When monetary systems unite
Interesting article in the Asahi Shimbum, about a call for a single Asian currency by 2025. The recent fall of the dollar against the Euro should demonstrate why this is important to U.S. business: The consolidated economic power of a region provides far more control over economic policy. Europe just got tired of U.S. foreign policy and had been more reserved in its cuts in interest rates, giving it a one-two punch to respond to U.S. aggression in the Middle East and our flagging economy. An all-in-one Asian currency, given the region's ability to produce goods at a substantially lower price than the U.S. is a far more power economic weapon, because monetary union provides increased independence of action in world trade -- the Asian countries don't need to act with U.S. cooperation.
From the Asahi article:
Posted by Mitch Ratcliffe at May 12, 2003 06:49 AM | TrackBack
Until recently, countries such as Japan, China and South Korea seemed to place more importance on their relations with countries outside the region than with each other. Thus it is not surprising that Asia is a patchwork of different economic systems that interact in a highly unsystematic way. The effects are often extremely unwelcome.
Growing intra-Asian tradeIn recent years, East Asian countries have begun to recognize this problem. To attack it, they have pursued a clear-cut strategy to open their markets to each other and intensify their division of labor. As a result, intra-Asian trade has grown faster than the region's trade with the rest of the world, and more than half of Asian trade today is among countries within the region.