More than two and a half years have passed since China announced a number of changes to its
foreign exchange regime in July 2005. During this period, the debate on the pros and cons of
China's exchange rate policy, which had begun in earnest several years earlier, intensified.
This important new book, based on an Institute conference in October 2007, takes stock of exchange
rate policy in China and identifies the major policy options going forward. Specific proposals presented in
the volume address how best to eliminate any misalignment of the renminbi; how best to reduce pressures
emanating from the sterilization of large reserve accumulation; how best to make capital flows the
ally—not the enemy—of exchange rate policy; and what institutional arrangements and policy guidelines
to put in place to reap the greatest benefits from management of China's large foreign exchange reserves.
Leading experts—including three from China—have contributed to the volume. The keynote address by
Wu Xiaoling, deputy governor to the People's Bank of China at the time of the conference, is also presented in the book.
Larry Summers, Jeffrey Frankel, and Ken Rogoff, Harvard University; Simon Johnson and Steve Dunaway, International Monetary Fund; Mohamed El-Erian, Harvard Management Company; William R. Cline, Gary Clyde Hufbauer, Michael Mussa, Edwin M. Truman, and John Williamson, Peterson Institute; Barry Bosworth, Brookings Institution; Takatoshi Ito, University of Tokyo; Stephen Roach, Morgan Stanley; Fan Gang and Jin Zhongxia, People's Bank of China; Eswar Prasad, Cornell University; Shang-Jin Wei, Columbia University; Bert Hofman and Louis Kuijs, World Bank; Yung Chul Park, Seoul University; Jean Pisani-Ferry, Bruegel; Timothy Adams, Lindsey Group; and Brad Setser, Council on Foreign Relations.
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Chapters are provided for preview only.
1. China's Exchange Rate Policy: An Overview of Some Key Issues [pdf]
Morris Goldstein and Nicholas R. Lardy
2. Monetary Policy Independence, the Currency Regime, and the Capital Account in China
Eswar S. Prasad
3. Rebalancing China's Growth
Bert Hofman and Louis Kuijs
4. Estimates of the Equilibrium Exchange Rate of the Renminbi: Is There a Consensus and If Not, Why Not? [pdf]
William R. Cline and John Williamson
5. The Management of China's International Reserves: China and a Sovereign Wealth Fund Scoreboard
Edwin M. Truman
6. The US Congress and the Chinese Renminbi
Gary Clyde Hufbauer and Claire Brunel
7. Influence of the Renminbi on Exchange Rate Policies of Other Asian Currencies
8. IMF Surveillance over China's Exchange Rate Policy [pdf]
Andrew Crockett, Fan Gang, C. Fred Bergsten, and Lawrence H. Summers
Keynote Address: China's Exchange Rate Policy and Economic Restructuring
About the Contributors