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China says investing in EFSF too risky
It looks like China is getting ready to make its big play on the International stage to add its own currency to the IMF basket.
Zhang Jianping, director of the international economic cooperation department under the National Development and Reform Commission’s think tank, said investing through the IMF would be a better option than investing in the European Financial Stability Facility (EFSF).
The EFSF, which is the European bailout mechanism, would be a high-risk channel for investment due to uncertainties in the European market.
Li Daokui, a leading Chinese economist, director of the Center for China in the World Economy at the Tsinghua University School of Economics and Management, as well as a central bank adviser, said "If they want emerging countries to put money in, do it in a business-like way. It’s necessary for the EU to make a commitment to release part of its shares to emerging economies,"
"Details could be discussed, and gaining approval from the IMF is not easy, but it’s a reasonable principle that providing money must be linked to quota reform," Li added.
The EU’s total quota in the fund is nearly 40 percent, followed by the US at about 17 percent. China’s current quota has been raised to about 6.39 percent from 3.9 percent previously. Emerging economies have long sought a bigger say in the IMF. A member nation’s quota – a financial stake in the fund – determines its share of the votes.
"China and other emerging economies have a lot to gain from being active in multilateral bodies, and I’m very pleased to see how China has grown its role in the IMF policy. It’s very noticeable and constructive," said Annika Melander, head of the economic and financial affairs section of the Delegation of the European Union in China.
more on this story in the ChinaDaily.