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China's exchange rate reform and exports.

Zhang, Z. (2001) 'China's exchange rate reform and exports.', Economics of planning., 34 (1-2). pp. 89-112.

Abstract

The paper argues that exchange rate reform is a vital supply-side factor in China's export growth. It contributes to China's export expansion by affording a realistic exchange rate and allowing freer access to foreign exchange, thereby leading to the reduction of anti-export bias and strong supply response. In an imperfect substitutes model, China's long-run export supply and demand functions are estimated in a system context. Evidence is found that the exchange rate reform is one of the most influential factors in China's long-run export expansion, inducing significant response of exports supply. In the short-run, the exchange rate reform and the export volume are also cross-linked through the error-correction process. China's exchange rate policy adjusts speedily to ensure the long-run equilibrium of the supply-side relationship and is likely to have played a dominant role in the adjustment. The study confirms, thanks to the exchange rate reform, China's exchange rate policy has benefited China's remarkable growth of exports before 1994.

Item Type:Article
Keywords:Economic reform, Exchange rate policy, Exports, Cointegration analysis.
Full text:Full text not available from this repository.
Publisher Web site:http://dx.doi.org/10.1023/A:1017549828555
Record Created:22 Mar 2007
Last Modified:19 Mar 2010 15:35

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