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Reinvent international monetary order or face Chinese dominance: France

EconomyJul 16, 2019 04:41PM ET
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PARIS (Reuters) - France's finance minister said on Tuesday the post-war international monetary order needed to be reinvented or become increasingly dominated by China.

The pillars of that order, the International Monetary Fund and its sister institution the World Bank, have been controlled by the United States and Europe since their inception at the Bretton Woods conference in New Hampshire in July 1944.

But gobalization, the growing populist backlash against it and the rise of big new economic powers like China are increasingly putting that order to the test.

"The Bretton Woods order as we know it has reached its limits," French Finance Minister Bruno Le Maire told a conference at the French central bank marking the 75th anniversary of the conference.

"The alternative we have is now clear – either we reinvent Bretton Woods or it risks losing relevance and eventually disappearing," he said.

Le Maire said that while Bretton Woods had defined the international economic order of the second half of the 20th century, the first part of this century may be defined by China's New Silk Road project.

The Belt and Road Initiative, as it is formally called, envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond with massive infrastructure spending largely financed by China.

"Unless we are able to reinvent Bretton Woods, The New Silk Roads might become the new world order," Le Maire said. "And Chinese standards – on state aid, on access to public procurements, on intellectual property – could become the new global standards."

IMF Acting Managing Director David Lipton said at the conference that the fund had a duty to reflect the rising power of emerging markets.

Le Maire said the reform priorities of Bretton Woods institutions should be focused on fighting climate change, curbing rising inequalities and regulating the emergence of digital giants.

He added that the arrival of a new IMF chief after Christine Lagarde's departure for the European Central Bank created an opportunity to rethink the fund's mandate while its shareholders needed to ensure it had enough resources for the next crisis.

Reinvent international monetary order or face Chinese dominance: France
 

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Comments (3)
David David
David9 Jul 16, 2019 6:22PM ET
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The New Silk Road is on it's way already. This will be the new world of trades. Either US join in this prosperity or get left behind.
Lloyd McCord
Lloyd McCord Jul 16, 2019 4:55PM ET
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Our attention should be collective and focused on S.E. Asia and Africa. It's time to solve the immigration issues plaguing both Europe and America, and put our energies toward the common good and economic expansion.
Warrior Tder
Warrior Tder Jul 16, 2019 4:52PM ET
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Climate change is a strategy used by some parties who dont want america and its allies to produce more oil and grow their econemy. So they can advance and take control the world. Its an evil conspiracy.
 
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