China’s think tank proposes East Asian currency alliance

The three economic powers of East Asia should unify their currencies to form an Asian version of the Eurozone to sever their reliance on the U.S. currency, a leading Chinese think tank argued.

The think tank, the Institute of International Affairs at China's top Tsinghua University, headed by Professor Yan Xuetong, also proposed that after China, South Korea and Japan integrate their currencies into one in what it called "the Asia 3" currency alliance, it can expand other countries, which are members of the ASEAN, to eventually create a pan-Asian currency union, comparable to European Union or NAFTA, the local Chosun Ilbo said on Saturday.

Chosun said the proposal was carried in multiple state-owned newspapers in China, including Global Times.

The proposal is based on the shared belief in the region that these three East Asian countries, whose economies mainly rely on their exports to Europe and North America, become the biggest victims whenever there is a global financial meltdown, it said.

Although the proposal claims its share of theoretical merit, skeptics say it would be difficult to implement the plan in reality due to reasons including the strong U.S. objections, it said.