Yuan Real Exchange Rate Undervaluation, 1997-2006. How Much, How Often? Not Much, Not Often

Yuan real effective exchange rate misalignment is esitimated in a behavioral equilibrium exchange rate (BEER) model for the period 1997 to third quarter 2007. Using the Beveridge-Nelson decomposition a vector error correction model (VECM) of the exchange rate as a function of macroeconomic fundamentals, including government expenditures, economic openness, the balance of trade surplus, and net foreign assets, is estimated. We find that the Chinese Yuan has been fluctuating moderately around its long run equilibrium value with undervaluation up to 4% and overvaluation up to 6% at various points in time since 1997. This result is consistent with findings of many of the most recent studies employing alternative econometric methodologies to determine the equilibrium exchange rate. While the Yuan real effective exchange rate has deviated from equilibrium, and it is sticky, taking over five years to correct 50% of the short run misalignment, it does not appear to have been consistently undervalued as has been widely argued.

Source: Yuan Real Exchange Rate Undervaluation, 1997-2006. How Much, How Often? Not Much, Not Often

China’s Policies and Actions for Addressing Climate Change (2008)

A responsible developing country, China sets great store by climate change issues.Fully aware of the importance and urgency of addressing climate change, followingthe requirements of the Scientific Out-look on Development, and taking into overallconsideration of both economic development and ecological construction, domesticsituation and international situation, and present and future, China has formulated andimplemented a national plan for coping with climate change, and adopted a series ofpolicies and measures in this regard.

Source: (Microsoft Word – 2008.10.30.White Paper \255 China’s Policies & Actions for Addressing Climate Change _English_.doc) – China_Climate_Change_Policies_Actions_English.pdf

NB: How much of this was real, and how much of it was so much posturing? We can now look back and evaluate.

Financing Energy Efficiency in China

Removing barriers to clean energy investment in China may contribute more to climate protection than any global climate treaty. The incentives and rules of such a treaty will be blunted and frustrated by distortions of the world’s largest potential clean energy marketplace unless policy makers recognize and deal with the realities of that market.This paper describes problem areas and suggests policy adjustments for domestic and international cooperation to reduce the growth of greenhouse gas emissions in China.

Source: 3103book.p65 – chandler_clean_energy_final.pdf

 

Chinese Corporate Governance: History and Institutional Framework

Yong Kang, Lu Shi, and Elizabeth D. Brown review the history of Chinese corporate governance; discuss eight pillars that make up the institutional framework for Chinese corporate governance; and identify problems associated with Chinese corporate governance, their policy implications, and areas for further research.

Source: Chinese Corporate Governance: History and Institutional Framework | RAND