Gallagher Publishes Op-Ed on China’s Influence on Global Finance
Kevin Gallagher, Professor of Global Development Policy at the Frederick S. Pardee of Global Studies at Boston University, published a recent Op-Ed discussing China’s growing influence on global finance at a time when the United States is scaling back its participation on the global stage.
The Op-Ed, entitled “China’s Influence on Global Finance Grows as US Scales Back Input,” was published on March 27, 2017 in the Financial Times.
From the text of the article:
World finance ministers will next month descend on Washington for the spring meetings of the International Monetary Fund and the World Bank. For the first time since they were founded, it is not clear that some ministers will be welcomed.
This month, Donald Trump, US president, submitted a budget that cut World Bank contributions by $650m and reduced US participation in the IMF.
As the US scales back its participation on the global stage, China has been scaling up. Ever since the financial crisis, Chinese institutions have been providing lifelines to foreign countries and billions of dollars in development finance.
China’s central bank, the People’s Bank of China, is playing a growing role in providing a backstop for international liquidity. In the wake of the financial crisis, Zhou Xiaochuan, the PBoC governor, raised eyebrows when he said “the desirable goal of reforming the international monetary system . . . is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.
Kevin P. Gallagher is a professor of global development policy at Boston University, where he co-directs the Global Economic Governance Initiative (GEGI). GEGI’s mission is to advance policy relevant research on governance for financial stability, human development, and the environment on a global scale. You can follow him on Twitter @KevinPGallagher.