On The Choice Of RMB Exchange Rate System In Open Economy

With the incessant depth of Chinese economy's opening up, choosing what kind of exchange rate system is a unavoidable problem to Chinese decision-makers. Financial crisis which occurred in some emerging market countries and countries in transition to market economy since the 1990s, induced the rethinking of how to choose the exchange rate system, especially for the developing countries. In china, the debate on this issue also directly influences recent furious discussions on RMB revaluation and the re-position of Chinese exchange rate system. In this article, through the analysis of different exchange rate systems' characteristics and macroeconomic policies, the author studies the historical evolvement process of RMB exchange rate system, at the same time, preliminarily analyzes the economic effect of freely convertible currency, summarizes the historical experience, explores the infective factors of choosing RMB exchange rate system and the cooperation of exchange rate policy and monetary policy.The role of exchange rate system subordinates to macroeconomic policy. Only the exchange rate system adapts the basic economic situation with the help of consistent governmental macroeconomic policies, can it fully plays its role. In this article, the author discusses that in the new international economic environment and new stage of economic development, China needs more flexible and corresponding exchange rate system, proposes the problems of Chinese RMB exchange rate system and the ideas to improve it, then brings forward the environmental constraints, holistic strategy and specific measures in the process of smooth transition to floating exchange rate system in the trend of RMB achieving completely free convertibility gradually.