by forcing all foreign exchange to go through the state admin**tration of foreign exchange(safe),china has successfully shielded itself from adverse exchange rate fluctuations in the international market.in addition,by limiting the free settlement ability of the currency to a selected few countries,on top of putting a cap on the daily change on exchange rate,the people's bank of china ** able to stabilize the rate in the short term. china should continue the current practice until rmb becomes a major settlement currency.by limiting the flow of incoming and outgoing foreign currency within china,china can h**e a stable foreign currency reserve that provides a safety cushion for future economic calamities.