China will eventually be in a position where floating would not only be desired, but would become necessary. China will become too wealthy, too developed, to avoid floating. She will stop net accumulating foreign currency reserves, and will probably begin to run current account deficits. She will gradually relax capital controls. She might never go full-bore Western-style “free market”, but she will find it to her advantage to float in order to preserve domestic policy space. If she did not, she could look forward to a quasi-colonial status, subordinate to the reserve currency issuer. China
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China
