EFTA Document EFTA01459585

15 January 2016 Global Economic Perspectives: China's evolving FX policy Our colleagues Zhiwei Zhang and Li Zeng recently offered at least a partial explanation. We have for years emphasized that one needs to consider Asian exports from the perspective of regional production networks. An emerging literature demonstrates that exchange rate elasticities for exports are lower the more integrated countries are in supply chains. Zhiwei and Li re-calculated China's real effective exchange rate