Washington DC (CNS) -- Former vice chairman of the People's Bank of China, Zhu Min, became Deputy Managing Director (DMD) at the IMF on July 26.
As the first Chinese in such a high position since the founding of the IMF in 1944, Mr. Zhu is bound to leave a significant impact on the history of China and the IMF as well.
The Mr. Zhu's single step from the Director's Assistant to the DMD is a symbolic and essential leap for China.
China has gained more attention in the IMF with the fruits of the opening-up policies, from its growing shares and voting rights to Zhu's appointment. This has also motivated the gradual shift of the international power structure.
During the economic downturn of the global financial crisis, China remained the bright spot in the global economy and contributed to over 50% of the world's economic revitalization. Moreover, it jumped into second place among all economies.
Undoubtedly, China is obtaining more and more weight in international discourse. Yet, even with this increased influence, the fact is that developed countries will still be playing the main roles in the world economy and financial system, as usual.
A simple comparison explains this reality well. Thanks to the IMF reforms of past year, the voting rights of China climbed from 3.65% to 6.07%, less than half that of the U.S. (about 17%). Adding those of some 100 newly rising economies, the sum of 40.5% is still disadvantaged against the Group of Seven's influence of 44.3%.
In other words, the U.S. is not giving up its decision-making power with its Western allies. Another example can be seen in the hidden rules of IMF's personnel; a European always sits at the top, followed by an American as the first deputy. The newly-added fourth deputy position for Mr. Zhu seems to be a breakthrough in IMF history. Yet, it actually reflects a negative aspect, because other deputies from the U.S., Europe, and Japan, refused to give away any of their power.
Economist Shi Jiandao at the Heritage Foundation told Reuters that no reasonable objection was expected in the invitation for a Chinese person to join the IMF leading group. However, it is such a misfortune that a new position was as it shows the hegemonic persistence of the old powers against new markets.
The 2008 financial crisis has thrown a heavy fist on the current international financial system under Western domination. Analysis indicates that a sustainable IMF is dependent on a thorough reform to get rid of the current hereditary regime of Western control and reenergize the improper and unfair financial order. This reform should include sound efforts in the redistribution of shares and voting rights, and reconsideration of its supervision duties and leader arrangement.
Just as Ms. Lagarde promised when she was elected as the General Director, deepening reforms in the IMF will be insisted upon and representation rights will be properly redesigned for contributors to the world economy, such as China.
On this, she should seek constructive methods under Zhu's suggestions. To a certain degree, China's development path is unique compared with other old powers. The voices of Zhu Min and Lin Yifu are in fact a concentration of China's 30-year opening-up experiences.
Lagarde highly valued and anticipated Zhu addition DMD, especially his potential for "strengthening the Fund's understanding of Asia and emerging markets more generally."
At this level, discourse does matter. With entry to the core management team, along with his fluent English and extremely talented skills, Zhu is promoting more dialogues ahead of the "Western decisions." The international community can get to know more about China and its rising peer states, and the other side can get better involved in the current order.
