China's Capital Control Relaxation Strengthens Economic Equilibrium Through Interest Rate and Exchange Rate Transmission.
Interest rates and exchange rates are important tools in controlling the money and foreign exchange markets. When these rates change, they affect each other in a flexible and efficient way. China is working on improving how these rates influence each other to balance its economy both internally and externally. By allowing more movement of capital and opening up its financial system, China aims to make sure that changes in interest rates and exchange rates have a positive impact on its economy.