Chinese economy and currency regime
Chinese economy had been controlled by the central government under the planned economy regime until 1979 (Morrison, 2007). In other words, most economic conditions used to be decided by the state in accordance with its policy, not by the market forces. From 1979, however, China has been experiencing huge innovation in its economic system until the present tim
The United States and other countries hope that greater demand from China for their exports, resulting from a higher value of the yuan, will help them resume sizable economic growth as they recover from severe recession. Their governments especially want to reduce the high levels of unemployment.
1. The impact on China
Advantage 1 : Cheaper Imports
China imports technologies, petroleum, m
Ⅱ. Effects of RMB appreciation on China
□ Exchange rate system of China
- The Chinese exchange rate system is the fixed exchange rate system which is fixed to the dollar. In 1994 January 1, China unified the official exchange rate and the market exchange rate and adopted a managed floating exchange rate system that restricted one day exchange rate fluctuation band with ±0.3% of the precedi
global imbalance problem reflects the political andeconomic
concern between the two states.
Global Imbalances have 3 features which ARE NOT Defined to Economic aspects.
1980s-RMB/US exchange rate declined from 1.50 to 8.62
1990s-It pegged to USD at 8.27
July 21,2005 the peg was lifted-RMBrevaluation to 8.11 per USD
As April 29, 2011 Yuan’s exchange rate was 6.49 per 1$
02 Overview
1. 1948-1972 : Security and conflict
[ Period of Cold War ]
- Korean War
- United States defined as a conspiracy of communism
- China defined the invasion of the United States
expanded to the policy of containment in Asia
military containment policy
economic isolation policy
economic cooperation did not exist.)