The Trend Of China's Export Price Exchange Rate Pass-through Effect Since The "Exchange Reform" And Its Impact On The RMB Settlement Of Cross-border Trade

The sensitivity of export prices to exchange rate changes is ostensibly determined by the pricing strategy of micro-enterprise entities in avoiding exchange rate risks.But at a deep level,the exchange rate effect of export prices reflects the economic balance of a region's economic structure and exchange rate policy.The marketization reform of the RMB exchange rate since July 21,2005 has entered its second decade.During this period,although the process of market-oriented reform of the RMB exchange rate has been slowed down by the impact of the global financial crisis,the reform direction of the RMB marketization and the trend of RMB internationalization have not changed.The occurrence of the financial crisis has also provided an opportunity to reform the existing international monetary system and promote the further deepening of the reform of the RMB exchange rate system.Based on this background,China began to pilot and gradually expand the RMB settlement of cross-border trade from July 2009,and the internationalization of the RMB has taken an important step.Then,with the launch of the "Exchange Reform" in 2010 and the introduction of the reform of the RMB exchange rate middle price quotation mechanism on August 11,2015,the degree of RMB marketization and internationalization,as well as the status and role of the RMB in the international monetary system.Significantly improved,the RMB has also become the SDR basket currency.Since the "2005 exchange reform",the RMB exchange rate and the changes in the international currency attributes of the RMB have profoundly affected the export pricing and settlement behavior of China's micro-subjects.Studying the changing trend of the RMB exchange rate on export price transfer since the "exchange reform" and its relationship with the settlement of cross-border trade RMB will help to better understand the impact of this change on the behavior of micro-subjects,and better evaluate the policy effect of "exchange reform".Based on the theory of Exchange rate pass-through and pricing currency selection,this paper analyzes the correlation between RMB exchange rate transfer and RMB settlement of cross-border trade.By calculating the export price index of various regions in China,the problem of insufficient statistical data is solved,and the fixed effect panel data model is used to estimate the export price exchange rate transfer effect and its changes in China's overall and sub-regions under the framework of imperfect competition.The trend measures the correlation between the PTM index and the RMB settlement of cross-border trade.This paper finds that after the"2005 exchange reform",China's overall export price exchange rate transfer effect is incomplete,and it has a tendency of volatility and shows obvious regional differences.The paper also finds that the existing market-based pricing(PTM)index has defects in measuring the competitiveness of export enterprises.The use of the PTM index to measure the competitiveness of exporting firms should consider the asymmetry of exchange rate transmission and the impact of industry(product)heterogeneity on it.In addition,the correlation between the PTM index and the proportion of RMB used in export trade is affected by factors such as the development stage of cross-border trade RMB settlement,speculation,and inertia of international currency use.