The Coordination Of RMB And Japanese Yen In The Monetary Cooperation Of East Asia

After collapse of the Breton Woods system, regional monetary cooperation has become the focus of the international monetary system reform. European Monetary Union and the process of dollarization in Latin American countries have developed rapidly and achieved great results. However, to contrast with terms of European monetary integration, East Asia has difficult in making monetary cooperation because of lacking of status of the axis and monetary anchor.Japan, as the only developed country in East Asia, its economic strength is among the forefront of the world, so the great-power status is no doubt. China as a rising star in recent years, its international status also increases with robust economic growth. Both sides highlighted the East Asian monetary cooperation to achieve the currencies of regional and international will, but compounded by their own shortcomings, they can not achieve the goal relying on unilateral power. In this process, the existence of competition or cooperation relationship between the RMB and Japanese yen has their legitimacies. At the same time, it shows that the cooperation or coordination relationship become a key factor to the process of monetary cooperation in East Asia.This paper firstly describe the historical background of RMB and Japanese yen, then using the game theory to analyze the benefits and costs under the two strategies, the conclusion is that corporation is the best choice for both of them; Secondly, compare the economic openness and explicit comparison strengths between China and Japan, we find that there exists strong trade complementarily between the two countries, so collaboration is feasible; Finally, against the lacking current cooperation between RMB and Japanese yen, I give advises to promote cooperation between RMB and Japanese yen and also suggest some strategy proposals to improve RMB's competitiveness.This paper is divided into five parts. The first part is the introduction, mainly outlines significance of the article, then cardings the domestic and foreign scholars'research on the relationship between RMB and Japanese yen, and briefly describes the article's methodology, the main findings, innovative points and deficiencies department.The second part describes the theoretical basis for the article - Mundell - Fleming model, Hamada (Hamada) model and game theory analysis. In this part, mainly introduces the static games and dynamic games.The third part analyzes the background of coordination between RMB and Japanese yen under the East Asian monetary cooperation. Firstly set out the progress of East Asian monetary cooperation, and then point out that lacking of "monetary anchor" is the main factor to slow down the progress of monetary cooperation. Secondly, summarize the internationalization of RMB and Japanese yen. Conclusion shows that the coordination affects their process of internationalization.The fourth section analyzes the necessity and feasibility of their coordination. Firstly using the game theory to compare the benefits and costs under the two strategies, the conclusion shows that: cooperation is necessary; Moreover, compare the economic openness and explicit comparison strengths between China and Japan, we find that there exists strong trade complementarily between the two countries, so collaboration is feasible.The fifth part gives proposal for the coordination between RMB and Japanese yen. Firstly, summing up the recent cooperation of them, obtaining that current cooperation is limited to the crisis prevention dimension under the framework of current system, and there still exists a big gap in the exchange rate level. Therefore, I hold that RMB and Japanese yen should firstly identify their own strengths and weaknesses, on this basis, promoting substantive cooperation of both sides under the East Asian monetary cooperation framework. Meanwhile, RMB should also enhance their competitiveness through opening the capital projects and implementing the RMB trading settlement.