China's Foreign Trade Structure And The Upgrading Of The RMB Exchange Rate Changes

In recent years, the relationship between the fluctuation of RMB's exchange rate and Chinese foreign trade has been the focus of discussion in theory domain all along. Especially, after the realization of revaluation of RMB since July 21, 2005, the gearing relationship between exchange rate and foreign trade has attracted people's vision once more. But, generally the result of studying at present tended to hold that the fluctuation of RMB's exchange rate is inversely related to Chinese foreign trade. However, the formal study laid particular emphasis on the analysis in perspective of the total volume of trade balance mostly, seldom linked the fluctuation of RMB's exchange rate with the merchandise structure and district structure. Moreover, the formal study reached the conclusion merely by econometric models of linking the exchange rate with trade balance directly or indirectly, and did not form the complete theory system.In view of the fact above, in order to better reflect the influence of the fluctuation of RMB's exchange rate on the development of Chinese trade, the dissertation, based on the above literature, uses the elasticity analysis method of import and export volume to the exchange rate and infers the influence of the fluctuation of RMB's exchange rate on current capacity of Chinese foreign trade through the further empirical analysis. It illustrates that the function of real effective exchange rate of RMB on the short-term elasticity of import is opposite to that of long-term one. In a short run, with the deflation of RMB's exchange rate, the price of import goods which is valued by the standard currency increases, and the import quantity decreases; while in a long run, since import goods in China are solid, with the deflation of RMB's exchange rate, the total amount of imports still increases. The function of real effective rate of RMB on the centralization of import and export is prominent and such function will last long. Thus we have built up a perceptive understanding based on the quantity.Following that, this dissertation further discusses the influence of the fluctuation of exchange rate on the structure of import and export goods after analyzing the influence of exchange rate on the trade volume. It illustrates that in a long run, on the condition that there is no serious restriction on capital and technology factor, the inflation of RMB's exchange rate has a positive function on the change of the structure of export goods, while negative on that of import goods. In order to further analyze the reason for these phenomena, the next part of the dissertation analyzes the principle...