IMF expands China footprint as global growth tilts to Asia
The International Monetary Fund (IMF) has formally opened its new Shanghai centre — its second, following the China-IMF Capacity Development Center in 2017 — in a move framed as deepening engagement with Asia’s fast-growing economies.
But the launch raises a larger question: What does this actually mean for global financial governance?
For the IMF, the vision is to use the Shanghai Centre as a regional hub for research, policy dialogue and outreach, with a focus on emerging and middle-income economies.
It is also expected to expand the Fund’s presence in a region that now drives more than half of global growth. China provided financial backing for the facility.
Chinese journalist Xu Zeyu said the opening is also the latest affirmation of China’s rising monetary status, noting that the renminbi joined the IMF’s Special Drawing Rights basket in 2016 with a 10.92% weight, later increased to 12.28% in 2022.
This, Xu said, proved the currency’s growing acceptance as a “freely usable currency” and its impact on the global monetary landscape.
Johannes Wiegand, a veteran IMF economist, has been appointed the centre’s first director. Its opening was marked by a seminar on macroeconomic challenges in emerging markets, including structural change, finance and the rise of artificial intelligence.
Xu added that the Shanghai Centre could accelerate RMB internationalisation by deepening IMF research on regional financial connectivity and strengthening the yuan’s function as a regional anchor currency—providing Asian economies with more stable, autonomous trade settlement options.
The new outpost comes at a time when demand for IMF lending is at record levels. The Fund currently has around $162 billion in credit outstanding—its highest ever—with 86 countries owing money. Argentina, Ukraine and Egypt account for nearly half of the total.
Founded in 1944 to stabilise the post-war global economy, the IMF now has 191 members and a lending capacity of about $1 trillion. It finances its operations through quotas paid by member states, with wealthier countries acting as creditors and earning interest. Last year, roughly 50 such countries received around $5 billion in interest payments.
Argentina remains the IMF’s largest borrower, with debts of about $57 billion following years of economic crises and repeated bailouts. Ukraine, engulfed in war, owes more than $14bn, while Egypt has leaned on the Fund to manage inflation, currency shortages and fiscal stress.
For Beijing, hosting an IMF hub aligns with its push to expand influence in global economic institutions. Yet the Shanghai centre will not shift the Fund’s decision-making power, which remains anchored in Washington and weighted toward advanced economies.
For emerging Asian countries, the centre could offer easier access to technical support and policy advice, though it does not alter borrowing rules or the IMF’s often-criticised loan conditions.
This story is written and edited by the Global South World team, you can contact us here.
