China’s road to exchange rate liberalization

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When Deng Xiaoping decided to open up China’s economy in 1978, he and other Chinese leaders were already aware of the need to introduce a greater degree of convertibility for its currency. They decided to achieve this in stages, first by inventing new, more convertible alternatives to the RMB. This is the multitrack system that lasted right through 1 January 1994. Section II will look at this history and assess the legacy of this policy. Starting on 1 January 1994, China proceeds to bring about a higher degree of convertibility “at the intensive margin”—i.e., convertibility of the unified RMB. Section III will assess China’s success in this endeavour. In Section IV I shall look at the risks and difficulties confronting China through the turn of the country. Finally, Section IV will conclude the Chapter with some brief comments.
Original languageEnglish
Title of host publicationChina in the Post-Deng Era
EditorsJoseph Y. S. CHENG
Place of PublicationHong Kong
PublisherThe Chinese University of Hong Kong Press
Number of pages18
ISBN (Print)9622017924
Publication statusPublished - 1998


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