This book is divided into two parts. The first part documents the rationales and considerations behind China's exchange rate system reform announced on 21 July 2005. It also discusses the actual implementation and achievements of the transitional reform as well as some subsequent mistakes committed by China's central bank. It also presents the author's proposed supplementary measures that could help the exchange rate system reform, and at the same time increase China's immunity and resilience against economic crises in future. The second part provides an updated discussion on China's economic performance and macroeconomic risk since the transitional reform was announced. With updated, insightful and thorough discussions, this book equips readers with a very good understanding of China's macroeconomic state and challenges.