| With the viewpoints of the exchange rate system choice and the maintenance of the exchange rate level, this article elaborates the feasibility to keep Renminbi exchange rate constant under the current revaluation pressure. It is pointed out that the maintenance of exchange rate parity is a reasonable choice, conforming to the China realistic economic condition and the theoretical principle logic. It is suggested that the financial system should reform before moving to greater exchange rate flexibility and the policies should intervene in order to release the revaluation pressure.This article first briefly gives the review of the history of international exchange rate system, the process and the present situation of Chinese exchange rate system reform. According to the IMF exchange rate system classification, the author separates the exchange rate system into three kinds, "the hard pegged system maintenance by institution and law", "the softly pegged system maintenance by regulations and intervention"and "the independently floating without any limit ". The fluctuation of Renminbi basic exchange rate per 3 months never has surpassed 0.02% since 1998, Renminbi exchange rate implements de facto the Conventional Fixed Peg Arrangements, not " the single, managed floating exchange rate system on basis of the market supply and demand" announced in " Regulations of the People's Republic of China on Foreign Exchange Administration (Fifth Chapter, 33rd)". This article refers the Chinese exchange rate system as the de facto exchange rate system classification. This article summarized the arguments about the defense and critique of fixed or the floating exchange rate system. Because of the scarcity of the unification of the economical theory, we cannot at present draw the consistent conclusion to affirm which exchange rate system is the superior one. Some researchers classify exchange rate regime based on official announce, while others are on the basis of IMF classification or classifications designed by themselves, so that there is not a same answer in empirical studies. But this result in the fact, that the majority nations implement "the intermediate exchange rate regimes ", variously Managed Floating.In order to overcome the shortcomings in the traditional arguments about the fixed and the floating exchange rate system, this article uses for reference from the modern open – economy macroeconomic model to couch the picture in two aspects:the automatic stability and the policy effect. In the automatic stability aspect, this article utilizes a formal open macroeconomic model and comparative static analysis to discuss the automatic stability of output and price of an economy under fixed or floating exchange rate regime, without any policy interventions and in the face of real or nominal transitory shocks. The analysis indicates that, the performances of the two regimes would be very closely related to the structural parameters of the particular economy. Neither of the two regimes can provide the more stability under all kinds of conditions. With regard to the possible type of the shock and the structural parameters of the economy, the fixed exchange- rate regime should be more desirable than the floating exchange rate system to keep the economy stable.In the policy effect aspect, this article uses the general and short–run equilibrium solutions of the Mundell - Fleming model under two kinds of exchange rates systems, to exhibit the difference of the policy effect under fixed exchange rate system and under floating exchange rate system. The solutions show that the monetary policy and fiscal policy can affect real GDP in the ordinary circumstances in the short run under the fixed and the floating exchange rate system. In the long run, the monetary and fiscal policies may take effect under the floating exchange rate system. Under fixed rate of exchange system, monetary policy effect expires, but the exchange rate policy possibly replaces the monetary policy to maintain price stability, and still sa...
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