China presses IMF for quota reform, better surveillance of advanced economies

China’s central bank chief has urged the IMF to serve as a bulwark against “rising unilateralism”, at a time when escalating trade restrictions and an intensified Middle East conflict threaten energy and food security.

The International Monetary Fund should “take a clear stand against protectionism and defend multilateralism”, People’s Bank of China governor Pan Gongsheng said in a statement to the fund’s International Monetary and Financial Committee, for its 53rd meeting, held on Thursday and Friday in Washington.

“The recent intensification of geopolitical conflicts has further dragged down global economic growth, exacerbated volatility in financial markets and undermined global financial stability,” Pan said.

“It should be emphasised that trade protectionism cannot resolve global imbalances, and that stable, rational and predictable cooperation is extremely valuable,” his statement showed.

Pan’s voice joins a growing chorus of concerns about the global economy amid the US-Israeli war on Iran and an intensifying energy crisis. Since February 28, military strikes have effectively closed the Strait of Hormuz, through which transits about one-fifth of the world’s oil and liquefied natural gas. The resulting price spikes and supply shortages are expected to disproportionately hurt developing countries without strategic fuel reserves.

The IMF should “provide tailored policy recommendations in response to mounting risks, promote stronger communication and coordination on macroeconomic policies among member countries, and safeguard global economic and financial stability”, Pan said.