The Economic Viability Of The Mainland And Hong Kong And Macao Monetary Cooperation

The Theory of Optimal Currency Area and the establishment of euro provide a theoretical basis and practical guidance for the monetary cooperation among the Mainland, Hong Kong and Macao; especially in the context of the debt Crisis, the study of the Monetary Coopeartion brings both positive and negative aspects of referential significance. In the point of positive, euro was given birth afterwards the European economic integration had been set up, meanwhile euro plays an enormous role in the progress of the European economic integration. It is the CEPA that provides an opportunity for the Monetary cooperation among Mainland,Hong Kong and Macao; and it promotes the liberalization of trade and free movement of capital, with which accelerates the economic integration of the three places. Therefore, as an important medium in the commodity economy, when the integration of the commodity and production factors market reaches a certain level, the discuss of monetary cooperation will naturally be raised. At the same time, the monetary cooperation of the three places is a’Special domestic monetary integration’without conflict of sovereign interests, and there are essential differences from that of European area. Consequently, monetary cooperation of Mainland, Hong Kong and Macao conform to the trend of historical development.Focusing on the Concrete Ideas, this paper starts from the economic feasibility of monetary cooperation among these three places. Firstly, we inspect the realistic economic basis of monetary cooperation through aspects of trade contacts, financial exchanges, personnel exchanges, outputs and price fluctuations, fiscal policy and exchange rate regime, and find that although there are certain obstacles in monetary cooperation, it fits the common interests of the entire Chinese people in long term. Secondly, we take the Optimum Currency Area theory as the theoretical basis for the cooperation of these three places, and we analyze and prove the "endogenousity" through demonstration,which reflects the feasibility and long-term of the monetary cooperation. At last, using European Monetary Integration and the European debt crisis for reference, the author proposes the specific steps of the implementation in both short and mid-long terms.