A Brief Note On Open Markets Index ( Odi ) Essay

734 Words 3 Pages
Liu (2011) presented four conditions that encourage RMB regionalization. First, free liquidity of production elements in East Asia is gradually increased. She suggested that easier capital and labor movements lead to optimum currency area. Certainly, the removal of tariff barriers and free movement of goods, services, labors, and capital within the common market are the basic requirement for establishing monetary union. With ACFTA, there will lead to greater link between China and ASEAN countries. When they build a closer trade and political link, RMB regionalization is just a matter of time. Second, economic openness is getting higher. The economic openness is one of the OACA’s determinants. According to International Chamber of Commerce, open markets are largely defined as the nonexistence of man-made barriers that impede the cross-border trade flows. Open Markets Index (ODI) comprises of four main components: observed openness to trade, trade policy, foreign direct investment (FDI), and infrastructure for trade. The score ranges from 1 to 6. The countries that score 5 to 6 are considered to be the most open market countries. Score 4 to 4.99 is considered as above average openness. Score 3 to 3.99 is considered as average openness. Score 2 to 2.99 is considered as below average openness and score 1 to 1.99 is considered as very weak. Table 4.8 illustrates the OMI score for China and ASEAN countries in three specific years; 2011, 2013, and 2015 (Q3). From Table 4.10, OMI’s…

Related Documents