Rumors are circulating in Chinese think tanks and media this week that Beijing may offer $100 billion to the International Monetary Fund (IMF) as part of international efforts to boost the IMF's cash reserves as numerous developing countries apply for loans to help them stay afloat amid the global economic crisis. The rumors have been fueled by Hu Xiaolian, deputy governor of China's central bank, who suggested March 23 that if the IMF were to issue bonds to raise funds for emergency financial bailouts, China would consider buying them. China therefore could formally pledge the $100 billion during the G-20 summit in London in early April. The world's richest countries and the heads of major international institutions like the IMF and World Bank will gather there to try to hammer out a new strategy for fighting the economic crisis and supposedly invent a new global financial architecture. States are increasingly looking to the IMF to lead the way in stemming the tide of crumbling economies in some high-risk areas, most notably Central and Eastern Europe. The IMF has already approved emergency loans to nine countries amid the current crisis, with three loans pending approval and another four under negotiation. Loan values have reached into the billions of dollars for Iceland, Hungary, Ukraine, Belarus, Pakistan, Latvia and Romania. The disbursement of funds relating to Ukraine's loan has been stalled due to disagreements about Ukraine's public budget. Turkey is negotiating a large standby loan that could be worth as much as $25 billion. Requests for more loans continue to trickle in; the list of countries potentially in need includes Estonia, Lithuania, Croatia and Bulgaria, as well as many others throughout the globe. All this lending is beginning to wear on the IMF. The IMF's approved lending so far totals approximately $64.44 billion; if that amount is used, it will leave the fund with about $191.86 billion in reserves, down from an estimated $256 billion. But a movement is under way to replenish the fund's reserves to better equip it for the ongoing crisis, which has intensified in 2009. In February, German Chancellor Angela Merkel and British Prime Minister Gordon Brown called for an approximate doubling of the IMF's available resources to $500 billion —specifically to assist troubled European states, but also to help other ailing developing countries. Several countries have pledged, or publicly contemplated pledging, the necessary funds already. Germany's reluctance to endorse an EU-wide bailout plan is the primary reason why the European Union is opting to support the IMF with about $100 billion worth of loan guarantees, rather than attempting to bail out Central Europe on its own. As an export-reliant economy, Germany needs Europe's economies to stabilize and start spending again, so it supports bailouts in principle. But the question is whether the bailouts should be handled by the IMF or the European Union, or through bilateral deals. Germany has no objection to offering bilateral loans to struggling countries, as Berlin could determine the conditions of such a loan directly. But Berlin knows that the onus of funding any EU-wide program would fall disproportionately on its shoulders, since it is the German economy that has the strength and flexibility to support any EU schemes. Furthermore, the political strings attached would be divided among the bloc's 27 members, awkwardly enabling some borrowers to have bargaining power over the conditions of loans granted to them. Germany prefers instead to reinforce the IMF's familiar role as a third-party provider of loans, which also allows Berlin to share the burden of the funds with other non-European IMF members. Japan and China are obvious candidates to contribute to the IMF because, unlike most of the rich world amid this particular crisis, these two economies are awash in liquidity. They also share the need to rejuvenate consumer demand in Europe and the United States so that sales of their exports will pick up, reviving their manufacturing sectors. Japan pledged $100 billion for the IMF early in the crisis, a deal that was concluded in Rome in February, because Tokyo realizes that for Japan's economy to recover, exports must revive. Japan depends on exports for most of its economic growth, and the latest statistics show that in February — one in a string of successively brutal months for the export sector — these exports fell by nearly 50 percent compared to a year earlier. Thus, Tokyo is willing to dole out the cash it has on hand in order for the IMF to rescue others, knowing that the sooner other countries can get back on their feet and start spending, the better off Japan will be. Bolstering foreign markets in order to revive its own exports is a consideration for China, too. In some ways the situation is an even more dire one, as the country's overall economy is more heavily dependent on exports than Japan's. Failing factories in China have generated massive unemployment and social problems among the country's migrant and poor workers, and this jeopardizes stability for a government that fears it is losing its grip. But China's situation differs slightly from Japan's, giving Beijing another reason to consider contributing to the IMF. The Chinese have $2 trillion worth of foreign exchange reserves built up from years of trade surpluses, but because the country's infrastructure and corporate structure are so underdeveloped, Beijing has trouble finding secure places to invest its extra cash to make a decent return. This has led China to invest heavily in U.S. government debt, which has proved safest and most profitable in the long run, while subsidizing the U.S. consumption of Chinese goods. But the managers of China's reserves are happy if they can find other, equally suitable financial vehicles, and the IMF is a potential contender because its loans pay interest. The investment is secure because the IMF is backed by the United States and the rest of the developed world. In addition, if Beijing chooses to lend to the IMF or purchase IMF debt, it can present its actions as an example of China's generosity toward the world and increasing status as a responsible participant in global affairs. China is trying to emerge as one of the major economic players globally, having more say in major economic decisions of regional and global consequence. Meanwhile, in Asia, the IMF has a reputation of being a U.S. political tool due to the austerity measures attached to loans during the Asian financial crisis in 1997-1998. Having a Chinese hand in the way the funds are distributed — and more importantly, in the requirements put on countries that draw on IMF funds — would give the Chinese a way to begin to influence U.S. or Western mandates, ultimately giving Beijing additional leverage in economic and political dealings within its region and the world. Saudi Arabia has announced that it is willing to provide an unspecified sum of capital for the IMF. The Saudis, like the East Asians, are awash in cash reserves; in the Saudis' case, these were built up over years of racking up profits on energy exports. Riyadh has been hesitant to commit funds to the IMF, however, arguing that its fiscal investment, especially in the energy sector, is helping the global economy enough. Of course, until global demand revives, oil prices will remain low. With the Chinese contemplating contributing to the fund, the Saudis will be under more political pressure to offer something significant themselves. Between Japan and the European Union, and possibly China, Saudi Arabia and the United States (which also could be considering contributing up to $100 billion to the fund), the IMF should receive the additional $250 billion it is hoping for to help finance the long list of countries that are tottering amid the global recession.