Saudi Arabia, which also sits atop a pile of foreign reserves, may pledge more than US$ 20 billion, said the source.

Three developing economies -- Russia, Brazil and India -- are like China in that they are at similar levels of development and have parallel interests in international financial organizations such as the IMF. Russia, Brazil and India may loans between US$ 10 billion and 20 billion, the source said, contributions that would take into account the fact that each country has individual problems. Russia suffers from low commodity prices, Brazil is paying special attention to domestic development, and India’s economy has been hit hard by the crisis.

Bond System?

On several occasions before the summit, Chinese officials made clear that they prefer buying IMF bonds rather than participating in a system called the New Arrangement to Borrow (NAB), whose members are a small group within IMF. China is not an NAB member.

The IMF charter allows bond issues, although that right has never been exercised. Such a move would require a majority vote by IMF’s executive board, said Ge Huayong, China’s representative to the board.

Other international organizations such as the World Bank and Asia Development Bank have a long history of issuing bonds. Bonds are a major fund-raising channel for these banks, allowing them to plan ahead for mid- to long-term loans for projects that focus on poverty alleviation, development and aid.

But as a firefighter for international finance, the IMF acts as a lender of last resort for countries swamped by financial crises. It can hardly predict in advance when and how much help countries will need. Issuing long-term bonds for unexpected, short-term needs would create a dilemma for the fund.  

A source at China’s central bank told Caijing that the IMF is not urgently hunting for credit. With US$ 250 billion in current resources, and a new credit line from Japan that’s worth US$ 100 billion, the fund’s motivation for additional financing is less than salient, the source said.

The source also said IMF might consider issuing bonds in the future if several developing countries make a joint request. But the fund may choose to prefer short-term notes.

Quota Reform

Despite the big jump in resources, IMF’s member-quota reallocation and governance reform issues remained unsettled at the summit’s end. Among IMF members, China’s current quota of 3.72 percent ranks sixth, trailing the United States, Japan, Germany, Britain and France.

G-20 participants agreed a quota review should be conducted by the year 2011, and more attention should be given to the voices of developing countries. But will China’s future quota match its economic status? One Chinese finance official expressed reservations.

“Considering China’s contribution to the world economy, its quota shouldn’t be less than that of Britain and France,” the source said.

But the source added that “it’s not very likely that China’s new quota can be around 7 percent,” which is the amount of China’s contribution to the world’s GDP. “But 4 percent is possible.”