China's Growing Influence On Global Institutions

China has drastically increased its influence in major global institutions over the past decade, and a Washington-based think tank on Thursday said this trend could call for scrutiny.

Chinese firms have come to dominate contracts offered by development banks, and Beijing has raised its contributions to those institutions to $66 billion, surpassing Japan as the second largest contributor behind the United States, the Center for Global Development (CGD) said in a report.

At the same time, China is a top recipient of aid from multilateral financial institutions like the World bank, the report said, even as it has gained voting power and leadership roles within them.

"This isn't necessarily a cause for alarm. The United States and other governments have pushed China to contribute more to the international system for years, and they should continue to do so," wrote Scott Morris, a senior CGD fellow and an author of the study.

"It's better for everyone to have China working inside the system instead of outside of it," Morris said.

However, the report said the findings could "point to the need for further scrutiny in some areas" and for "reasonable efforts to temper China's dominant position" to prevent the country from undermining development goals.

That includes Beijing's leading role as a lender to poor nations, many of which face debt distress.

In addition, "Chinese firms have come to dominate (multilateral development bank) commercial contracts to a degree that undercuts political support for these institutions in other countries," the report said.

Researchers tracked China's rising donations, voting power, and presence in leadership roles at 76 major global institutions, including the IMF, UN agencies like the World Health Organization, and vaccine supplier Gavi.

It showed that the country's voting power has increased, largely by virtue of the rapid growth of its economy, but China also more than quadrupled its discretionary contributions to such organizations.

"China clearly made a deliberate choice to increase its power and influence in the international system," wrote CGD policy fellow Sarah Rose.

Morris said much of the focus on China's rise as a geopolitical power has been on its Belt and Road Initiative and the associated lending to developing countries, but this research gives a clearer picture of Beijing's footprint showing "exactly how important China has become to the international system."

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