The Innovation And Impact Of China's Exchange Rate Regime

After the collapse of the Bretton Woods System,the argument of the Choice of exchange rate regime has been fierce within the academic circle. Fixed and floating exchange rate regime takes its advantage in turn during decades. With the continual breakout of economic crisis,the ability to Prevent the outbreak of crisis appears to be a new criteria for the applicability of a exchange rate regime.The choice of a suitable exchange rate regime is crucial to China,We had been living with a deface to Peg for almost 10 years,and it contributed to the rapid development of Chinese economy. But the Circumstances have changed entering the new century,we must take a more active role to reform the exchange rate regime. This Paper is intended to verify the rightness of exiting the dollar Peg and taking a more flexible exchange rate regime.The thesis is composed of five chapters. The first one is the summary of the background,purpose and the methodology of the writing. The second chapter is the theory review of the exchange rate regime. We comment on the new development of the theory firstly and introduce the implementation in the latter part. The third one is the analysis of the de facto Peg and the exiting strategy. Firstly,we analyze the good and costs of the old system,the n we point out that its right time to exiting the dollar peg and choose a more flexible regime. The fourth chapter is the exchange rate reform of RMB and its management. In this chapter,we comment on the new regime and do a analogy with the situation of Japan in the 1970s,with the conclusion that a rapidly-developed,trade-oriented economy can perform a managed floating regime even without the full development of a forward market,Provided that the central bank would bear the internalEconomy in mind and intervene the market appropriately. The last chapter is the conclusion of the whole thesis.