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IMF to give China more power

Scott Tong Aug 30, 2006

TEXT OF STORY

BRIAN WATT: The International Monetary Fund is doing more than a little tweaking. Some would even call it an extreme makeover. Part of the revamp is giving China more influence and more voting power. So, who’s pushing for this? Among others, the Bush administration. Marketplace’s Scott Tong reports.


SCOTT TONG: Critics of the present setup want more power for emerging economies, like Korea, Mexico and China. That would mean less for European and North American countries.

Now the Bush Administration has an uneasy relationship with Beijing, so why is it pushing for the change?

Robert Scott of the left-leaning Economic Policy Institute says it wants something in return, for Beijing to revalue its currency in relation to the dollar.

ROBERT SCOTT: The Bush Administration is trying to get China to come to the table and they think that will encourage China to participate and becoming a more responsible member.

That carrot approach has failed, says critics, including Scott.

SCOTT: We did this with the WTO we gave them membership on the promise that they would abide by global trading rules. They have done just the opposite.

An IMF executive told the Financial Times today that giving China more power could happen in the next few days.

In Washington, I’m Scott Tong for Marketplace.

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