Abstract
A cheap currency helps boost both exports and investment. The more renminbi foreigners can purchase with their currency, the cheaper China’s exports will seem to them, and the more they will buy. This increases the output and profits of Chinese exporters, leading to growth and stimulating more investment. Along with low interest rates and government guarantees, a cheap currency has been a key contributor to China’s rapid growth.
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Reference
IMF. (2012). The liberalization and management of capital flows – An institutional view. IMF.
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Armstrong-Taylor, P. (2016). International Distortions. In: Debt and Distortion. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-53401-9_5
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DOI: https://doi.org/10.1057/978-1-137-53401-9_5
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Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-53400-2
Online ISBN: 978-1-137-53401-9
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