A Research Of East Asian Monetary Cooperation Based On OCA Theory

States subprime crisis led to financial and stock market fluctuated in U.S. and even the whole world, it is the most serious financial crisis since East Asian financial crisis in 1997. This crisis had a great impact on the economy in East Asian countries, therefore, monetary cooperation in East Asia has important significance to facing the subprime crisis. As the current inherent contradictions and dilemmas of international monetary system, the creation of international and regional currency and the development of international and regional monetary cooperation can ease the current international monetary system inherent contradictions to some extent, it will became a revolution trend of current international monetary system. Based on the above background, East Asian monetary cooperation has become an increasing concern among East Asian countries, a new step of deeper regional monetary cooperation has become the consensus of most East Asian countries. As a precedent, the success of European monetary integration brings East Asian countries great confidence. As the economic link between East Asia countries are deepening, regional monetary cooperation in East Asian countries will undoubtedly bring greater benefits, at the same time, construct a series of cooperation mechanisms will also be able to play prevention and aid effectiveness in crisis. Based on this background, China should participate in the East Asian monetary cooperation actively, improve the status of RMB in East Asia monetary cooperation, promote Chinese economic and financial development, and enhance Chinese overall economic strength.This paper is based on Optimum Currency Areas Theory proposed by Mundell, and selecting the Optimum Currency Area (OCA) index method of American scholars Bayoumi and Eiehengreen from the book. Construct regression model, analyze and discuss the possibility and path of monetary cooperation in East Asia. In the framework of their analysis, this paper collects the macroeconomic data of nine East Asian economies, use econometrical tools, and calculate the coefficient estimates of the regression equation, then put the predictive value of the dependent variable into the regression equation to obtain the OCA index between the East Asian economies. The empirical results show that the interdependence between some East Asia countries is similar or deeper than European countries; It is fit for the formation of monetary union. However, monetary cooperation in East Asia have encountered many obstacles, such as the lack of political bases, the economic gaps and different structures, these delayed the East Asian monetary cooperation. How to solve such problems, this paper has further explanation about feasibility path of cooperation in East Asia based on empirical results. Establish three sub-regional monetary unions and promote the three sub-regional unions become one monetary union, this is the key point of East Asian monetary cooperation. As the great importance of China in East Asia, at the end of this paper use China as the epitome, discusses the situation of China in East Asia monetary cooperation. This paper thinks that speeding up the RMB regionalization and internationalization and enhancing the cooperation with other East Asia countries are the best strategic choice for China in East Asian Monetary Cooperation.