Structure Analysis Of The Effect Of G-3 Exchange Rate Volatility On Chinese Export

Since the collapse of Bretton woods, G-3 exchange rate volatility became the important reason of the world economy instability. G-3 exchange rate volatility may affect developing countries. Some of the variables mentioned as being influenced by this volatility are:trade flows, foreign direct investment, currency crisis, debt servicing and so on. But the above influence is indirect and indefinite. Therefore, whether preventing G-3 exchange rate volatility has the advantage to the development world economy or the developing countries become one interesting topic.But the early research is mainly about the target zones. Some people had done some real diagnosis research to the influence of G-3 exchange rate volatility on the trade flows of the developing countries. However, the final result merely was on specific analyzes. The exchange rate displays influence not only to the exportation quantity, but also to the export commodity structure, then it affects a country's industry structure. Moreover, USA, Japan and Euro sector are main trade partner of China. Theoretically speaking, the G-3 exchange rate volatility possibly can affect Chinese export, but to quantity and export structure, the influence degree is not in the same way. Therefore, it has significant practical significance to research how G-3 exchange rate volatility affects Chinese export and economy.The paper has provided all-round and detailed discussion about G-3 exchange rate volatility firstly. This part reviews G-3 exchange rate experience since the collapse of Bretton Woods, considers some explanation and discussion about G-3 exchange rate volatility, especially evaluates its impact on developing countries. As follows, section 2 studies the infection of the fluctuation of G-3 exchange rate on the total export, the export of primary products and industry products of our country by using"Gravitation Model". The result shows that, the fluctuation of G-3 exchange rate has baffled action to our country's export. Finally, the paper implies how to prevent the effect of G-3 exchange rate volatility on our country's export and economy by building up target zones and reforming exchange rate policy, aiming at providing a little policy suggestion.