China is close to clinching a top-level post at the International Monetary Fund, IMF sources said Wednesday after the Fund's new chief pledged to give more power to emerging economies.
They said Min Zhu, a Chinese national who was a special adviser to former IMF Managing Director Dominique Strauss-Kahn, was expected to fill a new deputy managing director post to be created by the Fund's new chief, Christine Lagarde.
"Min Zhu is expected to be named to deputy managing director," an IMF board member told Reuters. The appointment, which would give China one of the top five management jobs at the Fund, would first need the approval of the 24-member IMF board of member countries.
Lagarde Wednesday vowed during her first news conference as managing director to give developing nations a greater role in the fund. She said she was considering creating a new high-level job that would be filled by a candidate from an emerging market country.
The move should appeal to emerging and developing markets, which have demanded a greater say in the international financial institution to reflect their growing economic clout.
China, the world's second-largest economy, has pressed for a senior-level position but was blocked by Japan's long-held lock on another deputy managing director post, currently held by Naoyuki Shinohara.
Zhu is a former deputy governor of the People's Bank of China.
His appointment would give Asia two senior management posts in the IMF plus the chair of the IMF's top advisory committee, which was recently filled by Singapore Finance Minister Tharman Shanmugaratnam.
The deputy managing directors often chair board discussions on lending decisions when the managing director is absent.
The IMF's No. 2 job is also set to open up with the departure at the end of August of American John Lipsky, the Fund's first deputy managing director. IMF sources have said the United States is considering naming White House adviser David Lipton for the job, keeping the post in U.S. hands.
During her candidacy, Lagarde traveled to Beijing to lobby for support and was selected with the backing of China and other large emerging market countries, such as India, Brazil and Russia.
"The world is going to continue to change," she told reporters Wednesday. "We have these tectonic plates that are moving at the moment, and that needs to be reflected in the composition of governance and employment at the fund."
Derek Scissors, an expert on Asia economic policy at the Heritage Foundation in Washington, said it was long overdue that Beijing gain more influence in institutions like the IMF.
"I don't think that anyone has a reasonable objection to China getting a top-level post at the IMF," he said.
But Scissors said it was "unfortunate" that the IMF had to create an entirely new post just because the United States or Europe would not yield any power to emerging markets.
"This looks very much like we had a campaign for this job and (Lagarde) and others went around promising pork in order to get elected," he added.
Lagarde said she would press IMF member countries to pass voting reforms agreed on in 2010, which give some developing countries more power within the institution.
"But that should also reflect in our employment policies, in our training policies, in the way in which we build teams, in the way in which we organize recruitment so that people are not clones of each other," she added.
Lagarde sought to distinguish between her management style and Strauss-Kahn's. The former IMF chief, who is facing charges of sexual assault and resigned in May, was criticized for failing to delegate decision-making and instead relying on a tight circle of advisers.
"My style is about opening up, reaching out, engaging people and working as a team," Lagarde said. "I can't do it alone, they can't do it alone. We have to pool the institution together and engage the staff."
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