From Regional Monetary Integration China's Path Of Choice

With the continuous development of economic globalization, the trend of regional economic integration is becoming more and more evident. The Theory of the Optimum Currency Area and GG-LL Model which acts as an important reference for the decision of whether to participate in the monetary area were initialized respectively by Economics Masters namely Krugman and Mundell, and provide a powerful theoretical support for the development of regional monetary integration. The"regional monetary integration"had been recognized almost all over the world, as a result of the success of the establishment of Euro-zone, which had a critical influence not only to its member countries, but also to the whole European economy and even the global economy. Nowadays, the idea of"Asian Dollar Zone"has become a very hot topic among many Asian countries, and there are also many fierce discussions about whether to invent the so called"Asian dollar". Regional monetary integration is the main trend of the world economic development, and in particular, the completion of Euro area has thrown great competitive pressure on other countries. As a result, the building-up of"Asian dollar"would be an inevitable tendency and the steps to achieve regional monetary integration have been speeded up greatly. However, the realization of Asian dollar is still premature for the time being, so the writer suggests that, on the one hand, Asian countries should move towards the establishment of"Asian Dollar Zone"by gradually improving their conditions of all aspects, on the other hand, The setting up of the Asian dollar can be achieved by some indirect way, that is, to firstly realize sub-regional monetary integration separately, and then turn to the integration of every sub-regions, and finally the ultimate realization of the"Asian Dollar Zone". As to China, regional monetary integration may be operated by integrating Mainland China with Hong Kong, Macao, Taiwan, etc. Although some difficulties exist among Mainland China and Hong Kong, Macao and Taiwan in politics and economic systems, etc., there is also great potential for the monetary integration, on which this article will make analysis both theoretically and practically hereafter.