| The optimization and upgrading of industrial structure is an urgent need to accelerate the transformation of mode of economic development, and to achieve sustainable economic growth as well as to change the disadvantage position in the international industry division. From the resource-allocation point of view, the upgrade of industry structure is the process of optimizing the allocation of domestic and foreign resources. In the market economy, the price mechanism is likely to lead to an optimum allocation of resources. As an important external price signals, the exchange rate affects the cost of participation in the international division of labor, which changes a country’s relative prices of production factors, and guides the re-allocation of domestic resources. Therefore, the exchange rate has an important impact on the country’s industrial structure adjustment. As the economic globalization is deepening and developing, the depth and breadth of China’s participation in the global economy and the international division of labor continues to strengthen, the effect of economic globalization to domestic economic and industrial structure continues to enhance and the RMB exchange rate reform is concerned, analyze the influence of exchange rate changes on the industrial structure’s upgrade and make full use of the RMB exchange rate reform to adjust the domestic industrial structure has a very important theoretical and practical significance.This paper explores the mechanism how exchange rate changes affect the industrial structure, and describes the mutual relations between the RMB exchange rate movements and changes of industrial structure, and makes empirical analysis on the influence of the RMB fluctuation on the domestic industrial structure.From the perspective of resource allocation, this paper creates two theoretical models to study the mechanism of how exchange rate changes affect industrial structure, one is based on the relationship of "exchange rate-international trade-industrial structure", and the other focus on the relationship of "exchange rate-FDI-industrial structure", to make a deep and thorough study on the effect of exchange rate movements to industrial structure changes. The studies presented in this thesis find that, through international trade channels the exchange rate changes will affect the price of the import and export products, while changes in the price is bound to affect domestic factor markets, thus will make the prices of factors change accordingly. Under normal circumstances, currency appreciation in the labor-rich countries will cause the domestic price of labor to rise and the price of capital to decline, and the product market will vary in two ways:one is the production in the same industry products will use more capital, this forms the updating within the industry; the other is among different industries, the production of labor-intensive goods which sensitive to exchange rate will convert to the production of capital-intensive and technology-intensive, eventually will lead to the domestic reallocation of resources, achieve the upgrading of the structure of trade products and domestic industries. The mechanism of exchange rate changes affect the industrial structure through FDI is that, the currency appreciation of host country makes the international price of capital, labor and other production factors relative rise, results in the rise of FDI’s costs, the reduction in wealth. In the product market, FDI enterprises must improve capital-labor ratio to reduce the adverse impact of exchange rate appreciation; otherwise it will result in decrease in profit. The result is the products are updated, reallocation of resources, and industrial structure upgrading of the host country. Overall, international trade and FDI affect the adjustment of industrial structure through capital accumulation, technological progress and industrial linkage effects.On the basis of the above theoretical analysis, this paper reviews the evolution of RMB exchange rate, industry development, international trade and FDI, analysis the relationship among them based on historical trend over the years. The results show that there is a certain link between the exchange rate and industrial structure. Associated with the appreciation of RMB, there has been a reduction in the proportion of the primary industry and an increase in the proportion of secondary and tertiary industries; the proportion of labor-intensive industry declines, the proportion of capital-intensive industries and technology-intensive industries increase. Changes in the RMB exchange rate have brought about changes in the international trade, but FDI has not changed with the appreciation or depreciation of RMB. From1995to2005, there was a stable relationship between exchange rate and FDI growth, and along with the appreciation FDI rapid growth after2005. There was a convergence between FDI’s direction and industrial structure’s evolution, both declined in the primary sector and increased in the tertiary industry.Using industrial data and regional data, this paper constructs econometric models to test the impact of exchange rate changes on industrial structure. First, the paper builds a model to test the relationship between exchange rate and the structure of three industries, and builds another model to test the relationship between exchange rate and the factor structure of industries. Based on the provincial panel data, selecting nominal effective exchange rate (NEER)of RMB and real effective exchange rate(REER) of RMB as explanatory variables, the paper test the relationship between exchange rate and the structure of three industries and the relationship between exchange rate and the factor structure of industries employing panel unit root test, panel co-integration tests and fixed effects model of panel data. Based on the national data of labor-intensive, capital-intensive and technology-intensive industries, selecting NEER and REER of RMB as explanatory variables, the paper test the relationship between exchange rate and capital-intensive industry and the relationship between exchange rate and technology-intensive industry employing unit root test, co-integration analysis, error correction and Granger causality test and impulse response analysis. Empirical results show that, the Changes in exchange rates have a certain influence on the adjustment of industrial structure among industries and among regions, but the influences are different to different industries and different regions. In the whole country and Eastern、Central and Western of the country, the impact of RMB appreciation is negative to the development of the secondary industry and has a significant role in promoting the development of tertiary industry; The impact on Eastern and Central of the country is stronger than Western of the country. The appreciation of the RMB inhibits the development of labor-intensive industries, promotes the development of capital-intensive industries, and the impact on capital-intensive industry is uncertain.The paper further presents an empirical analysis on how the changes in the RMB exchange rate affect domestic industrial restructuring through international trade and FDI. Developing a simultaneous equations model with international trade, FDI and industrial structural on the national level, the result shows that changes in exchange rates can affect the industrial restructuring through international trade and FDI pathways. From the perspectives on international trade, the significance level of the relationship between changes in exchange rate and the proportion of capital-intensive industries is very low, and the significance level of the relationship between changes in exchange rate and the proportion of technology-intensive industries is higher; and the international trade has a positive impact on technology-intensive industries, but the effect on capital-intensive industry is not obvious. From the perspectives on FDI, changes in exchange rate have positive effects on the capital-intensive and technology-intensive industries, but the impact on capital-intensive industry is more significantly, the intensity is greater; the inflow of FDI promotes the proportion of technology-intensive industries, and has a weak influence on the proportion of capital-intensive industries.Based on the theoretical analysis and empirical findings, this paper presents suggestions to optimize and upgrade the industrial structure:increases the role of market regulation in the exchange rate regime, pushes forward the reform of the exchange rate system; uses the RMB appreciation to upgrade trade structure, imports capital-intensive goods; enhances the quality and level of FDI, promotes FDI-related technology spillover; promotes the coordinated development of regional economy. |
PDF Full Text Request