Study On Hong Kong's Trade Effect Of The RMB Exchange Rate's Appreciation

In recent years,renminbi has always been under the pressure of appreciation. In order to lessen trade friction,ameliorate bilateral trade relation,RMB reformed foreign exchange system in July in 2005,which is called floating rate.It is based on the markets' supply according to a basket of currencies.After the signing of CEPA and China's accession to the World Trade Organisation,there are bound to be more economic collaborations between Hong Kong and the mainland.The appreciation will have a direct effect on the trade of Hong Kong.This article will study whether the trade of Hong Kong will be affected by the appreciation.The exchange rate is the ties between a country's foreign economic and trade,the exchange rate system is an important component of the economic system,the appropriate exchange rate system is one of the most important guarantee for economic growth.There are mainly two methods to express the exchange rate:nominal exchange rate and real effective exchange,and there are some different between them.The first part of this article mainly told the background to study this issue.The second part reviewed the theory basis of exchange rate.The third part described the characteristics of Hong Kong.The fourth part researched the effect of appreciation on Hong Kong trade and mainly sums up the current situation of Guangdong- Hong Kong cooperation under the background of CEPA and the Pan-Pearl River Delta regional cooperation,proposes the future development planning.The development of CEPA will create benefits for mutual prosperities of China Mainland and Hong Kong.CEPA is a win-win agreement,bringing new business opportunities to the Mainland,Hong Kong and all foreign investors.For Hong Kong,CEPA provides a window of opportunity for Hong Kong businesses to gain greater access to the Mainland market.The fifth part stated that the Chinese mainland announced the pilot RMB Trade Settlement Scheme in April 2009.As for Hong Kong,the pilot RMB settlement scheme will further strengthen it as an international financial centre.Finally,some suggestion has been put forward for the government to fascinate the bilateral trade.