In 2005 the Chinese broke the absolute peg with the dollar which was at 8.28 yuan per dollar. But they made it so the Yuan could only move .1% up or down each trading day. Then later they made it so the Yuan could move .3% up or down each day. And they may have made an additional loosening of controls since then.
I like how China gradually makes changes, ending at the eventual goal.. without one chaotic leap with disastrous impact.
“I like how China gradually makes changes, ending at the eventual goal.. without one chaotic leap with disastrous impact.”
A freedom of movement much easier when your every fiscal move doesn’t prompt harmful-to-you hysteria.
Mao's Cultural Revolution showed them that big changes, even popular ones that sound good, can be traumatic if the occur too quickly. That's how the CCP can get away with promising slow advances for social freedoms... and even then, only after the economic freedoms have been "sufficiently advanced". In reality, this means the obvious: that the CCP will allow those freeedoms only when the population screams for them and the CCP is actually threatened... and while everyone is either enjoying the new wealth or trying to get in on the action, they aren't likely to complain too much about free speech (etc) that they've never known anyway.
Exactly. I can see the higher prices right now (I'm in Shanghai at the moment), and inflation is higher than in the US. However, their economy is growing even faster.
A GDP growth of 3% with a 2% inflation rate is much worse than a GDP growth of 10% with a 5% inflation rate.
China's economy is nearly as free-market as the US at this point, and you see a lot of pressures to open up the other aspects of life. China's opened Pandora's box of capitalism, and right now I get the feeling the leaders here aren't so much fighting the loss of a communist society as trying to manage the change to a socialist (think Germany or France style) government with the least harm to the country.
The Chinese, for anything else, are highly pragmatic people. The writing's on the wall that a free market and open society are the only ways they will grow in terms of international power and position, and so the problem is how to transition there with the least disruption to the day-to-day realities.
TIC - This Is China.