China's foreign ministry said on Thursday that the appointment of Zhu Min to a newly-created deputy managing director's position showed that the International Monetary Fund (IMF) had taken big strides to better represent emerging markets.

"We think this has demonstrated the major progress made by the IMF in increasing the representativeness of emerging market economies and developing countries," foreign ministry spokesman Hong Lei said.

When the new head of the IMF, Christine Lagarde announced she would be adding a fourth deputy managing director to the IMF staff, it was widely expected that the new post would go to somebody from China, the world's second-largest economy.

Sure enough, on Tuesday the 58-year-old Zhu Min was nominated and is set to begin work officially on July 26, after the IMF’s board of directors gives its approval.

Lagarde said on Tuesday that Zhu brought a "wealth of experience in government, international policy making and financial markets, strong managerial and communication skills."

"He will play an important role in working with me and the rest of my management team in meeting the challenges facing our global membership in the period ahead, and in strengthening the Fund’s understanding of Asia and emerging markets more generally," she added.

From Shanghai to Washington

Zhu Min was born in China's financial capital Shanghai. He studied economics at the city’s renowned Fudan University and later earned his doctoral degree at John Hopkins University in Baltimore, USA. In 1990, he took up a position at the World Bank and also taught economics at universities in the US and China.

In 1996, he started working at the Bank of China – one of the country’s four government-owned banks – where he occupied various positions, and in 2009, he was appointed deputy governor of the People’s Bank of China. According to Chinese media reports, the nomination, which came shortly after his countryman Lin Yifu became chief economist at the World Bank, was to help set him on the path towards the IMF.

The call from Washington followed soon after. Dominique Strauss-Kahn, who was still head of the IMF at the time, offered Zhu a position as a special advisor in February 2010.

The idea was to bring more expertise from Asia and other emerging markets into an institution, whose top positions are filled predominantly by Europeans and Americans. The move was also considered to be an attempt on Strauss-Kahn's part to acknowledge China’s growing importance for the world economy.

Keeping promises

Zhu's name cropped up again after Strauss-Kahn resigned from the IMF amid rape allegations. Although there were many in China who wanted Zhu to enter the race for Strauss-Kahn’s job, the government essentially stayed out of the power struggle between the world’s industrialized and emerging nations. It knew that the time is not yet ripe for a fundamental change in the institution's management structures.

Moreover, it is still the case that a large percentage of the fund's financial resources come from the industrialized countries.

Beijing supported Christine Lagarde's candidacy. The former French foreign minister in return promised to give emerging countries more say if she was elected - Zhu's appointment is the first step in keeping that promise.

Author: Zhang Danhong (sb)
Editor: Anne Thomas