The special adviser to IMF chief Dominique Strauss-Kahn, Zhu Min, on Wednesday called for European-China cooperation in establishing a healthy international market.
"What Europe and China can do? I can see the huge room in which both of us can work together to build a better and sound international market system for tomorrow," Zhu said at a symposium on European-China economic cooperation, organized by the French Treasury.
The IMF is making great efforts to strengthen and improve supervision to ensure a better capital flow, which will help promote a more stable and more integrated international financial system, Zhu said.
In doing so, the IMF needs support from Europe and China, he said at a roundtable discussion on global governance and the international monetary system.
At the beginning of his address, Zhu cited an imbalance between demand and supply of major reserve currencies, saying "obviously, the dollar remains the major reserve currency."
"The U.S. economy only accounts 24 percent of global GDP, but the dollar dominates the sovereign debt, accounting 42 percent of the world's total," said the expert.
In addition, he pointed to the absence of an automatic adjustment mechanism for international market systems, noting that whenever a crisis flares up, "the system can not adjust automatically," so the effects build up and accumulate rapidly.
In his view, another flaw in the existing market system is the volatile capital flow across the world.
The question is "how to establish a new (system)," the IMF special advisor said at the panel of the conference, which drew some 200 representatives from China and Europe.
The IMF was undertaking reforms in a bid to be able to play a more proactive and more effective role in building a new international monetary system, Zhu said.
He also suggested the United States and China cooperate and manage capital flows in a better way, to ensure the capital flows to an area where can be used more effectively, and to promote global financial stability for a better market system./.