Feasibility And The Path Of RMB Regionalization In ASEAN

After the financial crisis broke out in2008, the reform of the existing internationalmonetary system has been advocated around the world. China has proposed the RMBinternationalization strategy in this background. In terms of the path selection of the RMBinternationalization, Chinese scholars generally agree that it should start with RMBsubregional development, then RMB regionalization and realize the RMB internationalizationat last. At present, China is in the stage of the RMB regionalization. Given the closereconomic and trade ties between the ten ASEAN countries and China, and the rapiddevelopment of the China-ASEAN Free Trade Area, ASEAN region has favorable conditionsto promote the RMB regionalization. Therefore, the study of the RMB regionalization in theASEAN area has a strong practical significance.This paper first describes the usage of the RMB from the invoicing currency, investmentcurrency and reserve currency situation in the ASEAN region. Then qualitatively analyzes theadvantages and restricting factors of the RMB regionalization in the ASEAN area. Thefavorable conditions are trade, investment, policy guidance and good prospect of currencysubstitution, and the constraint conditions include our relatively low financial development,financial differences between the ASEAN countries, monetary replacement costs and theinterests of the larger disputes between the countries. Then we use economic indicators andthe SVAR model to give a empirical analysis of the feasibility. Finally, the path of the RMBregionalization in the ASEAN region is designed from the perspective of strengtheningregional cooperation, and also give reasonable policy proposals, such as strengthening theChina-ASEAN financial cooperation, improving the legal system, strengthening the role ofthe government, and developing the Singapore offshore financial market.