The United Kingdom will fully support an expanded Chinese role in international financial institutions at the upcoming G20 summit in London, a British diplomat said in Beijing yesterday.
Reforming international financial institutions, such as the International Monetary Fund (IMF), "so they represent the realities of the 21st century's economy" will be a major theme of next week's summit, counselor for trade and economic policy of the British Embassy in Beijing Duncan Sparkes said.
"That means giving China, among others, a bigger say in the way the organization (the IMF) is run," Sparkes said.
He said the UK wanted to see China "occupy a rightful place" in both the IMF and the World Bank.
China is now the world's third largest economy, but its role in international financial institutions remains rather limited.
Beijing has only 3.7 percent of IMF quotas, while the United States and the European Union share 49 percent in total. Quotas determine how much a country must contribute to IMF capital, how much it can borrow and how many votes it gets.
Sparkes said he can "assure" that London supports Beijing's bigger role in the international financial system.
"Indeed we were instrumental in making sure an agreement has already been reached that China joins the Financial Stability Forum (FSF)," Sparkes said.
The FSF – a group of central banks and regulators meeting in Switzerland – plays a "vital role" to "detect" financial crises, Sparkes added.
He praised China's plan to buy bonds if the International Monetary Fund (IMF) issues them.
"It's a signal we have been waiting for and very much welcome," Sparkes said.
While expanding China's role, Sparkes said world leaders should make the London summit one for the rest of the developing world, because poor countries are "more vulnerable" to the economic crisis.
"(The G20 leaders) must give a clear commitment to resist protectionism" to make sure developing countries' exports can gain access to developed countries' markets, he said.
He called China "a role model we must encourage others to follow" in resisting protectionism.
(China Daily March 25, 2009)