Empirical Study On The Impact Of RMB Exchange Rate Fluctuations On The Balanceof Trade Between China And The Belt Androad Countries

Under the background of China’s economic development,our country put forward The Belt and Road initiative,China how to promote the development of countries along The Belt and Road is the core issue.The trade development of China and The Belt and Road countries is mainly concerned with the price of trade goods and services : the exchange rate of RMB and related national currencies.Therefore,this paper studies the trade relationship between exchange rate of RMB and The Belt and Road countries,in order to enrich the exchange rate and the traditional trade theory,all the way to explore the area under the strategic new problems and new characteristics of exchange rate and trade,deepen the area along the strategic connotation,the RMB exchange rate,China’s foreign economic and trade measures,etcFirstly,based on relevant researches at home and abroad,this paper combs the theory of exchange rate and trade.Existing literature on research targets,fixed number of year,analysis methods,analysis object and conclusion are different,and all the way to our country and the area balance of trade and currency relations between countries study is less,so this paper studies the exchange rate and the balance of trade between China and The Belt and Road countries based on exchange rate theory,trade theory and free trade zone theory.The empirical part mainly uses the correlation data between China and The Belt and Road countries from 2001 to 2014,divide the total and internal plate to establish panel model to make co-integration analysis of exchange rate of RMB and balance of trade.The co-integration result shows that RMB appreciation can promote the expansion of balance of trade between China and The Belt and Road countries,the south Asian countries in the six sectors are consistent with the overall empirical results.At the same time,the area along the country’s GDP and foreign investment inflows increase can also lead to the corresponding expansion of the balance of trade.The Belt and Road along the route of southeast Asia,west Asia,South Asia and central and eastern Europe affected consistent with the overall effect of each plate.For further analysis of our country and the area along the exchange rate and trade relations between countries.Based on the different plates as well as the silk road economic belt with considerations such as maritime silk route in the 21 st century,all the casesselected area countries to analyze our country and the relationship between exchange rate and the balance of trade.It can be seen from the analysis that,in general,the volatility of RMB appreciation will bring about the expansion of China’s trade surplus with the country and ease the trade deficit.accordingly,the volatility of RMB depreciation will expand balance of trade between China and other countries,increase the trade deficit.In addition,factors such as trade structure,Free Trade Zone,policy,RMB settlement and external economic environment will weaken the effect of exchange rate of RMB on the the balance of trade between countries.Finally,this paper puts forward some Suggestions on the trade development between China and The Belt and Road.First,we need to maintain the relative stability of the exchange rate between our country and The Belt and Road countries.Second,we should increase the direct investment between China and The Belt and Road countries.In addition,we will try to promote the structural optimization of trade products between China and The Belt and Road from the import and export primary products to the finished products and high and new technologies.Finally,promote differentiated construction between The Belt and Road countries.