Japanese prime minister calls for South East Asian Currency

**Kiwi 1691** · 25-10-2009, 05:54 AM

South-East Asian leaders meeting in Thailand are discussing a new EU-style common currency community that could include Australia and New Zealand.
Prime Minister John Key yesterday arrived in the seaside resort town of Hua-Hin, 200km south of Bangkok, for talks with the leaders of 15 other nations which collectively represent half the world's population and a quarter of its trade.
The East Asia Summit, which follows the Association of South-East Asian Nations (Asean) meeting last week, brings together the 10 Asean nations plus China, Japan, India, South Korea, Australia and New Zealand.
On the agenda for the meeting is the creation of an EU-style common economic community by 2015 that New Zealand officials hope could lead to a pan- Asia free-trade area.
The Asean bloc is already committed to establishing a single market and manufacturing base by 2015, but Japan and China are keen to increase the size of the market to include the EAS countries including Australia and New Zealand.
Japan's new prime minister, Yukio Hatoyama, has made a radical call here for an EU-style single currency, which commentators say could - if it ever happened - change the global balance of power.
Hatoyama received support from China, which said it was ready for discussions

Single currency for Asia mooted - world | Stuff.co.nz

The nations at the East Asia Summit make up half of the worlds population and a quater of world trade. If they did form a common currancy could possibly take the place of the US dollar in international trade?

DC · 25-10-2009, 06:47 AM

Hmm, I would be very cautious about this. I doubt it will get off the ground at all, and I think it would be wise for Australia and New Zealand to adopt a similiar stance as the UK to the EU, where we're part of it, but in a limited way as well as not adopting an Asian Currency. There are simply too many issues between nations for this to work.

**Kiwi 1691** · 25-10-2009, 12:05 PM

Originally Posted by DCFGS3

Hmm, I would be very cautious about this. I doubt it will get off the ground at all, and I think it would be wise for Australia and New Zealand to adopt a similiar stance as the UK to the EU, where we're part of it, but in a limited way as well as not adopting an Asian Currency. There are simply too many issues between nations for this to work.

True, I do like their idea of free trade amongst the nations. As tariffs are a huge barrier to international trade.

DC · 25-10-2009, 12:16 PM

Originally Posted by Kiwi 1691

True, I do like their idea of free trade amongst the nations. As tariffs are a huge barrier to international trade.

However I get the feeling China is just going to take advantage of everybody. Perhaps an Asian Union should be formed without China, like the EU and Russia.

**Kiwi 1691** · 25-10-2009, 12:23 PM

Originally Posted by DCFGS3

However I get the feeling China is just going to take advantage of everybody. Perhaps an Asian Union should be formed without China, like the EU and Russia.

The only problem with that is the the Chinese middle class is growing so fast. They demand high quality consumer goods from offshore. They number in the hundreds of millions.

That is a huge potential market, which is the reason why NZ worked so hard to get a free trade agreement with china. You can buy a bottle of NZ wine for 20-30 dollars and ship it to China where it will fetch alot more. I actually know a guy who was going to do that at one time.

DC · 25-10-2009, 12:50 PM

Originally Posted by Kiwi 1691

The only problem with that is the the Chinese middle class is growing so fast. They demand high quality consumer goods from offshore. They number in the hundreds of millions.

That is a huge potential market, which is the reason why NZ worked so hard to get a free trade agreement with china. You can buy a bottle of NZ wine for 20-30 dollars and ship it to China where it will fetch alot more. I actually know a guy who was going to do that at one time.

Australia, New Zealand and Japan not so much, although make no mistake China is going to rip into Japan like there's no tomorrow if it ever gets the chance. But it's countries like Thailand, Malaysia and Singapore that will suffer from Chinese extortion.

**Kiwi 1691** · 25-10-2009, 01:30 PM

Originally Posted by DCFGS3

Australia, New Zealand and Japan not so much, although make no mistake China is going to rip into Japan like there's no tomorrow if it ever gets the chance. But it's countries like Thailand, Malaysia and Singapore that will suffer from Chinese extortion.

I am sure that is a possibility, but all we can do is speculate on China's intentions.

**Barry** · 25-10-2009, 05:20 PM

I can see this happening.
The balance of world economic power is shifting.
The USA and Europe are diminishing in power and economic strength, so the selling of oil in dollars is beginning to make little sense. The dollar is very weak since oil is being traded in currencies other than the dollar.

What remains to be seen is when the 'UniAsia' or whatever name they choose, becomes reality, will the Euro also start to go down the pan.

The currency markets are already very volatile.

Actually they could learn from Europe, in that the inability for individual's currency to float is causing untold difficulties in the constituent countries of Euroland. Spain, in particular would dearly love to devalue the Euro, which is at an artificially high level, as Europeans keep quiet about their economic woes.