The 15th edition of the Lujiazui Forum, an annual event created with the aim of promoting dialogue between senior government officials, global financial leaders and academics on China’s financial reforms and market opening, concluded in Shanghai on June 20, after discussions on promoting global economic growth through high-quality financial development.

On opening day, the International Monetary Fund (IMF) announced the official opening of a regional center in Shanghai, according to an IMF press release.

The decision of the Washington-based monetary body to open a regional center in the financial center of China is a step to deepen the IMF’s dialogue and cooperation with member countries and stakeholders in the region. It is a significant move for several reasons.

The most obvious aspect is the growing economic influence of the Asia-Pacific region, particularly China, which is becoming a critical driver of global economic growth. Establishing a regional center in Shanghai is in line with the IMF’s recognition of the growing economic importance of the region and allows for better interaction with major economies, as well as more effectively addressing regional economic problems.

The IMF’s new regional center is an initiative to stimulate greater collaboration with regional stakeholders. Proximity to major Asian economies will facilitate closer interaction and more efficient communication between the IMF and regional governments, financial institutions, and economic policymakers, enhancing the IMF’s ability to provide timely support, policy advice, and assistance. technique.

Furthermore, the movement underscores the need for regional stability. The Asia-Pacific region has diverse and dynamic economies, ranging from advanced ones like Japan and South Korea to emerging markets like India and Indonesia. Having a regional center in Shanghai will help the IMF more closely monitor economic developments, provide rapid responses to economic crises, and contribute to regional financial stability.

More specifically, the IMF’s goal is to provide technical assistance and training to member countries in this part of the world. A regional center in Shanghai will serve as a hub for capacity development programs, helping to strengthen the economic and financial frameworks of countries in the region, and contributing to more resilient and sustainable economic growth.

The decision has undoubtedly been influenced by China’s crucial role in the global economy. As the world’s second largest economy, China’s economic policies and performance have significant global implications. An IMF center in Shanghai will facilitate more direct and frequent interaction with Chinese authorities, fostering better understanding and cooperation on issues such as exchange rates, trade and structural reforms.

The decision to establish the regional center in the commercial capital of the Chinese mainland also has strategic significance. Shanghai is not only a major financial center but also a gateway to other significant economies in the region. Its key location offers logistical advantages for IMF staff and stakeholders, making it a convenient base for regional operations and initiatives.

In this regard, establishing a presence in Shanghai demonstrates the IMF’s commitment to the Asia-Pacific region, signaling the organization’s recognition of the region’s economic achievements and its intention to support the region’s continued development and integration into the Global economy.

From China’s perspective, the move is a recognition of the efforts of its securities regulator and the Shanghai Municipal People’s Government to establish a collaborative working mechanism that enhances Shanghai’s global competitiveness and influence.

Finally, the Shanghai regional center can be seen as a springboard for China’s growing role within the IMF and, more generally, in global finance. Former IMF managing director Christine Lagarde had said in an interview in 2017 that the IMF could be based in Beijing within a decade. Time will tell if her prediction was correct.

Note: this is an article republished from the media “CGTN” through a cooperation agreement between both parties for the dissemination of journalistic content. Original link.

Matteo Giovannini is a financial professional at the Industrial and Commercial Bank of China and a member of Global Young Leaders Dialogue.


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