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The Operation and Characteristics of the Fixed Exchange Rate System in Modern China(1935.11-1938)

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DOI: 10.25236/icssae.2019.095


Hongmei Li

Corresponding Author

Hongmei Li


Starting from the introduction of Legal currency in November 1935 and ending of the beginning of foreign exchange control in March 1938, this paper studies the operation and characteristics of China's exchange rate regime in this time framed by combining historical narrative and economic analysis. The introduction of Legal currency marked the beginning of the fixed exchange rate system in China. During the outbreak of the Sino-Japanese War in July 1937, the Chinese government maintained the fixed exchange rate system by some means, but all of them took "unrestricted foreign exchange trading" as the core measure, which ensured that the foreign exchange rate of Legal currency was very stable and undervalued.


Modern China; Fixed exchange rate; Legal currency; Unrestricted trading