Y. Y. Kueh
- Published in print:
- 2012
- Published Online:
- May 2013
- ISBN:
- 9789888083824
- eISBN:
- 9789888180158
- Item type:
- chapter
- Publisher:
- Hong Kong University Press
- DOI:
- 10.5790/hongkong/9789888083824.003.0009
- Subject:
- History, Political History
This chapter aims at studying the interplay between the so-called “China factor” and the dollar peg in Hong Kong in the run up to the 1997 handover, through the Asian financial crisis and beyond. It ...
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This chapter aims at studying the interplay between the so-called “China factor” and the dollar peg in Hong Kong in the run up to the 1997 handover, through the Asian financial crisis and beyond. It begins by describing the general changes in the economy following the adoption of the peg, and the factors precipitating the complete migration of Hong Kong's manufacturing industries across the border to China. This is followed by a detailed analysis of how the manufacturers’ exodus helped to expand the economic base of Hong Kong's export industries on the one hand, while keeping Hong Kong's exports internationally competitive on the other, despite a bout of accelerated domestic inflation caused by the peg before 1997/1998. This chapter concludes that despite the increased integration of the Hong Kong and mainland China economies, the likelihood of the Hong Kong dollar being de-pegged from the US dollar and re-pegged to the Chinese currency is yet remote.Less
This chapter aims at studying the interplay between the so-called “China factor” and the dollar peg in Hong Kong in the run up to the 1997 handover, through the Asian financial crisis and beyond. It begins by describing the general changes in the economy following the adoption of the peg, and the factors precipitating the complete migration of Hong Kong's manufacturing industries across the border to China. This is followed by a detailed analysis of how the manufacturers’ exodus helped to expand the economic base of Hong Kong's export industries on the one hand, while keeping Hong Kong's exports internationally competitive on the other, despite a bout of accelerated domestic inflation caused by the peg before 1997/1998. This chapter concludes that despite the increased integration of the Hong Kong and mainland China economies, the likelihood of the Hong Kong dollar being de-pegged from the US dollar and re-pegged to the Chinese currency is yet remote.
Eswar S. Prasad
- Published in print:
- 2016
- Published Online:
- October 2016
- ISBN:
- 9780190631055
- eISBN:
- 9780190631086
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190631055.003.0004
- Subject:
- Economics and Finance, International
This chapter describes the evolution of China’s exchange rate policy. The RMB was pegged to the U.S. dollar from 1994 until 2005. Since then, the RMB has in principle been allowed to float in ...
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This chapter describes the evolution of China’s exchange rate policy. The RMB was pegged to the U.S. dollar from 1994 until 2005. Since then, the RMB has in principle been allowed to float in response to market forces but in practice still remains tightly managed relative to the dollar. This chapter documents the stages in which the RMB’s exchange rate has been made more flexible, although China’s central bank continues to this day to intervene in foreign exchange markets to prevent sharp movements in the currency’s value. The chapter shows how China’s exchange rate policy has become a matter of contention in U.S.-China relations. The chapter describes the PBC’s attempts to reform and increase the flexibility of the exchange rate, and how this has had certain unintended consequences.Less
This chapter describes the evolution of China’s exchange rate policy. The RMB was pegged to the U.S. dollar from 1994 until 2005. Since then, the RMB has in principle been allowed to float in response to market forces but in practice still remains tightly managed relative to the dollar. This chapter documents the stages in which the RMB’s exchange rate has been made more flexible, although China’s central bank continues to this day to intervene in foreign exchange markets to prevent sharp movements in the currency’s value. The chapter shows how China’s exchange rate policy has become a matter of contention in U.S.-China relations. The chapter describes the PBC’s attempts to reform and increase the flexibility of the exchange rate, and how this has had certain unintended consequences.
Navin A. Bapat
- Published in print:
- 2020
- Published Online:
- April 2020
- ISBN:
- 9780190061456
- eISBN:
- 9780190061494
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190061456.001.0001
- Subject:
- Political Science, International Relations and Politics
This study argues that the war on terror can be explained as an effort to cement the U.S. dollar as the world’s foremost reserve currency by expanding American control over the global energy markets. ...
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This study argues that the war on terror can be explained as an effort to cement the U.S. dollar as the world’s foremost reserve currency by expanding American control over the global energy markets. Since the 1970s, the states of OPEC agreed to denominate their oil sales in U.S. dollars in exchange for American military protection. The 9/11 attacks gave the U.S. cover to eliminate current challengers to this system while simultaneously striking new security agreements with host states throughout the Middle East, Africa, and central Asia that are critical to the extraction, sale, and transportation of energy to global markets. However, the U.S. security guarantee soon created a moral hazard problem. Since the host states had American protection, they were free to engage in corrupt behaviors—while labeling their political opponents as terrorists. To make matters worse, these states had incentives to keep terrorists in their territory, given that doing so would force the U.S. to protect them indefinitely. As a result of this moral hazard problem, terrorists in the host states gradually grew in power and transitioned to insurgencies, which caused a rapid escalation in violence. Facing the increasing cost of securing the host states, the U.S. was forced to scale back its security guarantee, which in turn contributed to greater violence in the energy market. Although the U.S. began the war to maintain its economic dominance, it now finds itself locked into a seemingly permanent war for its economic security.Less
This study argues that the war on terror can be explained as an effort to cement the U.S. dollar as the world’s foremost reserve currency by expanding American control over the global energy markets. Since the 1970s, the states of OPEC agreed to denominate their oil sales in U.S. dollars in exchange for American military protection. The 9/11 attacks gave the U.S. cover to eliminate current challengers to this system while simultaneously striking new security agreements with host states throughout the Middle East, Africa, and central Asia that are critical to the extraction, sale, and transportation of energy to global markets. However, the U.S. security guarantee soon created a moral hazard problem. Since the host states had American protection, they were free to engage in corrupt behaviors—while labeling their political opponents as terrorists. To make matters worse, these states had incentives to keep terrorists in their territory, given that doing so would force the U.S. to protect them indefinitely. As a result of this moral hazard problem, terrorists in the host states gradually grew in power and transitioned to insurgencies, which caused a rapid escalation in violence. Facing the increasing cost of securing the host states, the U.S. was forced to scale back its security guarantee, which in turn contributed to greater violence in the energy market. Although the U.S. began the war to maintain its economic dominance, it now finds itself locked into a seemingly permanent war for its economic security.
