The Effects Of RMB Appreciation On The Textile Product Export Of China

After the collapse of the Bretton Woods system since 1973, many countries'exchange rates fluctuate frequently, it has caused many industrialized countries in a position of imbalance of international trade. Obviously, exchange rate fluctuation has become a very important factor which can affect the balance of international trade. After our country implemented the exchange rate reform in 2005, RMB appreciation has got a position.There are many research aiming at RMB appreciation how to affect our country's economy, which mainly focused on import and export trade, economic structure, employment and so on.. But, the records of study about RMB appreciation affect a specific industry are deficient, especially textile industry. Textile industry is a pillar industry of the national economy in China, it has unique advantages in getting foreign exchange through export.. As the one of the biggest producer and exporter of textile, why does RMB has what should we do under the circumstance of RMB appreciation and so many complicated international environment. With these questions, we will analyze .the relationship between RMB appreciation and textile export.This paper is divided into four parts for analysis. Firstly, RMB appreciation , China's textile industry and textile export are introduced briefly. Secondly, based on the elastic theory, the impact of China's textile exports form RMB appreciation was analyzed. Then get the equation by gathering data. Finally, raise some policy recommendations.First part, the background of RMB appreciation and characteristics of textile industry and textile exports are introduced. Firstly, Theoretical basis of RMB appreciation-The PPP theory and Interest rate parity theory are introduced briefly. Secondly, some factors which pushed the pace of RMB appreciation are also introduced, such as domestic economy growing fast, economy has been strengthened, trade surplus expanding, foreign exchange reserve scale increasing and pressure from USA and EU. Both domestic and foreign factors pushed the pace of RMB appreciation. Finally, textile industry and textile exports are introduced briefly. As China's textile industry and textile exports are based on lower cost, lower efficiency, lower level, which caused the lower competition in the international market.Part two. Firstly, the elastic theory is briefly reviewed, including Marshall-Lerner conditions and J Curve. Secondly, according to the elastic theory and characteristics of textile industry and textile exports, the impact of China's textile exports form RMB appreciation was analyzed theoretically. In this paper, the subject is discussed respectively form two aspects of static and dynamic. Static aspect, the majority of textile exports is clothing, because of clothing's lower level, lower additional value and living necessity, these factors lead to China's textile export demand price elasticity is low, M-L conditions can not satisfied. Dynamic aspect, after RMB appreciation, some data can not changed immediately, which leads to trade surplus increasing.Part three is empirical research. Firstly,exchange rate, textile's exports, GDP, CPI are chosen as explanatory variables. Secondly, based on the economic model, these variables are disposed. The first step is unit root test, the result is station on the condition that only after an order difference , then cointegration test can be continued. After cointegration test, the regression equation can be gotten by OLS. Finally, granger causality test and impulse response analysis would test this regression equation.Part four is policy suggestions. In this paper, policy suggestions which can develop China textile industry and boost exports are divided into three aspects. The macro aspect is some measures which enacted by government, such as adjust the industrial structure and the export commodity structure, perfect textile exports and financing management measures, actively push against trade barriers international standards, pioneering diversified market, and so on. The second aspect is some suggestions which enacted by textile community, such as promote textile enterprise technology innovation, strengthen the communication between with foreign trade, formulate standards for admittance into industries and the authentication system, and so on. The micro aspect is suggestions which can promote textile firms to follow, such as actively developing independent brand, implementing the strategy of "going out", and so on.