In his article in the latest issue of the China Finance magazine, published on 2nd October, Yi Gang, the Director of the State Administration of Foreign Exchange proposed a China's version of Tobin tax to discourage short-term speculation.

Anbound’s scholars, however, are of the view that such proposal is not only inappropriate but also detrimental to the economy.

The imposition of Tobin tax with the aim to stabilize RMB exchange rate is not solution at all, only palliative at best. Moreover, it contradicts the Chinese government’s wish to accelerate the internationalization of RMB, as such, the policy makers should be wary.