China would prosper from currency appreciation

China would benefit from moving to a flexible exchange rate regime and allowing the People's Bank of China greater independence to control inflation, research published by the Bank of Canada indicates.

The research, which involves a review of the latest literature on the subject of the renminbi's revaluation, also finds that the transition phase between a fixed and floating exchange rate would be best handled by using a managed float to limit volatility as firms adapt to the new system. Shock

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