Influence Of RMB's Revaluation On China's Foreign Trade

We are in a so-called "crippled"globalization periods.It is not because that developed country didn't follow the request of world trades regulation to some detailed issues such as open the dairy product market. It is the ultimate regression compared with the first globalization in the 19th century.Labor force factor which is the most flowage among all the factor can't be on the move freely worldwide. Therefore it caused many realistic economics issue especially brought the exchange issue—RMB's revaluation has become the hot issue focused worldwide.As economics community hold the different outlook to RMB's revaluation issue. Firstly I take the example of Japan's "Plaza protocol" to analyze the positive and negative influence on trade effect of Japan Yen's revaluation. Reviewing the history of effect of fluctuation of RMB's exchange on foreign trade to reveal the inspiration which China learned from Japan's "Plaza Protocol".Then it is reflected that price shift issue is RMB's revaluation virtually by explaining price adjustment in the domestic economic institutions and analyzing the internal and external pressure of RMB's revaluation. Whether the price shift is benefit, we should also consider China's industrial trade structure.Following analyzing the influence of RMB's revaluation on foreign export trade and using the EVIEW software to do the Johansen co-integration and VEC model based on the data from Year 2001—2006 to demonstrate that influence of RMB's revaluation on export trade to Japan is not evident in the short period and will be not negative even in the long terms.Finally giving the assessment on China's foreign trade structure and system. We should adjust the export commodity structure, export competitiveness, complete the foreign trade system and keep the exchange value for the export company to insure the positive effect of RMB's revaluation on export.