The euro crisis put Europe on the defensive on global governance. China was non-committal about IMF contributions and Europeans failed to win concessions on the convertibility of the renminbi.
The EU wants to see China take greater responsibilities in multilateral institutions, especially the UN, the WTO, the IMF and the G20. In 2010, the EU ceded voting rights to emerging powers including China. In 2011, the euro crisis put Europe on the defensive. After Dominique Strauss-Kahn resigned as head of the IMF in May, there was an attempt by emerging countries and Russia to back a non-European candidate, but China ended up supporting Christine Lagarde and Chinese economic adviser Zhu Min was appointed as vice-president. China was non-committal about whether to make a further contribution to the IMF to bail out eurozone members – unsurprisingly, perhaps, since others such as Canada, the UK and the US also declined to increase their own contributions. So far, China has successfully resisted increasing the contribution it makes to international capacity to intervene in financial crises. But since European leaders decided in December to put €200 billion at the disposal of the IMF, and as the US no longer is excluding a further contribution, pressure on China could mount in 2012.
During France’s presidency of the G20, Europeans were unsuccessful in offering China IMF reform as a way to persuade it to move towards convertibility of the renminbi. Europe was divided about the idea of a tax on financial transactions and, although France and other eurozone members supported it, it went nowhere at the G20 summit in Cannes in November. China moved closer to an important European goal when it agreed to legally binding limits on emissions at the Durban climate conference in December (see component 12). But such European successes with China in multilateral institutions are increasingly rare. Worryingly, although Russia and the US were for the first time present at the East Asia Summit in Bali in November, the EU wasn’t even invited to be an observer. This may be a sign of China’s (and other Asians’) increasing frustration with Europe’s inability to come up with a single representative in multilateral institutions.