ABSTRACT
This chapter focuses on the modalities that could lead to a major international Chinese currency, initially though monetary union between Hong Kong and mainland China. It reflects on the salient features of monetary unification processes observed in Britain's American colonies and later in Italian history. From this history, it draws inferences about how best to accommodate pressures for currency consolidation that arise inside a country such as China. The chapter then analyses the extent to which different plans for achieving Chinese monetary union apply these lessons and hold the promise of evolving a major international currency for all of China that would float against the USD. Most important, however, if Chinese monetary unification is achieved without selective expropriation and without preventing currency competition, particularly from the US dollar, it may lay the foundation for an international currency that will float safely against all the other major currencies.
