An Analysis Of Rmb Real Effective Exchange Rate’s Impact On Chinese Import And Export Trade

Exchange rate is different countries currency exchange ratio, in international trade, exchange rate performs price conversion functions, it has an important impact on one country’s import and export situation. As China’s economy and trade dependence of opening-up to improve, the RMB exchange rate and it’s influence on China’s foreign trade has become a more and more research focus. Recently, by the continuing influence of U.S. economic recovery slow and the debt crisis, the international market demand weakened, global inflation pressure spread, trade protectionism again. All of these make RMB exchange rate is still facing larger external pressure and our country foreign trade development will face more complex and bad peripheral environment. Therefore, in the current economic environment, it is of great practical significance to study the RMB exchange rate’s impact on China’s foreign trade.In this paper, we will use the data of1994-2011, through the empirical research methods to study the effect of real effective exchange rate changes on the impact of foreign trade. In order to make a more convincing and targeting conclusion, the article studied respectively the influence on the trade and it’s structure.After study, we can get main conclusions as follows:(1)RMB exchange rate has an positive effect on import and negative effect on export, the absolute value of the import and export value of elastic greater than1, meet the ML requirements.(2) RMB exchange rate has two-way Granger causes on export and one-way Granger causes on import.(3) RMB exchange rate and primary products trade structure does not exist co-integration relationship, but it has a co-integration relationship with manufactured products trade structure.(4) RMB exchange rate has no Granger causes on primary products trade structure and one-way Granger causes on manufactured products trade structure. Finally, we analyses the present economic environment and propose some policy recommendations as follows:The government should improve the exchange rate formation system, carry out cross-border trade RMB work actively, make export drawback policy more perfect, take simultaneously measures to promote foreign trade structure upgrade. Foreign trade enterprise should Improve their product competitive ability and enhance the consciousness and ability on avoid foreign exchange risk.