The Impact Of RMB Appreciation On Export Processing Industry In Guangdong

Since the People's Bank exchange rate formation mechanism reform the second time in June 19,2010,RMB against the U.S. dollar continues to climb and exchange rate and the Guangdong industrial upgrading become a hot spot against the majority once again. Although processing trade has achieved a lot for growth in Guangdong since reform and opening up, however, it is confronted with an urgent need to upgrade. In recent years, the research on the relevance of RMB Appreciation and processing trade in Guangdong is countless, but few research involved the impact of in-depth exchange rate fluctuations on the industry and fewer considering the relationship from the exchange rate and export industry itself. However this in-depth research helps to grasp the law of the export processing industry in Guangdong to upgrade.The article first selected the RMB continued appreciation in and after the financial crisis of 2007 as the research time interval. By use of two exchange rate theories, the theoretical and empirical analysis about the impact of RMB appreciation on export processing industry is done. Sometimes by exploring the relationship between exchange rate and the specific industry by comparative analysis and structural analysis, it reveals the impact of exchange rate fluctuations on the mechanism of the specific industry further. Secondly, based on the theory and representative industry, to test empirically the impact of exchange rate appreciation on trade and conclude:After the financial crisis, the RMB Appreciation impact on the trade of Guangdong mechanical and electrical products is greater, but while the ability of the industry to adjust enhances and the coefficient of restitution reaches to 0.52%. Finally, the article also raises the suggestions of making concerted efforts to change the crisis into opportunity.