An Analysis On The Correration Between RMB Exchange Rate And Foreign Direct Investment

RMB exchange rate and foreign direct investment is an important macroeconomic variable, the pressure in my domestic and international economic imbalances caused in the context of idespread concern and discussion at home and abroad. With the peg in July 2005 "package" a managed loating currency exchange rate system in China implemented a fixed exchange rate of RMB to bid farewell to the era of formal entry into the "small Run, "the appreciation of the stage. In the new exchange rate system, the trend of RMB appreciation will be accompanied by greater volatility. External and internal appreciation of the yuan, driven by the pressure of RMB appreciation trend and is expected to be in the longer term memory. Therefore, how to adjust the new situation based on foreign investment policy became the focus of debate.Foreign direct investment has long been a "double-edged sword"nature has been a general consensus, not only promoted China's economic growth, but also there are many negative effects, unlike financial derivatives, like through the intertemporal hedging, it contains more Large sunk costs, macro-economic variables (such as factor costs, preferential policies, exchange rate, real and potential macroeconomic conditions, etc.) become the main decision-making multinational foreign investment factors. Among the many factors, the exchange rate of foreign direct investment is an important factor. What exchange rate fluctuations is to "promote"or"hinder"Foreign direct investment has long been the focus of debate scholars. In order to verify how the nominal exchange rate of RMB into foreign direct investment in China the impact, we use a combination of theoretical and empirical analysis, and build on the RMB exchange rate and foreign direct investment model to analyze the specific relationship between them.