The RMB exchange rate started to be a widely international issue discussed with Sino-U.S. relations of Economic since 2002.The main Objective of this study is finding the causes of undervaluing and pressures of facing. However, China¡¦s Financial Security is closely related to the process participating in the international system of finance, so this article is concentrated in the scope of correlate research of RMB exchange rate, and analyzed to find what pressures China facing and what policies China choosing. The causes which nominal exchange rate was biased against the real exchange rate are discriminated between labor factor and interest factor, with observing the change of balance of payment and foreign exchange reserves, so the foreign market unequilibrium can be explained further by analyzing the flow and capital. Finally, the strategic consider of U.S. is also the one of factors that influences RMB exchange rate despite of the economic risks in China. perspectives of international politics in Pressuring RMB exchange rate or opening markets are considered on the coordination of interest groups¡Bcongress and government of United States. The conclusion revealed the main reason that China is now facing major secure threats, there are looseness in capital controls, and rigidity in foreign exchange regimes. This threats result in failing to diversify its investment risk of foreign exchange and causing its monetary policy much pressure. The other hand, The purposes of putting pressure on RMB exchange rate by U.S. reflected that they not only transferred the responsibility of unemployment and deficit but also showed the need of domestic politics and the consideration of international politics, so the strength of pressure was not the same in the time series. Therefore, the study argues that the dispute of Sino-U.S. exchange rate was not only the outcome of interaction between two countries¡¦ trade but also this regime of China and purpose of U.S. should be discussed and observed continually.

<p>The aim of this paper is to investigate if a revaluation of the Chinese renminbi is in China’s interest and whether or not a renminbi revaluation can contribute to correct the US current account deficit. For that purpose, advantages and disadvantages of a revaluation for China are discussed. Furthermore, the fundamental causes of the US current account deficit are analysed to evaluate to what extent a renminbi revaluation can correct this imbalance. The discussion is based on previous research in this area. The main result is that a revaluation of the Chinese renminbi is primarily beneficial for China. Additionally it is found that the fundamental causes of the US current account deficit are domestic macroeconomic conditions and not China’s exchange rate policy. Nevertheless, a renminbi revaluation can help to support to correct the imbalance situation. As evidence is found that a revaluation is beneficial for China, it is further analysed how the revaluation should be practically obtained. The basic result is that the renminbi revaluation should be initiated by more exchange rate flexibility rather than by a one-step appreciation.</p>

The diploma thesis examines the hypothesis that monetary policy can be an instrument of international policy, or a component of economic power. The case study focuses on the monetary policy of the PRC in terms of its potential international projection.

中國在世界貿易舞台上所扮演的角色日益重要，人民幣的均衡水準成為十分熱門的議題。本文為貿易財與非貿易財部門的相對生產力找尋新的代理變數來檢視Balassa-Samuelson效果，以解決中國物價指數因受政府控制而難以反映實際生產力的問題。此外，亦將對人民幣匯率的預期引進實證模型中，以量化分析來探討人民幣是否具有自我實現的行為。本文實證結果顯示人民幣均衡匯率與相對生產力、貿易開放程度、熱錢數目間有長期關係。貿易財與非貿易財相對生產力與熱錢數目的上升可能帶動人民幣升值；貿易開放程度則與均衡匯率呈反向關係。 / As China plays an important role in the world economy, the research on the real exchange rate in China has received a lot of attention. This study chiefly contributes to adopt a more reliable proxy different from previous studies to capture the Balassa-Samuelson effect; in addition, we formerly introduce the expectation of Renminbi into the empirical model. This paper empirically investigates the behavior of the real exchange rate in China during the period from 1980 to 2005. Particularly, we provide a single-equation in an empirical framework which takes the specific features and characteristics in China economy into account. The empirical evidence shows that the degree of openness, the volume of hot money, and the relative productivity of traded to nontraded sectors are key factors to the determination of the long-run equilibrium real exchange rate in China. Both the increases in the relative productivity and an anticipated appreciation in the real exchange rate eventually may lead to a real appreciation in the currency. In contrast, the influence for opening up to the world economy is that the real exchange rate may depreciate.

China has been in a state that the currency appreciation is needed to restore the external balance. However, it appears that Chinese government worries about that the Renminbi appreciation may decrease the output. This purpose of this paper is to empirically investigate whether the contractionary hypothesis prevailing in developing countries holds for China with quarterly data over the period from 1995Q1 to 2006Q2. We apply VAR models by means of impulse response functions and variance decompositions. The empirical evidences indicate that even taking the spurious correlation into account, the real appreciation of Renminbi leads to a fall in China’s output. Thus, our findings do not support the contractionary devaluation hypothesis. Moreover, the impact of the exchange rate on output is not through the inflation rate. In the short run, real exchange rate shocks have much power in explaining the output’s variation while the U.S interest rate and government spending shocks are determinants to the variation in output in the long run. Particularly, the monetary policy has relatively weak effect on the output and the real exchange rate.

本論文討論的問題是，國際政治因素對於匯率體制與政策有沒有影響？如果有影響，則國際政治因素如何影響匯率體制與匯率政策變化？國際政治因素影響匯率體制與匯率政策變化的程度有多大？我們希望透過以上問題的探討確認國際政治因素與匯率體制和匯率變化有無關係，然後分析國際政治因素透過怎樣的方式與機制來影響匯率體制與匯率政策，進而瞭解匯率變動與國際政治因素之間的因果關係為何？ 在上述問題下，我們有以下的研究假說： （一）匯率體制與名目匯率的變動除了受國內政治因素與經濟因素的影響外，國際政治因素對於匯率的變動亦是有影響。 （二）政府對於匯率政策的思考除了考量國內政治與經濟因素外，也考慮國際政治壓力因素。 （三）市場交易者對於匯率的預期與作為，除了受到總體經濟指標與國內政治局勢發展的影響外，也受到國際政治情勢變化的影響。 （四）國際貿易失衡下，貿易順差國對貿易逆差國依賴度上升，假如貿易逆差國為一強權國家，則強權國家會對貿易順差國有影響力。例如，兩國（A與B兩國）貿易失衡，A國在貿易順差累積大量外匯存底情況下，勢必會使得該國對於B國貿易依賴程度加深。在貿易失衡情況下，如果B國為強權國家，龐大貿易逆差的B國對於A國將會產生影響力。 在這些研究問題與假說下，本文將以人民幣匯率作為研究個案，藉由個案探討去回答上述問題。所以，我們探討人民幣匯率與匯率體制是否受到國際政治壓力？其次是國際社會如何對人民幣施壓？第三是中國政府與決策者如何反應？第四是市場如何反應與考量國際壓力對匯率的影響？最後是提出初步研究結果與結論。 根據本文研究，針對本文研究問題，我們認為： 首先，國際政治因素對匯率體制與名目匯率有沒有影響？而根據研究結果，我們的答案是肯定的。不過這個肯定的答案必須建構在下面的假設上，第一是兩國必須處於貿易失衡的關係，同時貿易逆差國為一強權國家。其次是在假設一之下，政府對匯率政策的思維不只是考量國內經濟與國內政治，也考量國際政治壓力。 其次第二個問題是國際政治因素如何影響匯率體制與匯率水平的變化。根據研究顯示，國際政治影響匯率體制與匯率水平的方式包括：公開施壓、雙邊高層官員會談、國際會議聯合施壓、甚至貿易制裁手段。通常首先透過公開發言的方式對貿易順差國施壓，要求貿易順差國對於經貿失衡現象做出相應措施，其中以調整匯率為主要要求，其次進一步透過雙邊高層官員直接面對面討論相關議題，藉由談判過程直接施加壓力，第三，則是在國際會議場合中和其他國家聯手施壓，對於匯率議題表達一致的立場形成聯合壓力，去迫使貿易順差國調整匯率制度與水平。第四則是威脅貿易制裁，透過提案以及口頭威脅貿易制裁方式，加重施壓的力道，對貿易順差國進一步施壓，最後則是實施貿易制裁。 第三個研究問題是國際政治因素影響匯率體制與名目匯率變化的程度有多大？從中國人民幣的案例中，我們可以發現，中國一開始面對來自國際壓力時就強硬表示不會改變現行匯率體制與水平。其強調由於中國本身經濟發展狀況與國內金融體制不健全，在加上美國貿易赤字並非完全中國所造成的，所以目前並沒有改變的需要。 但隨著不斷增加的雙邊貿易逆差與國際壓力，中國雖然仍沒有改變中國匯率體制與水平，但也開始改變表示願意思考人民幣改革的可能性並將人民幣完全自由浮動，完全由市場供需來決定作為最後終極目標。甚至到最後出其不意的改變人民幣匯率體制並升值2.1％。這顯示在中國改革人民幣過程中，國際政治因素扮演重要的角色，發揮重要影響力。因為在堅持不變的理由中，中國始終以國內經濟因素與中國內部穩定的政治性理由來拒絕國際社會的要求，但在最後改革的說帖中，中國也承認國際壓力是其推動匯率改革的重要因素，可見除了國內經濟與政治面向的考量外，國際政治因素也是具有重大影響力。 / This paper discusses whether exchange rate regimes and exchange rate policies are affected by international politics, as well as how international politics affect exchange rate regimes and exchange rates. By examining these questions, I would like to analyze the mechanism by which international politics affect exchange rates and figure out the relationship among exchange rate regime, policies and international politics. This paper puts forth four hypotheses. First of all, exchange rate regimes and exchange rates are not only affected by domestic politics and economic factors, but they are also affected by international politics. Second, decisions regarding exchange rate policies made by governments are based on international politics, domestic politics and economic factors. Third, the behavior and expectations of market traders are also affected by macro economic index, domestic political situation and international political situation. Forth, under bilateral trade imbalance, state B which is a great power and has large trade deficit with state A has influence on state A. State A and State B have an imbalance trade relationship. State A which has a large trade surplus will increase dependence on state B. Under these hypotheses, the author would like to answer the above questions by discussing the case of the Chinese currency, the Renminbi (RMB). Hence, the case study will ask the following questions. First of all, was the Chinese currency reform made on July 21, 2005 by the Chinese government affected by international politics? Second, how did the international community press the Chinese government to reform exchange rate regime? Third, how did the Chinese government respond to pressures from the international community and market? Fourth, how did market traders respond to and interpret interactions between the Chinese government and the international community. The research achieved the following results. First of all, under hypotheses two and four, exchange rate regimes and policies are affected by international politics. Second, ways which international politics affect exchange rates and regimes are through public pressure, bilateral official talks, trade sanctions, and oral threats. Public pressure is when a state with trade deficit asks a state which has trade surplus to adjust the exchange rate to reduce trade surplus. Bilateral official talks are when decision makers on both sides negotiate with each other for imbalance trade relationship. Exchange rate is an important dimension to negotiation. Trade sanctions are the last step to make the state which has trade surplus adjust exchange rate. Oral threats can be uses with the above mentioned measures. Third, in the case of RMB, the Chinese government rejected the international community’s request to adjust exchange and regime. Because of the weakness of China’s economic development and its unhealthy financial systems, the Chinese government rejected adjustments of exchange rate and regime under pressure from international communities. The Chinese government does not think that the undervalue of Chinese currency is the main reason of U.S. trade deficit and emphasized that there is no need to change RMB exchange rate and regime. With increasing trade surplus and pressure from international community, the Chinese government started to change its attitude towards the issue of RMB exchange rate. The Chinese government expressed that it was willing to consider the possibility of exchange rate reform, and movement of RMB exchange rate was fully determined by market forces. On July 21, 2005, the Chinese government adjusted regime and level of Chinese currency unexpectedly. The reform on July 21, 2005 implied that international politics played an important role in the exchange rate reform. Although the Chinese government denied that exchange rate reform was made under international pressure, international pressure is one of the main reasons behind the Chinese government changing the exchange rate policy according to the U.S. official’s testimony before the committee of Congress. The Chinese government reiterated that reform on July 21, 2005 was carried out according to the development of domestic economic development. But because of that, U.S. officials expressed that Chinese officials made a commitment of reform to them in bilateral talks, so we can understand that the international community has influence on the policy of exchange rate reform in addition to factors of domestic economy and politics.

University of Macau / Faculty of Social Sciences and Humanities / Department of Government and Public Administration

The subject of this diploma thesis is the analysis of the importance and development of Chinese renminbi convertibility. The paper describes the development of the yuan exchange rate, whose value is still largely decided by the PBOC. It also seeks to identify the growing role of the renminbi on the international scene despite its financial account that is still not completely liberalized. Last but not least, the Chinese trilemma is described here, with the renminbi convertibility being an integral part of this issue. Once China decides to solve the trilemma, one of the possible outcomes is the full renminbi convertibility. The paper also tries to identify the possible impacts that would occur in the event of the full renminbi convertibility.

This thesis analyzes the current disputes between the United States and China over the exchange rate of the Chinese currency renminbi using an International Political Economy (IPE) analysis. Monetary relations are not mere economic affairs, but bear geopolitical implications. Money is power. Money is politics. The pursuit of monetary power is an important part of great power politics. Based on this assertion, the thesis studies past cases of monetary power struggles between the United States and the Great Britain, the Soviet Union, Japan, and the European Union (EU), respectively. The thesis then investigates the dollar’s status as the dominant international reserve currency in the current international monetary system, as well as the power that this unique status can generate and provide. The dollar’s monetary hegemony has become the main characteristic of the current international monetary system and an important power source for continued U.S. hegemony. The dollar’s hegemony and the asymmetrical interdependency between the dollar and the renminbi are the source and the key basis for the recent U.S.-China monetary disagreements. The U.S.-China monetary disputes reflect not only each country's respective domestic interests and perceived benefits, but also the monetary power struggle between the two biggest global economies. Predictions are also entertained for the future monetary relations between the two countries, as well as the geopolitical implications that this relationship may have for the U.S.-China bilateral relationship in coming decades.

2008年發生全球金融危機，造成各國經濟大幅衰退。中國大陸於2009年開始積極推動人民幣國際化，希望降低對外貿易與跨境資本流動對美元的依賴程度。中國大陸雖有龐大的境外人民幣資金池，但由於欠缺人民幣回流管道，因而人民幣資金至今仍無法雙向流動。因此，中國大陸於2014年11月17日推動滬港通試點，建立滬港股票交易互聯互通機制，試行中國大陸金融帳開放成效，以作為日後擴大試點開放政策的參考。 本研究結果發現，經由滬港通試點試辦，改革中國大陸資本市場，可避免對中國大陸金融市場造成重大影響，實現人民幣跨境計價及結算功能，並建構良好的人民幣回流機制。 / The world economy declines substantially, influenced by the global financial crisis in 2008. In order to reduce the dependence of cross-border fund flows and foreign trades on the US dollar, the mainland China reinforces its efforts in promoting the Renminbi (RMB) internationalization in 2009. But, due to the capital control, the free fund flows of the RMB are not feasible even if there is a massive RMB pool worldwide. In order for the liberalization of financial account, the mainland China built Shanghai - Hong Kong Stock Connect on November 17, 2014, as a reference of further expansion of the offshore use of the RMB in the future. This study shows that, reforms on China’s domestic capital market are crucial to avoid the significant impact of Shanghai - Hong Kong Stock Connect, as the openness of capital account, on the domestic financial markets. The financial reforms can also improve the cross-border settlement functions of the RMB to increase RMB denomination in trades, and reinforce the freer flows of the RMB.