The Future of Asia Free Trade Roadmap - Reading APEC Summit Series 2
Xiaowei (Daniel) Li
It has been long discussed by the Asian leaders that
Asia needs to build a free trade economic zone to
compete with current European Union and the Northern
American Economic Zone (US, Canada, and Mexico ).
The proposed Asian Economic Free Trade zone contains
Japan, China, and Korea, the three nations, plus ten
members of ASEN (the Association of South East Asia
Nations). Asian Development Bank has also indorsed a
unified Asian currency towards this direction. Due to
the worsen situation in diplomatic relationship
between China and Japan in the past, this concept has
never been discussed seriously.
However now it is believed that this idea has been
translated into a road map, in line with the
relationship between Japan and China has
been much improved, and the dialog between the two is
so objective that no one would want to jeopardise the
conversation progress. Japan, China and South Korea
have set their agenda for regular dialogs. I
also believe that the road map on how Australia will
react this trend is also determined at this APEC
summit,.
The recent news from Sydney Morning Herald
http://www.smh.com.au/news/apec/china-set-to-become-financial-power/2007/09/07/1\
188783496636.html
said that Peter Costello had a meeting with a major
Chinese Bank�s chief, as well as the chief of Asian
Development Bank. It said that Mr Costello
criticised Chinese monetary and investment policies.
From my point of view it was a big tip to China from
Mr Costello as his advice was made not only from China
current monetary situation perspective, but also for
the future of a unified Asian currency which meets
Chinese expectation of becoming the
financial centre of Asia in ten years time.
Then what will happen in ten years time? My prediction
is as follows:
1. when China has built up its domestic free medical
benefit and welfare system
2. rule of HuKou ( people must stay in their
registered residential place policy) has been
removed, meaning Chinese citizens have the right to
move and stay in any city within mainland freely
3. China central bank, ie the People�s Bank of China
is relocated to Shanghai from Beijing
4. After Renminbi is floated, a unified Asian current
will be adopted in China, Japan and Korea firstly and
then expend to
ASEAN Nations
Let's read how the Chinese said in this regard. The
Chief executive of Bank of China, the second
largest Chinese Bank that is set for managing foreign
currencies, foreign trade and foreign reserve, said:
ten years ago, non one would believe that China was
going to be the manufacturing centre of the world, but
it happened; now we are saying China will be the
financial centre of the Asia, it will happen again,
and �Asia will become the World financial centre�.
Apparently, if Japan, China are joint plus other
nations such as Korea together then the total funding
available will be significantly large; as we know
China currently already has over trillion US dollars
foreign reserve.
From there, we can see, a unified Asia free trade zone
is on the way, and it will be largely dependent upon
Chinese domestic reform, as well as the relationship
between Japan and China. Though Japan will be unlikely
to challenge the leadership role that China wants to
play, it certainly wants to get more members involved
such as Australia, India etc. At that time Mr Costello
will likely be retired but he will remain as either
visible or invisible adviser to the Chinese.