A friend just returned from attending the World Bank/International Monetary Fund’s (IMF) annual meeting in Istanbul. An old hand in these circles, he’s talked about China’s efforts to be taken more seriously in matters of international economics for years.

Reflecting on the conference, he was impressed by the Chinese delegation’s assertiveness and global awareness, a far cry from the decades-old advice of Deng Xiaoping to “keep your head down abroad and focus on growth at home.”

For starters, the Chinese officials didn’t mince words regarding their own economic policies, as Finance Minister Mr. Xie Xuren reiterated that China would maintain its active fiscal policy and moderately loose monetary policy. As he noted, “We are seeing more positive signs and an upward trend in the Chinese economy, but we are also soberly aware that the economic rebound is yet to be stable, firm or balanced.”

On the issue of currency appreciation, the Vice Governor of the country’s central bank stated that “China’s exchange rate policy is very clear. China will continue its FX policy setting and emphasize stability.”

As longtime readers know, my view has been that the shift of economic power from West to East will also bring about political changes that will transform, among other things, the decision-making process on global economic policy.

To that point, the Chinese called for an overhaul of the IMF’s voting system to give developing nations more clout and advocated that the IMF play a bigger role in regulating global financial markets.

Specifically, the Chinese argued for “a system to automatically adjust (voting) quotas and to reflect changes in countries’ economic status in a timely manner.”

Note that during the most recent G20 meeting, the IMF agreed to shift at least 5 percent of the G7’s voting rights to up-and-coming nations. China is less than satisfied with this decision because it understates the country’s importance to the global economy. 

Turning to China’s domestic economy, the “golden week” celebrations in China boosted retail sales and tourism. Retail sales surpassed USD83 billion that week, with sales of passenger vehicles, jewelry, and home appliances strongly contributing for the annual numbers.

Tourism is also emerging as a big force in the Chinese economy. Half a billion passengers traveled by railways or buses during the  golden, more than five million by domestic air and 8 million by waterways. 

I continue to recommend that investors seeking exposure to China allocate funds to energy related companies and firms levered to domestic demand.