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The number of studies attempting to estimate the "equilibrium" real value of China's currency has proliferated in recent years as the country's presence in world markets has grown. These studies have sought to establish whether or not a significant part of China's competitive prowess can be attributed to the foreign exchange value of the renminbi. Unfortunately, no consensus has emerged because the studies yield a very wide range of estimates. The paper looks at a sample of these studies, with estimates of undervaluation ranging from zero to nearly 50 percent. It attributes the wide variation in these estimates to the influence of such factors as the different methodologies used, explanatory variables included, subjective judgments of the various researchers in deriving their results, and instability in underlying economic relationships, especially in a rapidly developing economy like China.

Electronic books. -- local. --- Foreign exchange rates -- China. --- Purchasing power purity. --- Exports and Imports --- Foreign Exchange --- Current Account Adjustment --- Short-term Capital Movements --- Currency --- Foreign exchange --- International economics --- Real exchange rates --- Purchasing power parity --- Exchange rates --- Current account balance --- Exchange rate adjustments --- Balance of payments --- China, People's Republic of --- Foreign exchange rates

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Increased attention is being paid to assessments of the actual values of countries' real exchange rates relative to their "equilibrium" values as suggested by "fundamental" determining factors. This paper assesses the robustness of alternative approaches and models commonly used to derive equilibrium real exchange rate estimates. Using China's currency to illustrate this analysis, the variance in estimates raises serious questions regarding how robust the results are. The basic conclusion from the tests used here is that, at least for China, small changes in model specifications, explanatory variable definitions, and time periods used in estimation can lead to very substantial differences in equilibrium real exchange rate estimates. Thus, such estimates should be treated with great caution.

Electronic books. -- local. --- Foreign exchange -- China. --- Foreign exchange rates -- China -- Mathematical models. --- Foreign exchange rates --- Foreign exchange --- Mathematical models. --- Cambistry --- Currency exchange --- Exchange, Foreign --- Foreign currency --- Foreign exchange problem --- Foreign money --- Forex --- FX (Finance) --- International exchange --- Exchange rates --- Fixed exchange rates --- Flexible exchange rates --- Floating exchange rates --- Fluctuating exchange rates --- Rates of exchange --- Rates --- International finance --- Currency crises --- Exports and Imports --- Foreign Exchange --- Current Account Adjustment --- Short-term Capital Movements --- Currency --- International economics --- Real exchange rates --- Real effective exchange rates --- Current account balance --- Purchasing power parity --- Balance of payments --- China, People's Republic of

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This 2009 Article IV Consultation highlights that Hong Kong Special Administrative Region’s economy was severely affected by the global financial crisis. The recovery is now under way, fueled by growth on the Mainland, supportive policies, and accommodative monetary conditions imported from the United States. Despite the steepness of the downturn in early 2009, job losses have been relatively modest and unemployment now stands at 5.2 percent. Executive Directors have welcomed the robustness of the Hong Kong banking system, the result of banks’ careful risk management, and the authorities’ vigilant, prudent regulation and enforcement.

Financial crises -- China -- Hong Kong. --- Fiscal policy -- China -- Hong Kong. --- Foreign exchange rates -- China -- Hong Kong. --- International monetary fund -- China -- Hong Kong. --- Banks and Banking --- Financial Risk Management --- Labor --- Macroeconomics --- Statistics --- Money and Monetary Policy --- Foreign Exchange --- Inflation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Wages, Compensation, and Labor Costs: Public Policy --- Data Collection and Data Estimation Methodology --- Computer Programs: Other --- Price Level --- Deflation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Current Account Adjustment --- Short-term Capital Movements --- Econometrics & economic statistics --- Banking --- Labour --- income economics --- Economic & financial crises & disasters --- Monetary economics --- Currency --- Foreign exchange --- Deposit insurance --- Real exchange rates --- Minimum wages --- Asset prices --- Prices --- Credit --- Money --- Banks and banking --- Crisis management --- Minimum wage --- Balance of payments --- Hong Kong Special Administrative Region, People's Republic of China