Empirical Analysis Of The Impact Of RMB Real Exchange Rate Fluctuation Upon The Sino-U.S. Trade Balance

Since the exchange reform in 2005, Sino-US trade surplus continues to expand (except 2009), it reached 145.37 billion dollars during January-July of 2010, foreign exchange reserves increased to 2.6 trillion dollars, the U.S. decided to adopt the loose monetary policy and the RMB motion to deal with the huge trade deficit, increasing the pressure of the facing RMB appreciation. Therefore, under the international background, research of the impact of RMB real exchange rate fluctuation upon the U.S. trade balance is necessary. On the one hand, it could ease the current pressure of RMB appreciation; on the other hand, it could bring up policy recommendations for improving the balance situation of Sino-US trade from the perspective of the exchange rate.Firstly, The paper reviews the basic theory and research progress about the impact of exchange rate fluctuation on trade balance from two aspects of trade and exchange rate flexibility in delivery; Then according to the classification of the real exchange rate, defines the real exchange rate, summarizes the popular real exchange rate calculation method in current theorists, and calculates the bilateral real exchange rate. Fourthly, reviews the history features of the impact of RMB real exchange rate fluctuation upon the Sino-U.S. trade balance , according to the evolution of the real exchange rate of RMB, then analyzes the impact of RMB real exchange rate upon the Sino-US trade balance from two aspects of trade and exchange rate flexibility in delivery, coming to some conclusions: the real appreciation of RMB can not solve Sino-US trade imbalances in short time,the international transfer of industry, the rebating tax policy of the export, the differences of the income effect and the cost of export products between the two countries are the important factors impacting Sino-US trade imbalance. Finally bring up policy recommendations to control the excessive growth of Sino-US trade surplus and ease the appreciation of RMB on the basis of the previous research.