When will "Asian Dollar" come true?

"'Asian Dollar' is a goal that is worth pursuing," said Long Yongtu, secretary general of the Boao Forum for Asia 2004 Annual Conference, Sunday.

As the globalization goes deeper, the importance of small countries' currencies is diminishing in economic terms. The development of the European Community has brought about the Euro, while in Asia, people are talking more and more about "Asian Dollar" as economic cooperation in this region is increasing in each passing day.

Like Long, Fidel V. Ramos, chairman of the board of the forum, also mentioned "Asian Dollar". The integration of Asia has greater potential, comparing to Europe and America.

Currently, Asia is experiencing the fastest economic growth in the world, and thus, a unitary currency for Asia is of great significance.

If "Asian Dollar" comes true, the "Asian Dollar Zone" members will enjoy zero tariff, resulting in a consolidated economy in the region; the unitary currency can also help the region avoid impacts of US Dollar and Euro when they fluctuate; and "Asian Dollar" may set prices for government bonds of Asian countries, which reduces risks for investment. Furthermore, the co-existence of US Dollar, Euro and Asian Dollar will be helpful for the stability of world economy.

Studies show that a unitary currency could triple the trade volume in the region, according to some researchers.

In recent years, Asian countries have adopted a series of actions to increase their cooperation and consensus on the issues, including an agreement between China, Japan, the Republic of Korea(ROK) and the ASEAN on exchange of currencies in 2000 and the establishment of a 1 billion US dollars worth fund for Asian bonds in 2003, by 11 Asian countries and regions.

China's attitude is also eye-catching as it has become increasingly active on the issue. President Hu Jintao, addressing the opening of the conference, pledged that China will increase coordination with all Asian countries in macro-economic-control and financial policy, trying to set up regional investment entities, the bonds market and a financial cooperation system.

An economist from Hong Kong said that the future of cooperation in Asia mainly relies on the views of the leaders of China, Japan and ROK. Hu's remarks made many believe that "Asian Dollar" may come earlier.

A unitary currency is the final result of a unitary market, but the birth of "Asian Dollar" is domed to be a hard and lengthy road, due to the remarkable differences of political system and economic development among Asian countries.

Robert A. Mundell, "Father of Euro", said last year that Asia needs a common currency, it takes at least 10 years for "Asian Dollar" to come.

Source: Xinhua