By Hong Guan (China Daily)
Updated: 2007-09-06 06:34

The European Union should serve as an example for Asian economies that are striving to push the Asian integration.

While the EU celebrates its 50th anniversary this year, the prospect of a united Asia still seems a long way off.

Closer cooperation will make the region stronger in the face of crises - this is what the region has realized after they were hit hard by the devastating 1997-98 Asian financial crisis.

Discussions about integrating Asia had begun to get intensive after that but progress has remained disappointing.

Experts were quick to point out that development-level disparities among Asian economies meant that European-style integration would not be seen in Asia anytime soon.

It is inconceivable, at least at the moment, that countries like China and Japan would forsake their independent monetary and fiscal policies for a common one, they said.

"Countries in Asia ... are a long way from the economic convergence that you would need to make monetary integration a realistic possibility," said David Burton, director of the International Monetary Fund (IMF)'s Asia-Pacific Department.

Long Yongtu, former vice-minister of foreign trade, said the continent needed at least 50 years to achieve economic integration.

It is thought that Japan and China, the two biggest economies of Asia, should play major roles in any form of Asian integration. But relations between the two still need to be improved.

Bumpy Sino-Japanese relations illustrate that obstacles for Asian integration are not only economic, but can also be political and cultural.

Despite the difficulties, headway has been made in different areas and at different levels. The number of free trade agreements (FTAs) among economies in the region has continued to grow. Signatories to the Chiang Mai Initiative are considering broadening its scope.

The initiative was set up seven years ago to enable East Asian economies to forge currency swap deals to tap each others' financial resources in the face of heavy speculation. And sub-regional integration such as the Great Mekong program has also been making progress.

None of these developments are breakthroughs, but all of them point to closer regional cooperation.

Long said that in addition to pursuing FTAs, Asian countries should deepen their cooperation on infrastructure, human resources, energy and environmental protection.

Integration that can be pursued at the moment includes that of financial markets, improving and putting in place common regulatory frameworks and trading platforms across the region, said IMF's Burton.

"Those sorts of things are ongoing and are realistic possibilities," he said.

Long said discussions about Asian integration have mainly been about East Asia, and more attention should be paid to connections between East Asia and South Asia, West Asia and Central Asia.

(China Daily 09/05/2007 page9)