A two-day G-20 Summit on Financial Market and World Economy ended in Washington D.C. on Sunday, November 15th. The leaders of the Group of 20 unanimously agreed to regulatory essential reforms to be carried out steadily in the global banking system. A major issue for solution during this reform is how to promote a pluralistic monetary system and jointly back up the stability of the global financial system.
The settlement mechanism with the U.S. dollar as the sole global currency for accounts settlement will be retooled or revamped gradually, noted some public opinions, and this is meant to involve in-depth topics to shake the "dollar supremacy".
World trade is now a "game", in which the United States print paper money, or the dollar, to buy from its trade partners worldwide a series of commodities ranging from petroleum oil, cars, TV sets and garments. The U.S. maintained its defense industry and researches. It has first of all outsourced its traditional, old (economic) manufacturing to Japan and Germany, and then outsourced its clothing and other products with low-technology contents to Asia and Mexico.
What most important is that the U.S. has practically set up and manages a new-type banking sector based on trash bonds and new structured-finance products. So, the frenzied growth of such fictitious economy poses one of the contributing factors for global financial crisis and results in the serious, imbalanced growth of world economy.
Global "dollar supremacy" has led the current global finances to stay in a state of "finance terror", and "any substantial change" will possibly incur a through, complete collapse of global financial or economic setup. And as upper-class nations in global financial system, European nations and Japan, for example, have for long hesitated to set forth any substitution plans with real reform contents nevertheless, though they feel a pinch of harms inflicted by the dollar supremacy to the balanced, sustainable growth of world economy.
So, leaders of both European nations and the U.S. at the G-20 summit deemed it essential to add the "weight" or importance of newly emerged market countries to the future financial order on one hand and, on the other hand, they still did not touch on the issue concerning the establishment of a pluralistic world monetary system.
Some critics ascribe this situation primarily to the contest of the nations involved for a leading role in the future international monetary order. Meanwhile, they after all have much shared interests, and keep their own interests in mind with joint efforts to guide the new international financial order in the years ahead. Particularly, the euro currency has been as popular and strong around the world as the U.S. dollar to be one of the leading currencies for international reserves and settlement. However, the dollar remains a dominating status in the global trade and commodities pricing, although its position has weakened and the status of euro is on rise.
Hence, it can be said that the bilateral "harmonious yet not submissive", and "compatible yet unbreakable" ties emerged since the end of cold war have been adapted to the needs arisen from pluralistic, bilateral political, economical and financial layers.
The world is heading for multi-polarism at present, and the pluralist setup in global politics and economics is irresistible. To "echo" or work in concert with this reality, global cooperation to spur a pluralistic development of global financial system also represents a general trend. In their pricing and settlement of accounts, the U.S., Euro zone nations, Britain and Japan all prefer keeping their own currencies. Then, developing countries have an ample reason to bring into play their due role and status compatible to their political and economic positions in the course of advancing a pluralistic monetary system.
As a matter of course, the settlement mechanism with the adjustment of a single world currency cannot be accomplished overnight, but has to be materialized gradually and steadily with an incessant rise in the strength of these new-emerging economics and along with an active support from of the U.S. and other developed nations. For a long-term point of view, with a smooth transition of this process, it is hopeful for establishing a new international financial order that is fair, just, inclusive and orderly and fostering an institutional environment conducive to sound global financial and economic order, and for laying down a much more substantial groundwork for the sustainable development of global economy.
By People's Daily Online, and its author is PD resident reporter in Germany Lu Hong