Preliminary Study Of East Asian Regional Monetary And Financial Cooperation

The eruption of 1997 East Asian financial crisis has pushed countries in East Asia to embark on regional financial and monetary cooperation, while regional integration of trade and investment was not yet reach a higher stage in the region. In particular, the wave of"Free Trade Area"which symbolize the integration of regional trade and investment was not yet emerged. This opposite sequence of money-before-trade sequence of the region was once considered in violation of the law of economic development, thus, aroused doubts from international mainstream of economic academy for the problem of regional economic cooperation in the reverse order could exacerbate regional financial instability, in turn, caused serious damage on the economy, therefore, it is not sustainable.However, fourteen years later, the regional monetary and financial cooperation in East Asia has not died down, but has been further deepened. On the one hand, the initial but unique mechanism of East Asian monetary and financial cooperation was established, including: communication and inter-regional coordination of financial supervision mechanism, regional currency swap mechanism and actively try to create the Asian bond market mechanism for direct financing. On the other hand, in some specific area of monetary and financial cooperation has achieved a breakthrough, especially long-awaited East Asia's pool of foreign exchange reserve has finally emerged in March 2010.Nevertheless, the process of monetary and financial cooperation in East Asia was not smooth, which is far away from the target. Though communication and coordination has been largely regional financial supervision mechanism, but has the characteristics of overlapping arrangements, and"pan-regional"even"cross-regional". To prevent a revival of the financial crisis, the establishment of lender of last resort and the regional mechanisms for emergency assistance, from the"bilateral currency swap"to a"multilateral currency swap", and to the establishment of"self-management of foreign exchange reserve", spent about 11 years, there are still many deficiencies. While the Asian regional capital markets, especially the cultivation and development of bond markets has made some progress, but bond issue size is small, and only has symbolic significance. Establishment of Asian currencies pegged to a basket (called the Asian dollar) exchange rate mechanism of the Asian regional currency cooperation will inevitably affect the national policy autonomy, and therefore, the most complex and difficult, and its development is struggling.How to get a better understanding of the process of East Asia's monetary and financial cooperation which is relatively close to the reality, but not only judge from the propaganda of official website? What exactly important results has East Asia achieved in its regional monetary and financial cooperation? And East Asia's monetary and financial cooperation is actually in which stage of development? What are the barriers constraint the region's monetary and financial cooperation? In addition, how to interpret the opposite sequence of East Asian regional economic cooperation? And whether such a reversal meets the internal logic of economic development in East Asia?Draws on rational elements from modern western theory on international monetary and financial cooperation, as well as international political and economic theory, and the use methodology of combining history with present, interaction between economic and political factors, and on the base of the combination of methods with normative empirical analysis, this paper is written.This paper discusses the roots for the rising of East Asian monetary and financial cooperation and studies the existing East Asian regional monetary and financial cooperation mechanism and its characteristics. Taking"Chiang Mai Initiative"(CMI) and the"Chiang Mai Initiative multilateralization"(CMIM) as cases study, this paper have showed the recent development of East Asian monetary and financial cooperation. The"CMI"had undergone two stages of bilateral currency swaps, many swap agreements had entered into during the period, and however, the actual utilization rate was very low. This study explores the underlying causes on the constraints of substantive progress of bilateral currency swap under"CMI". Furthermore, the external and internal powers thrust in the conclusion of CMIM are also being investigated. In addition, it makes a brief introduction of East Asian foreign exchange reserves pool, the significance if it's establishing, as well as the thorny problems confronting in the process.In the context of economic and financial globalization, China as an open developing country is facing the opportunities and challenges bring forth by liberalization of trade, investment and financial sectors like other East Asian countries. Especially global financial turmoil and economic downturn since 2008 triggered by the U.S. sub prime mortgage crisis caused a serious problem on financial stability, and added a lot of uncertainties on prospects of regional economic development in East Asia.China has more closely economic relations with world, especially with its neighbors, the East Asian countries after its accession to the WTO. As a major economy in East Asia, China should, as always, gives its unwavering support and participates actively the regional monetary and financial cooperation. This study hopes to provide a valuable reference for our country for better participation in the monetary and financial cooperation in the region.