Law Commons^™

China's Gatt Bid: Why All The Fuss About Currency Controls, Chris Brown

Washington International Law Journal

China did not succeed in its bid to join the General Agreement on Tariffs and Trade (GATT) during the Uruguay Round. A key stumbling block was China's mechanism of exchange rate controls. From the mid-1980s to the end of 1993, China used a dual-rate currency mechanism, administering these rates through a loose network of about 100 exchange centers ("swap centers"). The swap centers helped to create partial convertibility of the Chinese currency and were instrumental in creating incentives for China's exporters and in attracting foreign investment. However, the swap centers also caused trade conflicts with the U.S. and within GATT. …