NEW YORK – Long before the yuan was inducted into the International Monetary Fund’s hall of currency fame, China had upped its game as an economic powerhouse in a variety of arenas.
Here are four ways the Middle Kingdom has etched out its influence in the global economy:
China has the world’s largest foreign exchange reserves, valued at $3.53 trillion. To put it into context, that is more than Japan, Saudi Arabia, the 19-nation euro bloc, the U.K, and the U.S. all rolled into one. Such a vast reservoir of foreign cash can help an export-driven economy of China’s size absorb external shocks.
China is trailing the U.S. as the world’s largest military spender. As its ambitions in the South China Sea grew over the past decade, so did its defense expenditure. To the tune of $216 billion in 2014 — or 1.7 times what it spent in 2005 — according to the Stockholm International Peace Research Institute.
With growing economic clout comes greater responsibility.
At the United Nations, China is now being asked to pull its weight. Its contribution to the proposed $5.57 billion budget for 2016-2018 should increase to 7.9 percent from 5.2 percent in the 2012-2015, according to a U.N. committee’s assessment. This would place China among the top three contributors to the multibillion dollar annual regular budget. The country would have a bigger say on how funds are allocated for international development, peace and security, while also making it increasingly difficult for China to claim its status as a developing country.
If approved, China will overtake Japan and Germany to become the U.N.’s third largest donor. It is now ranked sixth. While the U.S. continues to foot one-fifth of total spending, China may one day even supersede the international body’s biggest donor in history.
China formed the Asian Infrastructure Investment Bank this year as part of its initiative to enhance its currency’s role. It already signed more than 50 founding members and has $100 billion in authorized capital. Half of its subscribed $50 billion is paid by China. The paid-up capital is $10 billion.