Casual talks during a International Monetary Fund (IMF) meeting that the headquarters could be based in Beijing in 10 years are recognition of the growing weight and contribution of emerging market economies. Chinese people shouldn’t take it too seriously, said Jin Zhongxia, an IMF executive director from China, in an exclusive interview with China Business Network on July 30.
IMF Managing Director Christine Lagarde said that emerging market economies should be better represented at the IMF if current growth trends continue, when introducing the newly released IMF World Economy Outlook at the Washington-based think tank Center for Global Development.
Lagarde’s comments are recognition of emerging market economies including China, and also a incentive for developed countries. Her main point is the current growth trend and growing weight and contribution of the emerging economies, Jin told China Business Network.
IMF rules require the organization’s headquarters to be based in the largest economy among member-states in terms of quota—and not GDP, noted Jin. China is now the third-largest shareholder in the IMF, after the U.S. and Japan.
In terms of GDP, China is the second largest economy, but GDP accounts for 50 percent and is only one factor in the IMF. China could exceed the U.S. GDP in two decades, but it would be very hard and not very likely that China could do this in one decade, the executive director predicted.
The IMF revises the voting structure every five years based on the quota review. Though China’s voting power in the IMF has increased, the gap between China and the U.S. is still large. China’s voting power could overtake the U.S. in a decade, and IMF’s relocation to Beijing is possible, said China Business Network.