The question Mundell avoids answering is how the central monetary authority, in whatever guise it ends up, will determine the demand for money so as to adjust the supply of money appropriately without inflating or deflating the currency?

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The chief advantage is that this outlaws any national discretion in the conduct of monetary policy: interest rates and the money supply adjust automatically to changes in economic circumstances, with the exchange rate totally fixed.

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Talking at China's Business Summit, China's Vice Premier Zeng Peiyan said China would adjust its money supply and credit and take "comprehensive measures to mop up liquidity in the banking system".

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