Study On The Influence Of Exchange Rate Fluctuation On Export Profit Of China’s Mechanical And Electrical Industry

Advocating existing trade and participating in the international economic cycle,China’s foreign trade has stepped into the fast track of development.However,the United States is acting against globalization.It not only uses fiscal policies and monetary policies frequently to regulate the flow of dollars around the world,but also uses the interest rate lever of money supply by the Federal Reserve,which has affected the domestic economic situation of inflation.As a result,the flow of US dollar,as the main settlement currency in the world,has affected the global economy,especially the commodity trade denominated in US dollar has entered a period of volatility.There is no doubt that the exchange rate of RMB against US dollar and other major currencies has undergone drastic changes,which is bound to affect China’s foreign commodity trade,especially its export trade with those industrialized countries.Because the fluctuation of RMB exchange rate changes the income and profit in import and export trade mainly through the transmission to the price,it is very important for the profit-maximizing export enterprises to grasp the impact of the degree of exchange rate transmission on the price.It is worth studying how to deal with the negative impact of exchange rate fluctuations in the import and export trade of the key industries and products that occupy a large proportion in the Chinese manufacturing industry.In this regard,because of summarizing relevant research literature at home and abroad,this paper understands and grasp the context and research methods of exchange rate transmission theory,selects products produced by enterprises above scale in the electromechanical industry as the research object,and discusses the comparison of profits made in the domestic market and profits made in the export market of the United States and Japan by exchange rate fluctuations.This paper deduces and establishes regression model through CES function,collects and processes monthly time series data such as profit,real exchange rate and market share,and constructs explained variables and explanatory variables respectively.The results of regression analysis show that in the two destination countries of our electromechanical industry,the export of enterprises to the United States and Japan,Profit from sales in the domestic market is significantly affected by exchange rate fluctuations compared with profit from sales in the destination country.Among them,the profit of domestic market is positively correlated with the real exchange rate compared with the profit of exporting to the US market,but on the contrary,it is significantly negatively correlated with the profit of exporting to the Japanese market,which means that whether it is positively correlated or negatively correlated,it indicates that the trade between enterprises and these two countries is interdependent.Finally,this paper puts forward some policy suggestions based on the research conclusions.