Research On Exchange Rate Fluctuations,Value Added In Trade And Export Revenues Of China's Manufacturing Industry Segmentation

Affected by exchange rate fluctuations,the relative prices of domestic inputs and import inputs are different.When the local currency appreciates,the cost of domestic inputs will increase.From the perspective of profit maximization,producers will increase foreign inputs to replace domestic inputs,which in turn lead to have the product price changed.In addition,the ratio of domestic inputs to import inputs is not the same in different industries,resulting in the inter-industry transmission of exchange rate having changed.Therefore,the paper will study the impact of RMB exchange rate change on export earnings of manufacturing sub-sectors from the perspective of trade value added.Through the research on the exchange rate pass-through in different industries under the value added,we can understand the reaction of export revenue of industry to exchange rate fluctuations,and then provide an effective forecast for the impact of RMB appreciation on China's trade balance according to industry characteristics and offer an effective support for establishing a reasonable exchange rate mechanism in China.The characteristics of international division and of value added are more obvious in the manufacturing process,thus the paper selects the manufacturing industry as the research object.Sixteen manufacturing sectors in the WIOD database are merged into nine sectors in the TiVA database jointly built by WTO and OECD,including food products,beverages and tobacco;textiles,textile products,leather and footwear;wood,paper,paper products,printing and publishing;chemicals and non-metallic mineral products;basic metals and fabricated metal products;machinery and equipment n.e.c;electrical and optical equipment;transport equipment and manufacturing n.e.c;recycling.We get their domestic value-added ratio in export from 1995 to 2011,expect for manufacturing n.e.c;recycling.The results show that the domestic value-added in the low technology is higher.In the first two,it's the food products,beverages and tobacco manufacturing and textiles,textile products,leather and footwear manufacturing,and the domestic value-added ratio is 72.0%,67.5%,which is a good example of the advantage of our labor resources in the country,and it has been followed closely by the industry of the resource-intensive industries like metals and mineral manufacturing.The manufacturing industry of electrical and optical equipment has a share of the average of 34.8% and the lowest ranking.The econometric model is built with the mean change and volatility variables of exchange rate on the basis of manufacturing value-added.We will study the difference of the impact of exchange rate on the export income of the manufacturing industry from the perspective of added value.The results show that impacts of short-term exchange rate volatility on the export income of various industries are not significant;impacts of long term exchange rate mean change on the export income of various industries are different,and the content of domestic value added has a significant role in promoting exchange rate transfer in some industries.