This Note considers the possible development of an independent convertible currency and other foreign exchange and trade policies that can contribute to Hainan's goals of close interaction and integration with the economy of mainland China and with the international economy. The author considers how a convertible currency for Hainan could be established, and how the ensuing exchange rate would be determined. He then considers whether a rapid or gradual path toward convertibility is preferable, and suggests how a fairly rapid process of moving toward convertibility might be accomplished within a period of about one year. Finally, he discusses policies for attracting foreign investment to Hainan.
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