The Empirical Study Of Rmb Exchange Rate And The Sino-us Trade Balance

Since China's accession to the WTO, as a significant trade in the contemporary world, trade between China and the United States has played a significant role in economic development.As the deepen mutual cooperation of the two countries in various fields, trade between China and the United States has been more and more frequently, total trade is also growing. Currently, the U.S. has become China's second largest trading partner only inferior to the EU; and since 2006, China replaced Mexico became the second largest trading partner of the United States only inferior to Canada. But with the growing Sino-US trade relations deepen the Sino-US trade imbalance between the degrees of peaked. Huge trade deficit between China and the United States became the main trade friction between the two countries, and also become a major destabilizing factor of the world. The U.S. has repeatedly accused China of keeping its currency artificially in order to promote exports, and called for the RMB appreciation. Therefore, on July 21,2005, China announced the reform of RMB exchange rate formation mechanism, that "the basis of market supply and demand with reference to a basket of currencies, managed floating exchange rate system", starting from the gradual appreciation of the RMB. However, since China's exchange rate reform in five years, although the continuous appreciation of RMB, the huge trade deficit between China and has not been improved, but continues to expand, which has aroused the attention of scholars from many experts.In this paper, we based on empirical research; analyze the RMB exchange rate and the Sino-US trade relations. Paper is divided into four parts. In the first part, the paper sets out the background papers, ideas and innovations, the research status and achievements in detail. To confirm whether the appreciation of the RMB to improve Sino-US trade imbalance and the impact of Sino-US trade relations to find the real cause of Sino-US trade imbalance. In the second part,this paper built on the Sino-US trade balance function based on the quarterly data between the first quarter of 1995 to the first quarter of 2010, consider the import and export statistics for the two sides of different caliber, in order to make the model more convincing, the paper data from the Chinese side and U.S. data were constructed model, while model to describe data of statistical analysis, summarized roughly in trend. In the third part of this paper, we use cointegration, error correction model to analyze the exchange rate of the China-US trade balance in the short and long term effects, found in the long run, RMB appreciation can really improve the trade balance, but the RMB appreciation on China-US Improvement of trade imbalance between the two countries as the development of national economy, the level of trade imbalances resulting from the further expansion of the role, while the short-term RMB exchange rate is also on the trade balance has about three quarters of the J-curve effect. At the same time using Granger causality test, impulse response functions and variance decomposition to analyze the impact of variables on the model system and found that appreciation of the RMB at the present stage of international human factors, while the exchange rates of the minimal impact of Sino-US trade balance. Finally found significant changes in policy or economic impact on Sino-US trade, this paper dummy variable method and the impact of model CHOW breakpoint test to find the structure of variable structure point, found to affect the trade balance is not usually considered a major event in China's accession to the WTO but the two financial crises in 1998 and 2008, cointegration by variable structure, we have come to after the two financial crisis, Sino-US trade moves against China's advantage. In the fourth part of this article, a summary of our full analysis and impact of Sino-US trade balance to find the real reason. The real reason caused the Sino-US trade imbalance is the rapid development of Sino-US economic and the impact of twice financial crisis, and because the international transfer of industry caused the increase of Chinese exports. The different export policies between China and the U.S. can not make the two countries complement each other, so that China's export trade comparative advantage; while the role of re-exports and the current statistical system indeed exaggerated the extent of Sino-US trade imbalance Innovation of this paper is:First, this is the data from the difference between the two aspects of modeling, more convincing; Second, this paper use the quarterly data between first quarter of 1995 and first quarter of 2010, and the data more updated the model to ensure a greater degree of freedom; Thirdly, the use of variable structure analysis of cointegration analysis to major economic events or policies, the scope of study of past papers is extended. The shortcomings of this paper is that the data used interval is too short to affect the variable structure cointegration analysis of the accuracy of the model. Therefore, the model variable structure cointegration analysis of the conclusions of the economic crisis of 2008 the exchange rate and trade relations may be too small because the deviation of the current data, the model capture the economic crisis period the exchange rate and trade relations will further need to correct observation and validation.