Analysis Of RMB Real Exchange Rate And Sino-US Trade Surplus Based On Comparsion Of ML Condition And BRM Condition

China,as the most powerful developing country, its trade development has attracted world's attention.While China's trade with the United States ,which ranks first in the world by the economic strength ,has attracted attention around the world. With the global economic integration and China's opening degree raises to a higher level, Sino-US trade has developed rapidly and bilateral trade volume has been increasing successivly,at the same time, Sino-US trade surplus shows the growing tendency.America takes the high surplus as a excuse,lanching"attack"to China and putting pressure on the RMB Appreciation frequently.This paper researches the RMB exchange rate and China's trade surplus to America.First,this paper compares Marshall-Lerner(ML) condition and Bickerdike- Robinson-Metzler(BRM) condition in theory.Then, in the empirical part,based on the imperfect substitution theory,establish import and export demand model,adoping monthly data from July 2005 to December 2008,applying unit root test, cointegration test, error correction model, impulse response analysis, variance decomposition and other methods. Empirical test drawn demand and supply elasticity of imported and exported goods,and test the ML condition and the BRM condition on the applicability of Sino-US trade. The results show that,no matter according to ML condition or BRM condition, RMB appreciation cann't reduce Sino-US trade surplus.The reason of China's long-term, sustained, unilateral trade surplus against the United States is mainly due to complementary nature of Sino-US trade commodities and U.S. domestic huge consumer demand.At the same time,both the theoretical and empirical analysis all reach the result that BRM condition is more in line with the Sino-US trade practices.Adjust exchange rate according to BRM condition can avoid excessive exchange rate issues. Finally, based on the result of empirical analysis,put forward the policy recommendations to relieve the pressure on Sino-US trade imbalance and RMB appreciation.