The Research On The Exchange Rate Reform Of China In The Context Of New Institutional Economics

In recent years, economic and financial globalization has been making the rapid development. China’s accession into the World Trade Organization(WTO) for 15 years. In this period of time, China actively participated in the process of economy and financial globalization and continued to expand the degree of openness. Chinese foreign economy has developed successfully. At the same time, the international situation has increasingly influenced on the domestic market. The entity economy and the risk prevention capacity of financial market of China are facing a greater challenge. The international economic and financial becomes increasingly merged each other. Meanwhile China advances the reform of elements marketization. The exchange rate system of China influences both the domestic and foreign markets. The domestic and foreign markets have put forward higher requirements on the exchange rate system of China. Therefore, the reform of exchange rate system of China is imperative.The choice of exchange rate system of China is an important part of Chinese economic and financial development. It is not only the change of the contents of the system, but also the innovation of the system itself. The new institutional economics theory and method were used in this paper to describe and analysis systematically the issue of Chinese exchange rate system. A profound interpretation and analysis on the nature of the exchange rate system, market structure and the change rules are made by using the transaction cost, property right theory, institutional change and institutional supply and demand principle, and to research the objectives of the reform of exchange rate system and countermeasure choice related suggestions. Specific content as follows:The first chapter: introduction. This chapter introduced the background, significance, main contents, research methods, as well as the innovation and the insufficiency of the whole paper. The frontier research of exchange rate system of China and some research based on new institutional economics research are reviewed.The second chapter: the basic research of exchange rate issue on institutional economics theory. This chapter which is the basis of the whole paper combed the research theory of exchange rate system including the Marx doctrine and the western economics and based on the historical development sequence and defined the relevant concept of Chinese exchange rate system and analyzed the problem of the origin of exchange rate system in the view of new institutional economics. The research was made on two level measuring system of exchange rate of transaction costs through the transaction cost paradigm and on the theory of property rights through the property model.The third chapter: the research on the changes of exchange rate system of China. This chapter combed the change process of Chinese exchange rate system and studied the causes of the regime transition. It is also pointed out that the path dependence, the cost of innovation, the time lag effect and the limited cognitive scope are restricting factors of institutional change. The changes of Chinese exchange rate system are classified into compulsory and gradual institutional change mode. The measurement was made on the transaction costs during the transition process of Chinese exchange rate regime.The fourth chapter: the fundamental research on the problem of China exchange rate system-- based on the analysis of the supply and demand system. This chapter studied the relationship between institutional demand and supply and clearly pointed out that exchange rate system of China is the supply oriented institutional arrangement. It is analyzed on the benefits balance and game behavior. Meanwhile it is studied the relationship between the exchange rate marketization and the supply and demand of the exchange rate system.The fifth chapter: comparison and reference to the rate of exchange system. The choices of exchange rate system and the evolutions of the different development stages and different countries are analyzed and compared in this chapter. Summarize the commonness and rules of the choice of exchange rate system. Finally, three enlightenments were obtained: transaction costs cannot be ignored; institutional change should choose the suitable time; long-term reform strategy is needed.The sixth chapter: the target design and countermeasure choice of exchange rate system reform of the China. This chapter discussed the necessity of establishing the multiple objectives of RMB exchange rate system which has the characteristics of China. It is divided into two targets: The transverse target and longitudinal target. Transverse target is the reason why Chinese exchange rate system was established. The longitudinal targets are the targets of the exchange rate system itself in each stage which divided into short-term goals and long-term goals. Finally, relevant policy suggestions are made according to the different goals.