Study On The Impact Of RMB Exchange Rate On China’s Import And Export And Its Heterogeneity

As a basic monetary tool to measure the price of commodities in the international market,the exchange rate is an important economic indicator to adjust the international balance of payments and has an important impact on the development of a country’s import and export trade.Since the Economic Reform and open up,the RMB exchange rate has undergone a series of changes from a single system to a dual-track system,again to a single system,and from a fixed exchange rate system to a floating exchange rate system,gradually moving towards marketization and internationalization.After the exchange rate reform in 2005,the RMB adopted a managed floating system based on market supply and demand with reference to a basket of currencies.The RMB exchange rate became more flexible,but its uncertainty risk also increased.At a time when the RMB exchange rate is controversial,its impact on imports and exports has become more complex.This paper studies the impact of RMB exchange rate fluctuations on China’s import and export trade,which can not only enrich the existing research results,but also has profound practical significance.Based on exchange rate theory,this paper makes use of bilateral import and export trade data and RMB exchange rate data between China and 149 countries from 2000 to 2017,and adopts panel data analysis method to systematically study the impact of RMB real exchange rate fluctuations on China’s import and export trade.Based on the traditional trade gravity model,this paper introduces the RMB exchange rate and other control variables to construct a trade gravity model,to study the influence of the RMB exchange rate changes on China’s import and export trade on the whole.And all samples were divided into two component samples,before and after the exchange rate reform in 2005 and before and after the financial crisis in 2008,to explore the heterogeneity.The empirical research conclusions are as follows:(1)the appreciation of RMB real exchange rate has a significant negative impact on China’s imports and exports;(2)the above influences of RMB exchange rate have heterogeneous characteristics.The appreciation of RMB real exchange rate before the reform in 2005 did not significantly affect China’s import and export trade,while the appreciation of RMB real exchange rate would significantly inhibit the development of import and export trade after the reform in 2005.Before the financial crisis in 2008,the appreciation of RMB real exchange rate had no significant effect on imports,but significantly inhibited exports.After the financial crisis in 2008,the appreciation of RMB real exchange rate reduced imports and had no significant effect on exports.(3)GDP,population size,geographical distance,uncertainty of national economic policies and the signing of free trade agreements also have an impact on China’s import and export trade to some extent.