The International Competitiveness Changes Of East Asia And Latin America Effected By The Real Exchange Rate

In the process of economic globalization, all countries to participate ininternational competition, the growing gap of economic growth rate andthe trade balance is obvious not only between the developed anddeveloping countries but also among the developing countries such as EastAsia and Latin America. To international economic development, it hasbecome the main source of inherent contradictions. As to this, manyexperts and scholars, especially the government with the trade deficitproblem due this to the exchange rate directly. Therefore, consider whatare the major factors in international competition, how to survive anddevelop in international competition and how to raise the status of acountry's international competitiveness has become particularly important.As to this, from the PPP decided by labor costs, and combined withRicardo's theory of comparative advantage. This paper can conclude that a country's real exchange rate, to some extent, on behalf of a country'sinternational competitiveness. Then on the basis of relative labor costchanges and export changes between East Asia and Latin Americancountries, reveals important factor in the export trade. Through the exporteconometric model depended on the comparative advantage theory and thetheory of a relative labor cost revealed the deep-seated causes of externalimbalances. Generally speaking, the depreciation of the real exchange ratebenefit to a country's exports, but this is mainly because one of the factorsthe real exchange rate - relatively low unit labor costs, improve a country'sbalance of trade and improve the international competitiveness of a country,and the gap between East Asia and Latin America, both in economic andtrade development, East Asia are far higher than the speed of the LatinAmerican countries. East Asia's export share was significantly higher thanthe Latin American countries. Although the share of Brazil, rise slightly,Brazil and Chile are still share at least among the seven countries. Brazil'sreal exchange rate depreciation has little effect on export shares. LatinAmerica's real exchange rate depreciation is much faster in East Asia, bycalculation we can see that. China, in particular, the appreciation of the realexchange rate in recent years as a small, but the absolute and relativeexport volume has been enhanced. Through the decomposition of the realexchange rate, impact on the share of exports can be seen, depreciation ofthe nominal exchange rate fell to promote exports, but unit labor costs can promote exports despite the rise in unit labor costs to China, but China'slabor productivity is rising rapidly. We can see through several empirical,The increase in export share is determined by labor productivity. China inEast Asia, Singapore, South Korea, and other countries as a newlyindustrialized country, pay more attention to value-added exports ofhigh-tech products. We can see that a country's internationalcompetitiveness depends not only on the price advantage but theimprovement of product quality and technology and the later is an moreimportant factor.In short, as the development of the world economy, in order to gain anadvantage in competition, developing countries should pay more attentionto the development of IT in education. To increase exports on thedepreciation of the nominal exchange rate is unrealistic. Another theory onthe basis of this hypothesis is Balassa analysis of the relationship betweenthe real exchange rate and a country's economic growth. On the same time,this paper provide some policy recommendations to a country'sinternational competitiveness from the empirical results.