Research On East Asian Monetary Integration

Since the latter half of 19th century, the trends of economic globalization and regional economic integration are deep-going, and have more and more impact on the world economy. The area of East Asia, which is known as one of the three economic areas in the world, plays an important role in the world economy, and various forms of economic cooperation have been rapidly launched in different levels. But compared to other economic areas in the world, monetary cooperation in East Asia has always been ignored by academics, international economic organizations and national governments. The parties have changed the views of the East Asian Monetary Cooperation until the outbreak of the Asian financial crisis in 1997. Soon, monetary cooperation in East Asia has attracted the worldwide attention. Today, in the global financial crisis which caused by the U.S. sub-prime mortgage crisis, on one can be spared. East Asian countries also began to pay more and more attention to this issue of monetary cooperation.East Asian monetary integration has been the topic of governments in East Asia and theoretical discussions and study. It is very important to the development of East Asian and the whole world and plays a guiding role in monetary and financial cooperation in East Asia. The article which is based on OCA describes the significances, reasons, feasibility and mode of East Asian monetary integration under the perspective of monetary integration in East Asia. Monetary integration is helpful to withstand the financial crisis, promote the whole economic strength and save the exchange reserve a lot. Whether the needs of trade or the trend of economic globalization, it promotes East Asia to monetary integration.This article describes the theoretical basis of the regional monetary integration and the process of monetary integration in East Asia, summarizes and discusses the motives and feasibility of the East Asian monetary integration, also the mode selection of the integration, and put forward the countermeasures to be taken in the process of monetary integration in East Asia. This paper is divided into six parts:Chapter One introduces the theory of optimal currency areas, the core of the regional monetary integration and other related theories. Chapter Two reviews of the early vision and substantial progress in the East Asian monetary integration and analyses the practical significance of the East Asian monetary integration. The achievement of the East Asian monetary integration will help countries to weather the financial crisis and exchange rate risks and enhance the overall strength of the regional economy.Chapter Three analyses the internal and external motives of the East Asian monetary integration. It's the need for trade and investment co-operation, the inevitable requirement of economic globalization and the boost by the instability of the international monetary system and financial crisis.Chapter Four discusses the feasibility of monetary integration in East Asia in detail and the difficulties. It analyses the feasibility of the East Asian monetary integration in the convergence indicators and cost-benefit, but there are some difficulties, for example, large differences in the economic development of countries, missing the leading country and so on.Chapter Five describes the mode selection of the East Asian monetary integration. Multi-currency union is the best option through the actual situation in the East Asian economies. At the same time, we should gradually start in different levels and evolve in phases. At last, there will form a single currency area.Chapter Six discusses the status and role of China in the process of economic development and monetary integration in East Asia and the countermeasures to be taken in turn.The article describes East Asian monetary integration using the data analysis and other methods. It discusses the feasibility in detail in the view of convergence criteria and cost-benefit and gets to the conclusion finally.In a word, the East Asian monetary integration is a major trend of the future development of the international monetary system. Though there are many differences among the countries in East Asia and some other problems, East Asian monetary integration is feasible upon the analysis of the whole feasibility. In view of the complex situation of East Asia, Multi-currency union which is from sub-regional monetary integration to the whole area is appropriate to East Asia. It will be helpful to the economic development of countries, enhance the overall strength of the East Asia regional economy and promote the development of the world economy. Although it can't be achieved in one day and there are many difficulties on the way, we should still have a great hope and work together with other countries to achieve the East Asian monetary integration.