The International Monetary Fund (IMF) held its 26th Ministerial Plenary Meeting of the International Monetary and Financial Committee (IMFC) in Tokyo on October 13, 2012. Twenty four governors representing the 188 member countries, together with representatives from international organizations including the IMF, World Bank, WTO and the FSB (Financial Stability Board), participated in the meeting. Participants discussed current global economic situation and financial sector development, the IMF’s governance reform, and etc. PBC Deputy Governor Yi Gang attended the meeting.
Deputy Governor Yi Gang said in his statement that, as the current global economic recovery is facing renewed headwinds, it is imperative to take swift and decisive actions to stabilize the global growth and to preserve financial stability. The continued absence of a credible medium-term fiscal consolidation plan in major advanced economies affects the current market sentiment and confidence, and thus is having negative impacts on investment, employment and consumption. Emerging market economies and developing countries have seen a mild slowdown as a result of earlier policies to address overheating risks and the negative spillovers from the policies of advanced economies.
Mr. Yi provided an update of China’s economic situation. He pointed out that the recent slowdown of growth reflected sluggish external demand as a result of tepid global recovery, as well as the effects of macroeconomic measures adopted by the Chinese government. The rebalancing of the economy toward domestic-driven growth is in progress, and China’s BOP account has become more balanced. In the uncertain global environment, the Chinese government will continue to take effective measures to maintain stable growth and accelerate the shift of growth pattern. The economy is expected to grow steadily in the second half of the year and to continue to have strong drivers in the medium and long term.
When talking about the IMF’s reforms, Deputy Governor Yi called on member countries to fulfill their commitments to complete the domestic approval process as soon as possible to conclude the 2010 quota and governance reforms on time. Also, he called on all parties to complete the review of the quota formula by January 2013 in a spirit of cooperation.
Deputy Governor Yi welcomed the Decision on Bilateral and Multilateral Surveillance, also known as Integrated Surveillance Decision, which was approved at an Executive Board meeting of the IMF. He said the IMF needs to re-orient its surveillance activities, and strengthen surveillance on macroeconomic and financial policies of major reserve-currency economies and cross-border capital flows, so as to safeguard global economic and financial stability.
He also indicated that, as the IMF faces challenges in offering financing facilities to low-income countries due to the current crisis, China supports initiatives to make sure that the PRGT is financed on a sustainable basis in the medium and long term.
Deputy Governor Yi’s proposal of adding “We reaffirm our commitment to avoid any form of trade and investment protectionism” into the Communiqué of this meeting was fully adopted.
