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Box: Milton Friedman on the Renminbi-HK Dollar
Relationship
"I’ve tried to look
at economic history for examples of a sovereign country which permitted two currencies to
exist simultaneously, at a floating, free exchange rate between them, the one currency
linked to a foreign currency and the other a national currency—the renminbi and the
Hong Kong dollar. And I only know one example in history that comes close: and that’s
the United States during the period of the Civil War and immediately after, when gold and
greenbacks circulated simultaneously.
.. .It is in the Chinese self-interest to let the
Hong Kong dollar remain what it is, because it’s been a tremendous value to them to
have a Hong Kong dollar that stimulated the investments in China itself."
From an Asian Wall Street Journal interview with the Nobel
Prize-winning economist during his recent visit in Hong Kong
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