All documents from essays.org are for research assistance purpose only. Do not present the material as your own work!
bookmark & share the essay...
How appreciation Chinese currency affect the export market
The research seeks to understand the effect of the China’s currency on other macroeconomic factors. This is important since there factors form the basis of international trade and exports. In addition, the appreciation of the currency might bring about inflation the effects of which also need to be analyzed.
|language || ||english
|wordcount || ||5398 (cca 15 pages)
|contextual quality || ||N/A
|language level || ||N/A
|price || ||free
|sources || ||17
Table of contents
Chapter 1 Introduction 3
Research Question 3
Other Objectives 4
Outline of the present research 4
Chapter 2 Background 5
Chinese exchange rate policy till 2005 5
Chinese exchange rate reform in 2005 6
Government economic policy for managing the exchange rate 7
China\'s recent exchange situation 8
Chapter 3 Economic theory 10
Central bank monetary policy options 10
The Bank of China gaining more independence regarding monetary policy 12
Chapter 4 Literature Review 14
Study of exchange rate issue 14
Ways to rectify exchange rate issues 16
Chapter 5 Analysis 17
Trade-off of China\'s exchange rate with other macroeconomic variables 17
Association between inflation and other macroeconomic variables 18
Chapter 6 Conclusions 21
List of References 23
Preview of the essay: How appreciation Chinese currency affect the export market
The Chinese government has long maintained that the Yuan is not ready to float until its foreign exchange and financial markets are ready to manage the potentially large swings of portfolio flows. However the international community does not agree with this and blames China’s monetary policy for the huge trade imbalances. Despite the fact that China deliberately, thug under pressure, shifted from a fixed to a controlled floating currency regime, many countries chiefly the United States and some countries in the European Union do not think that the measures taken by Chinese government is enough and still consider the currency to be grossly under valued. This is one of the hottest topics of debate in the international finance. The present study analyzes the impact of the Chinese currency exchange rate, chiefly its appreciation, on the international trade.
China’s currency regime and its monetary policy along with exchange rate policy is one of the most important issues in international finance. While many countries argue that China must not be so restrictive towards its currency policy, most economists also agree that its is unwise for countries like China, where foreign exchange ...
... ignored is the pressure of appreciation of the RMB. Granted that many economists do not believe that this is the cause of the world problems, yet a tighter monetary policy as well as higher interest rates may naturally lead to such a pressure. Inflationary pressures in China continue to remain acute despite the measures taken so far to contain them. In fact PBOC repeated increase in policy rates is a cause for concern even though the rates still remain at low levels. Even though the government has tried to curb the domestic demand growth, the inflation measured by the consumer price index still remains at6.25 percent.
Hence, looking at all the reasons above, it is fair to assume that China would be forced to let its exchange rate appreciate more rapidly in effective terms and that such as appreciation would be a favorable condition for the country itself, even if the interest of the rest of the world are not considered.
Essay is in categories
I like the style of presentation of this essay. It has what it takes to discuss adequately the given topic.