BREAKINGVIEWS - China still waiting for seat at IMF's top table

A photographer takes pictures through a glass carrying the International Monetary Fund (IMF) logo during a news conference in Bucharest in this March 2009 file photo.

-- The author is a Reuters Breakingviews columnist. The opinions expressed are her own --

By Wei Gu

HONG KONG (Reuters Breakingviews) - It's no secret that China would like to match its rising financial weight with a greater say in the institutions that oversee the global economy. That includes a larger formal voice in the International Monetary Fund.

For years, China has been shut out of influential positions at the IMF, which is dominated by the West. So the appointment of Zhu Min as a special adviser to Dominique Strauss-Kahn, the IMF's managing director, is a welcome sign of change.

Beijing may have preferred a more senior position. When Zhu Min was promoted to be a deputy governor of China's central bank late in 2009, the assumption in China was that he would soon become a deputy managing director at the IMF. Asia's top job at the IMF has long been held by Japan.

China may have unseated Japan as the world's largest holder of foreign reserves, but the IMF board is not ready to replace Japan just yet. This may be seen as entrenched interests resisting change. But it also reflects practical experience. When the IMF last year expanded its emergency borrowing program by $500 billion, Japan chipped in $100 billion before China committed providing $50 billion.

As an adviser, Zhu will not have direct influence in driving the IMF's policy agenda. But he may have some impact on the margins, depending on how the managing director integrates him into work flow.

He will be able to offer guidance on how the IMF can improve its bonds with Asian emerging markets - a relationship that was strained by the IMF's ill-perceived doling out of remedies for Asia during the 1997 crisis. A former executive at a large state-owned bank, he has first-hand knowledge of China's financial system.

Strauss-Kahn has made it clear that he favours giving emerging markets a greater say in the running of the fund. But he cannot change the balance of power at the IMF, which has been the subject of long and protracted negotiations.

Zhu's appointment may help speed up the process. But China is still some way from taking its place at the IMF's top table.

CONTEXT NEWS

-- The chief of the International Monetary Fund, Dominique Strauss-Kahn, on Feb. 24 appointed Zhu Min, a deputy governor at China's central bank, as his special adviser.

-- IMF said Zhu will help strengthen the fund's understanding of Asia and emerging markets more generally.

-- Zhu Min was transferred to the People's Bank of China in late 2009 from his previous role as vice president with Bank of China to prepare for the move to the IMF.

-- Justin Lin, a Chinese academic, joined the World Bank in 2008 as its chief economist, becoming the highest ranking Chinese in the organisation.