The Impact Of RMB Exchange Rate Volatility On China's Value Added In Trade

In the context of economic globalization,more and more countries are participating in the production of global value chains,and in the meanwhile the problem of deviations between the total export trade statistics and real values of the countries is becoming more and more prominent.Some of the merchandise have a larger total domestic export value than the actual ones due to the processing trade.However,the measurement of value added in trade can better reflect the true level of national trade.It decomposes total exports into four major sectors based on value sources: domestic value added,returning domestic value-added,foreign value added and pure double counting,and the segmentation of the sector can be more carefully portray the actual impact of macroeconomic and microeconomic variables on export trade.The value added in trade is affected by trade barriers,exchange rate volatility,trade comparative advantages,and R&D investment and so on.This paper mainly explores the impact of RMB exchange rate volatility on China's trade value in added.This paper uses empirical analysis to study the impact of exchange rate volatility on trade value in added in the industrial level,and draws the following conclusions: First,the domestic value added of the first and third industries are more volatile than the manufacturing industry.Secondly,from returning domestic value-added,exchange rate volatility can stimulate the development of the secondary and tertiary industries,but will inhibit the primary industry.In addition,exchange rate volatility can promote the growth of foreign value-added of various industries.Finally,exchange rate volatility can increase the double calculation of the secondary and tertiary industries and reduce the double calculation of the primary industry.Based on the above research conclusions,this paper proposes the following policy recommendations from the three major industrial levels: First,for the primary industry,adjusting the unreasonable trade structure and optimizing the quality of products in the primary industry are aimed to reduce the impact of exchange rate volatility on the domestic value-added.Secondly,for the secondary industry,encouraging R&D investment and guiding the flow of foreign direct investment of manufacturing enterprises are effective.Finally,for the tertiary industry,strengthening the macro-prudential management of service industry enterprises are vital;In addition,we can train the talents to promote the upgrade of the service industry.