Risk Management Issues in the UK Term Paper Example | Topics and Well Written Essays - 750 words

Risk Management Issues in the UK - Term Paper Example It is expected that major retailers will also experience a decrease in the market value of stocks. In order to strengthen its position in the market, British Airways launches its new airline subsidiary which would fly between the United States and Europe naming it Open Skies. Together with this development is the implementation of more flexible employment conditions relative to the current system. This includes the recruitment of new cabin crews for the airline in the United States. BA also adds that "there would be no link between the new airline and the seniority list for the existing BA mainline pilots." This decision brews protest from the Balpa which is the company's powerful union of pilots. This article highlights the operational risk which is currently faced by BA. The airline is currently facing the threat of incurring losses because of its internal problems with the staff. If the company pushes through its new system of recruitment, there is a huge possibility that Balpa will protest thus, hurting and even paralyzing the operation of the airline. Today, Financial Times reports another bad news for the UK retailing sec... bad news for the UK retailing sector: "Sterling dropped to a record low against the euro and its weakest level in six months against the dollar on Wednesday" (Garnham 2008). This depreciation of the sterling is another blow for UK retailers who convert their sales from sterling to euro. Another sad news is that because of the economic climate, it is expected that sterling will slide further in the coming months. This article both shows and discusses the effects of exchange rate risk. Because the foreign exchange rate in the market is subject to market conditions, the economic condition, as well as other factors, can largely contribute to the appreciation and depreciation of currencies which directly impacts the operations of the business organization. In the news, it is noted that the depreciation of sterling adversely affects Marks and Spencer which reveals a 2.2% decline in like for like sales during the last quarter.     

Prime Numbers Divide

Prime Numbers Divide Prime Numbers: History, Facts and Examples Prime Numbers: An Introduction Prime number is the number, which is greater than 1 and cannot be divided by any number excluding itself and one. A prime number is a positive integer that has just two positive integer factors, including 1 and itself. Such as, if the factors of 28 are listed, there are 6 factors that are 1, 2, 4, 7, 14, and 28. Similarly, if the factors of 29 are listed, there are only two factors that are 1 and 29. Therefore, it can be inferred that 29 is a prime number, but 28 is not. Examples of prime numbers The first few prime numbers are as follows: 2, 3, 5, 7, 11, 13, 17, 19, 23, 29, 31, 37, 41, 43, 47, 53, 59, 61, 67, 71, 73, 79, 83, 89, 97, 101, 103, 107, 109, 113, 127, 131, 137, 139, 149, 151, 157, 163, 167, 173, 179, 181, 191, 193, 197, 199, etc. Identifying the primes The ancient Sieve of Eratosthenes is a simple way to work out all prime numbers up to a given limit by preparing a list of all integers and repetitively striking out multiples of already found primes. There is also a modern Sieve of Atkin, which is more complex when compared to that of Eratosthenes. A method to determine whether a number is prime or not, is to divide it by all primes less than or equal to the square root of that number. If the results of any of the divisions are an integer, the original number is not a prime and if not, it is a prime. One need not actually calculate the square root; once one sees that the quotient is less than the divisor, one can stop. This is called as the trial division, which is the simplest primality test but it is impractical for testing large integers because the number of possible factors grows exponentially as the number of digits in the number to be tested increases. Primality tests: A primality test algorithm is an algorithm that is used to test a number for primality, that is, whether the number is a prime number or not. AKS primality test The AKS primality test is based upon the equivalence (x a)n = (xn a) (mod n) for a coprime to n, which is true if and only if n is prime. This is a generalization of Fermats little theorem extended to polynomials and can easily be proven using the binomial theorem together with the fact that: for all 0 (x a)n = (xn a) (mod n, x r 1), which can be checked in polynomial time. Fermat primality test Fermats little theorem asserts that if p is prime and 1≠¤ a a p -1≠¡ 1 (mod p) In order to test whether p is a prime number or not, one can pick random as in the interval and check if there is an equality. Solovay-Strassen primality test For a prime number p and any integer a, A (p -1)/2 ≠¡ (a/p) (mod p) Where (a/p) is the Legendre symbol. The Jacobi symbol is a generalisation of the Legendre symbol to (a/n); where n can be any odd integer. The Jacobi symbol can be computed in time O((log n) ²) using Jacobis generalization of law of quadratic reciprocity. It can be observed whether or not the congruence A (n -1)/2 ≠¡ (a/n) (mod n) holds for various values of a. This congruence is true for all as if n is a prime number. (Solovay, Robert M. and Volker Strassen, 1977) Lucas-Lehmer test This test is for a natural number n and in this test, it is also required that the prime factors of n − 1 should be already known. If for every prime factor (q) of n − 1, there exists an integer a less than n and greater than 1 such as a n -1 ≠¡1 (mod n) and then a n -1/q 1 (mod n) then n is prime. If no such number can be found, n is composite number. Miller-Rabin primality test If we can find an a such that ad ≠¡ 1 (mod n), and a2nd -1 (mod n) for all 0 ≠¤ r ≠¤ s 1 then ‘a proves the compositeness of n. If not, ‘a is called a strong liar, and n is a strong probable prime to the base a. â€Å"Strong liar† refers to the case where n is composite but yet the equations hold as they would for a prime number. There are several witnesses ‘a for every odd composite n. But, a simple way to generate such an ‘a is known. Making the test probabilistic is the solution: we choose randomly, and check whether it is a witness for the composite nature of n. If n is composite, majority of the ‘as are witnesses, therefore the test will discover n as a composite number with high probability. (Rabin, 1980) A probable prime is an integer, which is considered to be probably prime by passing a certain test. Probable primes, which are actually composite (such as Carmichael numbers) are known as pseudoprimes. Besides these methods, there are other methods also. There is a set of Diophantine equations in 9 variables and one parameter in which the parameter is a prime number only if the resultant system of equations has a solution over the natural numbers. A single formula with the property of all the positive values being prime can be obtained with this method. There is another formula that is based on Wilsons theorem. The number ‘two is generated several times and all other primes are generated exactly once. Also, there are other similar formulas that can generate primes. Some primes are categorized as per the properties of their digits in decimal or other bases. An example is that the numbers whose digits develop a palindromic sequence are palindromic primes, and if by consecutively removing the first digit at the left or the right generates only new prime numbers, a prime number is known as a truncatable prime. The first 5,000 prime numbers can be known very quickly by just looking at odd numbers and checking each new number (say 5) against every number above it (3); so if 5Mod3 = 0 then its not a prime number. History of prime numbers The most ancient and acknowledged proof for the statement that â€Å"There are infinitely many prime numbers†, is given by Euclid in his Elements (Book IX, Proposition 20). The Sieve of Eratosthenes is a simple, ancient algorithm to identify all prime numbers up to a particular integer. After this, came the modern Sieve of Atkin, which is faster but more complex. The Sieve of Eratosthenes was created in the 3rd century BC by Eratosthenes. Some clues can be found in the surviving records of the ancient Egyptians regarding their knowledge of prime numbers: for example, the Egyptian fraction expansions in the Rhind papyrus have fairly different forms for primes and for composites. But, the first surviving records of the clear study of prime numbers come from the Ancient Greeks. Euclids Elements (circa 300 BC) include key theorems about primes, counting the fundamental theorem of arithmetic and the infinitude of primes. Euclid also explained how a perfect number is constructed fro m a Mersenne prime. After the Greeks, nothing special happened with the study of prime numbers till the 17th century. In 1640, Pierre de Fermat affirmed Fermats little theorem, which was later on proved by Leibniz and Euler. Chinese may have identified a special case of Fermats theorem much earlier. Fermat assumed that all numbers of the form 22n + 1 are prime and he proved this up to n = 4. But, the subsequent Fermat number 232+1 is composite; whose one prime factor is 641). This was later on discovered by Euler and now no further Fermat numbers are recognized as prime numbers. A French monk, Marin Mersenne looked at primes of the form 2p 1, with p as a prime number. They are known as Mersenne primes after his name. Euler showed that the infinite series 1/2 + 1/3 + 1/5 + 1/7 + 1/11 + †¦ is divergent. In 1747, Euler demonstrated that even the perfect numbers are in particular the integers of the form 2p-1(2p-1), where the second factor is a Mersenne prime. It is supposed that there are no odd perfect numbers, but it is not proved yet. In the beginning of the 19th century, Legendre and Gauss independently assumed that because x tends to infinity, the number of primes up to x is asymptotic to x/log(x), where log(x) is the natural logarithm of x. Awards for finding primes A prize of US$100,000 has been offered by the Electronic Frontier Foundation (EFF) to the first discoverers of a prime with a minimum 10 million digits. Also, $150,000 for 100 million digits, and $250,000 for 1 billion digits has been offered. In 2000, $50,000 for 1 million digits were paid. Apart from this, prizes up to US$200,000 for finding the prime factors of particular semi-primes of up to 2048 bits were offered by the RSA Factoring Challenge. Facts about prime numbers 73939133 is an amazing prime number. If the last or the digit at the units place is removed, every time you will get a prime number. It is the largest known prime with this property. Because, all the numbers which we get after removing the end digit of the number are also prime numbers. They are as follows: 7393913, 739391, 73939, 7393, 739, 73 and 7. All these numbers are prime numbers. This is a distinct quality of the number 73939133, which any other number does not have. (Amazing number facts, 2008) The only even prime number is 2. All other even numbers can be divided by 2. So, they are not prime numbers. Zero and 1 are not considered to be prime numbers. If the sum of the digits of a number is a multiple of 3, that number can be divided by 3. With the exception of 0 and 1, a number is either a prime number or a composite number. A composite number is identified as any number that is greater than 1 and that is not prime. The last digit of a prime number greater than 5 can never be 5. Any number greater than 5 whose last digit is 5 can be divided by 5. (Prime Numbers, 2008) 1/2 0.5 Terminates 1/3 0.33333 Repeating block: 1 digit 1/5 0.2 Terminates 1/7 0.1428571428 Repeating block: 6 digits 1/11 0.090909 Repeating block: 2 digits 1/13 0.0769230769 Repeating block: 6 digits 1/17 0.05882352941176470588 Repeating block: 16 digits 1/19 0.0526315789473684210526 Repeating block: 18 digits 1/23 0.04347826086956521739130434 Repeating block: 22 digits For some of the prime numbers, the size of the repeating block is 1 less than the prime. These are known as Golden Primes. 2, 3, 5, 7, 11, 13, 17, 19, 23, 29, 31, 37, 41, 43, 47, 53, 59, 61, 67, 71, 73, 79, 83, 89, 97 9 primes out of the 25 (less than 100) are golden primes; this forms 36% (9/25). (Amazing number facts, 2008) Examples of mathematicians specialized in prime numbers Arthur Wieferich, D. D. Wall, Zhi Hong Sun and Zhi Wei Sun, Joseph Wolstenholme, Joseph Wolstenholme, Euclid, Eratosthenes. Applications of prime numbers For a long time, the number theory and the study of prime numbers as well was seen as the canonical example of pure mathematics with no applications beyond the self-interest of studying the topic. But, in the 1970s, it was publicly announced that prime numbers could be used as a basis for creating the public key cryptography algorithms. They were also used for hash tables and pseudorandom number generators. A number of rotor machines were designed with a different number of pins on each rotor. The number of pins on any one rotor was either prime, or co-prime to the number of pins on any other rotor. With this, a full cycle of possible rotor positions (before repeating any position) was generated. Prime numbers in the arts and literature Also, prime numbers have had a significant influence on several artists and writers. The French composer Olivier Messiaen created ametrical music through natural phenomena with the use of prime numbers. In his works, La Natività © du Seigneur (1935) and Quatre à ©tudes de rythme (1949-50), he has used motifs with lengths given by different prime numbers to create unpredictable rhythms: 41, 43, 47 and 53 are the primes that appear in one of the à ©tudes. A scientist of NASA, Carl Sagan recommended (in his science fiction ‘Contact) that prime numbers could be used for communication with the aliens. The award-winning play ‘Arcadia by Tom Stoppard was a willful attempt made to discuss mathematical ideas on the stage. In the very first scene, the 13 year old heroine baffles over the Fermats last theorem (theorem that involves prime numbers). A popular fascination with the mysteries of prime numbers and cryptography has been seen in various films. References Amazing number facts, 2008. Retrieved April 28, 2008 from http://www.madras.fife.sch.uk/maths/amazingnofacts/fact018.html Prime Numbers, 2008. Retrieved April 28, 2008 from http://www.factmonster.com/ipka/A0876084.html Solovay, Robert M. Strassen, V. (1977). A fast Monte-Carlo test for primality. SIAM Journal on Computing 6 (1): 84-85. Rabin, M.O. (1980). Probabilistic algorithm for testing primality, Journal of Number Theory 12, no. 1, pp. 128-138.

Abraham Lincoln And Jefferson Davis Essay -- Compare Contrast American

Abraham Lincoln and Jefferson Davis Works Cited Missing   Ã‚  Ã‚  Ã‚  Ã‚  In this report I compare two great historical figures: Abraham Lincoln, the 16th president, steered the Union to victory in the American Civil War and abolished slavery, and the first and only president of the Confederate States of America, Jefferson Davis. Abraham Lincoln was the President of the Union, and Jefferson Davis struggled to lead the Confederacy to independence in the U.S. Civil War. Lincoln was treasured by the African Americans and was considered an earthly incarnation of the Savior of mankind (DeGregorio 20-25). On the other hand, Davis was both admired and hated. Lincoln had a different view of how the U.S. should be in abolishing slavery. Davis was a politician, president of the Confederate States of America, and also a successful planter. He had beliefs for the South to continue in the old ways with slavery and plantations. Both Lincoln and Davis had strong feelings for the protection of their land (Arnold 55-57).   Ã‚  Ã‚  Ã‚  Ã‚  Both Abraham and Jefferson Davis shared several differences and similarities. Lincoln was known to have an easy going and joking type attitude. In contrast, Davis had a temper such that when challenged, he simply could not back down (DeGregorio 89). Davis had been a fire-eater before Abraham Lincoln's election, but the prospect of Civil War made him gloomy and depressed. Fifty- three years old in 1861, he suffered from a variety of ailments such as fever, neuralgia, and inflamed eye, poor digestion, insomnia, and stress. Lincoln also suffered from illnesses during the war. He had severe cases of headaches and stress.   Ã‚  Ã‚  Ã‚  Ã‚  Both presidents had a lot of pressure of them due to the fact of defending their region. Lincoln had difficulties growing up because of the deaths early in his childhood, poverty, and little education. Davis; however, studied at a Roman Catholic school in Kentucky and at Transylvania University, and entered West Point in 1824. Davis seemed to have had an outreaching environment to his success. The major difference, personality wise, was Davis's weakness in his inability to get along with other people where Lincoln was a well liked and easygoing man.   Ã‚  Ã‚  Ã‚  Ã‚  Both men shared a common bond in their education towards war. Davis served at frontier military posts and in the Black Hawk War before resigning in 1835. L... ...sident, we prospered in many ways. His actions brought about great challenges that he, and the following fathers of our country would go through. The combining of both races and more freedoms would stir troubles for many years to come. Although his actions stopped slavery, it didn't stop the harsh treatment of the black race which carried out for decades. Lincoln's Presidency was dominated by the war. The country was going through major changes socially and economically. Though Davis led the South through dramatic changes, no change has ever had more importance than the abolishment of slavery. Both the North and the South gained knowledge from this horrid experience of war. Lincoln's achievements—saving the Union and freeing the slaves—and his martyrdom just at the war's end assured his continuing fame. Both men have made their historical marks due to their great deeds, and ways they both sacrificed their devotion to shape our country. I agree with most historians that Lincoln had qualities that made him a great American statesman. His keen intellect, humor and boldness, and compassion all contributed to his presidency in unifying the nation and extending freedom.

Belonging †A Clockwork Orange Essay

The concept of belonging is essential. To belong is to form a connection which will allow a sense of identity, without this we lose our humanity; however, conformity is in a sense a facade of belonging, as it restrains our freedom and forces us to only mimic. My studied texts show how society demands us to conform, yet conformity prevents a sense of true identity being ever created. This notion is elaborated in the novel, A Clockwork Orange. Alex is a criminal who doesn’t belong anywhere within society. In the novel, the government attempts to suppress his criminality by physically preventing him from thinking of violence—thus making him conform to their standards. This is a prime example of how society attempts to make us conform to what is considered ‘normal’. Towards the end of the novel, the character F. Alexander tells Alex: â€Å"They have turned you into something other than a human †¦ being. You have no power of choice any longer. You are committed to socially acceptable acts, a little machine capable only of good. The quote shows us the central theme of the novel; if we cannot choose where we belong we lose our humanity—thus showing us the value of choice as well as the value of individuality. The metaphor and imagery of the title, a clockwork orange, symbolises what conformity does to a man. If we cannot choose where to belong we cease to be human but clockwork, or some type of mechanism. We need to be able to choose where we belong, for if it is not chosen its authenticity ceases. The novel ends with Alex choosing the path of goodness, the established normality of society. He states; â€Å"Perhaps I was getting too old now for the sort of life I had been leading, brothers† Alex chooses to belong to society, thus allowing a connection to be formed between him and the world. Conformity and the need to conform to a group or community is the central theme throughout both of the chosen texts I have studied, those being Strictly Ballroom and A Clockwork Orange. â€Å"Strictly Ballroom† also supports the fact that society attempts to make us conform to what is considered ‘normal’. The movie shows the disastrous effect conformity and fear have among members who gain their place inside the group at the price of conformity. Shirley Hastings, for example, lives a â€Å"life half-lived† cowering before what Barry Fife will say or think. She has let the Federation so dominate her that she has no respect for Doug and can only see her son Scott in terms of winning competitions. The movie represents belonging using a variety of techniques to distinguish between the world of artifice and the more realistic world. The image of the artificial world, shown as the ballroom world, is glitzy and colourful. Luhrmann has presented this world as having power, whereas the character of Fran, shown in plain clothes and reading glasses, is initially shown as powerless, because she does not conform to the ballroom world. The movie traces the shift from a world of false belonging dominated by conformity, fear and the cynical manipulations of the ultra-sleaze Barry Fife, towards the iconic last scene where the line between spectators and professional dancers blurs and is dissolved as Scott dressed in Spanish costume and Fran in Spanish-style red dress put passion back into dance, rescuing it from the deadening effect of the old brigade. Taking the similes of the two texts we can arrive at the conclusion that conformity allows us to become part of a functioning society but can in turn stifle individuality, expression and self-identity. I’ll leave you with two thoughts from â€Å"A Clockwork Orange†. â€Å"Goodness is something to be chosen. When a man cannot choose he ceases to be a man. † And so I ask you, ‘Is it better for a man to choose to be bad than to be conditioned to be good? † That is both the crux of the issues involved and the decision we must all, as individuals, make.

Country Case Report for China Essay

The third largest land area in the world belongs to the People’s Republic of China. Presently, its population is the largest on the record and its capital, Beijing is the economic and cultural center. China’s economic growth greatly improves due to the trend of poverty reduction during the period of 1980-1990. From 542 million to 375 million, shrinking by 167 million, China’s poverty population exceedingly reduced. Angang stated that China’s achievements in poverty reduction made huge contributions to the cause of poverty reduction of the world (2). According to World Bank, the poverty population of the world dropped off by 98. 3 million. Among the five Asian countries with the most condensed poverty population are India, China, Pakistan, Bangladesh and Indonesia, and according to the industrial poverty line, China’s current proportion of poverty population is the lowest. Statistics show that China has experienced a period of human history in which poverty population decreased by a largest margin in the past 2 decades, and reversed the trend that poverty population has been increasing in the past five decades in the world history, causing the poverty population of the world to decrease for the first time. That is to say, without China’s efforts of poverty reduction, the poverty population of the world would have increased from 848 million in 1980 to 917 million in 1990. (Angang, 2-3). Ambassador Baodong stated that the Development-oriented Poverty reduction program for Rural China for the period of 2001-2010 generated grand effects in the global poverty reduction. The number of rural population in China declined to 21. 48 million and 2. 3% of national poverty incidence was accounted for the 55% of global poverty reduction in 2007 (Baodong, 1). Technological development plays a vital role in the country’s economic growth. From 1980 to 1990, China’s expenditure amounted to US $17billion for imported technology. The trend of research and development made an immense leap. As a result there has been a modest amount of growth in the country’s development however the inefficiencies posted to be the chief dilemma. At the end of 1990, statistics illustrated that 50 of Shanghai’s large and medium enterprises only reached 10 percent of international level of quality standards and 30 percent arrived at the prototype stage using the new programs. From the year 2001 – 2005, this country became a major IT nation in the world, standing third place in manufacturing setting and first rank in telecommunications. The business cycle of the Chinese economy had undergone substantial magnitude from the time when the government established in the mid1950’s centralized economic management and planning. The period from 1979-1990 was depicted with relative stability and high escalation. In 1955-1978 economic growth rates, the movement went from 5. 7 percent to 9. 3 percent in 1979 to 1993 period. Investment cycles, harvest fluctuations, political disturbances, inflation and periodic retrenchments are the major factors that affect business cycles. Downturn was evident during 1980-1981, then an upswing from 1982 – 1989 and the business cycle in 1989 was another downturn and an upturn in 1990. Imai’s stated that his conclusion on Chinese business cycle stated that cycle interacts with exogenous shocks and generates business cycles with dissimilar amplitude and duration. An investment cycle is generated by patterned reaction of central planners who adjust the level of fixed investment in response to capacity pressure, an indicator of macroeconomic tension. An instititutional prerequisite of this cycle is the weak financial accountability of state enterprises (178). Economists added that the efficiency wedge, which represents institutional change and technology advance, was the main source of economic fluctuations in 1978 – 2006. The amplitude of it fluctuation declined after 1992, which resulted in moderation of business cycle fluctuations. Distortions manifest themselves as taxes on investment, which represents frictions in the capital market, became another economic fluctuation source after 1992, which is different from results of business cycle accounting on US and Japan data. Results also show that government consumption and net exports played minor roles in generating business cycles (Gao). China’s world trade generated a strong impact on its growth. Imports and exports led China to be among the world’s most significant export destinations for other Asian countries. Since the year 1979, the country’s global trade gradually improved. Presently, Japan’s exports of 11 percent came from China, before it was only 2 percent during the end of 1990. The Chinese government implemented tariff reductions in order to continue its longstanding trend in world trade. During 2004, China’s tariff rates dropped from 0. 6 to 10. 4 percent. Part of the country’s trade reforms to (WTO) World Trade Organization is to lessen tariff rates and eliminate import quotas and licenses, opening sectors for foreign country involvement such as telecommunications, financial and insurance services. Complete access to foreign participants is greatly assured through automatic licensing procedures. Eradication of limitations on trading and domestic distribution for majority of goods is also part of the plan. According to WTO, China will retain import state trading for wheat, rice, corn, sugar, tobacco, cotton and chemical fertilizers, as with export trading, corn, tea, rice, coal, silk, crude and processed oils, cotton, tungsten and ammonium products are included. In addition to this, China had been permanently bestowed with the most-favored-nation (MFN) treatment by other participants of WTO. As response to this honor, some countries have abolished restrictions on China’s imports. The contributing factor for the possible boost in China’s trade is when quota restrictions are lifted. China’s membership to World Trade Organization made enormous effect on some of the trends in relation to the role of China in international trade. Examples comprise of its magnetism to foreign investors and developing role in global export base. This is evident in IMF statistics that showed its market share in Japan, United States and Europe, from the period 1980 to 1990, an overall total of 10. 3 percent, and end of 2003, a whopping 37 percent (Source: IMF, Direction of Trade Statistics). â€Å"Just as water always flows to the lowest point, China is bound to be the first option for foreign capital investment† (â€Å"China’s Cheap† A1). China’s labor force is considered cheap and also of good quality. It is estimated that 100 million of employees in rural areas are likely to be waiting to be changed to urban workers. The Labor Force Participation Rate (LFPR) is a significant gauge to quantify the labor supply of PR China. In the period of 1980-1990, the LFPR in China is higher among other countries. The most likely basis is moderately low income level. There is high participation in the labor force among women because one wage earner is inadequate to support a family. In the last 5 years (2002-2007), women’s participation in the labor force exceedingly increased according to APEC statistics. Presently, the government was executing the guidelines which were implemented during 1997, which was the division of labor market between urban and rural areas. The labor market is exclusively for high school graduates or those with lower educational background. This probable outcome of this situation is the layoffs in urban places and labor surplus in rural areas. In the coming years, it has been forecasted that China might face a nationwide labor shortage. The country is fast approaching the â€Å"Lewisian turning point†. It is a theory by Arthur Lewis stating the turning point from surplus labor to labor scarcity. In the year 1980, State Council issued a decree prohibiting the use of foreign exchange for making payments in China. Foreign exchange rates or Waihui, equal in value to the Renminbi at effective rate, were put into circulation for use by nonresidents only. It could be use for transportation fares, hotel bills and purchases at Friendship stores. Then in 1981, the foreign trade rate was since fixed at 2. 80 from 1. 750. In 1985, the internal settlement rate was abolished and all trade was governed by the Effective Rate. A foreign exchange retention quota also exists for a portion of export proceeds. Authorization was granted for Chinese residents to hold foreign exchange and open foreign exchange accounts and to deposit and withdraw funds in foreign exchange. In the year 1986, The trade-weighted basket of currencies was abandoned and the Effective Rate was placed on a controlled float based on developments in the balance of payments and in costs and exchange rates of China’s major competitors. Shanghai International Trust and Investment Corporation was authorized to handle exchange business. In 1988, early this year, all domestic entities which are allowed to retain foreign exchange earnings were granted permission to trade in the adjustment centers, and by October 1988, 80 adjustment centers were established. Initially, a relatively small volume of transactions took place in these markets, but the volume has increased substantially since access to the centers was expanded. The Foreign Exchange Swap Rate was 6. 60 from 3. 72. In 1989, regulations were issued governing the use of foreign exchange obtained in foreign exchange adjustment centers. Imports of inputs for the agricultural sector, textile, and for technologically advance and light industries were given priority. Purchases of foreign exchange for a wide range of consumer products were prohibited. Such corporations are permitted to sell in China for foreign exchange provided that the sales involve purchases under the Government’s annual import plan, sales in Special Economic Zones and other promotional areas, and sales of import substitutes. The Foreign Exchange Swap Rate was 5. 40 from 3. 72. By the end of 1990, The Foreign Exchange Swap Rate was 5. 70 from 5. 22. (Ka Fu) Presently, Premier Jiabao stated in the Annual Meetings of the Board of Governors of the African Development Bank Group in Shanghai that the government continues to push the Renminbi exchange rate reform in order to confer larger range to the role of the market. The reform permits citizens to purchase more foreign currencies and commercial banks. Financial market development has been highlighted with China’s monetary reforms. The People’s Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases. Empirical evidence supports maintaining a reference to money in China’s monetary strategy and enhancing the role of interest rates in its conduct (Maino, 44). The most suitable monetary strategy for China would be an eclectic monetary policy framework, whereby the growth in money supply and bank credit extension are used as intermediate guidelines for the determination of short-term interest rates. In addition, in deciding on the most appropriate monetary policy stance, developments in a number of other variables need to be taken into consideration, because the monetary aggregates are loosing some of their usefulness as indicators of future inflation due to structural changes in the economy (Maino, 40). The IMF also points out that Chinese monetary policy could improve noticeably if the central bank were granted more discretionary power to set interest rates. In the last two years, increases in the trade surplus and significant inflows of foreign capital have led to a large accumulation of international reserves, which has further complicated monetary policy handling. In this respect, the IMF has welcomed the changes introduced into the Chinese exchange rate system as a significant step towards making this system more flexible. Although it is difficult to define an â€Å"equilibrium† exchange rate, and not just revaluation, must be adopted if china is to increase the independence of its monetary policy and shield its economy against external shocks (Ruete, 8). Works Cited Angang, Hu. China’s economic growth and poverty reduction (1978-2002). 2 June 2003. IMF. 20 April 2008 . Baodong, Li. Remarks by Ambassador LI Baodong At Ministerial Roundtable Breakfast of Economic and Social Council On â€Å"Food, Nutrition and Agriculture: Working Together to End Hunger†. 12 July 2007. China-UN. 22 April 2008 â€Å"China’s Cheap, High-quality Labor Lures Foreign Investment†. Editorial. Xinhua News Agency 21 December 2002, A1. Gao, Xu. Business Cycle Accoounting for the Chinese Economy. N. p. : n. p, n. d. http://www. wdi. umich. edu/files/Publications/WorkingPapers/wp795. pdf Imai, Hiroyuki, Explaining China’s Business Cycles. 6 June 1996. IDE. 22 April 2008 . Ka Fu, Wong. International Economics. 1 January 2007. 23 April 2008. . Manio, Rodolfo. China: Strengthening Monetary Policy Implementation. 1 January 2007. Social Science Research Network. 23 April 2008 . Ruete, Javier. The Development of China’s Export Performance. 7 March 2006. Central Reserve Bank of Peru. 23 April 2008 .