How China can resist devaluation pressure

For China's economy, the most appropriate exchange rate regime is a free floating one

In July 2005, the People’s Bank of China announced it was implementing a managed floating exchange rate system based on market principles and with reference to a basket of currencies.

Between end-June 2005 and end-July 2015, the renminbi’s (RMB’s) exchange rate against the dollar rose to 6.12 from the previous 8.28, appreciating by about 26 per cent. The RMB’s nominal effective exchange rate (NEER) and real effective exchange rate (REER) indices appreciated by 48 per cent and 57 per cent respectively over the same period.

That the appreciation of the REER of the RMB exceeded its NEER indicates that the