Zhou Eyes Bigger Emerging-Nation Role as G-20 Leaders Meet
By Bloomberg News
June 27 (Bloomberg) -- Chinese officials indicated the nation wants to play a bigger role in reshaping the post-crisis global economy and could be at the forefront of adopting new financial rules, as a Group of 20 summit began in Toronto.
Problems such as financial crises “can no longer be solved properly under the old traditional framework,” central bank Governor Zhou Xiaochuanwrote in a commentary published on Caijing magazine’s website yesterday. “There should be more participation of emerging-market nations.”
Zhou is in a Chinese delegation attending the G-20 meeting in Canada where leaders are discussing how to reform global financial regulation and sustain the recovery from the worst economic slump since World War II. China moved to minimize criticism of its currency policy at the summit by indicating on June 19 that it was scrapping the yuan’s peg to the dollar.
“Nobody has the luxury of ignoring China,” Peter Mandelson, a former European Union trade commissioner, said at a financial forum in Shanghai yesterday. “China’s own terms have started being an integral part of multilateral diplomacy.”
Zhou’s comments were published to coincide with the same two-day event, where one of his colleagues, Vice Governor Yi Gang said yesterday that China should actively participate in efforts to draft international financial rules and could benefit by being at the forefront of adopting them.
‘Louder Voice’
China is poised to overtake Japan as the world’s second- biggest economy this year, giving the nation added clout in global forums. Mandelson also said yesterday that it was important to reform the International Monetary Fund to reflect the nation’s influence.
Since a G-20 summit in London, developing nations and emerging economies have had a “louder voice,” Zhou wrote. “There has been consensus that their participation is needed in coordinated actions in global economic and financial policies, as well as in the drafting of rules for global financial regulation.”
The G-20 includes the U.S., the European Union, Japan, Germany and emerging economies such as China, India and Brazil. Zhou is attending the summit as part of a Chinese delegation led by President Hu Jintao. The U.S. is arguing for tougher regulation of the derivatives market, stronger capital requirements for banks and safeguards against market manipulation, President Barack Obama said ahead of the meetings.
U.S., Europe
Other speakers at the Shanghai forum also focused on China’s expanding role.
The central bank’s pledge of a more flexible yuan, a policy shift that may help to redress global imbalances, shows the nation’s leaders “are prepared to take a bigger responsibility,” said Charles Dallara, managing director of the Institute of International Finance, a banking industry group.
“Now it’s up to the U.S. and Europe and other key economies such as Japan to show that they can assume a greater responsibility for their share of leading the global economy to a sustainable recovery,” Dallara said. “Bickering between the U.S. and Europe about fiscal reform is not a good idea. The markets are fragile.”
China’s monetary policy was also discussed at the event in Shanghai yesterday. Yi, the central banker, said China has “room to maneuver so that we can loosen or tighten whenever we see appropriate.”
Analysts are split on whether the People’s Bank of China will raise interest rates this year as the economy surges back from the financial crisis, a Bloomberg News survey showed last week. Li Daokui, an academic adviser to the central bank, told reporters at the same forum on June 25 that inflation expectations are easing, weakening the case for a rate increase.
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