The sagging US dollar and the recent reevaluation of the Chinese Yuan has caused Korean economists to propose the creation of a pan-Asian currency:
“Asian nations have continued raking in U.S. treasuries _ they depend too much on the U.S. export market and no financial markets able to absorb the current account surplus exist,’’ Choi said.
“If this trend continues, Asian nations will face a growing financial risk caused by a sharp fall in dollar values, thus increasing instability in the global financial system,’’ he added.
Yoon stressed that the key to solving this problem is to create a regional currency, the so-called Asian Currency Unit (ACU), seen as a basket of intra-regional currencies, which he says is the approach taken by Europe.
I cannot envision this idea happening in northeast Asia any time soon. The way China, the two Koreas, Taiwan, and Japan argue and create political crisis’s out of everything from history textbooks, disputed islands, the name of a body of water (Sea of Japan/East Sea), apologies for World War II, Taiwan as a renegade province, and a host of other grievances between everyone involved; how could they ever iron out an agreement to use a single currency? Who’s face would they put on the currency? Mao Zedong, Kim Il Sung, Kim Jong Il, Chang Kaishek, or General Hideki Tojo? If it was decided to use landmarks that too would cause controversy because Korea would want the disputed Dokto Islands on the currency.
Yes, I think Asia is a long ways from creating a common currency, but that may not be a bad thing judging by the up and down performance of the European Euro.
