Exchange Rate Fluctuations,trade Balances And Employment

With the rapid development of globalization,countries around the world have frequent trade and economic interdependence.After the reform and opening up,China’s market economy started and promoted the export-oriented trade strategy.The most important trading partner is the United States.In 2000,China overtook Japan and became the largest trade deficit country in the United States.In 2001,China joined the WTO and traded more frequently with countries.At the same time as the rapid economic development,the United States continued to maintain a trade surplus for a long time.The United States demanded that the renminbi appreciate to balance the trade surplus between China and the United States.In addition,the international financial crisis that occurred in 2007 led to the economic recession in the United States,and the high unemployment rate in the country made the international trade protectionist forces rise.The huge trade surplus of China has thus become a critical goal.The United States has repeatedly blamed the high unemployment rate on Sino-US trade imbalances and pressured the Chinese government to demand an appreciation of the renminbi.Regarding the question of whether the exchange rate will affect the trade balance between the two countries,scholars at home and abroad have conducted extensive and in-depth research,but still have not formed a unified conclusion.Whether the Marshall-Lerner condition is established is an important basis for whether a country’s exchange rate can affect trade balance.The Marshall-Lerner condition states that a currency depreciation can only lead to an improvement in trade balances when the sum of the demand elasticity of a country’s export commodities and the price elasticity of imported goods is greater than one.In the early research of scholars,it is believed that the elasticity of import and export demand in most countries is strictly insufficient,so the exchange rate depreciation cannot improve a country’s trade balance,that is,"elastic pessimism"The impact of trade on trade can be traced back to the theory of comparative advantage and the theory of factor endowment.There is still much debate about the impact of Sino-US trade on employment in the United States.One view is that Sino-US trade has no significant impact on US employment.The main factors affecting US employment are the level of economic development and wages of the United States.Another view is that Sino-US trade has led to a deterioration in employment conditions in the United States.Will reduce the US unemployment rate.This paper first analyzes the real exchange rate of RMB and the trade balance between China and the United States.The research shows that there is no long-term equilibrium relationship between the real exchange rate of RMB and the trade balance between China and the United States.The main reason for the trade balance between China and the United States is that of China and the United States.The level of economic development.Secondly,analyzing the Sino-US trade structure,the results show that Sino-US trade has been in a competitive state as a whole,and there is great asymmetry in Sino-US trade dependence: China has a high degree of dependence on trade with the United States,and US has a low dependence on China.The most important reason is the US restrictions on China’s high-tech product exports;according to the adjusted GL index,Sino-US trade as a whole shows the state of intra-industry trade,indicating that there is a stricter production substitution or consumption substitution relationship in Sino-US trade;The similarity of the export products of the United States and the United States in the world market indicates that the export competition between the two countries in the world market is increasing,which is one of the important reasons for the United States to impose restrictions on technology exports to China.Finally,using the systematic GMM model to empirically analyze the impact of Sino-US trade on employment in the United States,it is found that the increase in US-China trade balance will slightly worsen US employment,and the appreciation of the RMB is not conducive to US employment.This may be attributed to the Sino-US trade structure and its impact.The most important factor in US unemployment is the level of US output.