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

Author(s): Paskal Zhelev
Subject(s): Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, International relations/trade
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: renminbi (RMB); undervalued exchange rate; currency manipulation; foreign exchange reform
Summary/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 advantagesto 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 manipulatingthe 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.

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