EARLIER this month, China beat Japan in a bid to appoint the head of a new organisation that may one day pave the way for a common currency in Asia.

Mr Wei Benhua, the former vice-head of China’s State Administration Of Foreign Exchange, was named the first director of the Asean+3 Macroeconomic Research Office (Amro). This is a Singapore-based regional financial surveillance body that was launched this month.

The news followed a controversial suggestion by Malaysian Deputy Finance Minister Lim Siang Chai that China should take the lead in creating a unified Asian currency – a proposal Beijing has not responded to publicly, but which it likely greeted with quiet pleasure.

With China pushing for a greater role in regional affairs, the prospect of leading one of the most aspirational pan-Asian initiatives – and one once championed by Japan – is attractive.

Already, it is China’s currency regime moves that are most closely followed by its Asian neighbours, since the yuan is certain to feature prominently in an Asian monetary unit.

China is thus asserting its voice on the Asean+3 platform, which comprises Asean as well as Japan, China and South Korea.

Its leadership rivalry with Japan was a talking point at a meeting of Asean+3 finance ministers in Hanoi two weeks ago, where China got its way in grabbing the plum appointment at Amro.

One gauge of how seriously Asian officials, especially the Chinese, consider the idea of a regional monetary unit is a recent paper prepared by a high-level group for the Asean+3 Research Group. Its recommendations were tabled at the Asian finance ministers’ Hanoi meeting.

It included a survey of about 1,000 government officials, academics and bankers in the Asean+3 countries on implementing a regional currency unit.

Dr Pradumna Bickram Rana from the Nanyang Technological University, who led the team doing the survey, said there was overwhelming backing for the creation of a regional currency unit to support regional surveillance in the Asean+3 group, although a single currency for the region is still a long way off.

Those surveyed said the regional currency unit should comprise a basket of Asian currencies – with the Chinese yuan and Japanese yen having the highest and equal weights. The weighting should be based on the proportionate contributions made by Asean+3 members to the Chiang Mai Initiative Multilateralisation (CMIM), which is a US$120 billion (S$149 billion) crisis fund established in the region.

Japan and China (together with Hong Kong) had each agreed to contribute 32 per cent of this amount. South Korea contributed 16 per cent and the Asean countries, the remaining 20 per cent.

Amro, as the surveillance unit of the CMIM, was also recommended as the agency best positioned to administer this currency, which would include calculating the value of this regional monetary unit and posting it on its website.

The Chinese are likely to be gratified by the findings. The recommended high weighting of the yuan reflects the growing recognition of China’s economic clout and its currency’s importance.

Just two years ago, Japan had presented itself as a leader in this decade-old idea of a common currency, before the global financial crisis diverted attention from it. Now, China has overtaken Japan as the world’s second-largest economy.

China has led the Asian pack out of the financial slump, and is moving quickly to regionalise its currency in Asia. This has included setting up clearing banks in Hong Kong and Singapore to support trade settlement and investment products denominated in yuan.

The yuan may also become convertible and an international reserve currency by 2016, said most global investors surveyed by Bloomberg earlier this month.

Burgeoning intra-regional trade has helped narrow economic gaps between Asian countries. Once-huge barriers to creating a common currency, from political differences to economic diversity, appear less daunting.

While the regional monetary unit will take some time to take off, China’s participation will give it a good start.

Dr Chow Hwee Kwan, associate dean of the School of Economics at Singapore Management University, pointed out that ‘since the yuan is a key component of the regional monetary unit, the success of its implementation does depend on China’s support’.

But even if China has the interest, is it ready to lead such a complex initiative?

Some scholars in China, such as Mr Tong Shijun, who heads the Federation of Commerce in Henan province, believes China ‘has the resources and the credibility’ to take the lead.

But others say Beijing has to allay its neighbours’ suspicions about its growing dominance in Asia.

China and Japan will also have to work out a balance of power in Asia first, starting with the top seat at Amro: Mr Wei will occupy the post for only a year before a Japanese finance official takes over.

But even if China only takes turns at the driver’s seat, the journey to achieving a common Asian currency, once little more than a pipe dream, looks set to begin in earnest.

Despite the creation of “offshore Asian dollar market,” Today is still in the conceptual stage, but many scholars have been recognized and supported. As the first that “offshore Asian dollar market,” the concept of scholars, vice president of Sun Lijian of Economics, Fudan University said: “This is a fully digest the stock of dollar reserves, in order to provide valuable experience in the internationalization of RMB step . “Sun Lijian in 2008 proposed the establishment of” offshore Asian dollar market “concept.

50s of last century offshore Eurodollar market in London has begun to take shape, and in 1968, Singapore also had the Asian dollar market. In this regard, Sun Lijian said he envisioned a more complete multi-level products offshore Asian dollar market. “The need for China to do, the only way to master the self-dollar wealth management initiative.”

China can fully benefit

The world not only in Asia such demand, why not through the offshore Asian dollar U.S. debt market to unite all countries.

“21 century”: In your opinion, offshore Asian dollar market is mainly a kind of concept?

Sun Lijian: offshore Asian dollar market mainly refers to the major Asian countries to strengthen financial cooperation, a step on the road. Dollars to carry out offshore operations in Asia, through a certain regulatory approach and the establishment of regional financial cooperation model that allows enterprises to issue U.S. dollar denominated securities, and Asian manufacturing companies and sovereign wealth funds can buy these from the United States need freedom government control of financial products and services, improve the operational efficiency of U.S. dollar assets.

“21 century”: the first time you mention the idea of ??Asian dollar offshore market in 2008. Why was mentioned? Now and then the macro environment has changed compared to it?

Sun Lijian: I first proposed in 2008 the offshore market, Asian dollar concept, and it is related to the macroeconomic situation at the time. At that time the financial crisis is significant, the introduction of quantitative easing policy of the Fed, the dollar value of seeing the shrink. Dollar foreign exchange reserves, China’s main investment channels was still no sign of holdings of U.S. Treasuries, holding high price to buy but the yield has remained at the bottom of U.S. Treasury bonds, it is not a cost-effective investment.

Countries in Asia and China have similar problems, which is the major Asian countries to discuss the basis of financial cooperation, but also the focal point of cooperation.

The fundamental problem now facing and did not change, but there is a new phenomenon is that more and more Chinese people begin to look at the focus on the internationalization of the RMB, but did not realize the internationalization of RMB is a distant goal, China’s capacity is currently very limited, can not step in success.

We must realize that the world Liucheng global trade is still denominated in U.S. dollars, do not mature if the internationalization of the RMB, it will bring bubble. My advice is, through the construction of the offshore dollar market and develop for the future internationalization of the RMB to provide a good infrastructure and platform, which is a more realistic step.

“21 century”: Why promote offshore Asian dollar market? For China, it can fully benefit from? Other countries in Asia What are the benefits?

Sun Lijian: Because we always deal with this change in the scale of the attitude of huge foreign exchange reserves – the establishment of offshore Asian dollar market, foreign exchange reserves is not aimed at crisis prevention, but a wealth management.

First of all, we can offshore Asian dollar market to create and manage their U.S. dollar wealth. Although Asian countries have been making their way through a variety of diverse foreign exchange reserves, but an indisputable fact that the Asian dollar reserves still account for about 600 billion to insure that the seven reserves. If we can change

One way to invest in U.S. treasury bonds, and then purchase a variety of more representative of the Asian economic growth in fixed income or equity products, then the Asian countries to achieve self-management of wealth for the dollar.

Second, think globally, not only is there such a demand in Asia, and even the Middle East oil-rich countries also have such needs. Why not offshore Asian dollar market by uniting all the U.S. national debt?

In addition, an unavoidable problem is that high-tech areas in the United States for China’s overseas investment, the United States still maintained a high degree of caution, the Chinese capital is difficult to direct investment by U.S. dollars. The offshore market is the opportunity to create investment products, making China the opportunity to share these large U.S. high-tech industry’s growth.

More practical idea of ??more operational

Good growth through vigorous development of the “Asian dollar investment products”, entirely outside the United States to create a virtuous cycle of offshore markets.

“21 century”: the Asian financial cooperation issues discussed for many years, from Chiang Mai to the later Asian Monetary Fund (AMF) idea, various cooperation frameworks or products presented one by one. Now present the construction of China’s own offshore Asian dollar market, the idea, and what is envisaged in the agreement or the similarities and differences?

Sun Lijian: Historically, the Asian financial cooperation under the framework of these products are not initiated by the Chinese. Whether the currency swap agreement that year, or later in Japan’s “Asian dollar” idea, for China can not fully benefit. Offshore Asian dollar market, through the full capabilities that help digest the stock of dollar reserves in Asia, in fact, these ideas than to come before the more practical, up and running faster.

Existing offshore Asian dollar market – for historical reasons, Singapore developed relatively stable, but its function is still relatively simple: that the majority of cases, the offshore market is still playing the role of the dollar pool of funds, through the various types of funds and products brought together the funds, is still invested in the U.S. onshore market, various types of products.