至2005年，人民币兑美元汇率为8.28元。为了保持人民币钉住美元的水平，中国央行必须向人民币提供人民币和外汇市场的需求美元。这种钉住制度为美国市场造成了一个严重的问题，因为美国生产商必须与中国的廉价产品，由于被低估的人民币。为了防止在美国市场，27.5%的关税是宣布对中国进口到中国调整人民币的价值。
2005年七月，中国宣布，它将在走向浮动汇率。按照这项新政策，它仍然在干预外汇市场，以防止汇率突然的动作，但它也允许渐进的变化。这一措施三年来人民币兑美元升值20%。
China has a fixed currency system which is also known as pegged currency system. In this type of currency system, the value of currency is fixed to the value of another currency or basket of currencies.
Till 2005, Renminbi was pegged against US dollar at 8.28 Renminbi/USD. To keep the Renminbi at pegged level, Chinese central bank had to supply Renminbi and demand dollars in foreign-exchange markets. This pegged system created a severe problem for US markets as US producers have to compete with Chinese cheap products due to undervalued Renminbi. To prevent this in US markets, a tariff of 27.5 percent was announced on Chinese imports until China adjusted the value of its currency.
In July 2005, China announced that it would move in the direction of a floating exchange rate. As per this new policy, it still intervenes in foreign-exchange markets to prevent large and sudden movements in the exchange rate, but it also permits gradual changes. This measure resulted in 20% appreciation of Renminbi against USD in three years.
Since mid-2008, Renminbi barely moved against the Dollar as Chinese exporter's sales overseas had dropped sharply because of the global economic downturn. It was almost certain that Chinese central bank returned to the policy of controlled exchange rate.
Objective: To know the reasons why China is keeping the currency stable and its relative consequences both visible and invisible.
Research 研究
Why did China resort to undervaluation?
为什么中国采取低估？
Export driven employment 出口带动就业
FDI generated employment 外商直接投资产生就业
Devaluating currency also attracts many foreign investors which strengthens the foreign reserves and generates more employment in China. In fact, almost 60 percent of Chinese exports to the United States are produced by firms owned by foreign companies, many of them American. These firms have moved operations overseas in response to competitive pressures to lower production costs and thereby offer better prices to consumers and higher returns to shareholders. The implication is that foreigners who invest in productive facilities in China are doing so solely because of cheap labor and cheap currency evident from graph moving up in the starting of 2009.
Migration 迁移
On top of the existing 103 million urban migrants, Chinese cities will face an influx of another 243 million migrants by 2025, taking the urban population up to nearly 1 billion people. In the medium and large cities, about half the population will be migrants, which is almost three times the current level. This adds to employment woes.
Oversupply: 供大于求：
China's economic statistics are based on recorded production activity, rather than being a measure of expenditure growth. As a result of stimulus the SOEs capital intensiveness made them produce huge amount of goods which added to the GDP but people savings were high. Thus consumption lagged behind production. The idle stock lying unsold can only be tackled by way of increasing exports.
