The International Monetary Fund's (IMF) acting managing director, David Lipton, said on Monday at the 75th anniversary of the Bretton Woods institutions, that the group should adapt to rising economic powers such as China and other similar countries if it wants to retain relevance in a fast-changing world.
According to Reuters, Lipton noted that economic activities will see a transition as the years pass. He said there will be new financial hubs that the world will regard as significant and worthy of more attention.
For Lipton, change is necessary if the IMF wants to help the global community maintain stability in monetary systems around the world. He said adapting to the apparent shift in economic powers is necessary.
While Lipton acknowledged the shareholding system within the organization that is based on economic influence, he pointed out that the existing voting systems "have not fully kept pace" with the changes in global economies.
"We cannot expect to retain the global reach and resources that we need unless countries gaining in economic importance and ready to take on commensurate responsibility gain appropriately in their say at the Fund," he stressed.
The voting rights in the IMF are dominated by the United States. U.S. dominance over the past years has caused some countries to feel that they do not have as much influence as they should in the organization, Lipton said.
Managing Director Christine Lagarde, who temporarily stepped down from her post in the IMF, also noted in 2017 that China, being the world's second-largest economy, can potentially be the home-base of the IMF.
Lagarde's comments were based on data indicating that China is growing in economic power even through trade disputes. Unfortunately, China only has 6.09 percent of voting power in the organization - far cry from the U.S. share of 16.52 percent.
Earlier this year, the White House was rattled by data from Standard Chartered as figures indicated that if China were to keep growing in its current pace, it could overtake the U.S. economy within a decade.
It's not just China that could try to steal the U.S. crown in this regard. The bank's report further suggested that Asian GDP will most likely account for around 35 percent of the world's overall gross domestic product.
If the forecast happens, six Asian countries, with China in the lead, will join the world's top 10 largest economies.
Lipton's latest comments and the Standard Chartered bank's forecasts could be based largely on the fact that Chinese tech appears to be developing faster than the U.S. In this time and age, technological advancements are significant factors that determine how far a particular nation can reach. With China, the sky is the limit.