Efforts should be made to establish a supranational currency as part of a new international financial order
The start of the G20 meeting in Nanjing on Thursday will hopefully provide some new impetus to reform of the international monetary system.
The fundamental problem with the current system is that the US dollar is used as the key international reserve currency, which gives the US central bank the "exorbitant privilege" of printing the United States' way out of its economic difficulties.
And that is exactly what it is doing. Its printing presses are running at full speed in a bid to boost the US economy, regardless of the impact on other countries. This practice contradicts the role of the US dollar as the international reserve currency.
One of the most important functions of the international reserve currency is to serve as a store of value for the savers of the world. The stability of the value of the US dollar in terms of dollar index as well as purchasing power is the prerequisite for the dollar to implement this function.
Yu Yongding is currently President of the China Society of World Economics, is a former member of the monetary policy committee of the Peoples' Bank of China
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