Double Game Analysis On Rmb Exchange Rate Policy :2002-2011

The dissertation is based on the theory of two-level games to analyze thecompetition and cooperation between China and the United States on China'sexchange rate policy since the year of2002, both from domestic and internationalperspectives.The dissertation contains seven parts. The introduction part presents that since thepure economic theory can't explain the RMB exchange rate problems, to research thisitem by using the two-level games is a comparatively new approach. Based upon theformer research, this part introduces the approach and methodology of the dissertation.Chapter one and chapter two are the interpretation of the theory. Chapter one, throughanalyzing the main opinions of two-level game theory, establishes a new two-levelgames model on international cooperation between two countries, which includes twotypes: single game and repeated games. Chapter two applies the two-level gamesmodel on international cooperation to exchange rate policy between China and UnitedStates, which includes two types: single game and repeated games. Chapter three,chapter four and chapter five are case studies. Chapter three interprets how the interestgroups who wanted to change China's RMB exchange rate policy expressed itspreference through the domestic political system of U.S, and analyzes the win-sets ofBush Administration (2002-2008) and Obama Administration (2009-2011) withoutexternal pressure. Chapter four describes how the manufacturing enterprises deliveredits preference through the domestic political system of China, and how Chinesegovernment made decision on its win-sets influenced by domestic political andeconomic factors during the period of2002to2008and the period of2009to2011without external pressure. Chapter five explains that how China and United Statesestablished cooperation on China's exchange rate policy during Bush administration(2002-2008) and Obama administration (2009-2011) through Sino-US StrategicEconomic Dialogue and U.S.-China Strategic and Economic Dialogue, and interpretshow the negotiation representatives of China and United States made use of suchstrategies as side-payments, issue linkage, and future benefits to adjust its win-set inorder to build cooperation. The last part includes main conclusion, policy suggestionsand future research direction.From the research above we can conclude that common benefit is the foundation ofinternational cooperation. Compared with the single game model, the repeated gamesmodel is much applicable to explain the game practice of China's exchange rate policy between U.S. and China during the period of2002to2011. Under the singlegame model the win-sets can mainly be adjusted by side-payments and issue linkage.In order to understand how China and United States established cooperation onChina's exchange rate policy, the variable of future benefit must be considered. Thatis to say the calculation of future benefit is one of the most important factors ofSino-U.S. cooperation in the process of game practice on China's exchange ratepolicy.