Analysis Of The Path Selection Of The Monetary Cooperation In East Asia

Nowadays, Monetary Cooperation in East Asia is one of the important issues which the international economic theory community is concerned about. Based on the theory of Optimum Currency Areas, this paper has analyzed the feasibility of Monetary Cooperation in East Asia from the perspective of the level of economic development, the openness of the economic, the influence of mobility of factors and the industry composition, and has established two models-the exchange rate equation and the interest rate equation, which consist of fixed effects by constructing with variable coefficients, to conduct empirical research on the possibility of carrying out monetary cooperation among the nine East Asian economies. It is concluded that there is a basis for cooperation among the nine East Asian economies. But it's quite difficult to cooperate directly. Accordingly, the model of East Asian Monetary Cooperation and path selection are set forth:East Asia should follow the principle of gradual and orderly progress, and use the multiple currency union model, which is the gradual transition from China-the ASEAN sub-regional, Japan-South Korea sub-regional and China-Japan-South Korea sub-regional to the East Asian region. Finally, this paper has made recommendations for China's participation in East Asian monetary cooperation on:China should make a strategic choice based on the domestic and foreign economic situation, which is maintaining stable and rapid development of the domestic economy, deepening the financial system, promoting the internationalization of the RMB actively, and strengthening the regional trade and economic exchanges. In the future, China will play a leading role in the monetary cooperation in East Asia.