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China's IMF role may be raised

AUSTRALIAN Prime Minister Kevin Rudd will push for China to have a more central role in the International Monetary Fund at an upcoming meeting of leaders from the world's 20 major economies, according to a media report yesterday.

Rudd, a China expert and fluent Mandarin speaker, will argue at a London meeting of the Group of 20 nations next month that China should be elevated within the IMF in an overhaul of the world economic order, an Australian newspaper said.

"Let's just get up with reality of the 21st century," he said, adding that the IMF's current voting rights reflect the balance of power in the wake of World War II.

Australia is co-chair of the G20's working group on reform of international financial institutions and is using its position to try to boost IMF's resources and transform its voting structure.

A review of IMF vote quotas last year gave developing nations an additional 2.5 percent, while EU member nations have 32 percent. The United States has 17 percent, China has 3.7 percent and India 1.9 percent. Australia has 1.5 percent.

Under Australia's plan, China's voting stake would be increased if it provides funds to fill part of a financial shortfall of about US$550 billion.

At a meeting of G20 finance ministers two weeks ago, China, India, Brazil and Russia called for greater voting rights for developing countries to be resolved at the London summit.

Australia's Treasurer Wayne Swan yesterday argued that the G20 should be given a more prominent role in international affairs, and there was a consensus in the group around fundamental reform of international financial institutions and the IMF.

"Resources of the IMF to deal with the global financial crisis will at least be doubled, and the representation of the developing world will be significantly increased," Swan wrote in the Australian.

Rudd said earlier this month big banks and financial institutions which are at risk of failure because of the financial crisis must be shut down or taken over by governments to ease market worries.


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