The Empirical Study On The Effect Of The Change Of RMB Exchange Rate On The Export Of Zhejiang Province

The rate of exchange is one of the important factors that impact the foreign trade of a country, but also one of the problems which is widely paid attention by the researchers. Since the the reform of the RMB exchange rate in 2005, excluding the impact of the financial crisis, the foreign trade flow of Zhejiang province is maintaining in a continuous upward trend. In order to find out the exchange rate changes on the impact of foreign trade of Zhejiang, this paper is based on the theory of purchasing power parity, the elasticity analysis theory and international balance of payments absorption theory, using the import and export data from 2006 January to 2010 December and the combination of qualitative and quantitative methods, making research of the impact of the RMB exchange rate changes on Zhejiang exports The innovation of this paper is not only an analysis of influence of the exchange rate changes on different industry export, but also study the impact on different commodity exports.Firstly, this article card the literature of the impact of exchange rate changes on the export trade; secondly, analyze the movements of the RMB exchange rate and foreign trade of Zhejiang province; then on the base of establishing demand model, using the ADF method,GARCH model,Johansen method, estimation,variance decomposition method to do the deeply empirical analysis the impact of the RMB exchange rate volatility on Zhejiang Province export trade of different industries and different commodity export. Conclutions: A cointegration relationship exists among the Zhejiang province exports and real effective exchange rate of RMB and the exchange rate fluctuation risk and the national income of the trade partners of China. The important factors that influence Zhejiang's overall export are the RMB real effective exchange rate and the national income of China's trade partners, while the impact of the risk of exchange rate fluctuation on the export is not grate. Finally, summarize and evaluate on the base of the conclusion of empirical analysis, then put forward the relevant policy recommendations, including: continue to optimize the structure of foreign trade, expand trade in order to reduce the risk of fluctuation of exchange.