《转国际货币与金融经济学》补充章节--增补内容电子版

1、biluowuka十七级 返璞归真 经验:336084/400000 大学英语 B交际英语1抱歉.- Sorry, I can't find theP95增补内容：Should China Peg or Float?In 2003, most currencies of the largest U.S. trading partners appreciated relative to the dollars. Most of these currencies appreciated. The currency of the third-largest U.S. trading part

2、ner, the Chinese renminbi, was pegged to the dollar in a very narrow trading band.As Chinas trade surplus with the United States continued to grow, so did foreign pressure on China to revalue or float the renminbi. To maintain the value of the renminbi, China purchased more than $60 billion in forei

3、gn exchange reserved in the first half of 2003 alone. Alan Greenspan, chairman of the U.S. Federal Reserve, stated that China could not continue to purchase foreign exchange reserves indefinitely and would eventually need to float its currency or risk crisis in its financial system.Chinese officials

4、, in contrast, claimed that the pegged-exchange-rate system was a success. Their claim was that the pegged system provided stability for the Chinese economy. Moving to a full float, they argued, might trigger a crisis in the banking system.Evolution of Chinas Exchange Rate RegimeGetting the exchange

5、 rate right is essential for economic stability and growth in developing countries, especially for China, which is under its way of economic and financial reform and accelerating its integration with the global goods and financial markets.Since the establishment of the Peoples Bank of China (PBC) in

6、 December 1948 and the publication of renminbi, Chinas exchange system has gradually evolved.Phase One (1949-1972): officially determined exchange rate and a single pegAfter the birth of the Peoples Republic of China, its economy experienced a transition toward a strictly planned one between 1949 an

7、d 1952. The exchange rate of renminbi in this period was completely established by the Peoples Bank of China (PBC) with occasional adjustments according to the economic needs and political considerations. The PBC determined the exchange rate on the basis of the relative price level of the domestic c

8、urrency, foreign currencies and the cost of exporting. The purpose was to encourage exports, restrict imports and serve the whole economy. During this period of economic reform, the exchange rate of renminbi was adjusted frequently. For instance, between January 1949 and March 1950, the renminbi/dol

9、lar exchange rate was adjusted 49 times. With the onset of the Korean War, China ceased tying its currency to the dollar in favor of the British pound.From 1953 to 1972, with the highly planned economy and the generally fixed exchange regime against major currencies, Chinas exchange rate remained st

10、able. During this period, the renminbi/pound exchange rate was adjusted only once from ¥6.893 /£ to ¥ 5.908/£. The renminbi/dollar exchange rate was only adjusted from ¥2.4618/$ to ¥ 2.2673/$ in December 1971 in response to the sharp depreciation of the dollar.In this p

11、hase, the renminbi exchange rate was relatively fixed as a result of its single currency peg. However, the computation was not based on the currency market. At the period of establishing the new country, China's capability of export is low and the demand for import is high. Also with the politic

12、al consideration, the renminbi exchange rate was overvalued in relation to the market price.Phase Two (1973- 1985): a basket peg and dual exchange rate systemAfter the collapse of the Bretton Woods System in 1973, the worlds major currencies began to float against each other with significant fluctua

13、tion in response to market forces.Because it faced increasing difficulty maintaining a single currency peg, the PBC moved toward pegging a basket of internationally traded currencies. The external value of the renminbi was linked to a basket of international traded currencies. The weights in the bas

14、ket were based on the relative importance of the currencies in Chinas external transactions and the relative values of these currencies in international markets. The currencies and weights in the basket were adjusted seven times between1973 and 1984. After the sharp depreciation in 1971, U.S. dollar

15、 depreciated again in February 1973 by 10%. It continued to depreciate during this period. Renminbi / dollar exchange rate was adjusted gradually. In 1980, the exchange rate had been adjusted from ¥2.4618 /$ to ¥1.4480/$, appreciated by 70%.Economic policies changed much following the impl

16、ementation of Chinas economic reform initiatives in 1978. In order to encourage exports and facilitate the accounting of different trade sectors at the beginning of 1981, an internal settlement rate was introduced. All national enterprises engaged in foreign trades were required to execute their pur

17、chases of foreign exchange from the Bank of China at that rate. The rate was computed by adding an equalization price to the official rate. The official rate was used only for non-trade-related transactions. Thus, China had established a dual exchange rate system. At the end of 1981, the official re

18、nminbi/dollar buying and selling rates were ¥1.7411 and ¥1.7499 respectively. At the same time, the internal settlement rate was ¥2.8 per dollar.However, in order to comply to the single exchange-rate standard and facilitate international trading, the use of the internal settlement ra

19、te was discontinued at the beginning of 1985 and all transactions were to be executed at the official rate published by the State Administration for Exchange Control (SAEC).Phase Three (1986-1993): managed floating and swap center-first step toward market determined ratesAt the beginning of 1986, th

20、e PBC shifted its exchange rate policy from pegging to a basket of currencies to a managed floating. This was an important part of Chinas financial reform, driven by its desire to move toward market economy.In November 1986, Chinese enterprises and foreign investment corporations in the four Special

21、 Economic Zones (SEZs) of Shantou, Shenzhen, Xiamen and Zhuhai were permitted to engage in foreign exchange transactions in the Foreign Exchange Adjustment Centers (FEACs) at the rates agreed between buyers and sellers. The establishment of the swap center marked the introduction of an embryo foreig

22、n exchange market in China. By October 1988, 80 swap centers had been established. The rate determined in the swap centers constantly depreciated relative to the official rate.Meanwhile, the regulation of foreign exchange was still strict. The official rate remained unchanged at ¥3.72 per dolla

23、r from July 5, 1986 to December 15, 1989, during which time a 21.2 percent depreciation of the renminbi was announced. At the end of 1989, the official renminbi/dollar exchange rate was 4.72. At this time the SAEC also had the power to control market access on the basis of “guiding priority lists” a

24、nd “retention quotas”. It also operated on behalf of the PBC to intervene from time to time to stabilize the price in the swap center.Market forces emanating from the swap center continued to put pressure on the renminbi to depreciate. This trend accelerated with Chinas expansive policy, rapid econo

25、mic growth and high inflation. By June 1993, the renminbi/dollar exchange rate had depreciated from 5.25 (March 1987) to 10.5. However, with the announcement of a tight financial policy and the appointment of a new governor to the PBC in July, the renminbi appreciated within a week. The official ren

26、minbi/dollar exchange rate was then adjusted to 5.8 by the end of 1993. Because the divergence between the two rates was so large, PBC officials stated that the renminbi exchange rate would be unified within five years in an effort to facilitate trade and smooth the process of integration with the W

27、TO and the global market.Phase Four (1994-present): unitary managed floating and current account convertibilityThe reform progress was much faster than it had been foreseen. On January 1, 1994, the official and swap market exchange rates were unified at the prevailing swap market exchange rate at th

28、e end of 1993-¥8.7 per US dollar and unitary managed floating was established in China.An interbank foreign exchange market was also established. All regional swap markets were amalgamated into the Shanghai foreign exchange center. It was managed by the China Foreign Exchange Trade System (CFET

29、S). CFETS offers trading and settlement services to its members, which include domestic banks, foreign banks and a number of non-bank financial institutions (NBFIs). The renminbi is primarily traded against the US dollar with a small portion of trading against the Hong Kong Dollar and the Japanese Y

30、en. There are no forward transactions or hedging operations in this market.During this time some older regulations were nullified while new regulations were enacted. In the unified market, the issuance of retention quotas was terminated. The priority lists that governed the provision of foreign exch

31、ange and regulated market access were abolished. Under the new regulations, domestic enterprises are required to conduct their sales and purchases of foreign currencies and receive current transaction control through authorized financial institutions. On the other hand, the foreign-funded enterprise

32、s (FFEs) may purchase or sell foreign exchange directly from the CFETs. Different regulations also apply to domestic and foreign banks. Domestic banks may buy and sell foreign exchange for their customers, while foreign banks may only sell foreign currencies against the renminbi. Foreign banks are n

33、ot allowed to operate in the domestic money market. Another important regulation is the “regulation of foreign exchange purchasing, selling and providing”. This requires that domestic banks to hold a minimum amount of liquid foreign exchange assets to ensure that they have adequate liquidity to meet

34、 their obligations in foreign currencies. Banks have to cover any shortfalls in these funds by the following day. However, if the foreign exchange holdings exceed the limit, these banks are required to sell the excess in the CFETS market.Chinas current exchange regime is a tightly managed floating.

35、The PBC establishes the central target or reference rate. The fluctuation of the renminbi/dollar exchange rate is only permitted within a 0.3% band. The PBC is committed to maintain a stable exchange rate through interventions in the CFETS. The interventions, which are carried out in Shanghai, are t

36、riggered by deviations of the renminbi/dollar exchange rate in the CFETS market during trading hours.This phase has also been characterized by a move toward free transactions and establishing convertibility. In October 1993, China made an official commitment to follow IMF guidelines by implementing

37、current account convertibility by 2000. In 1994, the requirement to obtain prior approval from the SAEC for the purchase of foreign exchange for most trades and trade related transactions conducted by domestic enterprises was rescinded. Foreign exchange controls for current account transaction was d

38、elegated to the banks. Preliminary steps were taken to achieve current account convertibility on December 1, 1996 in an effort to make Chinas goods and financial markets more integrated with the world. Chinas exchange rate system has evolved over the last half century and has changed at an accelerat

39、ing speed during the past fifteen years. It has moved from one in which access to foreign exchange was highly restricted and the exchange rate was firmly administered to a system wherein the exchange rate was unified and stabilized via a market based managed floating.P405增补内容：Chinas Conflicts and Co

40、ordination between Exchange Rate Polices and Monetary Policies since 1994China has experienced three serious conflicts between exchange rate policies and monetary policies during this period, including rapid growth of foreign exchange reserves during 1994-1996, a nose dive of the foreign exchange re

41、serves growth in 1998 and decreasing commodity prices, the crash between the stable exchange rate in 1998 and the different interest spreads of principal and foreign currencies as well as the crash between the stable exchange rate and tightening monetary policies after 2003. The links between exchan

42、ge management and monetary policy are best expressed in the form of the “impossible trinity”that is, a country cannot simultaneously have perfect capital mobility, monetary autonomy and an officially determined nominal exchange rate. Under perfect capital mobility, the monetary authorities must choo

43、se between retaining monetary autonomy and fixing the exchange rate. The logic is that, if the exchange rate is fixed, any exogenous change in domestic credit would create an incipient money market disequilibrium, which would put pressure on the domestic interest rate to derivate from its uncovered-

44、parity level. But any such deviation would trigger massive capital flows which could not be sterilized. To defend the parity, therefore, the central bank would have to intervene in the foreign exchange market, and its doing so in unsterilized fashion would cause the money supply to adjust in a direc

45、tion opposite to that implied by the original change in credit. Indeed, the magnitude of the change in the money supply caused by intervention in the foreign exchange market would have to be exactly equal to but opposite in sign from the original change in domestic credit, thereby offsetting the ini

46、tial credit expansion and restoring the original money supply. Thus, with perfect capital mobility and a fixed exchange rate, the money supply is demand determined. On the other hand, if the central bank eschews intervention in the foreign exchange market after a change in the stock of domestic cred

47、it, the domestic interest rate must adjust to clear the money market. Incipient capital flows triggered by the resulting divergence between foreign and domestic interest rates will simply cause the exchange rate to adjust until the expected returns on domestic and foreign interest-bearing assets are

48、 equalized when expressed in a single currency. Monetary autonomy is preserved, but at the cost of loss of control over the level of the exchange rate.For developing countries, the macroeconomics objective is to achieve internal stability and equilibrium in the balance of payments. Under capital mob

49、ility and fixed exchange regime, independent money policy is almost certain to result in significant balance of payment disequilibrium sooner or later and hence provoke potential destabilizing flows of speculative capital. To maintain exchange stability, governments will then be compelled to limit e

50、ither the movement of capital or their own policy autonomy. There is a fundamental incompatibility in simultaneously keeping exchange rate stability, capital mobility and monetary autonomy. When the disequilibrium goes beyond a certain threshold, serious incompatibility of macroeconomic policies or

51、speculative attacks are sure to occur.In China, exchange rate management and monetary policy had been absolutely separated before 1993. When China abolished its dual exchange rate regime in 1994, it implemented significant reforms in its foreign exchange system and abolished the right of domestic en

52、terprises to retain their foreign exchange earnings. The old system was replaced by compulsory foreign exchange settlement. The RMB initially launched at an exchange rate of RMB 8.7 to the dollar. Ever since current account convertibility was achieved in late 1996, the RMB has maintained a stable ex

53、change rate of 8.28 RMB to the US Dollar since that time. On the other hand, having a huge economy, China should have built an independent monetary policy. It is inevitable for China to further loosen its restrictions on capitals after its accession to the WTO. Under this condition, conflicts betwee

54、n forex policy and monetary policy are sure to occur frequently.1994-1996: pressure of appreciation and inflationAfter the foreign exchange system reform in 1994, China's international trade increased sharply, this remarkably improved Chinas balance of payments status. Although China still had a

55、 current account deficit of $11.902 billion in 1993, China was able to generate current account surplus of $7.56 billion, $1.62 billion and $7.24 billion respectively from 1994 to 1996. Under the encouragements of open policy, fast increased macroeconomics and high interest rate of RMB, foreign capi

56、tal inflow increased quickly. Capital account surplus reached $32.65 billion, $38.67 billion and $39.97 billion respectively from 1994 to 1996. Dual surpluses in the current account and capital accounts generated pressure on the RMB to appreciate. In order to maintain a stable exchange rate, the Peo

57、ples Bank of China (PBC) intervened. In the foreign exchange market, the PBC bought the US Dollars and sold the RMB. Therefore, foreign reserves increased remarkably $30.42 billion in 1994, $21.96 billion in 1995 and $31.45 billion in 1996. As a result of this strong intervention, the RMB/Dollar exc

58、hange rate was 8.3 after the second quarter of 1995. The central bank of China successfully achieved its external objective. In the same period, as China accelerated efforts to initiate economic reform and openness, China's economic growth reached a remarkable level. Rapid and persistent economi

59、c growth generated an investment boom. With a weak financial sector and undeveloped markets, underlying economic problems began to emerge. By the mid- 1990s, these economies began to show classic signs of overheating. Inflation pressure was serious. On the other hand, as a result of external adjustments in the foreign exchange market (through the RMB sales and the Dollar purchases), the RMB supply increased dramatically. Since 1994, the