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Exchange Rate Flexibility and Economic Rebalancing in China

  • Takuji Kinkyo
Chapter

Abstract

China has long been accused of keeping the renminbi undervalued so that its export competitiveness can be maintained (IMF, People’ Republic of China: 2004 Article IV Consultation IMF Country Report 064/351, 2004; Bergsten et al., China’s rise: challenges and opportunities, 2009). In response to the international pressures to increase flexibility in the exchange rate regime, the Chinese government introduced a new exchange rate regime in July 2005. Under this regime, the renminbi would be managed with reference to a basket of currencies rather than a single currency of the US dollar. However, the renminbi–dollar rate is kept within a narrow band by massive official interventions in foreign exchange markets and its central rate has been allowed to appreciate only gradually.

Keywords

Exchange Rate Foreign Direct Investment Real Exchange Rate Exchange Rate Regime Foreign Exchange Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.Graduate School of EconomicsKobe UniversityKobeJapan
  2. 2.Policy Research InstituteMinistry of FinanceTokyoJapan

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