Exchange Rate Changes Impact On The Industrial Structure Of Hunan Province

The exchange rate fluctuation range is expanding recently.the fluctuation of the RMB exchange rate has an significant impact on economy what has aroused concern in China. At present the formal study laid particular emphasis on the analysis in the impact on economic growth, international trade and employment,but seldom linked the fluctuation of RMB exchange rate with industrial structure.But the exchange rate as a price variable plays an important role in the adjustment of industrial structure,because of its impact on international trade、capital flows and so on. In view of this, this article focuses on how the exchange rate through middle transmission channels and ultimately impact the industrial structure adjustment. As our present strategic goal is structural adjustment to promote development, research this subject has some practical significance.In this paper, based on reading literature, study the extent that exchange rate fluctuations impact on industrial structuring in Hunan Province, the use of real effective exchange rate index of Hunan Province since exchange rate regime reform in1994, and three industrial annual data, With a view to seeking the correlation between the two. Based on the previous research, this paper analyzes the impact of fluctuations of exchange rate on Hunan industrial structure adjustment from two perspectives. Firstly, analyzes the transmission channels of the real effective exchange rate fluctuations on adjustment of industrial structure. This Paper studies the transmission channels empirically, which features a innovation. Second, by adopting VAR model analyzes the impact of fluctuations of exchange rate on Hunan industrial structure adjustment. Empirical test results show:First, the correlation between real effective exchange rate volatility and the development of primary industry is very small, the nature of the primary industry lead to the impact channel is not smooth, so the effects were not significant. Secondly, while short-term rise in the real effective exchange rate devaluation to promote the development of secondary industry. But in the long view, the devaluation will inhibit the development of secondary industry; on the other hand, the impact of exchange rate fluctuations on secondary industry is great, which shows the internal structure of the secondary industry in our province is unreasonable. Third, the appreciation of RMB will also have little effect on the development of tertiary industry. Fourth,this Paper finds that real effective exchange rate affects industrial structure adjustment mainly through export channels, and list through FDIChannel is the least one. Overall, the decline in the real effective exchange rate of RMB will stimulate intra-industry upgrading and optimization of industrial structure, but indirect transmission channels and Industry self-discipline make this effect is very limited. Therefore, the exchange rate as a global economic variable should not be as a measurement to drive industry development, but the government can use the opportunity of exchange rate fluctuations to publish relevant industrial policies. Finally, based on the empirical result.this paper Propose some industrial development strategy.