On the May 3, Xie Xuren, minister of China's Ministry of Finance said in Bali, Indonesia, "the establishment of an Asian regional foreign exchange reserve pool is not only of great importance to safeguard regional financial stability, but will have a positive impact on the reform and improvement of the international financial system."
On the same day, the 12th ASEAN + 3 Finance Minister Meeting was held in Bali. The conference reached an agreement on the Asian regional foreign exchange reserve pool, the total size of which is 120 billion U.S. dollars. The reserve pool will come into existence and become operational before the end of this year.
Xie Xuren said at a joint interview by Xinhua news agency and some other Chinese media, "this ASEAN + 3 Finance Minister Meeting reached a consensus on the main components of the reserve pool, which showed the confidence and determination of the East Asian countries to make concerted efforts and jointly deal with the financial crisis. This united the initially loose bilateral aid network into a relatively close multilateral financial assistance mechanism, ensuring regional financial cooperation to a new level, and enhancing the region's ability to resist financial risks."
He said that considering the actual role of the reserve pool, ASEAN countries can get financial support from the reserve pool when encountering liquidity difficulties. The reserve pool is a strong supplement to the financial assistant of international financial organizations such as the International Monetary Fund. In order to ensure the smooth operation of the reserve pool, relevant countries will strengthen monitoring of regional economies and set about to establish an independent regional economy surveillance mechanism, which will help to improve the early-warning capacity and further enhance the ability to prevent crisis.
Xie Xuren pointed out that the establishment of foreign exchange reserve is an important cooperation between the East Asian countries in terms of strengthening the international financial crisis early warning and international rescue mechanism, and also a good exploration to reform and improve the international financial system. The reserve pool can make better use of the adequate foreign exchange reserve of East Asian countries to safeguard the financial stability of the region's economy and make up for insufficient existing international multilateral financial assistance,
He said that the regional economy surveillance mechanism will be established aiming to ensure the smooth operation of reserve pool and will be able to make more focused tracking and monitoring on the regional economic and financial situation. This is a good supplement to the international financial early warning mechanism. Various forms of regional financial cooperation represented by the foreign exchange reserve will become an important part of a sound international financial system in the future.
Xie Xuren pointed out that the overall trend of the East Asia financial and monetary cooperation goes from simple to profound, from loose to close. It will gradually deepen with the regional economic integration progress and its content and form will also become more diverse. Through the joint effort by many parties, the Finance Ministers Meeting reached a consensus on the main components of the foreign exchange reserve pool, which indicated a substantial progress of the "Chiang Mai Initiative" multilateral process.
The achievements of this meeting are only achievements at certain phases during the "Chiang Mai Initiative" multilateral process. The reserve pool has yet to be implemented and improved in the next phase. As the level of regional economic integration continues to deepen, financial and monetary cooperation in East Asia will face new challenges. Enhancing the region's ability as a whole to resist financial risks and building deep, efficient and dynamic financial markets in the region still has a long way to go. He said that on the next phase while firmly promoting the “Chiang Mai Initiative" multilateral process, the parties should also focus on the long term, and actively discuss various ways of deepening the regional financial cooperation to enrich the content and form of cooperation, making unremitting effort to maintain regional economic stability and promote the regional economic integration process.
When talking of China's role in promoting financial and monetary cooperation in East Asia, Xie Xuren said China is a decisive promoter and supporter to the financial and monetary cooperation in East Asia. Over the past years, China and other East Asian countries were in close cooperation to jointly promote the regional financial and monetary cooperation, the main contents of which are "Chiang Mai Initiative" multilateral process and a development initiative for the Asian bond market. As of the end of 2008, under the framework of "Chiang Mai Initiative", China signed 6 bilateral currency swap agreements with countries like Japan, South Korea, Thailand, the Philippines, Malaysia and Indonesia. The total size of which was 23.5 billion U.S. dollars. Among which, China promised to contribute 165 million. Since the spread of the international financial crisis in October 2008, China also signed the bilateral currency swap agreements with some East Asian countries outside the framework of "Chiang Mai Initiative", the size of which was 3600 billion yuan, providing liquidity support to these countries and regions.
Xie Xuren said "the development process of the East Asian financial and monetary cooperation can fully prove that as long as all parties strengthen their confidence and uphold the East Asian cooperation model, can we make progress in various fields, jointly push forward the East Asia integration process, achieving stability, development and prosperity in the East Asia region."
By People's Daily Online
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