Remarks at the Opening Ceremony of the Third Annual Meeting of the International Finance ForumBy John Lipsky, First Deputy Managing Director
International Monetary Fund
Xianghe, People's Republic of China
September 12, 2006
I would first like to thank the organizers of this conference for offering me the opportunity to join you today before such a distinguished audience, including so many old friends. I am honored to join you this evening for this important event. This is one of my first public addresses as First Deputy Managing Director of the International Monetary Fund, which I joined only at the beginning of this month. I am very pleased to speak at a gathering that demonstrates China's emergence as an important participant in the global economy.
Less than a year ago, this conference center hosted the Finance Ministers of the Group of 20 nations, which was chaired during 2005 by China. That meeting was the setting for important discussions on some of the crucial issues facing the international community. I believe it was appropriate for China to be at the center of those ongoing discussions.
Indeed, there is no question that China has assumed an important role in the global economy. Its extraordinary achievements over the past generation are known—and admired—worldwide. The rapid rise of living standards in this country is one of the great success stories of the global economy in recent years. All of us in this room are fully aware of the enormous economic challenges that China continues to face. But I think we also can agree that there is a will to address these challenges that bodes well for the future.
It is therefore fitting that the International Monetary Fund itself has recognized China's growing importance. Exactly two weeks ago, our Executive Board—which represents all 184 of our member countries—proposed to the Fund's Board of Governors that China's quota and voting rights within the Fund should be increased substantially. This increase, together with those also proposed for Korea, Mexico, and Turkey, is a direct recognition of the emerging market countries' increased weight in the global economy. It is a step that is essential if the voice of rising economic powers is to be heard in important economic forums—and represented in the decision making that could help determine the future course of mankind.
This quota adjustment is just a first step. In the next two years we hope to implement other reforms that will make the International Monetary Fund even more representative. These changes are crucial as they will enable the IMF to do a better job of tackling global economic issues. More importantly, we must ensure the continuation of the strong growth of the world economy—and especially Asia—of recent years. It is essential that the international community cooperates to address economic and financial vulnerabilities so that we can avoid future crises. An IMF that is fully representative of the community of nations is an important tool for strengthening that cooperation. And there is no doubt that China's larger role in the IMF will contribute to the legitimacy of the institution.
Of course, it goes almost without saying that greater voice in the international community is accompanied by greater responsibility. That has always been the burden of great nations throughout history—one that we are sure China is ready to assume.