China's clout grows with World Bank voting shift

In an acknowledgement of China's growing economic clout, the World Bank has significantly increased its voting rights, making the world's fastest growing economy its third biggest member after US and Japan.

With member nations of the financial institution agreeing to shift its decision-making powers slightly towards the emerging economies, China was the biggest benefactor with its voting power increased to 4.42 per cent from 2.77 per cent.

As a result of the decisions taken by World Bank during its Spring meeting that concluded here today, China becomes the third biggest member after the United States and Japan.

As the World Bank gave Beijing a greater say, along with other emerging economies, in deciding how the bank is run and how its funds are disbursed, its President, Robert Zoellick said China is an increasingly important investor.
    
"China's share has increased because of its growth of the world economy," Zoellick told reporters.
    
"In the last IDA (International Development Association) contribution which we completed at the end of 2007, IDA15, China for the first time contributed," he said.
    
"It was a small amount compared to that of Japan, the US, and Europe, but it was significant that they start to make that step, and I believe that there are different ways that developing countries can contribute," Zoellick said.
    
The voting power of India, which was at par with China with 2.77 per cent, has increased to 2.91 per cent, while Brazil's voting power has risen from 2.06 per cent to 2.24 per cent.
    
"Some of it is through means like IDA, but other ways--there are other aspects, for example, the growth in China and East Asia is very important for commodity prices; that's been important for Latin America.
    
He said China is an increasingly important investor and the World Bank would work with it on some of its investments in Africa.
    
The move elevated China above a number of Western powers, including Germany, France and Britain.
    
The US, the world's largest economy, remained at the No 1 spot at 15.85 per cent, effectively giving it veto power, followed by Japan at 6.84 per cent.
    
"We, in calculating this, looked at size of the world economy, using purchasing power but also exchange rate measures, but also, as a development institution, the contribution to development including the contribution to IDA, our fund for the poorest," Zoellick said.