Rmb Appreciation On China's Macro-economic Impact Analysis

It has been two years since the Chinese exchange rate system was adjusted to take the market supply and demand as the foundation, referring to a basket currency and with the management floating exchange rate system, July 21 2005. In these two years, the RMB to US dollar exchange rate appreciated to 7.6155 RMB/US dollar at the end of June 2007, comparing to at the beginning of the reform 8.11 RMB/US it has been appreciated more than 6%.The exchange rate is only one of the variables in the national economy development, but it is an extremely important economic variable under the open economy condition because it can affect the capital market, the foreign trade, financial, the price, even government behavior. So exchange rate can influence the expense, investment, government behavior, import and export of the national economy. In the meantime, the national economy in turn can influence the exchange rate, the exchange rate appreciates when economy grows, and the exchange rate depreciates when economy declines in the contrast.The influence of RMB appreciation to Chinese macroeconomy is various. It can lead to the price of Chinese property rise, more international investment, the congenial capital continue to inrush China once all of the world anticipate the RMB will appreciate in the future, so all of these cause the huge impact to the Chinese economy. Entering 2007, China has sustained double surplus of the international revenue and expenditure, the foreign exchange reserve reached a record 10663 billion US dollars, real estate and stocks are rising sharply, the consumer price level rapidly rise, all of these phenomena are related to RMB appreciation .Find out the relation between the RMB appreciation and Chinese economy, present suggestions to the government are the goal of this paper .This paper divide into five chapters. Chapter 1 refers to the concept of the exchange rate and the theory of the exchange rate system. In order to understand the revaluation of the RMB we should know about the type of the exchange rate system and the factor which influence the exchange rate. This chapter introduce the theory of the exchange rate system and the literature summarize of the influence of the exchange rate on economy.Chapter 2 refers to retrospect of the exchange rate system of RMB. This chapter has reviewed the exchange rate system for each periods since the foundation of the state, has analyzed the overall running situation.Chapter 3 analyzes the appreciation reason of RMB. RMB appreciate is related to the every part of the economic operation. This chapter firstly discuss the exchange rate decisive theory, and then analyze the reason of the RMB appreciate, at the end of this chapter we get the conclusion that RMB will appreciate in the near future.Chapter 4 Chapter four is about the analysis of the RMB appreciate influence macroeconomy. Since July 21 2005, RMB appreciated to U.S. dollar one-way, this kind of phenomenon must exert an enormous influence on China's economy. Since 2007, with the acceleration of the RMB appreciation, various pressure accumulated in national economy in the previous appreciation process have already displayed, which deserves we pay more attention to.Chapter 5 is the suggestions on RMB appreciation. This chapter analyzes experience and enlightenment brought to our country of Japanese yen appreciates at first, and then analyze the advantage and disadvantage of the Japanese yen appreciates fast. On the analysis of the RMB appreciation, I give reasonable suggestions on the RMB exchange rate to make sure Chinese economy grows steady.