The Study On The Influence Of RMB Exchange Rate Fluctuationsin The Overseas Power Project

With the continuous development of economic globalization and the opening up of China’s financial markets, the impact of changes in the RMB exchange rate for the entire national economy and generate electric power industry is becoming increasingly important. Since2005, the exchange rate reform, the RMB exchange rate has experienced eight years of continuous appreciation. But since2014, due to impact of multiple factors, such as, the reduction in the Fed QE, restructuration and growth slowed down for China economic, the RMB continued depreciation. Current economic fundamental situation, which determines supply and demand of RMB, basically balanced, the economic fundamentals of RMB greatly appreciation and depreciation in the future do not exist, and two-way volatility will be the norm. Therefore, under the new situation of RMB exchange rate movements, is particularly important to research the impact of RMB exchange rate changes on overseas power projects.In this paper,we assume that the two-way volatility ofthe RMB exchange rate is smooth. Based on this, the impact of changes in the RMB exchange rate and related countermeasures on overseas power projects is systematically studied. The specific contents are as follows:(1) Combined with the new situation of continued depreciation of RMB in this year, assumed that the RMB exchange rate two-way volatility becomes the norm, the factors affecting changes in the RMB exchange rate has combed and analyzed.(2) The development trend of the world and China’s electric power industries is introduced briefly. Then, the result that the development of power projects is mainly determined by the joint influence of the world and China’s power industries is presented. The analysis revealed that China surpassed the U.S. as the world’s largest electricity consumer. This marked China’s comprehensive national strength improved, and indicated a huge challenge of power project investments in China’s. Final, the necessity of the development of power projects in China is mentioned.(3) By analyzing the impact of the real effective exchange rate, power generation, electricity consumption per capita gross domestic product and other factors on net exports of electricity, a model that is used to describe the impact of net exports is proposed. In order to determine the parameters of the model variables, the co-integration analysis in Eviews software process models were introduced. (4) The effectiveness of the proposed model is verified by an empirical research. The results indicate that the RMB exchange rate is a major factor affecting China’s net exports of electricity.