The Influence Of Exchange Rate On Industrial Structure Adjustment

Industrial structure adjustment and transformation is the key point to the development of our society and economy, while the expansion of foreign trade and foreign investment increase in our thirty years of opening up provides industrial restructuring and upgrade inexhaustible power. As a very important price variable-real effective exchange rate, its movements through import and export prices, foreign investment income can have effects on both the external and internal economy. This paper base on discussing relationship between China’s economic growth path and changes in real effective exchange rate, analyzing the internal and external drive on the industrial restructuring of real effective exchange rate of RMB appreciation and from the current account and capital account two aspects, it is elaborated how RMB real effective exchange rate to promote industrial restructuring. The main structure is as follows:The first chapter introduction analyzes theoretical and practical significance of the topic of this paper, highlighting necessity and importance of the impact of the exchange rate on industrial structure adjustment.The second chapter elaborates RMB real effective exchange rate and industrial restructuring related concepts and theories, including the definition of real effective exchange rate, industrial structure definition, exchange rate pass-theory, the Balassa-Samuelson effect, the purchasing power parity theory exchange rates, international capital flows and industrial structure adjustment theory for the analysis below do basic bedding.The third chapter discusses the RMB real effective exchange rate and China’s industrial structure adjustment mutual relations. Focuses on the following aspects:First, realistically detailed description of the real effective exchange rate on the impact of China’s industrial structure adjustment, China’s export-oriented economic research model of the formation process and the internal and external differences between the two departments productivity developments; Second, based on the Balassa-Samuelson model to explore China’s economic growth pattern and industrial structure is the current RMB exchange rate changes the internal driving force; three, respectively, from the balance of payments current account and capital account two aspects of RMB real effective exchange rate movements on the role of China’s industrial structure adjustment path.In Chapter Ⅳ, firstly, I summarize the historical evolution of RMB exchange rate, then combine with the change trend in real effective exchange rate, analyze the correlations between RMB real effective exchange rate and foreign trade structure’s movement. Finally, in empirical part, regression analysis, causal analysis, VAR model, impulse response etc are used to analyze RMB’s real effective exchange rate movements’ effect on labor-intensive, resource-intensive and capital-intensive products in export and import, explore RMB current real effective exchange rate’s appreciation effect on China’s foreign trade structure adjustment.In Chapter Ⅴ, in respect of capital projects’ research, from the practical and empirical two perspectives the article analyzes effect on structure adjustment of foreign investment industry. First, from the practical perspective, review changes between the exchange rate and foreign investment in the last three decades, then use regression analysis, causality test, co-integration, VAR and impulse response etc. to make measured analysis of the relationship between RMB real effective exchange rate movements and foreign direct investment and other investments.In Chapter Ⅵ is the conclusion which we drawn:RMB real effective exchange rate appreciation has a positive effect on the adjustment of industrial structure both in foreign trade and foreign investment.RMB real effective exchange rate appreciation exerts a significant impact on our economic development. From industrial added value, RMB real effective exchange rate appreciation is conducive to the second and tertiary industries; from products structure, it can promote capital and resource-intensive products’ import and export and restrain labor-intensive products’export; from an investment perspective, it will drive foreign direct investment and maintain China capital markets’ stability. Pros and cons of these changes will lead to our enterprises and government to accelerate the transformation of export and economic growth patterns, thus achieving industrial restructuring is a natural result.