China is in intensive talks with the EBRD and its shareholders about joining the bank, a top Beijing official told Emerging Markets in Astana yesterday. But EBRD president Thomas Mirow denied that Chinese membership of the institution – a highly politically sensitive question – was on the table.
“We are very clear that we want to be part of the EBRD,” Zhang Tao, Director General of the International Department at the People’s Bank of China, told a seminar at the Astana meeting.
Asked how talks were proceeding, Zhang told Emerging Markets: “Most of the shareholders we have talked to have already expressed their support.”
He added that the talks were “going on quite well” and the fact that the EBRD had invited official Chinese representatives to attend and participate in discussions at this year’s annual meeting for the first time was a “very positive sign”.
“We have been in contact with the EBRD management many times. [...] The EBRD has a board, it has many shareholders and there are rules and we have to discuss with the shareholders,” he said.
But his comments contrast sharply with those of EBRD president Thomas Mirow who told Emerging Markets in an interview before the annual meeting that the question of Chinese membership in the EBRD is “not at all currently an issue. Neither has China made any such request nor would it be very easy with regard to our statutes”.
Mirow added that the issue of Chinese membership of the bank “is not related to the North Africa and Middle East [expansion] question which is now the prevailing strategic debate with regard to the EBRD. So for the time being it’s a non issue.”
The EBRD’s Article One principles – “multiparty democracy, pluralism and market economics” – could prove an obstacle to Chinese involvement in the bank, despite Zhang’s insistence that China was “becoming open and more democratic.”
Zhang was at pains to underline China’s enthusiasm to join the EBRD, in response to a question from Emerging Markets. The country had “made a huge change in terms of economic development over the last thirty years”, he said, and is now “much more integrated with the world economy, pointing out that the EU is now China’s largest trading partner.
“Our development experience will be beneficial to EBRD member economies and countries and also your experiences and achievements of EBRD and EBRD member economies could be benefit to China. So I believe this is a good thing for both sides.”
Erik Berglof, EBRD chief economist, said that there were “many ways that the EBRD could collaborate with China short of membership”, but that he “could not comment on prospects for the future or on shareholder decisions”. He added that the bank was already collaborating with China on a number of financing and research projects, and that he “very much welcomed collaboration with China”.
He also revealed that the bank would like to issue RMB denominated bonds in Hong Kong in the future, following the issue of a RMB-denominated eurobond by the bank last year.
EBRD deputy treasurer and head of funding Isabelle Laurent told Emerging Markets that the bank “currently has no specific plans to issue RMB-denominated bonds in Hong Kong,” but that it would “continue to monitor the Dim Sum market for opportunities to issue at commensurate levels to the Bank’s other funding transactions.”