The new Asian exchange reserve scheme will be constructed on next 3^rd, March among Association of Southeast Asian Nations (ASEAN), and other three key Asian powers (China, Japan, Korea). As the name of this scheme tells that it is aimed to ensure sufficient liquidity of foreign reserve in the event of the financial crisis.

The once horrible Asian financial crisis in 1997 is a tragedy for Asia. During this crisis, the IMF arranged a series of financial loans (more than 1000 billion US dollars together) for Thailand, Indonesia and South Korea. But, it was controversial that these loans were provided unless the government in these countries cut spending, raised interest rates and sold state-owned enterprises. These conditions are based on the well known Washington consensus. Although it was predicted that these hurt countries would recover soon, on the contrary, the reality betrayed the expected episode.

The 1997 Asian financial crisis taught Asian countries many lessons. After this crisis, Asian countries are more careful about their domestic foreign reserve level for precaution. This agreement is released and will be conducted next year as the upgrade of the initial agreement "Chiang Mai Initiative".

This scheme will construct a foreign reserve of 120 billion US dollars. The specific proportion of the pool funding agreement was approved in this May. That is China with 38.4 billion; Japan with 38.4 billion; South Korea with 19.2 billion; and ASEAN with 24 billion US dollars.

This scheme will strengthen the multi-cooperation in this region to minimize financial risks. Specifically, it will resolve the regional balance of payment and short-term liquidity difficulties, furthermore, it acts as the supplement of existing international financial arrangement. Although IMF offers similar financial arrangement, this regional scheme would be also necessary as the achievement of political cooperation in this region.