The Chinese Renaissance and Its Currency Conundrum

Dilip K. Das

Chapter 5 in The Chinese Economic Renaissance, 2008, pp 198-232 from Palgrave Macmillan

Abstract: Abstract After frequent adjustments and fluctuations, the value of the renminbi (RMB) yuan,1 the Chinese currency, remained stable over the 1952–70 period. During this period, the exchange rate was first pegged to the dollar and then to the pound sterling, but it did not have much relevance because the volume of China’s trade and financial flows was tiny and the related decisions were controlled by the ministries and government authorities. Also, in a planned economy, the exchange rate was used as an instrument for financial planning and fixed at at an overvalued level. The convertability of the dollar into gold was suspended in August 1971, and between 1971 and 1973 the Bretton Woods system brokedown. The RMB yuan was pegged to a broad basket of 15 hard currencies instead of a single major currency. It began appreciating gradually after that. This peg endured until 1980.

Keywords: Exchange Rate; Real Exchange Rate; Exchange Rate Regime; Chinese Economic; Real Effective Exchange Rate (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1057/9780230227446_5

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