China, now the world’s largest economy, is challenging the International Monetary Fund as an emergency lender especially to countries that are at loggerheads with the West. And it has a lot of money. It has foreign reserves of $3.89 trillion, the largest in the world. According to Bloomberg, China has just promised Russia $24 billion. It provided $2.3 billion to Argentina and $4 billion to Venezuela. “By lending to nations shut out of overseas capital markets, Chinese President Xi Jinping is bolstering the country’s influence in the global economy and cutting into the International Monetary Fund’s status as the go-to financier for governments in financial distress. While the IMF tends to demand reforms aimed at stabilizing a country’s economy in exchange for loans, analysts speculate that China’s terms are more focused on securing its interests in the resource-rich countries,” Bloomberg says. “By promoting the use of its currency, China acts in its own interests as it challenges the dominance of the US in the global economy.” Zimbabwe has been trying to cement its ties with China but its “Look East” policy has often been condemned. Zimbabwe has even been accused of mortgaging its wealth to Beijing yet the United States, now the second largest economy owes China $1.317 trillion in government debt.
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