Summary of key points: A fixed exchange rate and a flexible exchange rate each have its own advantages. A country should have the right to choose the regime best suited to its circumstances. Nevertheless, the de facto dollar peg may now have outlived its usefulness for China. China's economy has...

Fixed and flexible exchange rates each have advantages, and a country has the right to choose the regime suited to its circumstances. Nevertheless, several arguments support the view that the de facto dollar peg may now have outlived its usefulness for China. (1) China's economy is on the...