China's interest in a revaluation of the yuan

John Williamson

China Economic Journal, 2011, vol. 4, issue 1, 15-23

Abstract: This paper aims to illustrate how an equilibrium exchange rate of the Yuan would contribute to China's achievement of non-inflationary full employment – defined as internal balance by James Meade in 1951, as well as the balance of international payments. In terms of Meade's model, China currently has both excess demand and a payments surplus, so that it would benefit from revaluation, which helps curb internal inflation and the external foreign surplus simultaneously. For China, specifically, revaluation would support combating price increases and facilitate a shift of resources into consumption and raising living standards. The paper also examines three common reasons advanced by groups in favor of avoiding appreciation of the RMB, finding none of them theoretically or empirically convincing. The pursuit of both growth/employment and price stability objectives makes China unable to afford having an undervalued exchange rate.

Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/17538963.2011.618696 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rcejxx:v:4:y:2011:i:1:p:15-23

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rcej20

DOI: 10.1080/17538963.2011.618696

Access Statistics for this article

China Economic Journal is currently edited by Tiechang Gao and Yiping Huang

More articles in China Economic Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst (chris.longhurst@tandf.co.uk).