Feasibility Of East Asia Monetary Cooperation And China's Strategic Choice

With the economic globalization, regional monetary cooperation has become themainstream trend. This paper first reviews the literature of the East Asian monetarycooperation feasibility study, and the OCA theory. This article analyzes the indicatorsof economic impact in East Asia, including the consistency of economic fluctuationsand the symmetry of economic shocks. In the SVAR model, economic shocks aredivided into supply shocks and demand shocks.The analysis is based on the data from1980to2010. The East Asian economies should coordinate policies of regionalmonetary cooperation. Monetary cooperation could be developed in sub-region. Thispaper reviews the course of monetary cooperation in East Asia. To take the fullaccount of the characteristics of the East Asian region, this article analyzes thedifficulties in the East Asian monetary cooperation.This paper analyzes the revelation on the practice of regional monetary cooperation,including the European Monetary Cooperation and dollarization in Latin America. Atthe same time, this paper analyzes the sovereign debt crisis of the euro-zone. We cansee the institutional drawbacks of euro area. Regional monetary cooperation can notbe achieved at once. It requires the cooperation of the economies. The euro mode isnot the ideal model of monetary cooperation in East Asia. The RMB may become theregion’s dominant currency with the mode of dominant currency regionalization. Themulti-level arrangements are fit for East Asia now. The form of the cooperationdepends on the consensus of the economies of East Asia. According to the revelationof the euro zone sovereign debt crisis, this paper analyzes the short-term measures.The paper analyzes the significance of participation in monetary cooperation forChina. China should take measures to take part in monetary cooperation of East Asia.