China Seeks More Involvement--And More Clout

Last month, I insinuated that China may be considering expanding its global influence more aggressively, in preparation for its baby-boomer generation to retire and leave the workforce. It seems that I may be right in thinking that: Today, the Wall Street Journal reported that the International Monetary Fund has been begging China for additional funds, on the order of around $50 billion (the actual amount was not stated in the article, but IMF's goal is a $250 billion dollar increase and has recieved $100 billion from Japan and $100 billion from the European Union). China is now under negotiations to grant the additional money in exchange for more votes in the IMF, which, though it comes at the expense of already-overrepresented smaller European countries, also aims to wrest policy control out of the hands of the US. This is a clear reversal of the traditional roles between the IMF and China because China has normally kept a low profile and has had a "sometimes rocky relationship" with the IMF. This change is possibly because the IMF itself has been adapting: the IMF has often been considered a last-resort option for developing countries. In light of current economic trends, however, the IMF has been changing alot of policies, such as loosening the conditions it places on the country in order to recieve the loan. The IMF has gone so far as to consider changing its name, or at least not using its name on its loans. In basic economic terms, there is a large demand for loans at the moment but--despite a sufficiently large supply--not for an IMF loan. Voila! The perfect opportunity for a large economic profit in an almost monopolistic market, if only the Chinese can convince the begging countries that the IMF is different now. And with China a key player, it almost undoubtably will be different.