FOR all but three of the last 18 years the World Bank’s senior management has had a common theme. Serving high in the ranks alongside its US-appointed president — currently Jim Yong Kim — has been a Chinese official, acting as a vital link to Beijing’s leadership and a voice for a country whose influence is rising within the institution.

With the departure at the end of this year of its top World Bank official, however, China risks losing that seat at the bank’s top table, introducing another potential irritant into an increasingly sensitive relationship between Beijing and both the bank and its sister organisation, the International Monetary Fund.

Jin-Yong Cai, a US-educated economist and former Goldman Sachs banker, is stepping down from the leadership of the International Finance Corporation, the bank’s private sector arm, a year before his four-year term expires. The bank portrays this as the result of normal turnover. The consummate dealmaker, insiders say, has for years expressed a desire to return to the more freewheeling private sector.

The politics of Mr Cai’s exit are complicated by the fact that it comes amid rumblings among some shareholders about him being too close to Beijing and having pushed to do too many projects with Chinese companies, some of which have proved controversial. A $300m equity investment in the Postal Savings Bank of China was approved by the bank’s board in June, but nine of its 25 voting members including the US, Japan and European shareholders abstained in protest.

China risks losing its voice at World Bank’s top table

But analysts say his departure — and replacement by a European, Frenchman Philippe Le Houérou — is only likely to add to Beijing’s frustration. Europe and the US have had a longstanding hold on the Bretton Woods institutions and China feels it does not get the representation it deserves both as a shareholder and within the institutions’ staff and management.

“For [China’s leadership] to lose a senior position like this is a concern,” says Yukon Huang, a former US Treasury official and World Bank country director in China. “They have always felt they should have someone at the highest levels in these [international financial institutions].”

China’s frustration with the governance of the World Bank and the IMF — and particularly the stalling in the US Congress of 2010 reforms that would give it a bigger voice at the IMF — contributed to its decision to establish the Asian Infrastructure Investment Bank and other potential rivals to the existing international order. But it has hardly ended there.

At a meeting of senior officials last month China’s president, Xi Jinping, railed against what he called the ‘unjust and improper arrangements in the global governance system’, in particular the IMF and World Bank, according to state media reports.

In response, both Mr Kim at the World Bank and Christine Lagarde at the IMF have worked hard to build both personal and institutional relationships with Beijing. Ms Lagarde in particular has also made a push to hire more Chinese nationals to roles across the fund.

“I am very proud of the great partnership between China and the IMF,” Ms Lagarde told students in Beijing last year, pointing to the ‘deep talents’ of the fund’s existing senior Chinese staff and efforts to recruit more young and mid-career Chinese economists to work at the fund.

“I encourage you all to consider joining us,” she added.

For all of the efforts the number of Chinese people working at both of the Bretton Woods institutions remains relatively small.

According to the World Bank, 447 of its salaried workers worldwide were Chinese nationals at the end of October. That amounted to 2.8pc of its 15,652-strong workforce, a modest improvement on the 2.6pc that carried Chinese passports five years ago. At the IMF, meanwhile, this year just 146 of its worldwide staff of about 2,400 are Chinese, or about 6pc.

Alison Cave, the World Bank official in charge of increasing the diversity of its staff, said the bank was focused on recruiting ‘under-represented nationalities’ like China.

Over the past decade it has managed to increase at least their raw numbers by 13.7pc, she said. “But they are still not at full representation.”

Published in Dawn, Business & Finance weekly, November 16th, 2015