In this paper, we establish a turning point chronology for the Chinese provincial deviation cycles during the period 1989–2009. The existing work has exclusively focused on the national business cycle.

Pegging in a coordinated way to a regional basket currency is considered by many as optimal for east-Asian countries. By contrast, according to existing empirical studies, these countries have most often relied on noncooperative United States dollar or G3 pegs. We show for the first time that by...