Research On The Impact Of RMB Real Effective Exchange Rate Fluctuation On China's Export Trade Structure

Since the 1970s and 1980s,China's economic openness and trade dependence have been continuously improved,and China's trade structure has also undergone tremendous changes.In international trade,the exchange rate has a direct impact on the relative prices of a country's international trade products and services,thereby influencing the international competitiveness of different products and services.Thus,the exchange rate has a deep influence on the structure of a country's import and export trade development.China's foreign trade has been in a surplus for a long time under the condition of a slow appreciation of the RMB,and the trade surplus has been continuously expanding.With the continuous expansion of trade surplus,China's trade structure has exported too many low technology value-added products and resource-intensive products,and too few service trade imports and exports,which is not helpful to the long-term healthy and balanced development of China's foreign trade.Thus,China's trade structure needs to be optimized imminently.Based on the optimization of trade structure,this article considers the factors such as gross domestic product,foreign direct investment and trade dependence,and from the perspective of export trade,studies the impact of RMB exchange rate fluctuations on China's export trade structure.Firstly,the article sorts out the definitions and relevant research theories and mechanisms at home and abroad about the real effective exchange rate of the RMB and export trade structure,including elastic analysis,absorption analysis,monetary analysis,direct and indirect influence mechanisms,etc.,and sums up the development history and development state of RMB exchange rate and the export trade structure,as well as the impact of RMB exchange rate fluctuations on China's trade structure.Secondly,in consideration of FDI,the dependence on foreign trade,and GDP,based on the annual data from 1995 to 2016 of the real effective exchange rate,GDP,FDI,trade dependence,and export value for the period,five VAR models have been established to empirically analyze the impact of RMB REER fluctuations on China's export trade structure.The empirical analysis is from three levels including the total trade export structure,goods trade export structure,and the export structure of industrial manufactured goods trade.It is also further subdivided into five areas:resource-intensive,labor-intensive,capital-intensive,technology-intensive products and services in order to comprehensively analyze the impact of the REER fluctuation on the export trade structure of China.The results of the study show that for trade exports of technology and capital added-value products,the RMB exchange rate fluctuations will have a long-term positive effect on them and a higher contribution to their structural changes.However,for the rough-wrought and labor-intensive products,the RMB appreciation will significantly reduce the proportion of its exports,and the exchange rate of the RMB will contribute less to its structural changes.It can therefore be concluded that an increase in the real effective exchange rate of RMB will,in the short term,have a negative impact on the export trade as a whole,however,in the long term,it will force China's enterprises to increase technological innovation and capital investment,and continuously reduce the proportion of the rough-wrought and labor-intensive products export trade,and constantly improve and optimize the export trade structure,and stimulate the upgrading of industrial institutions,and make China's foreign trade develop more healthily.Finally,according to all the studies and research,combined with China's current development status,the article proposes several suggestions to optimize export trade construction,for example,improve the construction of the RMB exchange rate mechanism,increase the marketization of the RMB exchange rate,rationally promote the appreciation of the RMB,advocate the diversified development strategy of commodity exports,and improve China's high value-added industries,develop and vigorously promote service trade,and at the same time improve foreign exchange risk management capabilities and enhance the quality and threshold of foreign capital inflows.