Like the appointment of Lin, these events herald the arrival of China not only at the center of the global economy, but in the very heartlands of American financial power. With the American economy now facing the prospect of a prolonged recession and the Chinese economy likely to escape its worst effects, the process of US decline and China's rise is likely to be foreshortened.

It would be naive to think that Lin's appointment will result in a major shift in the policies of the World Bank. The latter will still be a creature of Washington. But nor will it be possible for Lin's voice to be ignored. And if that is true now, it will become increasingly the case in the future.

There is a growing crisis of representation in the major bodies of international economic governance – the IMF, World Bank and G8. The Western countries that dominate them, along with Japan, account for a declining share of global economic activity, and, with the rise of countries like China and India, that proportion is destined to fall rapidly over the next two decades.

But if these countries are to be allowed their voice, as surely in time must happen, then the priorities and policies of these bodies are bound to change as greater weight is given to the interests of the developing world, rather than the developed world. Escalating food prices and their impact on the world's poor would be a good place to start. The World Bank, like the IMF, is likely to become the site of growing rivalry between the developing and developed worlds.

However, in the longer run it is not at all clear what will become of the World Bank or the IMF – as opposed to the G8, which could easily change at some point by ditching those who have little case to be there (for example, Italy and Canada), and adding China and India (and, in due course, Brazil and South Africa). A key question, however, is how China will perceive the World Bank and the IMF in the longer term.

Already its own aid program for African countries considerably outdistances what the World Bank contributes to the continent. As the Chinese economy grows ever larger, its potential for offering economic aid to Africa, and indeed other parts of the developing world, could far exceed the parsimonious contribution on offer from the World Bank.

Over the past decade, China has shown great eagerness to be seen as a full-fledged member of multilateral bodies. There are questions that might still be some way off, but they demonstrate just how fundamentally China's rise will change our Western-made world. 

(China Daily via The Guardian June 3, 2008)