Proposed Exchange Rates That The Participants From Japan, Europe, And China

PROPOSED EXCHANGE RATES THAT THE PARTICIPANTS FROM JAPAN, EUROPE, AND CHINA SHOULD ADOPT
Japan: We do understand that Japan has an adjustable peg exchange rate, in which we believe that this is the most desirable type of exchange rate policy the Japanese should adopt. Reasons being that it has a zero interest rate policy. It also has the world's largest foreign exchange reserves. Thereby, if the Japanese changed their exchange rate policy otherwise (e.g. to a floating exchange rate), it could lead to an increase in the value of the Yen, in which Japanese exports would become expensive for other countries, and this would hinder the Japanese economy as already seen in recent times.
China: Currently, China has a Fixed exchange rate policy vis-à-vis to the other world currencies. This has been the case since the mid 1990's, a policy that we believe is giving Chinese exporters an unfair advantage. We do understand that the Chinese have held discussions with the International Finance Corporation, an arm of the World Bank, and Asian Development Bank, about renminbi bonds. They have embarked upon a gradual easing of the amount the renminbi that can be exchanged under capital account, thus eventually leading to full convertibility of the currency to a more floating exchange rate.They are looking at five measures, which they believe would lead to full convertibility. They are; Insurance companies to invest overseas, easing foreign direct investment by local enterprises and approving renminbi denominated bond issuance by 'foreign development organisations'. This is good news and we believe this would stabilize the imbalance of world trade to the benefit of the Chinese economy and the rest of the world.
Europe: has a floating exchange rate in which the various members of the Euro (15 members, who have a pegged exchange rate (boundary) to the euro). This has initially had the effect of causing huge fluctuations with regard to the purchasing power parity within Europe and the rest of the world. With regard to the US, we believe that a floating exchange rate is the right policy to adopt, however, certain countries within the European union, are prone to severe economic recession if their economies cant keep within the exchange rate band which the European Central Bank sets. This could lead to huge differences in economic growth within the various members, thereby, it could potentially affect world markets in relation to exports from these countries and imports to these countries (e.g. Romania, Greece, Latvia, and Slovakia are all new entrants of the Euro with economies that are not as buoyant as the core members of Germany, France, Italy, The Netherlands, Portugal and so on). It would be more productive if each member country of the euro acted as an individual entity rather than as a union.