Empirical Analysis Of Exchange Rate Of RMB And The Change Of China's Export Merchandise Structure

Since reform and opening-up, the relation between the exchange rate of RMB and international trade of our country has been strengthened day by day. From 1994, our country has set up single floating exchange rate system with management which is based on market supply and demand. This makes the alteration of exchange rate of RMB has more remarkable impact on China's trade development. Exchange rate alteration of RMB which we face at present, especially its appreciation becomes the focus of world interest. The dispute of this question is more constant. On July 21, 2005, Chinese Government announced that they would make the great reform to exchange rate mechanism. From this day, they will carry out floating exchange rate system with management that is based on market supply and demanding, consults a basket of currency. This makes the appreciation trend obviously. As we know, appreciation of exchange rate will reduce a country's trade competition, it requests the rectify of trade structure. Meanwhile, the export merchandise structure has changed in the course of trade development in our country, from mainly relying on exporting the resource-intensive products to the labor- intensive products, then upgrade for merchandise structure of capital and technology-intensive products. The change of this kind of structure is following the exchange rate of RMB that are taking place, there must be connections between them. The alteration of the exchange rate has important influence on the transition of the export merchandise structure. This text mainly studies on the relation of the alteration of exchange rate with export merchandise structure. And it makes key researches on analyzing influence of exchange rate alteration in long-term to export merchandise structure. First of all, this text startes from general exchange rate terms that realizes the comparative advantage, proves the meaning and function of real exchange rate to measure the trade competitiveness. Then it analyzes the influences of exchange rate alteration on the export merchandise structure based on different angles (production cost and market structure). And it explains the significance that multinational corporation's behavior to one country's trade structure under the exchange rate alteration. In the part of empirical analysis, the history and current situation of the alteration of the exchange rate of RMB, export merchandise structure have been analyzed. Then analyzes the impact of exchange rate alteration and internationalcapital flow to export merchandise structure using co-integration theory and ECM(1980~2003). Study their long-term and short-term relation. The result shows that in the long terms, under the condition that the capital and technological element does not have restricted seriously, the appreciation of the exchange rate of RMB has positive effect on the change of the export merchandise structure.