The Influence Of RMB Exchange Rate Fluctuations On Chinese Foreign Trade

Exchange rate is the most important comprehensive price index used in international economy transaction and executes the function of transforming price. It becomes the most important lever to regulate trade balance. After the implementation of reform and opening policy, the fluctuation of RMB exchange rate has promoted Chinese export trade and improved Chinese trade balance.This paper fist introduced and analyzed the related theories and documents of the effect of changes of exchange rate on trade balance and the restricted factor. And then , analysis the effect of changes of RMB nominal exchange rate-, real exchange rate and real effective exchange rate respectively, by means of combining qualitative methods and quantitative methods. Analysis result is as follows: change of the RMB exchange rate in nominal and real terms have greater influence on our trade balance, import and export goods conform to the Marshall-lemer condition, which proved that depreciate of RMB in real terms can improve our trade balance greatly. RMB depreciation may promote export greatly rather than restrain import, because of poor elasticity of import. The time delay effect of RMB should be within one year. R-squared between RMB, import and export is insignificant, which implied that the sensitivity of import and export to exchange rate fluctuations of RMB is weak, and has other factors affecting import and export.Finally, this paper makes comments and gives some suggestion on the basis of above analysis. We implied that RMB nominal exchange rate mainly affect capital account ,and the appreciation of RMB nominal exchange rate can not solve the trade imbalance problem between china and Japan and the USA. Simultaneously the appreciation of RMB real exchange rate may decrease our foreign trade scale largely. For the request of economy development, we should improve labor productive rate and industry structure, make the trade innovations , increase the international competition ability of export. On the base of RMB stability, reform formation mechanism, enlarge the fluctuation range of RMB exchange rate.