China is close to clinching a top-level post at the International Monetary Fund (IMF).
IMF sources say Zhu Min, a Chinese national, is expected to fill a new Deputy Managing Director post created by the Fund's new chief, Christine Lagarde.
On Wednesday, Lagarde vowed during her first news conference as Managing Director that developing countries would have a greater role in the IMF. Lagarde said she was considering creating a new high-level job that would be filled by a candidate from an emerging market country.
An IMF board member told Reuters that Zhu is the leading candidate for the post. Zhu was a special adviser to former IMF Managing Director Dominique Strauss-Kahn, and a former deputy governor of the People's Bank of China, the country's central bank. He also worked for the World Bank as an economist, and taught at Johns Hopkins University and Fudan University.
If approved by the full 24-member IMF board, the appointment will give China one of the top five management jobs at the Fund. China has been pressing for a senior-level position at the IMF for some time, but was blocked by Japan's long-held lock on another Deputy Managing Director post, currently held by Naoyuki Shinohara.
Zhu's appointment will also strengthen the general Asian presence in the IMF. Aside from the other Deputy Managing Director post held by Shinohara, Singapore Deputy Prime Minister Tharman Shanmugaratnam recently became the chair of the IMF's top advisory committee, in his capacity as Singapore's Finance Minister.
The IMF's No. 2 job is also set to open up with the departure at the end of August of American John Lipsky, the Fund's first deputy managing director. IMF sources have said the United States is considering naming White House adviser David Lipton for the job, keeping the post in US hands.
Lagard is trying to distinguish her management style from former IMF chief Strauss-Kahn's. Strauss-Kahn, who resigned in May over allegations of sexual assault, was criticized for failing to delegate decision-making and instead relying on a tight circle of advisers.
"My style is about opening up, reaching out, engaging people and working as a team," Lagarde said. "I can't do it alone, they can't do it alone. We have to pool the institution together and engage the staff."
The expected appointment of Zhu to the new top-level post has been well-received in China.
The state-funded China Daily newspaper said this reflects the growing role China has been playing in the international community since the financial crisis, and that Zhu represents the viewpoint of emerging markets in the IMF.
Derek Scissors, an expert on Asia economic policy at the Heritage Foundation in Washington, said it was long overdue that Beijing gain more influence in institutions like the IMF. But Scissors said it was "unfortunate" that the IMF had to create an entirely new post just because the United States or Europe would not yield any power to emerging markets.
"This looks very much like we had a campaign for this job and (Lagarde) and others went around promising pork in order to get elected," he added.
Report and Analysis: Lagarde to give China senior IMF job: sources [Reuters, 6 July 2011]
Report: Zhu may be in line for senior post at IMF [China Daily, 7 July 2011]
In other economic news, officials from ASEAN and Japan are meeting business leaders today for talks on securing closer economic ties.
According to a Malaysian spokesperson, industry leaders from ASEAN and the Japanese Chambers of Commerce and Industry asked ASEAN politicians to join them at an annual gathering in Kuala Lumpur. The meeting aims to address problems faced by Japanese investors targeting the 10-nation bloc.
The Malaysian Trade Ministry says business leaders and ASEAN officials will deliberate on implementation of the ASEAN Free Trade Area and lowering barriers to trade with Japan. They will also discuss the economic impact of Japan's March 11 earthquake-tsunami on the region and how ASEAN could help in the country's recovery.
Senior trade officials from ASEAN have confirmed attendance, including Brunei, Indonesia, Singapore and Malaysia. ASEAN secretary-general Surin Pitsuwan will also attend the meeting.
Japan is the top source of Foreign Direct Investment (FDI) in ASEAN, pouring in US$5.2 billion in 2009. Trade between ASEAN and Japan in 2010 is estimated at US$220 billion, well up from US$160.9 billion the previous year.
Report: ASEAN, Japan ministers to hold talks with business leaders [Channel NewsAsia, 7 July 2011]
Finally, Singapore's Temasek Holdings has doubled its net profit to S$13 billion and saw its portfolio value hit a record S$193 billion in the financial year ended March 31, as compared to the previous year.
But Temasek's one-year total returns to shareholders was a "modest" 4.6 per cent - compared to 42 per cent in the previous year.
Chairman S Dhanabalan said the past year has been an eventful one, with continued economic uncertainty in the US and Europe, along with political upheaval in the Middle East.
On Wednesday, Temasek sold US$3.6 billion worth of shares in two of China's largest lenders - Bank of China and China Construction Bank. These transactions were not included in the annual report released yesterday.
Temasek had said that the divestment in the two Chinese banks was part of its periodic portfolio rebalancing.
At a press conference yesterday, Temasek reiterated that China is still their leading investment destination. But Temasek is also looking to new markets and investment opportunities, such as Latin America and Africa, as well as the energy and resources sector.
Currently, Asia accounts for about 77 percent of Temasek's portfolio exposure. Of this, 32 percent is in Singapore. North America and Europe plus Australia and New Zealand account for 20 per cent, while Latin America, Africa, Central Asia and the Middle East combined account for 3 per cent.
At the press conference yesterday, the topic of succession planning cropped up again. But Temasek has dismissed speculation that CEO Ho Ching is leaving the company.
Report and Analysis: Temasek net profits double [TODAY, 8 July 2011]