Analysis On The Effects Of RMB Appreciation On FDI Inflows In Chongqing

The People's Bank of China announced to transform the exchange rate- forming mechanism of RMB on July 21st of 2005. It also announced to come into practice managed floating rate system, based on market supply and demand with reference to a basket of currencies. After RMB exchange rate reform, RMB began to appreciate remarkably and constantly. According to international investment theory, the change of exchange rate level will influence FDI. Chongqing,as the unique municipality in inland area,has played a role of linking the eastern and the western parts. How Chongqing develops its economy making use of FDI is worth discussing and studying. In the context of RMB appreciation, it makes sense to research the influence of RMB revaluation on FDI in Chongqing.The data of article comes from statistics almanac about Chongqing,statistics almanac about China,and other material in the web. In the premise of using these data, by using the methods of combining theoretical analysis and empirical analysis,empirical analysis and normative analysis,the paper researches the influences of RMB appreciation has on the overall scale of FDI in Chongqing and the different effects it has on various industries. Finally, it studies the trend of RMB exchange rate in future and the effects it has on the FDI, and then combing theoretical analysis with empirical studies,it gives some policies and suggestions to deal with the RMB appreciation for Chongqing. Through this research,the paper hopes to know about the effects of RMB appreciation on the FDI inflows in Chongqing,and provides some political suggestions which are conducive attracting FDI in Chongqing to be followed in the context of RMB appreciation.The innovation of this paper is that the paper researches into the effects of RMB appreciation on FDI in Chongqing by using relevant theory and building some models. Moreover, this paper not only researches the effects of RMB appreciation has on the overall scale of FDI in Chongqing but also discusses the effects of RMB appreciation has on the industry Structure of FDI in Chongqing.