Abstract
This chapter discusses how the rise of China fueled East Asia’s interest in regional monetary cooperation and integration. China’s rise nurtured the notion in Southeast Asia that ASEAN countries need to restructure and integrate their economies in order to stay competitive and remain an important growth pole in the global economy. Aside from pushing AFTA, ASEAN leaders also declared the goal of establishing an ASEAN Economic Community (AEC) by 2020, during 2003 ASEAN Summit in Bali. The AEC is envisaged as a single market and production base with free flow of goods, services, investments, capital, and skilled labor. Even the possibility of creating a single currency for the AEC has been raised. The rationale for the AEC is that an integrated ASEAN market with a combined population of more than 550 million should keep the region competitive vis-à-vis China—and the other rising giant, India.
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