China Calls Christine Lagarde to step up reform of the IMF

A spokesman for the People’s Bank of China (PBC), the Central Bank of China, said Wednesday that China welcomed the appointment of the French Finance Minister Christine Lagarde as new director of the International Monetary Fund (IMF).

China hopes that under the leadership of Ms. Lagarde, the IMF will continue its reform and play an active role in stabilizing the world economy, while increasing the representation of emerging markets and developing countries in the governance of the IMF, said the spokesperson in a statement posted on the website of the PBC.

The spokesman of the PBC also said that the election to head the IMF had been open, transparent and tough.

The Governor of the Bank of Mexico, Agustin Carstens, has also shown professional leadership qualities and impressive competence during the campaign, added the spokesman.

The fast-growing economies of Asia now focus their views on key appointments to the IMF, following the appointment of its new chief Christine Lagarde Wednesday, hoping it will hear the requests to give more power to the emerging markets.

Lagarde said the right words during his recent campaign tour of Asia. She acknowledged that countries such as China and India deserve a larger voting rights to reflect their growing economic power, and a fair representation in decision-making institution.

“Ms. Lagarde is a friend of India,” said a senior source close to the Government of India. “We can not get the position of Director of the IMF now, but at least India can get some high-level appointments to the IMF during her tenure, and we will work in this direction.”

Ms. Lagarde will begin its five-year term as Director of the IMF on July 5 and will be immediately immersed in efforts to avoid that Greece can not meet its commitments in the debt crisis, which could trigger an international crisis.

Among the things on her list of what needs to be done to the Fund, there will be appointment of senior management that reflects a fair economic influences in the world and a process of voting rights redistribution to give more weight to emerging markets.

Ms. Lagarde was supported by many major economies of Asia, even though they disapprove that a European holds the position of Director of the IMF. But it is true that no candidate from Asia to challenge Lagarde and her competitor, the Mexican Agustin Carstens.

“Ms. Lagarde was more successful in building a consensus to establish a bridge between advanced countries and emerging markets,” told Reuters the Governor of the Central Bank of Indonesia Hartadi A. Sarwono.

She will need those qualities to make difficult decisions. The United States are already thinking of proposing a Treasury Department official for the position of No. 2, which has traditionally been occupied by an American.

Break with this tradition will help convince Asian countries that Ms. Lagarde is serious about reforming the IMF, although there is no indication that she has made any promise to grant the second important position to a representative of Asia.