China should have a more central role in the IMF, with its voting stake increased, Australian media cited him as saying. He pledged to work toward that end during the London summit.

The IMF is having a US$550 billion financing shortfall in the developing world which was hit hard by the crisis via plunging exports and capital outflow, while China is one of the few countries in the world sitting on huge piles of cash.

“It shouldn’t be a big problem for China to invest US$100 billion in IMF,” Professor Yuan Gangming of the CASS said in a telephone interview, as the country has a foreign exchange reserve of about US$2 trillion, albeit the growth slowed down dramatically due to falls in exports.

However, countries are divided over whether any new financing to the IMF should be offered in the form of increased quota for capital providers, or pure loans, as the former will dilute other countries’ voting rights.

China would like to see more voting rights after contributing more, while the US, Japan, and EU want to keep their say in the IMF.

However, Yuan did not regard that as a big issue. “The voting rights issue can be put aside for a while,” he said. “The imperative is that China should first take the initiative to actively present itself at the platform of IMF.”

Zhejiang University’s Professor Shi Jinchuan agreed, saying increased capital contribution will lay a foundation for China to demand greater say for developing countries within the organization.

(chinadaily.com.cn March 25, 2009)