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Experts urge more backing for China on IMF stake

By Fu Jing (China Daily)
Updated: 2009-09-10 09:34

The international community should encourage China to commit more funds to the International Monetary Fund (IMF) to increase its lending capacity, while allowing it more say in the global financial architecture, an expert has said in a yet-to-be published report.

Bessma Momani, a professor on politics at the University of Waterloo, said while a number of industrialized countries have committed government loans to the IMF, the G20 needs to continue encouraging countries such as China and the oil-producing Gulf states, to commit more funds to the IMF. "The reluctance of these capital-surplus countries to invest in the IMF is partly related to their perceived alienation from real IMF decision-making power," said Momani in the Special G20 Report: Flashpoints for the Pittsburgh Summit.

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In the same report, Gregory T. Chin, an assistant professor at the York University in Toronto, urged leaders from industrialized countries to back off from self-defeating positions for effective discussions on currency revaluation, particularly on the Chinese renminbi. Putting the currency issue on the agenda for Pittsburgh risks inducing uncomfortable questions about the US dollar system, and may cause reverberations in currency markets. However, Chin said that as the United States and China ease their positions on exchange rates, each of the G20 countries should step back from narrow definitions of national economic interest and strike a balance between national and systemic needs.