How China’s global ambitions have almost replaced the IMF president
Whether Kristalina Georgieva’s previous position at the World Bank manipulated data to benefit China caused an uproar that almost made the Bulgarian economist. Lost his job.
Regardless of the veracity of the accusations, no one doubts that China is determined to leave its mark on the multilateral institutions that underpin the global financial system.
“China wants a bigger voice and more seats,” said Yu Jie, a senior China researcher at the Chatham Institute. “It wants to establish itself as the leader of the global South.”
In recent months, China’s geopolitical ambitions have changed from outlawing Cryptocurrency trading While promoting the digital renminbi, it also takes trade measures against countries that do not agree.These include closing the gate Lithuanian export This month, the Baltic States allowed Taiwan to open a representative office in Vilnius.
Equally important are China’s financial and diplomatic ambitions in the United Nations and Washington-based institutions (such as the International Monetary Fund and the World Bank), which are at the core of the global system designed by Western countries after World War II.
What is unique is that China has achieved its ambitions by using its unusual dual status as a developing economy and a superpower.
“The situation we saw in China really has no precedent,” said Scott Morris of the Global Development Center, a Washington-based think tank. “China has a unique importance in these institutions, especially in the World Bank… as a shareholder, donor and customer.”
For the poorest country in the world, China is now The world’s largest bilateral lender, Is actually larger than the sum of all other bilateral lenders.
Its ambitious overseas infrastructure investment “One Belt One Road” initiative has also won reduce It was replaced by a moderate global development initiative launched by President Xi Jinping at the United Nations General Assembly in September.
Yu said this is an example of China’s “playing with two hands”. On the one hand, it seeks recognition from global institutions such as the United Nations to advance its agenda and gain support, especially in developing countries. Yu said that GDI “does not even sound like a Chinese initiative.”
At the same time, however, when its global ambitions at the World Bank or elsewhere were blocked, it quickly established alternatives, such as the Shanghai-based New Development Bank and the Asian Infrastructure Investment Bank.
China’s frustration is understandable. The prominent role of the G20 during the 2009 financial crisis was the belated recognition by the West that China and other major emerging economies should have a greater say in global governance. However, since then, almost nothing has changed in the International Monetary Fund or the World Bank.
Although accounting for nearly one-fifth of the world economy, China’s shareholding in these two institutions is only about 6%, which is lower than that of Japan and only one-third of that of the United States. Efforts to reform the quota system of the International Monetary Fund have been hindered by losers, including European countries.
As for the World Bank, a formula it devised after the financial crisis would double China’s shareholding ratio to 12%. But when considering the proposal, Sino-US relations deteriorated during the Donald Trump administration, and China’s ambitions were shelved after the plan was shelved for future consideration.
“If you are the United States, do you want to be deeply depressed? [allies] To please China? Morris asked. “It is difficult to interpret the situation and conclude that the United States will do this.” “
This tension reached its peak during the World Bank’s 2018 capital increase.The CEO at the time, Georgieva, was allegedly in charge of overseeing Data manipulation In the bank’s flagship “Doing Business Report”, China ranks high.
When these allegations came up in September this year, Georgieva, who was later transferred to the post of IMF president, was accused of doing so to help persuade China to increase funding.But with her Pointed out in her defense, China “has clearly supported the bank’s capital increase for many years.”
On the contrary, her critics said that she did so to appease Beijing after others were not allowed to increase their holdings in Beijing.
Georgieva denied any wrongdoing, and the IMF’s board of directors, after reviewing these allegations, concluded that Insufficient evidence To show that she played an inappropriate role.
China has achieved greater success in the United Nations. In the past 20 years, as Beijing seeks to increase its influence, China’s contribution has risen from 1% to 12%, placing the country in second place. At the same time, the contribution of the United States has fallen from 25% to 22%.
Like the United States, Chinese citizens are now in charge of four United Nations agencies, including the Food and Agriculture Organization of the United Nations and the International Telecommunication Union.
The cost of this impact is relatively low. Augusto Lopez-Claros, executive director of the Global Governance Forum, said: “You have to believe that they understand that they can become an important participant in the international environment with relatively little money.” They know this better than Americans.”
CGD’s review of China’s expanding role in multilateral institutions and other development banks shows that Beijing does its best to express its position in these institutions. However, since China is still officially classified as a “developing country”, it also seeks financial and technical assistance from these institutions.
“They have not given up their status as a developing country at all,” said Morris of CGD. “It’s really unique. Think about India or other large emerging economies. They borrow a lot of money but don’t have the status of a global leader.”