The Impact Of RMB Appreciation On Promoting And Restructuring Of Processing Trade

Leap-forward development of processing trade made a significant contribution to China's economic development. Suffering pressure from RMB appreciation, promoting and restructuring problem of processing trade must be accelerating. This paper launched the impact of the RMB real exchange rate appreciation on processing trade in China. The promoting and restructuring of processing trade issues were discussed. First, the content of processing trade and development were introduced; second, reviewing the status of China's processing trade, describing the financial crisis, RMB appreciation and the situation of the processing trade, based on analysis of focus from the mechanism of RMB appreciation on the different Way of processing tradeWith the data of China's quarterly economic data (2001-2010), this paper deflated and adjusted time series variables in the way of the X12.Using ADF unit root test, Granger causality test, and the co-integration model of the RMB exchange rate China's processing trade. It showed that processing trade imports and exports are high correlation and changing in the same direction. The RMB real effective exchange rate appreciation has a negative impact on the processing trade and apositive impact on trade partner countries'GDP and their own in long-run equilibrium. In a quarter lag, the RMB real effective exchange rate are the processing trade with imported materials'exports, processing trade with imported materials and processing trade on giving materials'imports Granger cause. Finally, after theoretical and empirical analysis, this paper gave some policy recommendations. Reform the RMB exchange rate is an inevitable trend but its pace must take account of the capacity of the relevant economies, including the processing trade enterprises. Meanwhile the processing trade enterprises should also be actively to achieve industrial upgrading, self-improvement and enhance the ability to resist exchange rate risk.