BEIJING-- The latest news regarding the eurozone's two-year-long debt crisis has overshadowed discussions on reshuffling the dollar-based global monetary system, although China has called for more efforts to reform the system.

President Hu Jintao once again suggested accelerating the reform of the international monetary and financial system, a topic on the initial agenda of the ongoing G20 summit, in talks ahead of the meeting.

Despite an ongoing debate regarding the super-sovereign Special Drawing Rights (SDR), which were designed to augment international liquidity by supplementing standard reserve currencies, experts are convinced that a crisis-resilient global monetary system should rely on a basket of currencies rather than a single currency.

Doors open for change

French President Nicolas Sarkozy, who is presiding over the Nov 3-4 G20 meeting in Cannes, has not been the first person to prompt a fundamental rethink of the global monetary system. But his voice has echoed a wider yearning for change, which may indicate that global monetary reform is more likely, analysts said.

Criticism of a "hegemonic dollar" has not been new, but explicit requests for a new global monetary system have been relatively scarce, said Li Jianjun, an analyst with the state-owned Bank of China.

However, since the global financial meltdown in 2008, the idea has gained momentum. Calls for international monetary reform have come not only from once-peripheral emerging economies, but also from long-term US allies in Europe like France and Germany, Li said.

Many have started to recognize the problems that have emerged from using a single dominant currency in global markets.

The deep root of the current financial crisis lies in the dollar standard, said Zuo Xiaolei, chief economist at Galaxy Securities.

The real purchasing power of the greenback vanished with the breakup of the Bretton Woods regime, which pegged the dollar to gold and all other currencies to the dollar, Zuo said.

Yet under the dollar standard, investors were eventually kidnapped by US Treasuries, which served as a "final alternative" for any other investment vehicle, Zuo said.

In addition, Li pointed out that market confidence in the dollar has been unraveling, as the world's largest economy has been stuck with a debt crisis and stagnant growth.

"The world is now loath to see the dominance of the dollar, which opens doors for change," Li said.

SDR under depate

Although economists are still largely at odds concerning the SDR's possible role, many have agreed that a future international currency system should be built on a basket of currencies, including the dollar, the euro, the yen, the sterling and the yuan.

They have unanimously ruled out the possibility of returning to the gold standard, and many say other currencies like the euro and the yuan are not strong enough to overtake the dollar's key role.

A real debate is heating up over the super-sovereign SDR as a possible alternative.

Some economists believe the SDR, created by the International Monetary Fund, could become an ideal global reserve currency to eliminate the word's reliance on the dollar, while others have deemed it infeasible for now.

Nobel Prize laureate Robert Mundell, known as the "father of the euro," said Monday in Beijing that the SDR will play a significant role in the post-crisis global monetary system.

He also backed Sarkozy's proposal to include the yuan in the SDR basket, which now includes four currencies: the dollar, the euro, the sterling and the yen.

The inclusion of the yuan would better reflect the new realities of global economics, Mundell said.

Ba Shusong, an economist with the Development Research Center under China's State Council, said the role of the SDR should be strengthened to create diversity and reestablish global financial order.

However, others have been pessimistic about the super-national currency and do not see much need for China to join the SDR.

"The crux of issuing a super-sovereign currency is determining who gets the final say. Both issuance and allocation involve a lot of political give-and-take. Without seeing great benefits, countries will have little incentive to take the onus," Li said

The expansion of the SDR will not solve the fundamental problems in the current monetary system, said Cao Tong, deputy governor of Citic Bank.

China should focus on its own business and not worry about the entry, nor alter its own schedule regarding yuan reform, Cao said.

China's former central bank governor Zhou Xiaochuan said in early September that China is in no hurry to have the yuan added to the SDR basket.

"Chinese currency will become more powerful as the country's economy grows stronger. Sooner or later, the yuan will be added to the SDR," Zhou said.

Yuan reform progress

China has pledged to increase the yuan's flexibility, while stressing that exchange rate policies will be reformed in a gradual and controlled manner and the currency's basic stability will be maintained.

To push forward the internationalization of its currency, the Chinese government has encouraged the use of the yuan in cross-border trade and investment settlement.

China is still in the process of signing a yuan-denominated trade settlement agreement with the Association of Southeast Asian Nations (ASEAN), Jin Qi, assistant to the central bank's governor, said in late October.

The government first allowed trials of cross-border trade settlement in yuan in some Chinese cities in July 2009. Hong Kong, Macao and ASEAN were chosen as trial areas.

China's yuan settlement in cross-border trade surged to 957.57 billion yuan ($149.62 billion) in the first half of 2011, 13 times more than that of the same period last year, according to statistics released by the central bank.

The country also approved foreign direct investment in yuan legally obtained overseas on Oct 14. The move was aimed at further boosting cross-border use of the yuan, as well as supporting the yuan market in Hong Kong, the central bank said.