China has maintained RMB exchange rate nearly unchanged since 1998. However, with the relaxation of capital control, a crawling peg, a more flexible RMB exchange rate regime, is inevitable. Based on improving the curr...China has maintained RMB exchange rate nearly unchanged since 1998. However, with the relaxation of capital control, a crawling peg, a more flexible RMB exchange rate regime, is inevitable. Based on improving the current formation mechanism of RMB exchange rate, Chinese government could widen the floating band around the central parity; in the long run, switching the peg from USD alone to a basket of currencies may be a better choice.展开更多
Since 2014, capital inflows into China have turned into capital outflows, reversing the gradual appreciation path of the renminbi against the US dollar into an erratic depreciation path. The paper explains the current...Since 2014, capital inflows into China have turned into capital outflows, reversing the gradual appreciation path of the renminbi against the US dollar into an erratic depreciation path. The paper explains the current capital ouows by comparing China and Japan with respect to the impact of exchange rate expectations on speculative capital flows. It is argued that both in China and Japan, given benign liquidity conditions in the USA, policy-induced appreciation expectations have generated capital inflows that have contributed to overinvestment and financial market bubbles. The current reversal of capital flows is seen as a signal that the bubble in China has burst. To stabilize growth in China and to discourage speculative capital ouows a fixed exchange rate to the dollar is recommended. Given Japan＇s experience and given that China＇s foreign assets remain high, the depreciation pressure on the Chinese renminbi can be expected to abate.展开更多
This paper looks at the foreign exchange rates （FX rates） and specifically the RMB/US dollar exchange rate issue from the international political economy （IPE） perspective. It argues that in reality, the US-China ...This paper looks at the foreign exchange rates （FX rates） and specifically the RMB/US dollar exchange rate issue from the international political economy （IPE） perspective. It argues that in reality, the US-China debate on the renminbi （RMB） exchange rate and the new reform initiated on July 21,2005 is Hot only an economic issue, but more than that, an issue of political economy, that is determined by the dynamic interaction of various economic and political factors at both the national and international levels.展开更多
Pegging the RMB exchange rate to the Asian short term, been proved a better solution than currency unit （A CU） has not, at least in the pegging to the US dollar or pegging to a G- 3 （US$, Japaneseyen and euro） cur...Pegging the RMB exchange rate to the Asian short term, been proved a better solution than currency unit （A CU） has not, at least in the pegging to the US dollar or pegging to a G- 3 （US$, Japaneseyen and euro） currency basket. Although the Asian currency unit can help Asian economies to keep the relative price of regional currencies stable, the cost of joining a formal regional monetary cooperation is the relinquishment of the autonomy of their domestic policies. Asian monetary cooperation needs to provide more potential benefits if it is to attract Asian economies. We argue that Asian monetary cooperation should be designed to solve the problem of regional trade imbalance, and regional exchange rate policy coordination should be adopted as the first step towards exchange rate cooperation.展开更多
文摘China has maintained RMB exchange rate nearly unchanged since 1998. However, with the relaxation of capital control, a crawling peg, a more flexible RMB exchange rate regime, is inevitable. Based on improving the current formation mechanism of RMB exchange rate, Chinese government could widen the floating band around the central parity; in the long run, switching the peg from USD alone to a basket of currencies may be a better choice.
文摘Since 2014, capital inflows into China have turned into capital outflows, reversing the gradual appreciation path of the renminbi against the US dollar into an erratic depreciation path. The paper explains the current capital ouows by comparing China and Japan with respect to the impact of exchange rate expectations on speculative capital flows. It is argued that both in China and Japan, given benign liquidity conditions in the USA, policy-induced appreciation expectations have generated capital inflows that have contributed to overinvestment and financial market bubbles. The current reversal of capital flows is seen as a signal that the bubble in China has burst. To stabilize growth in China and to discourage speculative capital ouows a fixed exchange rate to the dollar is recommended. Given Japan＇s experience and given that China＇s foreign assets remain high, the depreciation pressure on the Chinese renminbi can be expected to abate.
文摘This paper looks at the foreign exchange rates （FX rates） and specifically the RMB/US dollar exchange rate issue from the international political economy （IPE） perspective. It argues that in reality, the US-China debate on the renminbi （RMB） exchange rate and the new reform initiated on July 21,2005 is Hot only an economic issue, but more than that, an issue of political economy, that is determined by the dynamic interaction of various economic and political factors at both the national and international levels.
文摘Pegging the RMB exchange rate to the Asian short term, been proved a better solution than currency unit （A CU） has not, at least in the pegging to the US dollar or pegging to a G- 3 （US$, Japaneseyen and euro） currency basket. Although the Asian currency unit can help Asian economies to keep the relative price of regional currencies stable, the cost of joining a formal regional monetary cooperation is the relinquishment of the autonomy of their domestic policies. Asian monetary cooperation needs to provide more potential benefits if it is to attract Asian economies. We argue that Asian monetary cooperation should be designed to solve the problem of regional trade imbalance, and regional exchange rate policy coordination should be adopted as the first step towards exchange rate cooperation.
