Research On Relationship Between Economy Growth Style And RMB Nominal Exchange Rate

With the rapid development of China economy, relationship between economy growth and RMB exchange rate becomes closer and closer. Study of the relationship between RMB exchange rate and economy growth is meaningful for RMB exchange rate reform and economy promotion.This paper analyses the mid-term and long-term influencing factors and investigates the mid-term and long-term effect of economy growth style on RMB exchange rate using empirical study,. Based on the model of economy growth style and RMB exchange rate, it depicts the evolvement process in different phrases of economy growth. and then quotes the experience of Japanese and Germany currency exchange rate fluctuation to illustrate the involvement style of exchange rate in economy development process. Finally It make a judgment for Chinese current development phrase by structure analysis of trade commodity, then deduces future trend of RMB exchange rate by empirical study.Conclusion are listed below. Different economy growth style has different effect on exchange rate. Extensive economy growth and intensive economy growth both determine of exchange rate change. The evolvement of economy growth style is destined to make local currency depreciate firstly and then appreciate later. If the potential of labor and capital devotion to boost economy growth has not been depleted, currency depreciation causes extensive economy growth. When economy reached some phrase, intensive economy growth is destined to cause local currency appreciation. Trading commodity structure illustrates that China is on the way from economy growth phrase two to phrase three. Technology structure of trade commodity shows that Chinese technology level is in the promotion phrase, so the rise of RMB is inevitable. My empirical study proved that there exists cointegration relationship among RMB NER, intensive economy growth and extensive economy growth. Intensive economy growth can causes RMB appreciation ,while extensive economy growth cause RMB depreciation.