Fallacies underlie yuan devaluation debate

Article Abstract:

The reasons given for devaluing the Chinese yuan, which seem compelling at first glance, can be easily debunked upon closer inspection. An impending economic crisis brought about by increasing savings, a slowdown of economic growth and a weakening of the domestic demand, can only be true if exports are assumed to be an engine of China's growth. However, exports have been contributing only 4.5% to the nation's gross domestic product and in 1998 even failed to make any growth contribution.

China, Government regulation, Analysis, Economic aspects, Exports, Currency devaluation, Devaluation (Currency)

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Rate cut shows Beijing's concern over state-run firms

Article Abstract:

The People's Bank of China's difficult decision to reduce interest rates in China is effective of central bankers' concern over the problems suffered by state-owned firms, such as high debt positions. The move shows Chinese technocrats' greater concern over the more imminent collapse of state-owned enterprises in the country. China's reduction of interest rates, however, can result to risks such as the destabilization of exchange rates and of the banking system, as well as inflation.

Interest Rates, Management, Inflation (Finance), Inflation (Economics)

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Central Bank governor confirms China will ease monetary policy by summer

Article Abstract:

People's Bank of China Gov. Dai Xianglong has announced that the government plans to relax its policy on credit by the middle of 1996. Moreover, Dai stated that credit for the agricultural sector will be expanded by some 30%. The announcement came after repeated denials of any planned relaxation in the country's monetary policies. Economic experts interpret this development as a sign that Chinese economic growth may finally be bottoming out.

Planning, Economic policy, Central banks, People's Bank of China

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