Study On Currency Cooperation Of East Asia

Economic globalization of developing countries has brought enormous benefits and potential opportunities. However, a lot of problems and adverse effects are also coming up with it. Only developing countries strengthen their economic cooperation, especially in monetary cooperation, can do change these disadvantages. The East Asian financial crisis in 1997 has given the entire region enormous economic losses. Any individual country and region can not resist such a strong crisis by virtue of its own strength. East Asian countries widely recognize that lack of cooperation in monetary and exchange rate arrangements is the source of such non-stability. There is an urgent need for monetary cooperation to enhance the stability of financial markets. East Asian countries (regions) start thinking how to choose an appropriate exchange rate and monetary arrangements, without prejudice to its own benefits under the conditions of implementing national and regional common economic developments.This thesis consists of six parts. Chapter I introduces the background and significance of thesis topics, the basic concepts and an overview of relevant research areas. Chapter II introduces Optimum Currency Areas Theory, the development of this theory and two practical models. In Chapter III, firstly, the author analyses the historical background and external pressure to the East Asian monetary cooperation, and introduces economic fundamentals and intrinsic motivation in monetary cooperation of East Asia; Secondly, the author analyzes the need and feasibility of monetary cooperation in East Asia and the relative cost-benefit assessments; Finally, the author gives an empirical study on monetary cooperation in East Asia. Chapter IV firstly describes a realistic action for East Asian monetary cooperation based on the different characteristics of the international regional monetary cooperation. Secondly, arranges the specific path for the East Asian monetary cooperation. Chapter V reviews the exchange rate system choice theory firstly, including the fixed exchange rate, the floating exchange rate, exchange rate target zone theory, and the current exchange rate regime choice in developing countries theory; Secondly, analyses the basic economic factors of the exchange rate choice and the East Asian exchange rate system; Finally, introduces the construction of the East Asian exchange rate coordination mechanism comment options; Chapter VI first carries on cost-income analysis of the participation of china in currency cooperation of East Asia and in the progress and obstacle of currency cooperation of East Asia; Secondly, the currency of China at East Asia cooperates a medium function; Finally, puts forward the strategic plan that China takes part in currency cooperation in East Asia.Through the full text of the analysis and argumentation, we can see that East Asian regional economic cooperation and integration in theory has its solid foundation. In addition, it is also feasible on implementation in practice. East Asian countries have been fully aware of the possibility and the need of regional monetary cooperation. Monetary cooperation will bring tremendous economic benefits to the participating countries, including enhancing ability to withstand the financial crisis, promoting of foreign trade and investment, saving foreign exchange reserves, improving the efficiency of the use of funds, maintaining economic stability and sustaining economic growth. However, the present economic policy coordination of East Asian countries is still defective. There is a certain level of economic development gap coupled with lack of political identity, and it is not the full implementation of monetary cooperation. The main task of this stage is to strengthen political consultation and cooperation, and improve the supervision mechanism of policy coordination to achieve sub-regional monetary cooperation. When the time is ripe, we can achieve monetary integration in East Asia region.