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China commits to IMF funding

By Song Shengxia (Global Times)

08:10, June 12, 2012

China will contribute to additional funding for the International Monetary Fund (IMF) and disclose the amount of its contribution at an "appropriate time," an official with the People's Bank of China (PBC) reiterated yesterday, urging IMF members to implement a quota reform as a condition for specific cash commitments.

"Regarding enhancing funds for the IMF on the basis of a consensus in the international community, Chinese leaders have stated many times that China will not be absent from the effort," Zhu Jun, deputy director of the International Department of the PBC, said at a briefing yesterday.

Zhu urged the IMF to complete a membership quota reform agreed to in 2010, suggesting China's contribution should be conditional on the implementation of the reform.

When asked about the amount of China's contribution, Zhu said China will disclose the details of the contribution when it is ready.

Contributions from IMF members are usually attached to voting power, known as membership quotas, that they can gain at the fund.

"China has committed to contributing more money to the IMF, which should give China matching voting power. This is the minimum requirement and non-negotiable," Zhao Yongsheng, vice chairman of Paris-based l'Association des Juristes et Economistes Chinois en France (China-France Association of Lawyers and Economists), told the Global Times yesterday.

"The delay in redistributing the voting power could only raise concerns among economies committed to the contribution and add uncertainties to the IMF's fundraising," he said.

In April, the IMF announced it had doubled the size of its emergency funds to more than $430 billion, as part of efforts to shield the global economy from the eurozone debt crisis.

Members ranging from developed economies such as Japan and Australia to emerging economies such as Brazil and Russia have pledged to increase contributions. The US, the fund's largest shareholder with 17 percent of the quota, declined to provide fresh funds.

"To get the IMF and developed economies including the US to honor their commitment and exert more pressure on them is especially important at this time when China's economy is slowing due to weak external demand," Ding Yifan, a researcher at the Development Research Center of the State Council, told the Global Times.

In 2010, the IMF's Executive Board passed a quota reform plan, which if completed could raise China's quota to 6.39 percent from 3.72 percent now, giving it a greater say at the fund.

However, the implementation of the quota reforms has been delayed as some countries, including the US, have failed to ratify the proposal.

At a G20 meeting in April, the G20 financial leaders agreed that their countries would honor their commitment to fully implement the IMF's quota reform by October, complete comprehensive review of the IMF quota formula by January 2013 and the next general review of quotas by January 2014.

"The EU is China's largest trade partner and export market," China's Minister of Commerce Chen Deming told a national imports working meeting yesterday. "To expand the IMF's emergency fund to help the EU out could help boost China's trade and diversify international currencies."

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