Hong Kong Institute for the Humanities and Social Sciences, The University of Hong Kong

A managed foreign exchange regime has been integral to the Chinese economy since 1949, but how did it come about? In this talk, I discuss its gradual formation from the Communist victory in 1948 – 49 to the first Canton Fair in 1957. While influenced by Soviet institutional models, the foreign exchange regime in early PRC era was built on an export- and remittance-oriented economy that only partially aligns with the new government’s geo-economic orientations. I trace the confluence of Yan’an-era and Nationalist techniques of reserve margin management on this era, and stress two previously under-discussed features — one, the impact of US-led embargo on official thinking on foreign exchange; and two, that we need to view and compare the Chinese experience as part of a global management of “hard” currency in the post-war era.