Friday 25 September 2009

IMF Reform 'Bright Spot' Of G-20 Summit-China Vice Foreign Min

Fri, Sep 25 2009, 19:06 GMT

IMF Reform 'Bright Spot' Of G-20 Summit-China Vice Foreign Min

By Ian Berry


PITTSBURGH -(Dow Jones)- China's vice foreign affairs minister said a shift in voting rights for the International Monetary Fund likely to emerge Friday will be a key success of the Group of 20 summit and called for increasing coordination between the world economies.

He Yafei, the vice foreign minister, wouldn't specify the extent of the shift but said progress on reform of the international financial system "is a bright spot of the Pittsburgh summit." China and other developing nations have argued for a more equal distribution of voting rights in the IMF.

"The most important thing is to send a message, that is to say the governance structure and decision-making procedures of the [international financial institution] should reflect the reality of the world economy today," he said in a briefing.

Earlier Friday, an Argentine official speaking on the sidelines of the G-20 summit said countries had agreed on a 5% increase in developing nations' shares under the IMF quota system.

On currency, He didn't specifically mention the U.S. dollar but said that given China's major holdings of foreign currencies fluctuation in them was a concern in both the short and long term.

He voiced support for a system of "mutual assessment" involving the IMF, and said he thought "assessments of the policies of major reserve currency-issuing counties will be included in this."

But when asked about any enforcement mechanism to settle potential currency disputes between the U.S. and China, He noted the system of mutual assessment would be voluntary and legally nonbinding.

With the G-20 poised to take a more permanent role in coordinating economic policy, He also called the locations of future summits "a very important issue." Summit locations should be based on principles such as justice, fairness and equality, and developing countries should also get a chance to host, he said.

"I think we still need to discuss and finalize who and which counties will host future summits," He said. "As for whether China will be a host, I think we will give serious consideration to that."

-By Ian Berry, Dow Jones Newswires; 312-341-5778;

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(END) Dow Jones Newswires

September 25, 2009 15:06 ET (19:06 GMT)

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