---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/39719406.md"
description: "Why is it difficult for China to achieve exchange rate freedom in the next 100 years?1. The core reason: We are a country with high savings, high real estate, and high external debt expectations.Once completely free-floating and unrestricted:- The wealthy in China would frantically exchange for US dollars.- Capital would flee on a large scale.- The exchange rate would plummet instantly.- Housing prices, the stock market, and the bond market would all crash together.This is not speculation; it's the common outcome for all developing countries that liberalized their exchange rates.2. We are not yet at the stage of "withstanding the shock."Developed countries can have free-floating rates because:- Capital is a net inflow.- Their currencies are global reserve currencies.- They are capital-exporting countries.We are:- A major manufacturing country.- Prone to capital outflow.- The Renminbi is not yet a truly international currency.Complete liberalization = opening the city gates to let the flood rush in.3. Once the exchange rate crashes, the entire economic chain breaks.- Imported crude oil, chips, grain, and metals all become more expensive.- Domestic inflation would explode directly.- Corporate external debt would blow up.- Ordinary people's wealth would shrink.A stable exchange rate = a stable economic foundation.This is the bottom line; it cannot be touched.4. It's not "control," it's "managed floating."Our current model is:- Letting it fluctuate freely under normal circumstances.- The central bank steps in to stabilize it at critical moments.This is called mature and pragmatic, not backward.Compared to the Ruble:- The Ruble is locked down hard behind closed doors.- We have flexible management, smooth external circulation, and sufficient reserves.Completely different things.5. It will definitely be gradually liberalized in the future, but it cannot be rushed.The order must be:1. First, strengthen the economy.2. Then, promote the internationalization of the Renminbi.3. Finally, liberalize the exchange rate.Doing it all at once = suicide.Most concise summaryThe exchange rate of developed countries is a "moat," our exchange rate is a "flood control dam.""
datetime: "2026-04-03T16:49:56.000Z"
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author: "[浩浩小课堂](https://longbridge.com/en/profiles/19784218.md)"
---

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# Why is it difficult for China to achieve exchange …