The Chiang Mai Initiative: Real Financial Regionalism?

Abstract

This chapter analyses Japan's policy towards the development of regional institutions for monetary and financial cooperation in light of the rise of China. There are three main sites at which such institutionalization is progressing; Chiang Mai Initiatives (exchange rate), the Asian Bond Market Initiative (finance) and the Asian Currency Unit (common currency). This chapter focuses on the development of the Chiang Mai Initiative (CMI), and to a lesser extent on the Asian Currency Unit (ACU) debate. The reason for focusing on the CMI is that it is the most institutionalized of the three sites outlined as well as having the most developed, if still incomplete, academic literature. Additionally, the CMI is shaping up to be a significant institution in its own right.