Political Economy Of Yuan Dollar Exchange Rate

2266 words - 9 pages

  The Chinese exchange rate policy has been one of the top topics of debate in recent years. It has attracted a great deal of attention in academic and policy area due to the slower pace of economic growth and manufacturing job creation from the beginning of 21st century and recent financial crisis in United States. China has been accused of pursuing new mercantilist policy, that is, encouraging export and impeding import mainly through the manipulation of exchange rate between Chinese currency known as Renminbi and US dollar. China was maintaining its currency strongly pegged with US dollar from 1994. Some recognised economists and policy makers are repeatedly blaming the Chines exchange rate policy for the prolong financial crisis and sluggish recovery where as some other prominent economists provide the different opinions.

  The debate on Chinese exchange rate policy started from the East Asian crisis in 1997. But it has been intensified only after the publication of some articles on economic newspaper in western world (Financial Times) and in Japan (Nihon Keizai Shinbun). Afterwards, government officials of USA and Japan on many occasions urged and pressurized the Chinese authority to allow more flexibility for the movement in the Chinese exchange rate. In G7 meeting of 2002, the Japanese Finance Minister Masajuro Shiokawa raised the concern over the manipulation of currency exchange rate by China, and asked the G7 community to jointly put pressure on the China to appreciate its currency so as to combat global deflation. The then US President George W. Bush and Sectary of Treasury John W. Snow also touched this issue during the different meetings with different Chinese high officials on various occasion in 2003. In early 2005, G7 countries, without mentioning the name of China, "stressed the need for greater exchange rate flexibility by countries whose currencies had not been floated ((Kanamori and Zhao, 2006)." The Financial Times reported on 17 April 2005 that the G7 agreed to call on the China to take immediate action to shift to a more flexible exchange rate regime.
  On the part of china it is repeatedly emphasized that the Chinese currency policy is not meant to manipulate the international trade, rather it is for the overall stability of the Chinese economy. The Chinese authorities expressed their concern that allowing more volatility in currency would damage the export industry as other economic reforms were going on in China such as closing down the inefficient public enterprises. They feared that the Chinese banking system is so underdeveloped and burdened with heavy debt that it would not be able to deal effectively with possible speculative pressures that could occur under more flexible exchange rate regime (Morrison and Labonte, 2009). Further more, Chinese authorities stressed that the any economic instability would result in unemployment that could spur political unrest un the country. However, The Chinese authorities...

Find Another Essay On Political Economy of Yuan-Dollar Exchange rate

Analyze the Determinants of the GBP Nominal Exchange Rate and Its Future Prospective

1320 words - 5 pages , this survey also reveals that the price sterling to dollar has risen steadily between1.45 and 1.55 since last month. So, what causes the fluctuation of the GBP nominal exchange rate has provoked a heated discussion. The purpose of this essay is to explore the determinants of sterling nominal exchange rate and forecast its future trend. Firstly, it will give definition of nominal exchange rate compared to real exchange rate. Secondly, three factors

Currency and Interest Rate Swap: A Case Study of the Australian Foreign Exchange Market

3038 words - 12 pages forward exchange rates.Statement of the ProblemConsidering the economic factors, it can be noted that in 2000s national economy was actually growing at the desired economic growth rate which facilitated opening of more commercial banks in anticipation of earning normal profits by the investors. For instance, even after the worst economic depression of the years 2000 to 2002; the overall economic growth continues to thrive which witnessed the decrease

Four approaches to the political economy development of Latin America

1559 words - 6 pages The study of development in Latin America has been approached from a variety of academic disciplines. International Political Economy scholars have provided a number of different approaches for studying, analyzing and understanding the political and institutional constrains that have shaped the development of Latin American countries. They have also incorporated into the analysis variables such as the influence of international organizations and

The economy of Singapore. Family, Marriage and the Threat of declining birth rate in Singapore

2046 words - 8 pages I. IntroductionThe economy of Singapore is increasing rapidly yet it is also facing the threat of declining birth rate which causes the aging population. This fact is cited in two articles of Wendy Tan and Grace Chua from The Strait Times Interactive Website which are attached in this report. It can be argued that Singapore is not alone among developed nations in having a declining birth rate, however, the aging population, for a small

An Analysis of the theories of Neoclassical and Political Economy and the practicality of each.

1547 words - 6 pages applies these variables to economic occurrences. There are, to more specifically illustrate these variables, four "C's" of Political Economy. These are: Context, Collective Behavior, Conflicting Interests, and Change. These contexts are important because, "...political economists perceive important social groups within our society as being related to each other by unequal power and uneven access to resources."(p.122, Shulman) In looking at issues

The Role of IMF in the International and National Political Economy of Nigeria and Cameroon

2435 words - 10 pages The Role of IMF in the International and National Political Economy of Nigeria and Cameroon The financial system in the international scale has been very impressive in the struggle to develop the economy of the world. With the integration of the economy of the world through Foreign Direct Investment (FDI) to interfere in the activities of an economy has been imperative among others (Havnewk, 1997). Overtime the idea that richer countries taking

Political Economy Theory: Does the structure of the media industry influence its content?

1059 words - 4 pages Political Economy Theory: Does the structure of the media industry influence its content?The political economy in mass media theory argues that "the structure of the industry influences content." (Andrejevic M, 2007). This theory will be demonstrated by analysing an article entitled '"Sky's the limit" for MySpace', published on News.com.au on August 10th 2007. The presumption of the theory is that media content is influenced by a combination of

A brief summary of the Liberal approach to international political economy.

1828 words - 7 pages must stop to wonder whether those adherents of Liberal doctrines really understand the history behind and application of their own theory. In today's world of Liberal buzz-words like, "globalization" and "free trade" it is the task of the observer as well as the adherent to cut through the jargon and arrive at the root of the discussion - Liberal economic theory and its role in the international political economy of the 21st century. The

Economics, Politics and (International) Political Economy: The Need For a Balanced Diet in An Era of Globalisation

6749 words - 27 pages Even the dogs may eat of the crumbs that fall from the rich man's table; and in these days, when the rich in knowledge eat such specialised food at such separate tables, only the dogs have a chance of a balanced diet.( n1)The Guest Editors of this issue of New Political Economy invite us to 'put the "P" back in to political economy'. This exhortation poses two immediate questions. Who took it out? And, indeed, what is political economy? For

Star Wars. Essay proving that the US was incapable of bringing it to life. Speaks of the economy, technology and treaties and political obligations

1265 words - 5 pages , and it also prohibits military bases on any celestial bodies. It also outlaws the testing of weapons and/or military maneuvers. As these two conditions of the Outer Space Treaty clearly show, no one is allowed to establish any type of military outpost in space. If no military testing was allowed, the US would not place multi-billion dollar, untested weapons in space, so they would not rely on SDI. A political obligation that made SDI impossible was

"Testimony before the U.S. Senate, 1883" and "The Political Economy of Seventy-three Million Dollars, 1882," to compare and contrast the two different view points.

1759 words - 7 pages Gould v. LloydAre government regulations really needed in the late 1800's to stabilize industrialization or is "control by the government...contrary to our institution..?" To better describe the long time feud between ideas, we will be using two documents titled "Testimony before the U.S. Senate, 1883" and "The Political Economy of Seventy-three Million Dollars, 1882," to compare and contrast the two different view points of industrialization

Similar Essays

Understanding The Exchange Market Rate Pound To Us Dollar (Gbp/Usd) Exchange Rate

3315 words - 13 pages . These two currency is very popular and also important in the way to contribute to the exchange rate in foreign exchange market The United States Dollar (USD) or its sign was ($) is referred to as the U.S Dollar, and also as the American Dollar. It is the official currency to the Unites States and its overseas territories. The currency of United States Dollar was divided into 100 smaller units called cents (Wikipedia, 2014). The United States Dollar

A Short History Of The Worlds Exchange Rate Systems

2898 words - 12 pages collapse under the pressure of these attacks with destructive impacts on the real economy. Section Two: Historical Exchange Rate Regimes and their Fates Barter System: Before the metallic and bimetallic systems of the 1700 and 1800 hundreds there were no currencies, only an exchange of goods and services. The issue with barter transactions was the difficulty in quantifying the value of say bushels of wheat in terms of cattle. For a transaction to

What Might Cause An Appreciation Of A Floating Exchange Rate?

1775 words - 7 pages own currency. Buying the currency will increase demand and raise the exchange rate. Economies with strong "export-led" growth may see their currency's rise in value. Japan is a good example of this in recent years. The Euro was weak during the first six months of its existence in part because the financial markets were worried about the slow growth of the European economy and the persistently high level of unemployment The currency

The Political Economy Of Globalization Essay

1180 words - 5 pages Globalization exists when neither distance nor international boundaries obstruct economic transactions. Furthermore, globalization increases political relations among a wide variety of people and nations. Globalization, according to L. Mosley “disregards political boundaries” (Mosely, 2007, p. 107); it establishes a sense of openness and acceptance throughout corresponding countries. In “The Political Economy of Globalization”, Layna Mosely