A Research On The Impact Of Real Exchange Rrate Changes On The Manufacturing Trade Of The Cross-Strait

Since the reform and opening up, the cross-strait trade cooperation has become more and more closely. As the two sides achieved the navigation in 2003, achieved the "big three" in 2008,signed ECFA agreement in 2010, Cross-strait trade dependence is more and more closed. At present, the Mainland is Taiwan's largest export market and the largest source of trade surplus, Taiwan is the Mainland's the largest source of trade deficit.At this stage, cross-strait trade has become a hot issue. And in international trade, the impact of real exchange rate changes on trade has always been the focus of domestic and foreign scholars study. So this paper studies the influence of the real exchange rate changes on the import and export trade between the cross-strait.This paper first summarizes the literature of exchange rate changes on the overall trade and industry trade and the literature of cross strait trade impacts. Then this paper tries to use the Redux model established by Rogoff and Obsterld as the basis for theoretical deduction. Second this paper studies cross-strait trade development history and current situation from the overall level, and cross-strait trade dependence, Mainland major imports industries from Taiwan, the Mainland exports major industries to Taiwan, the import and export industry technical level, as well as the main deficit industry trade between the cross strait. Then, this paper based on the national economic industry classification standards, select different import and export industry quarterly data from 2009 to 2014. Using static panel and dynamic panel model to analyze the impact of real exchange rate changes on the import and export of different technical level industries.The results show that there are significant differences in the impact of real exchange rate between the cross-strait. From the static panel model, it is concluded that for the Mainland exports to Taiwan there are 24 manufacturing industries in the 25 manufacturing industries effected by the CNY/TWD real exchange rate. For Mainland import from Taiwan there are only 16 manufacturing industries in the 26 manufacturing industries effected by the CNY/TWD real exchange rate.And the exchange rate elasticity of the Mainland to Taiwan is much larger than that of the Mainland from Taiwan. It is Explained that the Mainland export to Taiwan manufacturing industry more affected by the CNY/TWD real exchange rate. From the dynamic panel model, no matter the import and export trade has the clustering effect, and the high technology manufacturing industry agglomeration effect is greater than the low tech manufacturing industry. At the same time, for import, only low technology industry affeted by the CNY/TWD real exchange rate is large, and the impacts of the high technology and medium technology industry are small. But for export all industry is affected by the CNY/TWD real exchange rate. Maybe, exports compared to import products technical content is relatively low, added value low makes the product substitutability strong, more affected by the real exchange rate changes. Finally, this paper gives some suggestions from the macro level, industry level and enterprise level.