Study On The Influence Mechanism Of RMB Exchange Rate To China's Industrial Structure Upgrading

With the deep participation in economic globalization and market gradually opening,China has reached the high speed development of economy,the sharp rising of foreign exchange reserves,the closely contact with other countries,and the accelerate efficiency of the production,the industrial structure began to change from labor intensive,or resource intensive to capital intensive,or technology intensive.However,the reinvention of imported technology is still neglected.Additionally,at present,China's economy need to change from the stage with high speed development into the important stage with high quality development to ensure the sustained economic development,in addition,the high quality development depends on the cultivation of the talent,the progressed technology,the institutional innovation and the efficiency management.With the gradual opening of China's economy,the exchange rate becomes the link of the domestic and foreign markets and becomes an important influenced factor of the macroeconomics at home and abroad.This paper bases on the monetary banking,investment,industrial economics,econometrics and other theoretical knowledge,studies the influence mechanism of RMB exchange rate on China's industrial upgrading.In addition,discuss in detail with the change,the fluctuation and the dislocation of RMB exchange rate affect China's industrial structure upgrading,which can be measured by the Moore's structure and the annual change of industrial structure,through three ways of inflows foreign direct investment,outflows foreign direct investment and international trade.After the further study on this topic,the following conclusion can be listed:Chapter One is the introduction.It describes the situation of economic development in China,the trend of RMB exchange rate,the status of industrial structure,inflows foreign direct investment,outflows foreign direct investment and import and export trade.In this chapter,it also reviews the domestic and international research results,lists the direction of further study,draws the research route,selects the methods and plans the main research contents of this paper.Chapter Two is the influence mechanism study.Firstly,describing the relative theory about the change of exchange rate with FDI,OFDI and international trade and the theory about FDI,OFDI and international trade with industrial structure.Then,based on the theoretical analysis,the influence mechanism of the RMB exchange rate on the industrial structure through FDI,OFDI and international trade approaches is derived.It must be concluded that RMB exchange rate have an impact on the industrial structure upgrading through FDI,OFDI and international trade channels.Analysis from the host country,the appreciation of RMB exchange rate will cause the foreign direct investment choose to exit the market,which can release production elements of resources and labor for redistribution,or choose to increase the product competitiveness and product upgrades.These can lead industrial structure optimization through elements allocation.Analysis based on the investment country,RMB exchange rate appreciation can make outward foreign direct investment enterprises choose to transfer the excess capacity,or to obtain more resources and technology,or to expand the market.These will be through technical backward spillover effect and industry correlation effect to optimize the industrial structure of the investment country.Analysis based on the international trade,the RMB exchange rate changes will directly affect the price of import and export commodities or services,as well as to affect the allocation of production factors.International trade enterprises need to promote the product competitiveness,or to switch to production technology or capital intensive production,and then make the optimization and upgrading of industrial structure.Chapter Three is the relative empirical study.Firstly,analyze the change,fluctuation and dislocation of RMB.Using the nominal effective exchange rate index and the real effective exchange rate index analyze the change of the exchange rate level.Using the behavior equilibrium exchange rate method to calculate the equilibrium RMB exchange rate.Using the conditional variance of the GARCH(1,1)model to express the intensity of the exchange rate fluctuation?Then,choosing the Moore structure value and the annual average value of industrial structure to indicate the measurement index of industrial structure upgrading,and calculate with national data and provincial data respectively.Finally,use VAR model with national data to calculate the correlation between RMB exchange rate change and industrial structure upgrading.From the result of impulse response function,concluding that the change of RMB exchange rate has a positive effect on the industrial structure upgrading.The following three chapters are the empirical test about three detailed conduct pathways.Firstly,it expounds the current situation of China's regional development in FDI,OFDI and international trade.Secondly,using the national level data,constructing the VAR model,and verify the correlation between variables.Finally,devided the RMB exchange rate into the RMB exchange rate level,exchange rate fluctuation,exchange rate dislocation;using Moore structure value and industrial structure annual change as the industrial structure upgrading index;introducing the cross item of lagged exchange rate and FDI,lagged exchange rate and OFDI,lagged exchange rate and trade,using the provincial panel data to calculation.Draw the following conclusions and take the FDI channel as an example,when the RMB exchange rate level increased by 1%,China's industrial structure vector angle is reduced by 0.606%,and the industrial structure annual variation decreased by 28.47%.In another word,The RMB exchange rate level has a restraining effect on the industrial structure upgrading.However,from the coefficient of 0.0822 and 0.8925,the exchange rate level has a reverse regulation on industrial structure upgrading through the FDI channel can be concluded.The RMB exchange rate dislocation and the RMB exchange rate fluctuation can promote the industrial structure upgrading,but,with the FDI channel,the result can be reverse.This can be explain that the FDI enterprise with exchange rate fluctuate and exchange rate dislocation,believing that China's economic development is unstable,will reduced the investment motivation,which is not conducive to the adjustment of China's industrial structure.In addition,similar conclusions are drawn from the OFDI and international trade channels.Chapter Seven is the conclusion and prospect.Summarize the results of theoretical and empirical analysis,give management suggestion on the RMB exchange rate,FDI,OFDI and international trade,point the innovation and further research direction.