WASHINGTON, June 11 (Xinhua) -- The United States should empower China under the current global economic structure to maintain an open economic system, an expert said Tuesday.
Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, also called on the two countries to strike a "Power-for-Purpose Bargain."
The United States could give up some power to China in leading multilateral institutions, including the International Monetary Fund (IMF) and the World Bank, in return for China taking on greater global leadership to preserve the system's real purpose -- free and fair globalization, Subramanian said at a luncheon event hosted by the think tank.
The United States, the largest shareholder in both the IMF and the World Bank, could increase China's quota in these Washington-based agencies, offer China the veto power in the IMF, and place the RMB in the basket of currencies that make up the special drawing right, the IMF's special currency, said Subramanian, former assistant director of the IMF's Research Department.
"Empowering China increases its stake in the open system that China continues to need for its own development," he said.
In a recent policy paper, the economist noted that the paramount challenge in the economic sphere for the two countries' policymakers is to overcome what might be called the Kindleberger Conundrum.
According to the theory, Subramanian said, the preservation of an open, rules-based multilateral economic system goes against the background of a historic shift, in which rising powers might be unwilling to sustain it at a time when a declining power is increasingly unable to single-handedly shoulder the burdens of leadership.
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