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The Foreign Exchange Policy of China – Is the Country a “Currency Manipulator”?

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  • Zhelev, Paskal

Abstract

China’s exchange rate policy has been one of the most contentious economic issues in present times. The large open economy with a state-led development model has been often accused of deliberately keeping its currency undervalued, thereby conferring unfair competitive advantages to its exporters, and fuelling global imbalances. The experts’ opinions on that however are greatly divided. The paper’s main goal is to evaluate whether China has been manipulating the exchange rate of the RMB through its exchange rate policy over the last decade. Based on various indicators, the results show that there is no evidence of China engaging in currency manipulation to the detriment of its trading partners.

Suggested Citation

  • Zhelev, Paskal, 2022. "The Foreign Exchange Policy of China – Is the Country a “Currency Manipulator”?," MPRA Paper 116735, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116735
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    File URL: https://mpra.ub.uni-muenchen.de/116735/1/MPRA_paper_116735.pdf
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    References listed on IDEAS

    as
    1. C. Fred Bergsten & Joseph E. Gagnon, 2017. "Currency Conflict and Trade Policy: A New Strategy for the United States," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 7267, April.
    2. Maurice Obstfeld & Kenneth S. Rogoff, 2009. "Global imbalances and the financial crisis: products of common causes," Proceedings, Federal Reserve Bank of San Francisco, issue Oct, pages 131-172.
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    More about this item

    Keywords

    Renminbi (RMB); undervalued exchange rate; currency manipulation; foreign exchange reform.;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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