PERSPECTIVE China's exchange rate policy and fiscal expansion

Purpose - The purpose of this paper is to present an overview of China's exchange rate policy and fiscal expansion. Design/methodology/approach - This paper is a reprint of a Financial Times online forum contribution dated 10 February 2009. Findings - The paper finds that there is a good economic rationale for China's wanting to keep the yuan/dollar rate stable. Originality/value - This "perspective'' piece written by a Professor of Economics is brought to a wider readership via its inclusion in Journal of Chinese Economic and Foreign Trade Studies.