【毕业论文】The Influence of the RMB on Exchange Rate Policy in Other Economies”.pdf

“The Influence of the RMB on Exchange Rate Policy in Other Economies” Takatoshi Ito University of Tokyo October 19, 2007 Washington DC Prepared for Peterson Institute for International Economics Conference China’s Exchange Rate Policy 1. Introduction The East Asian countries, most notably China, are often collectively described as a region that manages, if not manipulates, the exchange rate toward undervaluation, achieves large current account surpluses, and accumulates foreign reserves. Indeed the East Asian region, as well as oil producing nations, is on the surplus side in the accounting of global imbalances. However, unlike the first impression, the exchange rate regimes of East Asian countries are diverse and uncoordinated. A lack of coordination prevents, rather than help, global exchange rate adjustment that is essential to resolve global imbalances.1 Countries that trade with China and compete with China in exports to the third market are keen not to allow too much appreciation of own currencies vis-à-vis the Chinese RMB. When China is allowing its currency to appreciate only very gradually, the neighboring countries will not allow sharp appreciation of their own currencies. 1 See Blanchard, Giavazzi, and Sa (2005) and Obstfeld and Rogoff (2005) for standard references for global imbalances and the necessity of exchange rate adjustment. 1 Currently, countries under the managed exchange rate regime, such as Korea, Singapore, and Thailand, tend to keep the trade-weighted exchange rate stable—rather than the dollar peg. As the weights of China in exports and imports have increased in these countries, the influence of Chinese exchange rate policy on these currencies is considere