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{{improve categories|date=June 2017}}
{{improve categories|date=June 2017}}
[[Category:Economy of China]]
[[Category:Economy of China]]


This is a relatively good summary of China's ongoing issues with the IMF. It would perhaps be fair to provide more input about IMF programs that perhaps are helping China as well, and perhaps some information from the article 4 consultations would be good as well. The information about the SDR basket seems a little bit arbitrary and doesn't seem to be in place here. Maybe just mentioning that the Yuan is part of the basket would be better. Overall, the lack of an opposite viewpoint makes this article and extremely pro-China anti-IMF piece, even if it was not meant to be so. The citations all work and the information seems good. [[User:Jseo1|Jseo1]] ([[User talk:Jseo1|talk]]) 01:04, 10 June 2017 (UTC)

Revision as of 01:04, 10 June 2017

In 1945, China, under the governance of Chiang Kai-shek’s Kuomintang (KMT) government, founded the International Monetary Fund (IMF) with 34 other founding states. After the Chinese Civil War, the Communist Party of China (CPC) defeated KMT and obtained control over Mainland China. In April 1980, the People’s Republic of China, led by CPC, established a formal relationship with the IMF and replaced KMT’s position within the institution. The Chinese-IMF relationship mainly develops around affairs associated with the IMF governance and the IMF SDR[1][2].

China and IMF Governance

China has been trying to expand its political and decision-making power in the IMF. As a country's voting power in the IMF is determined by its quota, which is the amount of that country’s money contribution to the IMF, China has been trying to raise its quota continuously. In May 1980, the Chinese government appealed to adjust its IMF quota upward. With the approval from the board of IMF, the quota of China was increased from 1.2 billion SDR to 1.8 billion SDR. China also obtained a single-country seat in the IMF executive board, which expanded the number of IMF executive directors to 22. At present, the quota of China in the IMF is 30.5 billions of SDR, and it takes 6.09% of the total vote[3].

To further rebalance the power distribution in the IMF, which has been favoring the West and the developed countries, China criticized IMF for assigning the emerging economies and developing countries biased quotas that do not fairly reflect their economic capacities. China also appealed for reform in transferring the heavy voting power of developed countries to developing economies[4]. In 2010, the Chinese executive director of IMF, Zhou Xiaochuan, addressed to the board of IMF and asserted that giving more power to the emerging economies is critical for the legitimacy, accountability and long-term health of the IMF[5].

China also cooperated with other developing countries to advance its appeal of rebalancing the share of power within the IMF. One of such cooperation is the BRICS, which is a coalition of Brazil, Russia, India, China and South Africa. With the voices of these five countries combined, the BRICS has been more effective at negotiating with the developed countries on IMF governance[3].

China and IMF SDR

In 2015, the executive board of IMF reviewed the currency composition of Special Drawing Rights (SDR) basket and the appeal of having the Chinese Yuan as an additional reserved currency to the IMF SDR. The board decided that the Chinese Yuan met the criteria of IMF SDR and thus was approved to join the SDR basket[6].

On October 1, 2016, Chinese Yuan officially joined the SDR basket and became a foreign exchange reserve currency of the IMF, along with U.S. Dollar, British Pound, Euro and Japanese Yen.

The IMF conducts a quarterly survey called COFER, or the Currency Composition of Official Foreign Exchange Reserves. This survey collects the information on the IMF member states’ foreign exchange reserves. With the recent joining of Chinese Yuan, the currency varieties in the 2016 4th quarter COFER report include: U.S. Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Australian Dollar, Canadian Dollar, and Chinese Yuan. For the 5 SDR reserved currencies, their respective global foreign exchange reserve sums are:

U.S. Dollar: 5,052.94 billion USD

Euro: 1,559.26 billion USD

Chinese Yuan: 84.51 billion USD

Japanese Yen: 332.77 billion USD

British Pound: 349.33 billion USD[7][8]

The currency composition of the SDR basket is reviewed every 5 years. The current weights for the component currencies are:

U.S. Dollar: 41.73%

Euro: 30.93%

Chinese Yuan: 10.92%

Japanese Yen: 8.33%

British Pound: 8.09%[9]

The current value of SDR is determined by these 5 SDR reserved currencies and equals the sum of the following currency values:

U.S. Dollar: 0.58252

Euro: 0.38671

Chinese Yuan: 1.0174

Japanese Yen: 11.900

British Pound: 0.085946[10]


References

  1. ^ "At a Glance - China and the IMF". www.imf.org. Retrieved 2017-06-06.
  2. ^ Helleiner, Eric; Kirshner, Jonathan, eds. (2014). The Great Wall of Money: Power and Politics in China’s International Monetary Relations (1 ed.). Cornell University Press. doi:10.7591/j.ctt1287chj.8.pdf. ISBN 9780801453090.
  3. ^ a b Momani, Bessma (2016). Enter the Dragon: China in the International Financial System. McGill-Queen's Press. pp. 267–288.
  4. ^ "IMF Members' Quotas and Voting Power, and IMF Board of Governors". www.imf.org. Retrieved 2017-06-06.
  5. ^ "Statement by the Hon. Zhou Xiaochuan, Governor of the Fund for the People's Republic of China" (PDF). {{cite web}}: Cite has empty unknown parameter: |dead-url= (help)
  6. ^ "Special Drawing Right SDR". www.imf.org. Retrieved 2017-06-07.
  7. ^ "Chinese Renminbi to be Identified in the IMF's Currency Composition of Foreign Exchange Reserves". www.imf.org. Retrieved 2017-06-08.
  8. ^ "Special Drawing Right SDR". www.imf.org. Retrieved 2017-06-08.
  9. ^ "Press Release: IMF Executive Board Completes the 2015 Review of SDR Valuation". www.imf.org. Retrieved 2017-06-08.
  10. ^ "IMF Launches New SDR Basket Including Chinese Renminbi, Determines New Currency Amounts". www.imf.org. Retrieved 2017-06-08.


This is a relatively good summary of China's ongoing issues with the IMF. It would perhaps be fair to provide more input about IMF programs that perhaps are helping China as well, and perhaps some information from the article 4 consultations would be good as well. The information about the SDR basket seems a little bit arbitrary and doesn't seem to be in place here. Maybe just mentioning that the Yuan is part of the basket would be better. Overall, the lack of an opposite viewpoint makes this article and extremely pro-China anti-IMF piece, even if it was not meant to be so. The citations all work and the information seems good. Jseo1 (talk) 01:04, 10 June 2017 (UTC)

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