The Study On The Effects Of Appreciation Of The Renminbi On The Chinese Industrial Structure And Industrial Transfer Between Regions

This thesis studies the effects of the change of RMB exchange rate on the adjustment and upgrading of china’s industrial structure and the industrial transfer between the east,middle and west region of china. We studiesthe possible mechanism for the adjustment and the transfer.Firstly,we use of time-series unit root test, cointegration test, vector auto regression method, panel data to study impact of the appreciation of the RMB exchange rate on China’s industrial restructuring, industrial upgrading and the industrial transfer.Out study showed that:the exchange rate appreciation has some negative effects on China’s secondary industrial output share while has a positive effect on the share of the tertiary industry output, and this effect produces a certain period of time lag. From a regional perspective, the exchange rate appreciation has a smallest negative impact on the secondary industry of eastern region while the negative impact on the central and western regions is relatively large. It also has smallest positive effect on the tertiary sector of the eastern region while has relatively large effect on the central and western regions.This reflects our regional industrial structure and morphology between the rungs are formed. As for Internal structure of the secondary industry, after the 2005 exchange rate reform, the RMB real exchange rate appreciation, the internal structure of the industry changes. Secondary industry in labor-intensive industries suffered the negative impact of large exchange rate appreciation, reducing output more; whilethe negative impact on the degree of capital-intensive industries are followed; technology-intensive industries were not affected. Due to exchange rate appreciation asymmetric shocks to different resources intensive industries such reallocation of resources between different types of industry, secondary industry internal structure corresponding changes. In the short term, the RMB real effective exchange rate appreciation has a negative impact on labor-intensive and capital-intensive industries, but in the long run, exchange rate appreciation in favor of the limited resources of labor-intensive industries to capital-and technology-intensive industries and other industries flows, conducive to the adjustment and upgrading of the internal structure of the secondary industry. For the third industry, traditional industry is not sensitive to the exchange rate appreciation, and the emerging industries’output increase with the appreciation of RMB real effective exchange rate; tertiary industry in the consumer services sector is not sensitive to the exchange rate appreciation, and production services’output increase with the appreciation of RMB real effective exchange rate.This thesisalso studies the mechanism of exchange rate changes through three channels to affect the industrial structure:an import and export trade channels, the foreign direct investment channel, the liquidity channel.From a national perspective, the appreciation of the RMB exchange rate through export channels, import channels, foreign direct investment channels and liquidity channel,has a a negative effect on the secondary industry while has a positive effect on the tertiary industry. Therefor the exchange rate appreciation through the three channels is positive to China’s industrial restructuring and upgrading.From a regional perspective, (1) for the eastern region, exchange rate appreciation through export channels have a significant negative impact on the secondary industrial output while have a positive impact on the tertiary industry. In addition, exchange rate movements through import channels, foreign direct investment channels and liquidity channels are conducive to industrial restructuring and upgrading of the eastern region. (2) For the middle region, exchange rate movements through export channels and liquidity channels have positive effects on the region’s industrial restructuring and upgrading. From the import channels, the RMB real effective exchange rate has no significant effects on the middle region’s secondary industrial output share while has a significant negative effect on the share of the output of the tertiary industry.Exchange rate appreciation has no significant effect through foreign direct investment channels for industrial restructuring and upgrading (3) For the western region, exchange rate fluctuations through export and import channels have no significant impact on the second and tertiary industries.. Exchange rate appreciation through foreign direct investment channels have a significant positive effect on the region’s share of the secondary industry output, while has no significant effect on the share of the tertiary industry output. RMB exchange rate through the liquidity channel has a negative effect to China’s industrial structure adjustment and upgrading of the West.From the second industrial/manufacturing internal structure, the appreciation of the RMB exchange rate adjustment through export channels has some positive effect to the internal structure of the manufacturing sector. It has some negative effects on that throught the import channels and liquidity channels. The appreciation of RMB appreciation through foreign direct investment channels has great different effects on the textile industry, chemical materials and chemical products manufacturing, pharmaceutical manufacturing, general equipment manufacturing, special equipment manufacturing industry.From inside the tertiary industry/services perspective, exchange rate movements through the role of foreign direct investment channels in the internal structure of the tertiary industry is conducive to adjustment and upgrading of the internal structure of the tertiary industry. RMB appreciation by acting on the liquidity channel internal structure of the tertiary industry is not conducive to restructuring of the tertiary industry/services, optimization and upgrading.In addition, we also studied the inter-regional industrial transfer effect of exchange rate changes.We found that it fully reflects the tendency of some labor-intensive industries have transferred from the eastern provinces to middle provinces. China’s industrial cascade structure is being formed.Finally, we use the vector autoregressionmodel (VAR) and variance decomposition method to investigate the exchange rate through import and export trade channels, foreign direct investment channels, and liquidity channels. We found that:theimport channel is the biggest contribution of, followed by foreign direct investment, export trade and liquidity channels for China’s industrial structure adjustment effect is relatively weak.