The Influence Of RMB Exchange Rate To China’s Trade

During recent years, the western developed countries, whose spokesman is the United States, have kept pressing China, claiming the threat, compelling RMB to appreciate. Especially after the world financial crisis, the exchange rate of RMB burdened so much. The relationship between the fluctuation of exchange rate and China’s trade structure is focused again.The trade structure is not only the basis of the trade development, but also the criterion to judge the quality of trade behavior.The trade structure will decide the change of the trade behavior, what’s more, it shows the condition of the economic development of one country. Exchange rate is a tool to measure the prices of money and transfer the price of trade and economic activities in international markets. The exchange rate links the international prices with the domestic prices, and influence the trade by prices, which is one of the most important index concerning international economic activities and is closely linked to the international trade. So researches concerning the trade structure mean much. Although in recent years the economic condition is not so good and the world economy lay at the bottom, the international trade of China has always grown fast, which means the total amount of export and import grows every year and the significance of international market expands also. Since the reform and open, especially after the reform of exchange rate in2005, China’s international trade has been enlarged gradually, and the trade structure has been optimized. As the decrease of the proportion of the original products, the increase of the proportion of the manufactured goods, processing trade has been the main way of trade.Considering the appreciation and fluctuation the exchange rate of RMB, we cannot deny the effect of exchange rate on traditional comparative advantage goods. Different kinds of goods should base on the condition of themselves and consider the long or short run. In the long run, we need to enhance the technology of products and improve the international competitiveness and the ability of negotiating prices to decrease the bad influences of RMB appreciation.Researchers pay more attention on the effect of exchange rate on trade flows or balance, little on the trade structure. So, the paper studies the effect of fluctuation of the exchange rate on trade structure from theoretical and empirical views. The paper first introduces the theories of the effects of exchange rate on trade structure, and use charts and figures to demonstrate the relationship between them, and after gathering huge data, uses empirical ways to test the relationship between them. At last, the paper sends policy suggestions from views of financial reform, industrial structure reform, trade policy.