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Although not an official policy statement, the paper by Xu Hongcai, a department deputy director at the China Center for International Economic Exchanges, offered a window onto the domestic pressures bearing on Beijing to move away from a dollar-centric global economy.

The China Center, a top government think tank, has represented the Chinese government in organizing a forum on Thursday in Nanjing that will bring together finance ministers, central bankers and academics from the Group of 20 wealthy and developing economies.

Xu's paper, "Reform of the international monetary system under the G20 framework," was published in Chinese on the center's website this week (www.cciee.org.cn).

"Nations around the world have no way of restricting dollar issuance by the Federal Reserve. The current international monetary system lacks both stability and fairness," Xu wrote.

He said the global monetary system had fallen into a "dollar trap." While it would be sensible to reduce dollar holdings in official currency reserves, nations cannot easily cut back, because doing so would only lead the dollar to weaken and so hit the value of their assets, he said.

CHINA'S DILEMMA

China's dollar dilemma is particularly acute, though Xu did not say as much. China had $2.85 trillion in foreign exchange reserves at the end of last year, more than any other country. About two-thirds are estimated to be invested in dollars.

Beijing has repeatedly warned that loose U.S. monetary policy threatens the dollar, but it has continued to accumulate dollar assets at the same time, adding about $260 billion of Treasury securities last year, according to U.S. data.

With the Chinese government determined to limit yuan appreciation, it must buy a large amount of the dollars streaming into the country from its trade surplus and recycle those into U.S. investments.

Xu was not shy about proposing ways to remake the global monetary system.

For a start, he said diversification was needed, with several reserve currencies. Other countries could reinforce these currencies' status by buying or selling them to keep their exchange rates stable, Xu said.

He said the International Monetary Fund should also play a policing role.

"If any international reserve currency depreciates, the IMF would be responsible for issuing a timely alert, increasing international pressure to force the country in question to take measures to stabilize its currency," he said.

LITTLE SUPPORT

Xu's call for regular intervention to keep key currencies steady is unlikely to find much support among developed economies, which have come to view a system of floating, largely market-determined exchange rates as the most stable underpinning of the global economy.