Study On The Influence Of RMB Exchange Rate Changes On Foreign Direct Investment In China

Under the background of trade and investment liberalization, the exchange rate is being received increasingly extensive attention from a variety of communities. After China carried out reform and open policy, the RMB exchange rate regime has changed from the single to the managed floating. The base of the regime has changed from the government to the market. The reference has changed from pegging to the dollar to referring to a basket of currencies. In the meantime, the trend of RMB exchange rate has changed from devaluation to appreciation. Then it-changed from appreciation to devaluation again. It is an important subject to analysis the effect of RMB exchange rate on economic development. Foreign direct investment is a significant supplement for the economic development. It has grown out of nothing. But it has a very large scale in China recently. Therefore, the study on the relationship between exchange rate and foreign direct investment has important realistic significance.This paper starts from two aspects—exchange rate regime transition and the change of foreign direct investment (FDI). It studies the influence of RMB exchange rate and FDI. The focus of this paper is the influence of the investment scale, the area of source and the investment orientation. We can analysis the influence from two aspects by using of Excel and Stata. By this means, we will draw a conclusion about exchange rate and FDI. Then some suggestions will be presented.