Asian currency union? An investigation into China's membership with other Asian countries

This paper applies Optimum Currency Area (OCA) theory to investigate the suitability of Asian currency union and its membership, in which China is taken as the central country. Cluster analysis is applied for this study. Both hierarchical clustering and fuzzy clustering approaches are used. The study finds that Japan, Korea, Hong Kong, Malaysia, Philippines, Singapore, Thailand, Cambodia and Vietnam are most converged with China, and these countries are more likely to be the member countries of the Asian Currency Union.