The Internationalization Of The Renminbi And East Asian Monetary Cooperation

There are two characteristics to describe world economy of the time, one is unceasing process of regional economic integration, the other is rapid upspring of emerging markets. East Asia Cooperation and China's sustainable fast economic development are two symbols of such two features.As the largest developing country, China plays as an engine to drive economic development in East Asia area. Demand of Chinese currency RMB will rise up based on Chinese economic and political influences. The world is undertaking financial globalization and financial liberalization, meanwhile China is accelerating its pace of financial openness. A strong pressure on RMB appreciation, practice of WTO commitments and domestic macroeconomic situation ask for RMB internationalization.International currencies US Dollar, Japanese Yen and Euro enlighten us in the process of RMB internationalization. Taking current monetary system with Dollar as its core into consideration, learn from Yen's journey of internationalization, RMB should follow the way of Euro. The way achieves internationalization through regional currency cooperation. Therefore, RMB internationalization and East Asia cooperation are well connected.East Asia is one of the world's fastest growing areas. Going along with step of financial globalization, gone through the crisis prevention period, East Asia cooperation strides forward a higher stage of positive cooperation age. Although there is no adequate capacity to establish Optimal Currency Area, East Asia Cooperation process in inevitable. Exchange rate coordination and monetary unification are final products of further development, which also adhere to the multi-polar currency system. At present, East Asian countries get on consensus to strengthen regional financial coordination, power cooperative mechanism, maintain stability on financial market. In the process, China will play and important role in this process undoubtedly. Noted economist Dornbush concluded in 1999 that only a small number of currencies exist in 20 years. In Asia, China's currency may dominate in Asia; U.S. dollar will be commonly used in South and North America; Euro will lead the rest of the world. Mundell also predicted in 2000 that there will be three major currency areas: the euro zone, the U.S. dollar zone and Asian currency area in 10 years. Asian Currency Unit (ACU) is designing by East Asia nations now, and further endeavor is needed in the future.