Thesis (Ph.D.)--University of Connecticut, 2007. / Adviser: Fred V. Carstensen. Includes bibliographical references.

This thesis examines China's exchange rate and its relationship with China's foreign trade in the reform period from the late 1970s to the present. China's foreign exchange management system has undergone major changes in the past two decades. The exchange rate regime has evolved from a fixed (but adjustable) rate, to a dual exchange rate system in the 1980s and early 1990s, and to a managed floating rate in the mid 1990s. The official exchange rate was devalued substantially from 1980 to 1994. Since1995, the official exchange rate has been de facto pegged to the US dollar. Although the nominal exchange rate is subject to central bank intervention in the foreign exchange market, the government claims that China’s currency, the Renminbi, achieved current account convertibility at the end of 1996. / The parallel exchange rates were an internal settlement rate adopted in the 1981-1984 period and a swap market rate in the 1987-199:3 period. The internal settlement rate was based on the cost of foreign exchange earnings and it was constant over the period. The swap market rate was semi-market-determined in foreign exchange swap markets in which foreign exchange retention quotas were traded. Since the official exchange rate and the interest rate were rigorously controlled by China's authorities, it is not surprising that purchasing power parity and interest rate parity do not hold for this period. However, it is found that the swap market premium over the official exchange rate is closely related to the inflation differential between China and the United States. / Trade liberalisation accompanied by currency devaluation has been one of key elements of the successful experience of the Chinese economy. This thesis calculates a new and improved series for the real effective exchange rate in order to estimate the effects of exchange rate changes on foreign trade. By estimating real export and import equations, it is found that changes in the real exchange rate did affect the volumes of foreign trade, and that a real devaluation would promote exports and restrain imports, thus improving the trade balance. / China has a strongly dualistic trade regime, and because of this characteristic the total trade account is disaggregated into processing and other trade. Processing trade is the trade of export processing when imported intermediate inputs are processed in China and then the finished goods are exported. A model of fragmentation with multistage production is set up to analyse the relationship between exchange rate changes and the volume of processing trade. The model shows that a devaluation of the domestic currency would likely increase China's processed exports and domestic employment. The empirical evidence is consistent with the findings from the theoretical model. / The thesis then goes on to examine China's exchange rate mechanism. Official documents and statements clearly indicate that export promotional was a major objective of the authorities in adjusting the exchange rate and that price stability was also a key factor in determining the level of the official exchange rate, particularly after the late 1980s. The results from estimating policy reaction functions suggest that the authorities did adjust the exchange rate in response to changes in trade performance and prices (or the rate of inflation). A worsening trade account would prompt the authorities to devalue the currency while rising inflation would slow the pace of devaluation. / The findings from this thesis imply that the current policy of a nominal exchange rate pegging to the US dollar and related restrictions on foreign exchange and imports will not assist further liberalisation of foreign trade, which is necessary to sustain China’s economic growth. With the accession to the World Trade Organisation in the near future, an exchange rate policy consistent with the reduction of trade restrictions is an urgent need for the Chinese economy.

The value of the RMB, China's currency has become a contentious issue. China's RMB exchange rate regime has moved from a fixed exchange rate before July 2005, to a managed floating change rate regime. There has been external pressure on China to agree to the RMB's appreciation to the US dollar. There is a common view that the RMB is considerably undervalued at this moment, with some quarrelling that this is an issue of global concern. This study has two objectives. First, to review and critically comment on China's exchange rate regime over the period 1994 to 2008. Second, to review and critically comment on whether the RMB was undervalued over the period 1994 to 2008. This study shows that the evidence is mixed. The popular Big Mac Index shows that the RMB was significantly undervalued from 1994 to 2008. In contrast, this study reviewed research that provides evidence for alternative perspectives on the valuation of RMB. / Thesis (MBA)-University of KwaZulu-Natal, Wesville, 2009.

published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy

Master Thesis Paper Submitted to: Wits Business School University of the Witwatersrand Johannesburg, South Africa Master in Finance & Investment, 2015 / Does the volatility of the Renminbi (RMB) have any significant impact on China’s trade? This fundamental question has garnered considerable debate in both the academic and financial circles. The recent “currency wars” amongst larger economies has further fueled the question. Using a number of econometric methods, this research dissects the heart of the effect of the volatility of exchange rate on trade. The research makes crucial findings to provide an affirmative response to the central question posed. In line with most theoretical and empirical studies, the study found that volatility of exchange rate has a positive impact on trade by boosting exports and reducing imports. The appreciation of the RMB has tended to lead to a decrease in China’s global competitiveness, and often suppresses growth. The research provides an important insight on how Chinese monetary authorities can maintain the managed pegged currency system while simultaneously expanding economic growth. Key words: Exchange rate volatility; trade balance; imports; exports; causality; appreciation; depreciation. / MT2016

by Cheung Sin-ching, Suzanne, Wu Bin, Willliam. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1994. / Includes bibliographical references (leaves 96-99). / ACKNOWLEDGMENT --- p.ii / ABSTRACT --- p.iii / TABLE OP CONTENTS --- p.v / LIST OF TABLES --- p.viii / LIST OP EXHIBITS --- p.ix / CHAPTER / Chapter I. --- INTRODUCTION --- p.1 / Background Information --- p.1 / Fixed Rate System --- p.1 / Pegged Rate System --- p.1 / Re-arrangement of RMB Exchange Rate --- p.2 / Repeated Realignments of the Official Rate / Multi-Rate System --- p.3 / Managed Floating Rate System --- p.4 / Purposes of Study --- p.4 / Statements of Problems --- p.4 / Scope of the Problem --- p.5 / Plan of the Report --- p.6 / Chapter II. --- LITERATURE REVIEM --- p.7 / Chapter III. --- RESEARCH METHODOLOGY --- p.11 / Secondary Source Data Collection --- p.11 / Primary Source Data Collection --- p.12 / Strengths and Weaknesses of the Methodology --- p.12 / Chapter IV. --- THE ARRANGEMENT OF THE RMB EXCHANGE RATE --- p.13 / The categorization of Exchange Rate System --- p.13 / The Selection of RMB Exchange Rate system --- p.15 / Pre-Reform Era . . ´ب --- p.15 / Post-Reform Era --- p.17 / The Alteration of Official Rate --- p.17 / The Multi-Rate System --- p.19 / Internal Settlement Rate --- p.19 / Swap Rate --- p.22 / Pros and Cons of Multi-Rate System --- p.24 / Termination of Multi-Rate System --- p.26 / The Determination of RMB Exchange Rate --- p.27 / Chapter V. --- RMB DEVALUATION --- p.30 / Reasons for Devaluation --- p.30 / General Background t The Overvaluation of RMB --- p.30 / Export Promotion --- p.31 / Inflation and Loss of RMB Purchasing Power --- p.32 / Import Surge and Foreign Trade Deficit --- p.33 / Speculative and Psychological Factors --- p.34 / Unification of Dual Rate System --- p.35 / Impacts of RMB Devaluation --- p.35 / External Economy --- p.35 / Merchandise Trade Account --- p.36 / Effects on Export --- p.36 / Effects on Import --- p.39 / Effects on Foreign Trade Balance --- p.39 / Other Considerations --- p.40 / Time Lags --- p.40 / The Fragmentation in China's Foreign Trade Industry --- p.41 / Non-Trade current Account --- p.42 / Tourism --- p.42 / Othet Items in Non-Trade Account --- p.43 / Capital Account --- p.43 / Other Countries' Response --- p.45 / Internal Economy --- p.46 / Imported Inflation --- p.46 / Import Substitution Industry --- p.47 / People's Faith in RMB --- p.47 / Practical Implications of RMB Devaluation: Strategies for Hedging against RMB Risk --- p.48 / Agreement with Chinese Side --- p.49 / Forex-Guaranteed Loan --- p.49 / Diversification of Business --- p.50 / Forex Future Market --- p.50 / Chapter VI. --- PROSPECT OF THE RMB EXCHANGE RATE --- p.52 / Expectation of RMB Exchange Rate: A Move in the Near Future --- p.52 / Forex Demand vs. Forex Supply --- p.53 / Inflation --- p.53 / Free Convertibility of RMB --- p.54 / Definition --- p.54 / Internal Convertibility --- p.55 / External Convertibility --- p.55 / Pros and Cons of RMB Convertibility --- p.56 / Prerequisites to RMB Free Convertibility --- p.57 / Rational Exchange Rate --- p.57 / Sufficient International Settlement Means --- p.57 / Sound Macroeconomic Policies --- p.58 / Efficient Microeconomic Environment --- p.58 / procedures for RMB Free Convertibility --- p.60 / Eliminating the Dual Rate System --- p.60 / Realizing the Limited Convertibility of RMB --- p.60 / Establishing Foreign Exchange Market --- p.62 / Eliminating the FECs --- p.63 / Allowing Free Transfer of Foreign Exchange in Capital Account --- p.63 / Chapter VII. --- CONCLUSIONS AND RECOMMENDATIONS --- p.65 / Conclusions --- p.65 / A Rational Managed-Floating Rate System is in Need --- p.65 / Devaluation is not a Panacea --- p.67 / The RMB Rate is Bearish in Near Future --- p.68 / Free Convertibility is a Long Way to Go --- p.68 / Other Things to Do --- p.69 / Recommendations --- p.69 / Controlling Inflation --- p.69 / Rebalancing Trade Deficit --- p.70 / Restructuring Foreign Trade Industry --- p.70 / Improving the Chinese Enterprises' Efficiency --- p.70 / TABLES --- p.72 / EXHIBITS --- p.83 / BIBLIOGRAPHY --- p.96

Wu, Tujin. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (leaves [47]-49). / Abstracts in English and Chinese. / Abstract --- p.i / 摘要 --- p.ii / Acknowledgments --- p.iii / Chapter I. --- Introduction --- p.1 / Chapter II. --- China´ةs Economic Transition and Literature Review --- p.6 / Chapter II.1. --- Export-led Strategy and Exchange Rate Evolution --- p.6 / Chapter II.2. --- Literature review of exchange rate misalignment --- p.10 / Chapter III. --- Theories Background --- p.14 / Chapter 1. --- Purchasing Power Parity and Balassa Samuelson Hypothesis --- p.14 / Chapter 2. --- Modified Balassa Samuelson Hypothesis --- p.17 / Chapter IV. --- Empirical Estimation --- p.21 / Chapter 1. --- Cross-Section Estimate --- p.21 / Chapter 2. --- Time Series Estimation --- p.25 / Chapter 3. --- Policy proposal in the duration of price revaluation --- p.36 / Chapter V. --- Summary --- p.44

Not available / text

published_or_final_version / Business Administration / Master / Master of Business Administration

by Yan Yuk Fung. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1996. / Includes bibliographical references (leaves 41-42). / ABSTRACT --- p.i / TABLE OF CONTENTS --- p.ii / LIST OF ILLUSTRATIONS --- p.iv / ACKNOWLEDGMENT --- p.v / Chapter / Chapter I. --- INTRODUCTION AND METHODOLOGY --- p.1 / Chapter II. --- BENEFITS AND TYPES OF CONVERTIBILITY --- p.3 / Economic Benefits --- p.3 / Current Account Convertibility --- p.4 / Capital Account Convertibility --- p.5 / Chapter III. --- TRENDS OF BALANCE OF PAYMENTS IN CHINA --- p.7 / Characterics --- p.7 / Trend of Current Account Balance --- p.8 / Trend of Capital Account Balance --- p.9 / Cyclical Nature of Balance of Payments --- p.10 / Chapter IV. --- EVOLUTION OF FOREIGN EXCHANGE REGIME SINCE 1978 --- p.12 / Trade Liberalization --- p.12 / Control on Current Account Transactions --- p.13 / Foreign Exchange Retention System and Swap Centres --- p.14 / Chapter V. --- DEVELOPMENT OF CONVERTIBILITY IN 1994 --- p.16 / Achieved Convertibility on Trade Related Transactions --- p.16 / China's Choice of A Managed Floating Rate Regime --- p.18 / Chapter VI. --- CONDITIONS FOR CONVERTIBILITY --- p.21 / Stable Domestic Price --- p.21 / Favourable Balance of Payment --- p.22 / Sufficient Foreign Reserve --- p.23 / Exchange Rate Stability --- p.24 / Liberalization Measures on Service Transactions Implemented in 1996 --- p.24 / Chapter VII. --- RISKS OF CONVERTIBILITY --- p.26 / Peso Depreciation in Mexico --- p.26 / Export Slowing Down in China --- p.27 / Cumulative Inflation --- p.28 / Budget Deficit --- p.29 / Risk of Import Surging with China Entering WTO --- p.30 / Foreign Direct Investment Slowing Down --- p.30 / Political Risks within China and Across the Formosa Strait --- p.31 / Chapter VIII. --- POLICY PRESCRIPTIONS --- p.33 / Maintain Balance of Payments --- p.33 / Fiscal & Monetary Discipline --- p.34 / Improve Efficiency of Foreign Exchange Market --- p.35 / Strengthen Economic and Financial Reforms --- p.35 / Avoid Premature Capital Account Convertibility --- p.36 / Chapter IX. --- CONCLUSION --- p.38 / RMB Full Current Account Convertibility Achievable Before 2000 --- p.38 / Business Implications --- p.39 / BIBLIOGRAPHY --- p.41