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Sino-Soviet Exchange Rates

Published online by Cambridge University Press:  17 February 2009

Kang Chao
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Extract

In one of my articles published in this journal several years ago, I promised to clarify the mystery of the Sino-Soviet exchange rate system. However, some puzzling points remained unanswerable until the publication of an article by Iu. V. Vladimirov. Now, there seems to be a clearer picture about the most complex exchange rate system that has ever existed between any two national currencies.

Type
Research Article
Information
The China Quarterly , Volume 47 , September 1971 , pp. 546 - 552
Copyright
Copyright © The China Quarterly 1971

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References

1. Chao, Kang, “Pitfalls in the use of China's Foreign Trade Statistics,” in The China Quarterly, No. 19 (07–09 1964), pp. 47–65CrossRefGoogle Scholar, and Trugly, Edmund Jr., “The Ruble-Yuan Exchange Rate” and my reply, in The China Quarterly, No. 21 (01-03 1965), pp. 183–184.Google Scholar

2. Vladimirov, Iu. V., “The Question of Soviet-Chinese Economic Relations in 1950–1966,” translated in Chinese Economic Studies, Vol. III, No. 1 (1969)Google Scholar. It was originally published in Voprosy istorii (Problems of History) 1969Google Scholar, No. 6.

3. See Chao, Kang, in The China Quarterly, No. 19, pp. 55–60.Google Scholar

4. Shih-chieh chih-shih nien-chien, 1961 (World Knowledge Yearbook, 1961) (Peking: World Knowledge Publishing House), p. 1323.Google Scholar

5. Directive of the People's Bank of China, 29 January 1957, number Yin-kuo- ts'ai 25, in Chin-jung fa-kuei hui-pien (Collection of Financial Laws) (Peking: Finance Publishing House, 1957), p. 59.Google Scholar

6. “Notice on Foreign Exchange Adjustments of Transactions in Rubles,” issued by the Head Office of the People's Bank of China, 18 December 1959, number Yin- kuo-ts'ai 400, in Joint Publications and Research Services, No. 19499, 31 05 1963, pp. 137–139.Google Scholar

7. See Chi-chung, Yeh's speech, Hsiu-hua pan-yueh kan (New China Semimonthly) No. 16, 1957, p. 93.Google Scholar

8. For instance, see Jen-min tien-yeh (People's Electric Industry), 1958, No. 1, p. 14Google Scholar. Comparisons of the yuan figures and rouble figures of Sino-Soviet trade in the 1950s also imply a conversion rate of about 1 to 1. See Eckstein, Alexander, “Sino-Soviet Economie Relations: A Reappraisal,” in Cowan, C. D. (ed.), The Economic Development of China and Japan (London: Allen and Unwin, 1964), p. 146Google Scholar; and Chao, Kang, in The China Quarterly, No. 14, pp. 47–65.Google Scholar

9. One Soviet source, however, mentions a yuan-rouble rate of 1 to 1 prior to 1960. See Aizenberg, I. P., Valintnaia Sistema SSSR (Moscow, 1962), p. 149Google Scholar. Unfortunately, while the author has cited the data sources for other exchange rates he has tabulated in his book, he fails to cite the source for the yuan rate. I suspect that the author has obtained this rate by comparing Sino-Soviet trade figures.

10. For instance, Chi-hsieh kung-yeh (Machinery Industry), No. 10 (1957), p. 5Google Scholar states “The cost of designing performed in the Soviet Union required 4,000 roubles per person per month; this amount is equal to 2,000 yuan.” Since no rouble-yuan exchange rate could apply to both trade and non-trade transactions, the 0·5 yuan rate as implied by the above statement must be a non-trade rate.

11. Vladimirov, in defence of the Soviet Union, emphatically points out “The Soviet Union did not enjoy any manner of unilateral economic advantage in its currency transaction with China” and “currency relations between the Soviet Union and the CPR were based on objective economics and mutual agreement.” See Vladimirov, , in Chinese Economic Studies, Vol. III, p. 24.Google Scholar

12. See Chin-jung fa-kuei hui-pien, 1957, p. 59.Google Scholar

13. Vladimirov, , in Chinese Economic Studies, Vol. III, p. 22.Google Scholar

14. Ibid.

15. Hsueh-shu yueh-k'an (Academic Monthly), No. 10 (1957), p. 55Google Scholar; Chi-hua ching-chi (Planned Economy), No. 12 (1957), p. 29.Google Scholar

16. Vladimirov, , in Chinese Economic Studies, Vol. III, p. 24.Google Scholar

17. Ibid, p. 23.

18. See Klockho, M. K., Soviet Scientist in Red China (New York: Praeger, 1964), p. 57.Google Scholar

19. Jen-min jih-pao (People's Daily), 15 12 1959.Google Scholar

20. Joint Publications and Research Services, No. 19499, (31 05 1963), pp. 137–139.Google Scholar

21. See Shih-chieh chih-shih nien-chien, 1961, p. 1323Google Scholar, and Vladimirov, , in Chinese Economic Studies, Vol. III, p. 24.Google Scholar

22. See Shih-shih shou-ts'e (Handbook on Current Events) (Peking, 1965), No. 3, pp. 37–38.Google Scholar

23. Vladimirov explicitly states that even when the Soviet credits were originally expressed in roubles, they were then converted into dollars at the exchange rate of four roubles to the dollar.

24. See Chao, K., in The China Quarterly, No. 19, p. 56.Google Scholar