisis, and called for the establishment of a multi-currency international monetary system, saying other currencies should be promoted. He did not give details.
China's Finance Ministry did not respond to calls and a fax for comment Wednesday. The People's Bank of China referred calls to the Ministry of Foreign Affairs, who did not respond to calls. Foreign Ministry spokeswoman Jiang Yu said Tuesday the financial system needs to be reformed effectively.
Brown said Tuesday that countries with the largest reserves should do the most, and argued that the IMF needs much more than its current $250 billion set aside to assist struggling countries. He did not specify how much more.
The IMF and its sister institution, the World Bank, were founded at the end of World War II and have been dominated by the United States, the largest shareholder, and the major European Union countries.
Earlier this year, members of the IMF gave final approval to an overhaul that triples the basic votes of developing countries in the 185-nation organization.
But the voting shares of China, India and Brazil do not approach the weight they carry in the global economy. China has one director on the IMF's 24-member executive board, but only 3.66 percent of the total voting rights even though it accounts for nearly 10 percent of the world's economy.
http://edition.cnn.com/2008/
WORLD/asiapcf/10/29/china.imf.ap/index.html
Print This