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Effectiveness of China's Monetary Policy and Reform of Its Foreign Exchange System
Author(s) -
Gu Xinhua,
Zhang Lan
Publication year - 2006
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2006.00039.x
Subject(s) - overheating (electricity) , china , economics , monetary policy , speculation , foreign capital , sterilization (economics) , foreign exchange , monetary economics , foreign exchange market , international economics , exchange rate , capital account , foreign exchange reserves , economic policy , macroeconomics , foreign direct investment , political science , quantum mechanics , physics , law
This paper examines the effectiveness of China's monetary policy in curbing the overheating and speculation problems under the current foreign exchange system. The paper stresses the necessity of capital controls in China's gradual foreign exchange reform and the importance of credible government policy in guiding market expectations. Also, the paper discusses the persistence of China's external imbalance, and provides policy recommendations for its reduction. (Edited by Zhinan Zhang)