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Nanjing and the New International Monetary System

(Version in 中文)

I am delighted to be back in China this week for a high-level seminar in Nanjing on the international monetary system. Every time I come to this part of the world, I am impressed by the dynamism of the economies and the optimism of the people. The future is here.

The region’s economic performance over the past few decades has been nothing short of remarkable. Asia now accounts for about a third of the global economy, up from under just a fifth in 1980. This trend has been reinforced by the crisis, with the emerging market powerhouses leading the global recovery.

Asia has also made tremendous progress with poverty reduction. China alone has pulled hundreds of millions of people out of poverty over the past few decades. Such a feat has never before been accomplished in the history of human civilization.

But to sustain this progress, Asia needs to grapple with numerous challenges today, among them the need to deal with overheating pressures and volatile capital inflows. And this relates directly to our discussion at Nanjing.

The current international monetary system has certainly delivered a lot. But it also has flaws that need to be fixed, especially if the next phase of globalization is to succeed in bringing a strong and broad-based rise in living standards. I see four pressing issues:

These issues go right to the heart of the IMF’s mandate, and their resolution will require further engagement and discussion among our global membership. Certainly, they are challenges in which all global citizens have a stake—to support an ongoing recovery and avoid future crises, ensuring better outcomes for all.

The Nanjing meeting was a useful step toward the international monetary system of the future. And speaking as the head of the IMF, it was also a useful step in advancing the partnership between Asia and the Fund. A partnership that I firmly believe will continue to strengthen in the future.