Asia is deepening economic integration to complement closer trade links, but the region looks set to take a different road than Europe and a common currency remains far off, officials and experts said yesterday.
"The approach to financial integration in Asia ... will take a different path from what we have seen in other parts of the world, in particular in Europe," Malaysian central bank Governor Zeti Akhtar Aziz said.
"Given that our region is more heterogeneous in nature, it has different aspirations and different starting points in this integration process," she told a seminar on the sidelines of the IMF-World Bank meetings in Singapore.
In Europe, economic and monetary integration has been accompanied by political integration but experts say this looks less likely in East Asia due to regional frictions, notably between Japan and China.
Financial integration will allow Asia to channel its massive savings around the region for economic development, the panelists said.
It will also complement growing free trade ties bolstered by the rise of China and India, and Japan's recovery, but is unlikely to result in a regional currency area any time soon, they added.
Barry Eichengreen, professor of economics and political science at the University of California, said that Asia could take a step toward monetary union with a regional currency unit based on a basket of currencies.
This unit could be given legal tender status until such time that the transition to a single currency was completed, he said.
The Asian Development Bank has been spearheading a proposal for the creation of an Asian currency unit or ACU, which would initially be an index rather than a real currency, to try to bolster monetary stability and economic growth.
"Importantly, and for me this is the key point, there is no reason why the currencies in this basket cannot continue to fluctuate against one another," Eichengreen said.
Thailand central bank governor Pridiyathorn Devakula said however he did not expect to see a sole Asian currency within his lifetime.
Japan's vice minister for international finance, Hiroshi Watanabe, agreed it would take a long time but said the result could be a sturdy currency.
"If in the long term -- I'm not sure how long it takes -- there is one Asian currency and it is backed by good economic performance in Asia, in that case such a currency will have a good position in the world market," he said.
He said that while Asia was more heterogenous than Europe, the gaps were narrowing because of globalization.
"Some countries have differences but ... we are going to move on and such kind of heterogeneity becomes smaller and smaller," Watanabe said.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
RSS