The Impact Research Of RMB Appreciation Against Agricultural Product In Anhui Province

China has begun to adopt a manageable floating exchange rate system which is based on the market supply and refer to the basket of currencies since 21 july 2005. From then on, the Rmb form a more flexible exchange rate mechanism instead of focusing on the dollars. With the quick development of china's economy, the exchange rate of the Rmb is becoming higher. Agricultural trade plays an important part in our foreign trade, leading to the increasment of the trade balance and foreign exchange reserves, as well as promoting the development of domestic economy. Anhui province, As an big province of agricultural production, owns vegetables, tea, natural honey as its main products with a big percent of the output in the whole nation. The export of agricultural products are in a rapid growth reaching $6.9 billion in 2010 which increased 35.7 percent, this thus stimulated the growth of GDP in anhui, providing a favourable security for the development of agriculture, the employment of the peasants and their income. This article analyses the factors influencing the agricultural exports of Anhui province, in which the change of the Rmb exchange rate leads to the Increasing risk of the agricultural production and export. According to the traditional theory, the Rmb's Appreciation increases the real value of the Rmb, having an adverse effect on the agricultural exports and increasing the imports of foreign cheap agricultural products which has greater impact on the agricultural development in Anhui province.This thesis studies the agricultural exports In anhui province,using the real effective exchange rate changes from 2006-2010 and the exports data in Anhui in this period as the data, as well as refering to the relevant research of the China scholars,and it is based on the Marshall-Lerner conditions and the J-curve effect, making the quantitative and empirical analyses on the export of agricultural products in Anhui province. The conclusion is the changes of the Rmb real effective exchange rate has a significant relationship with the agricultural exports in Anhui province. In the short term, the revalueing of the rmb is conducive to the increaing of the exports because of the influences of the time lagging. while in the long run, the influences of the time lagging will gradually disappear which eventually leads to a negative impact on agricultural exports of Rmb Appreciation in Anhui province.In order to increase the international competition of the agricultural exports in Anhui province,This thesis makes some advice about the impact on agricultural exports by the fluctuating of the exchange rate. The government and enterprises should strengthen the improving of its own agricultural productions'quality. The government should improve the Rmb exchange rate mechanism,Assisting the development of small and medium enterprises and providing more advantageous incentives for the agricultural exports.Companies must also make use of advanced science and technology to innovate and to reduce production costs, enhancing brands development of agricultural products,promoting the diversification of agricultural markets. In order to avoiding exchange rate risk, companies should promote the development of new financial instruments.