Currency swaps, regional bond market better for Asia

BEIJING - Asian countries should promote regional economic cooperation by increasing currency swaps and setting up a region-wide bond market to secure the economic safety of the region as policymakers are grappling with the complicated financial puzzle caused by the sovereign debt crisis in Europe, economists said on Wednesday.

Asian countries like China and South Korea are seeing more inflows of hot money, as eurozone countries are becoming less attractive for investors due to the lasting uncertainties, they said.

The relatively stable fiscal and financial situation in Asian countries has attracted more capital flows, which will lead to risks such as asset bubbles and increasing inflation pressure, said Sun Lijian, an economics professor at Fudan University in Shanghai.