Empirical Studies On The Effects Of RMB Incomplete ERPT To The Exports Price In China

Exchange rate and price as two of the more important macroeconomic variables,both of which exist in close contact in an open economy. With the global trend ofeconomic integration continues to deepen, the degree of openness of the nationaleconomy continues to expand, the impact of the interaction between a country’seconomy by the increasingly significant.Our country since reform and openingup,especially after joining the WTO,foreign trade and foreign investment sustainablegrowth,forming a huge foreign exchange accumulation.Since July21,2005,Chinastarted reform of the RMB exchange rate formation mechanism,and implementedfloating exchange rate regime on the basis of market supply and demand withreference to a basket of currencies. The fluctuations of RMB exchange rate becomemore frequent and wider.As the relative price of the currency,the exchange rate shockscan affect the exportation price directly,what’s more,for different industries,exportprices have a different response to the exchange rate shocks.The paper studies theconduct of China’s export-enterprises’micro-pricing by use the theory of incompleteexchange rate pass-through to try to find out the specific mechanism and extent ofeffect by changes of RMB exchange rate to export-enterprise in China.Based on12major industries classified under HS product, using the data in July2005to December2013, the research industry level to pass on Chinese export pricesfrom the exchange rate, select China12industrial manufacturing as the researchobject, One can grasp the extent of the RMB exchange rate changes affect the exportcommodity prices as a whole, because the manufactured goods accounted for morethan95%of China’s total exports, has become China’s most important exportcommodities, China is also the world ’s major industrial manufactured exports one ofthe country; Second, it could examine the different sub-sectors under manufacturingexport price reaction degree of appreciation of the renminbi, and then analyzed todetermine the different industries in different sectors of market structure, pricing andinternational competitiveness. By constructing a theoretical model singleprofit-maximizing monopolist derive optimal decision is to be interpreted in theexport price variable to the exchange rate as the main explanatory variablemeasurement model and using panel data model to RMB incomplete pass on different sectors of export commodities affect the price of an empirical test. Empirical studiesshow that exchange rate pass-through effect of various industries is not complete, theoverall pass rate is negative transfer and deposit rates between different sectors passrate differences, the traditional labor-intensive industries less flexible exchange ratepass-and technology-intensive industry rate transfer greater flexibility.According to theoretical and empirical results, combined with the currentsituation at home and abroad, this paper presents a proposal on the exchange rateimpact of incomplete pass-through effect, and from the dependence of exportcommodities on the international market, the export industry, market forces,competitive advantage and export commodities export refund sharp policy exploreaspects and other aspects of reasons not fully pass rate, in appreciation of therenminbi, the Chinese companies did not pass the impact of exchange rate changes toexport prices go up, on the contrary, in order to maintain and expand market share,companies have generally adopted a puerile market strategy, at lower export prices,resulting in a negative transfer situation, and to support the export tax rebate policyhas helped lower prices for export enterprises. With the continued rapid appreciationof the renminbi and the continuous adjustment of export tax rebate system, subject tothe constraints of corporate profit margins, negative transfer situation unsustainable.This requires changing the puerile marketing strategies, improve pricing. To do this,companies must accelerate the pace of independent innovation, with independentintellectual property rights, improving product competitiveness, higher value addedproducts. Finally, therefore for the domestic monetary and fiscal policy, trade policystatus quo proposed alternative policies to deal with RMB appreciation of riskaversion and industrial restructuring policy recommendations.