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Asian Financial Cooperation Moves Forward

The Boao Forum for Asia, which convened its annual conference in southernmost China's Hainan Province this past weekend, held a panel meeting on Asian financial cooperation Sunday afternoon. The topics of a unified Asian currency and averting financial crises were focuses of the meeting.


A unified Asian currency – the "Asian dollar" – was the buzzword among the delegates attending the Boao Forum for Asia's (SFA's) panel meeting on regional financial cooperation Sunday afternoon. Participants agreed that although there is a long way to go, it should be regarded as a long-term pursuit. Because a single currency is the result of high economic integration, financial cooperation is urgently needed.


Delegates at the meeting also concurred that there is a strong need for financial crisis resistance, recalling the damage done by the 1997 Asian crisis.


"In the context of a globalized economy, without a well-designed, mature international financial architecture and global governance to provide safeguards to the smooth functioning of the participating economies, it is just impossible to rule out recurrence of such a financial disaster," said Jin Liqun, vice governor of the Asian Development Bank. "The main issues are how to strengthen the existing coordination mechanisms and forums, and move up to a higher level of cooperation in this area."


In recent years, Asian countries have been fundamentally restructuring their financial sectors, providing a good foundation for regional cooperation in money and finance.


The Chiang Mai Initiative, launched in May 2002, has resulted in 13 bilateral currency swaps, totaling about US$33 billion. In June 2003, 11 central banks in Asia jointly launched the Asia Bond Fund.


Wu Xiaoling, vice governor of the People's Bank of China, the nation's central bank, emphasized the urgent need for financial cooperation in East Asia, the most dynamic subregion in Asia.


"Regional economic integration calls for strengthening East Asian financial cooperation in order to maintain financial stability in the region." Wu said that China fully supports and actively participates in East Asian financial cooperation, and will also strengthen cooperation with ASEAN, Japan and South Korea.


"To maintain regional financial stability, China will maintain the basic stability of the RMB exchange rate," she added.


Last year, China, South Korea and Japan decided to establish a Northeast Asia Cooperation Bank to enhance cooperation.


Xu Zhimin, president of the Hong Kong General Chamber of International Investment, suggested that regional financial cooperation should be expanded into new realms. He said that in order to cope with the possibility of financial crisis, the currency swap system should be diversified and its quota increased.


Furthermore, Asian countries should strengthen mutual understanding and eliminate differences, gradually coordinating and developing a unified economic policy, Xu said.


(China.org.cn by staff reporter Tang Fuchun April 26, 2004)


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