The Impact Of Real Exchange Rate Fiuctuation On Sino-US Bilateral Trade Balance

After the severe impact of the financial crisis in 2008,Sino-US trade imbalance has become worse and worse.“The New Trade Protectionism” of America often censure the Chinese government has the suspicion of exchange rate manipulation.In addition to nominal shock,can real shock effectively change the trade balance?Based on the traditional incomplete substitution theory of two-sector and the exchange rate determination theory,this dissertation makes a further study on how the nominal factors and real factors effect on China’s bilateral trade balance through the mechanism of exchange rate determination.The first chapter introduces the research significance,research objectives,research methods,research content and features.The second chapter is the literature review on theoretical hypothesis and empirical research,mainly on the determinants of the real exchange,changes in terms of trade and theories of trade balance,rate and theories of trade balance.The third chapter is the theoretical model deduction and empirical model construction.Under the framework of incomplete alternative theory,structures a two-sector model which proposed by Feenstra and Taylor,after analysis of the exchange rate decision mechanism and the main factors affecting the trade balance,the applicability of the dynamic general equilibrium condition of the model,put forward tradable goods market clearing is investigated for the empirical study on the China.Then an empirical model for bilateral trade experience of China was modified by the Imperfect Substitution Theory and the logarithmic decomposition of real exchange.The fourth chapter is the empirical analysis of Sino-US bilateral trade and research how the relative changes of output scale,as well as the trade structure and the structure of two sector impact on trade balance.The fifth chapter summarizes to the research results and discusses policy implications.The basic conclusions of this study are: Trade balance condition at the present stage is tradable goods market clearing,which means " effective demand " is equal to " effective supply".And the complex economic operation mechanism will make the trade balance of Sino-US bilateral trade continue to a ratio of exports to imports fluctuates around a relatively stable level in the long run.What’s more,the impact of the real economic factors and the nominal price factors to RMB will affect the trade balance via economy operational mechanism.Based on the theoretical analysis and empirical research results,this study proposes the policy recommendations for China’s exchange rate system reform and the trade policy to the United States: Strength the cooperation with the Asia Pacific and neighboring countries,promote the internationalization of the RMB and the realization of a flexible floating exchange rate system gradually and cautiously.Accelerate changes to the economic restructuring,optimize the industrial structure of manufacturing industry,realize the diversification of trade products,improve the terms of trade from the source,enhance the position of China in the international division,making China’s Foreign trade e develop sustainably.