A plan by the International Monetary Fund (IMF) to boost China's voting
rights is not aimed at putting more pressure on Beijing to make its exchange
rate flexible or undertake other policy changes, IMF chief Rodrigo de Rato said
yesterday.
The 184-member institution plans to adjust its existing structure by
immediately boosting the quotas of China, South Korea, Turkey and Mexico and
later rework the voting rights of all member nations within two years.
While most countries back the plan, ensuring its passage today, the Group of
Seven industrialized countries that dominate the IMF have at the same time been
urging China to ease its controls on the currency exchange rate.
Welcoming the IMF changes, Zhou Xiaochuan, governor of the People's Bank of
China, reiterated that China would reform its foreign exchange regime in a
"gradual, effective, and controllable" way.
Zhou said that China is a big country and has to consider many aspects in its
policymaking.
He downplayed the role of the yuan's exchange rate in resolving global trade
imbalances.
"Structural policy plays a much larger role compared with the exchange rate,"
he said.
De Rato said the move to boost China's voting share was just a recognition of
its economic strength and was not linked to any reciprocal action.
"The international community recognizes that China has increased its role in
the world economy," de Rato told reporters. "I don't think ... a bigger role in
the institution (IMF) makes you subject to more pressures."
Being a member of the IMF, China is already under its surveillance and the
fund regularly communicates its view on the challenges confronting the Chinese
economy just as it does with all other member countries, he said.
De Rato, however, acknowledged that more power often brings more
responsibility.
A bigger voice at IMF "would allow you to express your views but, of course,
you will listen to the views of others," he said. "That happens to the first
share holder and the last shareholder."
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