Analysis On The Status Of Renminbi In The East Asian Monetary Cooperation

The Asian financial crisis in 1997 caused the eastern Asian countries to realize the necessity for currency cooperation, while the whole world financial crisis in 2008 makes the East Asian currency cooperation to be the focal point of the world. How to adopt workable measures to fulfill the East Asian currency cooperation becomes urgent for eastern Asian countries. As the economic potential of China is gradually enhancing, its influence is strengthening in East Asian economy, and the receptivity of Renminbi is getting wider and wider in the East Asia, it is of great necessity to make a thorough discussion to the East Asian currency cooperation and the Renminbi status.Many positive measure have been taken by the countries in East Asian currency cooperation, such as:"Chiang Mai agreement" which has the guiding sense, Asia bond fund and common foreign exchange reserve fund and so on. And they make the further effort as the loan crisis occurs. For example, they co-publish" Asian economic financial stability planning for action"," 10+3 "signe the overall scale to reach 84 billion US dollars bilateral currency exchange agreement, China and Japan signed the free trade agreement separately with the Association of Southeast Asian nations and so on. These measures are significant in promoting the East Asia regional economic cooperation and the currency cooperation.Given the economy and politics of the East Asia, this thesis thought that the multiple monetary union is the most realistic choice for the East Asian currency cooperation, and set up the multiple currency baskets. But the integrant for the currency in the multiple baskets is based the economic potentiality and the region volume of trade and the amount of investment as well as the foreign exchange reserve among different countries. China is the biggest developing country in East Asian region and the economic development is steady and rising, especially in the economic crisis, China still maintains the high economic growth rate, and brings the turning point of the economic resurgence for other East Asian countries. Moreover, the Renminbi has maintained strong, and wins good international fame, therefore Renminbi should become one of the multiple currency basket in East Asian. Japan as the most developed country in East Asia economy, moreover the Japanese Yen already becomes the international currency, and the influence of Japanese economy is very important to East Asia, therefore, the Japanese Yen should also become one of the multiple currency basket in East Asian. South Korea and Singapore are two" the Asian four dragons", the economic development is rapid, has the positive lead role to East Asia's economy, therefore South Korea and Singapore should also become one of he multiple currency basket in East Asian. In Asian country, Thailand, Malaysia, Indonesia and Philippines make important effect to local economy development, so these countries'currency should also become in East Asian multiple currency baskets. In summary, in the East Asian multiple currency basket's currency should include:Renminbi, Japanese Yen, Singapore, Korean Won, Singapore dollar, ThaiBaht, Malayan dollar, Indonesian Rupiah and Philippine peso.In recent years trade between China and Association of Southeast Asian Nations is getting more and more close, the growth of the economic development level and Renminbi long-term stability, which causes China to receive acceptable in the East Asian, the receptivity for Renminbi is also getting higher and higher. The abundant foreign exchange reserve is also offer the strength to deals with the risk. This article analyses Chinese GDP and the rate of increment, China to the region in other national volume of trade and the amount of investment and Chinese foreign exchange reserve, and then making a conclusion the dominant position of china in the multiple currency baskets. For recent years as the East Asian most developed economy Japan's economy has been very slow, the foreign exchange fluctuation is frequent, in addition the Japan government impressed aggressive which stays behind to the people, which causes the Japanese Yen to miss extremely in the East Asian region, people are not willing to accept the Japanese Yen. Therefore, Renminbi occupies the dominant position in the East Asian multiple currency baskets, and along with Chinese economy the status of Renminbi will be enhanced. Although China participates in the East Asian currency cooperation positively, Renminbi resides in the dominant position in the East Asian multiple currency basket, the Chinese economy has a great influence on the East Asian economy. China financial system was still imperfect, the interest rate, the exchange rate mechanism not yet completely market, Renminbi still can not exchange freely under the capital project, without doubt these factors become the barrier for China to play leading role in East Asia. The insufficiency which discussed above, this article suggested carrying on the financial system reform unceasingly along with Chinese economy's development, and perfecting RMB rate mechanism, and enhancing Renminbi's exchange rate elasticity, speeding up the exchangeability for Renminbi under capital project, continuing to advance Renminbi internationalization advancement, guaranteeing that Renminbi plays the major role in the East Asian currency cooperation.