China — already the world's largest exporter, manufacturer and international-reserve-asset holder — is poised to overtake the United States as the world's largest economy (measured according to purchasing power parity) this year. Now, it is using its growing clout to reshape global economic governance. Indeed, the country's days of following Deng Xiaoping's injunction to "hide brightness and cherish obscurity" are long gone.
After decades of actively participating in international economic institutions — including the Group of 20, the International Monetary Fund, the World Bank and the World Trade Organization — China has begun to resemble a revisionist power seeking to create a new world order. Last month, China and 20 other Asian countries signed a memorandum of understanding to establish a new multilateral development bank, the Asian Infrastructure Investment Bank. Viewed as the first serious institutional challenge to the World Bank and the Asian Development Bank (ADB), the AIIB was proposed by China.
In a sense, this shift should not be surprising, given the widespread debate over the inherent weaknesses of existing international institutions and governance structures — in particular, China's disproportionately small role in them. China accounts for a 3.8 percent voting share of the IMF and a 5.5 percent share of the ADB, compared to 16.8 percent and 12.8 percent, respectively, for the United States and 6.2 percent and 12.8 percent for Japan.
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