China's Defense of the Peg Perpetuates Central Planning‪.‬

China has maintained a nearly fixed exchange rate of 8.26 renminbi (RMB) to the U.S. dollar since 1994, in spite of the near total collapse of practically every other fixed exchange rate regime over the last decade. Hong Kong, a special administrative region of China, happens to have the world's other so-far durable fixed exchange rate regime. That is a coincidence, geographically speaking. In Hong Kong's case the stability of its exchange rate derives from the currency board apparatus that was installed before the 1997 reversion to China. The Hong Kong currency board model may be appropriate for smaller developing economies. Large economies are better candidates for floating exchange rates.