A Feasibility Study On Renminbi Regionalization Based On OCA Index Model

It is increasingly clear for China to realize that there are quite a few defects of thepresent international monetary system that would be bad for the economic growth anddevelopment of China in the future after the international financial crisis happened in2008. China has to do something significant in order to cast off the constraint of thepresent international monetary system that restricts Chinese national economy. Therefore,a considerable amount of studies on RMB Regionalization, which is considered as aneffective measure to get rid of the restriction of the present international monetary system,has been launched. But it is not so comprehensive that there are some aspects differentfrom previous research we can use to explore. This article wants to supplement TheTheory of RMB Regionalization via doing research as following.First of all, it explains the real elements of RMB Regionalization by analyzing theactualities of RMB’s development. Secondly, it selects some relative explanatoryvariables to construct the OCA index model of RMB Regionalization according to TheTheory of Optimal Currency Areas and some criteria of constituting an Optimal CurrencyArea, combined with several years’ data of selected sample countries or regions in EastAsia. And then, it makes use of the constructed OCA index model to calculate the OCAindex of other selected East Asian countries or regions to China Mainland, and comparethem with the OCA index of these countries or regions to Japan at the same time. So itconcludes that the integral economic convergence of East Asian countries or regions toChina is increasingly becoming strong, but Japan is still a crucial economy which has aconspicuous influence on regional economy in East Asia. With the evaluation of resultsof the OCA index calculating, and the analysis to existing obstacles of the process ofRMB Regionalization, it gives some feasible paths of RMB Regionalization.