Prof. Shu Lin, director of Monetary Financial Research Center Fudan University, was invited to give a lecture on “Capital Control in China and RMB exchange rate” on 15th April. The fundamental framework of Monetary Policy was introduced at the beginning of the lecture. China’s exchange rate regime has changed from Pegged Exchange Rate system to Managed Floating Exchange Rate System after the Exchange Rate Reform in China in 2005. During the lecture, Prof. Lin explained the reasons for employing the Pegged Exchange Rate system. Prof. Lin then proposed that challenge arose after China's accession to the World Trade Organization (WTO), which called for a reform on the Chinese Exchange Rate System.