CHINA'S EXCHANGE RATE SYSTEM REFORM

Paul S. L. Yip ()
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Paul S. L. Yip: Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore

The Singapore Economic Review (SER), 2007, vol. 52, issue 03, 363-402

Abstract: This paper first documents the rationales behind the transitional exchange rate system reform adopted by China on 21 July 2005. It then outlines the theory behind the medium- and long-term exchange rate arrangements that could be adopted. Thereafter, the paper provides recommendations on supplementary packages that could increase the chance of a successful reform, and increase China's immunity and resilience against financial crises in the future. Finally, the paper discusses the market and economic developments after the transitional reform, and highlights that failure to check the stock market bubble and rampant property inflation could turn the initial success of the reform to an eventual failure and bring disasters to China in the longer future.

Keywords: Exchange rate system; financial crisis; Asia; China (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1142/S0217590807002774

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