A Study On Mode And Steps Of China Monetary Integration

After the retum of Hong Kong and Macao,China has been in a unique situation,that is"one country,four currencies".After the signing of CEPA,economiccooperation and exchanges among the mainland,Hong Kong and Macau have beenelevated to the level of institutional construction.In 2008 the cross-straits relationshipchanged substantially after fulfilling the big three links,which created a new chancefor further economic cooperation of cross-straits.In 2008 the outbreak of the globalfinancial crisis promoted the economic integration further between cross-straits inorder to cope with challenges confronted by crisis.These have laid a foundation forChinese monetary integration realistically.Monetary integration is helpful for countryreunion,promotes RMB internationalization and is a strategic platform for Chinajoining East Asia monetary cooperation as well.Therefore,the study has importanttheoretical and realistic significance.The article justifies the need of China monetary integration from different anglesand analyzes the realistic economic basis,which are the present state of economic andtrade exchanges among Hong Kong,Macao,Taiwan and Mainland and the evolutionprocess and possible future development direction of exchange rate regimes of HongKong,Macao,Taiwan.It meanwhile analyzes the interrelation of East AsianMonetary Cooperation and China monetary integration in the context of East AsianMonetary Cooperation With the method of empirical analysis of SVAR model,theconclusion is got that is Mainland,Hong Kong,Macao and Taiwan can not constitutean optimal currency area at present.After reference to international experience,ahybrid model is used to integrate China's four currencies including dollarization,Euromode,improving convergence model and conversion absorption model.The article has some contributions.The first is the study has sort of pioneeringmeaning with regard to Chinese monetary integration mode and steps。The view pointof mixed mode should be used in the process of monetary integration.The second isconceive and steps of cross-straits monetary integration based on the present politicaland economic situation and future dynamic trend.The third is evolution game theoryand the development trend of international currency system is first used to explain theneed of China monetary integration.