Chinese Monetary Policy as Foreign Policy

Paper Summary:

This paper discusses China's economic policies. It focuses on its monetary policies and the use of its artificial control over its exchange rate as an unofficial brief of its foreign policy. It shows how China uses its monetary policy internationally to improve its positions on trade, foreign relations, and bilateral agreements with various countries.

Table of Contents:
Abstract
Overview
Chinese Monetary Policy
Foreign Investment as Policy
Foreign Trade
Conclusions

From the Paper:

"For many years the Chinese Yuan was pegged to the U.S. dollar and, until recently, this was not a foreign policy issue. However, as the U.S. as well as other markets, have seen their import markets grow far beyond their export markets and consequently maintain extreme trade deficits, the artificial manipulation of the Yuan has now become a matter of foreign policy. Many foreign markets view China's exchange regime, managed float or not, to be an economic weapon and one in which it has not been reticent to utilize."

Sample of Sources Used:

• Barnathan, J. (2005). China steps onto the global stage. Business Week Online 12 Apr. 2005 1+.
• Bernstein, A. (2004). Shaking up trade theory. Business Week, 12/6(3911), p.116.
• Bora, B. (Ed.). (2002). Foreign Direct Investment: Research Issues. London: Routledge
• Chinn, M. and Meredith, G. (2004). Monetary policy and long-horizon uncovered interest parity. IMF Staff Papers 51.3, 409+.
• Debus, K. (2005). China is cheating. The Enterprise Feb. 14-20.

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• Term Paper # 99956 : "Chinese Currency Policy"

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