ABSTRACT
Since the Asian crisis hit, financial integration has been looming high on the
agenda of East Asian policy-makers. Many ideas have been developed and discarded, various initiatives have been called into action, and numer-
ous task forces have been set up. Over the past few years, a multitude of
declarations and initiatives concerning financial integration have been
announced by the Association of Southeast Asian Nations (ASEAN) and
ASEAN+3 (ASEAN plus China, Japan, and Korea) groupings. This has
been complemented by initiatives from various other regional fora, such as
the Executives’ Meeting of East-Asia and Pacific Central Banks (EMEAP)
or Asia-Pacific Economic Cooperation (APEC). And yet there is a lack of clarity and consensus about what is to be achieved, and in which direction
financial and monetary integration in East Asia are heading. East Asian
countries seem to have different interpretations of ‘‘financial integration’’
and even more diverse ambitions. While ASEAN already constitutes a highly
heterogeneous group, this is even more true for the ASEAN+3. The countries
involved appear to be driven by differing strategic interests. This is particu-
larly the case for China and Japan, who both seem to regard Southeast Asia
as their own backyard. Both countries are eager to maintain or increase their influence in the region, and eye each other conspicuously. Squeezed in-
between the two giants is Korea, trying to secure its economic position. The
ASEAN countries too, fearing competition from China’s masses of under-
employed, try to position themselves as attractive destinations of foreign
investment and seek to maintain their status as thriving export nations.
