Firstly, I am heartily thankful to my supervisor, Maguire Alison, whose encouragement, supervision and support from the preliminary to the concluding level enabled me to develop an understanding of the subject. Without her guidance and persistent help this dissertation would not have been possible.
I would also like to thank my parents who were always supporting me and encouraging me with their best wishes. I would also like to express my deepest gratitude to my wife, Weidong Sun. She was always there cheering me up and stood by me through the good times and bad.
I also would like to make a special reference to Mr. Xie Junhong, my boss who provided me every convenience when I engaged in my dissertation.
Finally, I offer my regards and blessings to all of those who supported me in any respect during the completion of the dissertation.
Contents:
Executive summary II
Acknowledgement III
Contents: IV
List of charts: VI
Abbreviations: VII
Chapter 1: Introduction 8
Chapter 2: Literature review 12
2.1 The exchange rate and exchange rate regime 12
2.1.1 The exchange rate 12
2.1.2 Exchange rate regime 12
2.2 The exchange rate determination theory 14
2.2.1 Purchasing power parity (PPP) theory 14
2.2.2 The Mundell-Fleming model 15
2.3 The impossible triangle and rate regime choices 15
