Global financial system needs reform: Argentine Foreign Minister

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By Dan Chinoy (chinadaily.com.cn)
Updated: 2009-09-08 13:45

During an official visit to China this week Argentine Foreign Minister Jorge Taiana said the global financial system should be reformed to increase regulation and give developing countries greater influence. He also emphasized growing economic and political ties between China and Argentina.

"The government bodies of these institutions are not democratic," the Minister said in an interview with the China Daily, referring explicitly to the International Monetary Fund (IMF) and the World Bank. "Very small groups of countries have a lot of power and this is not necessarily to do with the importance of the country."

During meetings on Monday with both Vice President Xi Jinping and Foreign Minsiter Yang Jiechi, Taiana said that it was clear that both the Chinese and Argentine governments agreed on the need to make major changes to the global financial system, especially in the wake of the financial crisis.

"The control and regulation of the financial system was nothing. And you can see what has happened," he said. "Of course you have a lot of technical and difficult issues, but on the big [questions], we are together."

Taiana also said that Vice President Xi told him that President Hu Jintao would welcome a visit from Argentina's President, Cristina Fernández de Kirchner. The two countries will probably announce a date for the visit soon, Taiana said, noting that the number of high-level exchanges between Argentina and China has also increased recently.

This is partly a function of the two country's growing economic relationship.

China's leaders are "looking with increasing interest to Lain America and South America, and within South America," Taiana said. "I do think that we have more complementary economies, so it is good for us and good for China to strengthen our relations."

In March, Beijing and Buenos Aires recently agreed to a 70 billion yuan ($10 billion) currency swap that was designed to bolster Argentina's foreign reserves and enable greater trade with China. Argentina is a major supplier of natural resources and food to China, and imports mostly Chinese textiles and low-end consumer goods in exchange.

Still, there is some trade friction between the two countries as Chinese imports have displaced some local Argentine industries.

In a recent speech in Sao Paulo before the Third Brazil-China Business Summit, noted China scholar David Shambaugh, a professor at George Washington University, observed that half of all Argentine antidumping and counter-trade measures were directed against China in 2007. That that number rose to 90 percent in 2008, he said.

Taiana was on the final leg of a trip through Asia. He had previously stopped in Seoul and New Delhi.