The Institutional Perspectives Of China's Foreign Exchange Regime

The innovations of China's foreign exchange policies are one of the most important parts of the Chinese reform, and also a vital policy during the international transactions. Especially, after the RMB became exchangeable under the current items, and China entered the WTO. the issue when RMB will be free convertible comes to be a heated issue. Moreover, the huge amount foreign exchange reserve and deep political depress from USA. EU, and Japan, RMB came across the problem that whether RMB should be appreciated. Most of the papers and books on this topic emphasize on one of the hot spots, using the analysis idea of international economics. This paper analyzes the whole history of China's foreign exchange regime, from the planned economic time up to now. at the point view of institutional economics and the history method, in order to disclose the reason and characteristic the changing of China's exchange policies.This paper is divided into five sections. Section one is the review of the theory of institutional economics. In section two. during the planned economic time, we point out that the starting point of China's foreign exchange regime and the reasons of its changes followed. In section three, we discuss the experience of China's foreign exchange regime from 1979 to China's entry WTO. Also the heated topics during that time are mentioned. Section four discusses the influence of China's entry WTO on China's foreign exchange regime, and the case whether RMB should be appreciated at present .Section five is the conclusion.