7th Jun 2023

Lagarde backs greater role for China in IMF

  • Shanghai: booming non-Western economies are seeking more IMF clout (Photo: stuck_in_customs)

French finance minister Christine Lagarde has backed a greater role for China in the International Monetary Fund, the Washington-based lender currently propping up a number of European economies.

Tipped as the most likely contender to take over from former IMF-chief Dominique Strauss-Kahn, currently facing sexual assualt allegations in the US, Lagarde also said her two days of meetings in Beijing, during which she lobbied for her candidacy, had gone well.

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"I am very satisfied with my visits," she said on Thursday (9 June), but declined to clarify whether she had won Chinese support for her bid.

Asked whether she might pick Zhu Min, a senior economic advisor inside the IMF, as her deputy, Ms Lagarde said it would be "fully appropriate if he played a key role".

As well as the question of senior positions, emerging economies such as China, India and Brazil have repeatedly expressed their desire for a re-weighting of IMF voting rights, frustrated by the West's disproportionate decision-making power.

Chinese voting rights were increased from 3.65 percent to 6.4 percent last autumn, a trajectory that Lagarde said should continue after a meeting with Chinese vice-premier Wang Qishan and central bank chief Zhou Xiaochuanon on Wednesday.

"The trends of reforms that has taken place must be continued and must be developed, both in relation to the governance of the fund, in relation to the appropriate representativeness of its members, particularly with those countries that are underrepresented, as is the case with China," she said.

Friday is the deadline by which candidates must register for the IMF's top post, with Lagarde's biggest challenge coming in the form of Agustín Carstens, governor of the Mexican central bank.

The Mexican official has so far failed to win open backing from key emerging countries however, while the US has indicated its support for the French finance minister.

A possible French inquiry into Lagarde's role in a 2008 arbitration payout appears to be her main obstacle.


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