To Study The Impacts Of The Appreciation Of The Renminbi To Our Country Automobile Industry

On July21,2005, People’s Bank of China (PBC) announced the reform of RMB exchange rate regime, which opened the prelude to the reform of RMB exchange rate regime. From then on, the fluctuation range and the complexity of the formation mechanism of RMB exchange rate increased obviously, which has had certain impact on China’s import and export trade and foreign direct investment. Auto industry, as the pillar industry in China, plays an important role both in import and export trade and the national economy. It has become a focus that the impact of the fluctuation of RMB exchange rate to the development of auto industry.This paper mainly discusses the influence of RMB exchange rate fluctuation (appreciation of the RMB) on China’s auto industry. Firstly, this paper reviews and studies the related theory on the influence of RMB exchange rate fluctuation on import-export trade and foreign direct investment. Secondly, on the basis of the investigation of auto industry’s current situation in China, this paper does empirical researches on the influence of RMB exchange rate fluctuation (appreciation of the RMB) on export, import and foreign direct investment of auto industry in China. And then, by applying the moderating effect analysis, this paper studies the influence of RMB exchange rate fluctuation on China’s auto industry. The results show that, appreciation of RMB can promote the import and foreign direct investment, and restrains the export of China’s auto industry. But in consideration of the moderating effect of foreign direct investment, the negative impact of RMB appreciation on China’s auto industry may decrease. Finally, this paper, on the basis of empirical research, combined with the problems left over the development of China’s auto industry, presents some relevant policy suggestions, which include expanding the scale of utilizing foreign capital, accelerating the pace of opening of the auto industry, improving the quality of introducing foreign direct investment, as well as expanding the use of foreign capital, enacting and perfecting relevant laws and regulations, and encouraging foreign enterprises to implement research and development in our country and so on.