Analysis Between Real Exchange Rate Of RMB And Trade Market Structure

The exterior continues and stable trade development is an important guarantee of country balanced and the economic growth. The exchange rate has been playing the important role in the economic life, relates the national interior and exterior economical and even the international economy, affects the important attribute which a national or the area import-export trade develops. Therefore, it is a widespread research topic which the exchange rate influence the import-export trade.This thesis using purchasing theory and theory of elasticity is aiming to carry out empirical analysis to examine the influence between RER of RMB and import and export. First I have carried on the elaboration to the historical rate and the import and export nationality structure as well as the exchange rate change to the trade influence's correlation theories. We has selected to our country trade influence big 15 countries or areas. Second the paper set up mathematical model with regard to the exchange rate affecting import-export market structure through mechanism analysis, and calculated the requirement which the demand price elasticity must satisfy when the exchange rate devalues or revalues; the export or import proportion to each country or areas raises or reduces. Third after outlining the historical rate and the import and export proportion change tendency, the paper calculated the import and export demand elasticity of 15 big trade partners respectively through Regression and the elasticity definition. There are two regressions between RER of RMB and import and export market structure during1981-2004 and August of 2005–April of 2007 respectively through panel date under the background of different exchange rate system. When we contrast the empirical analysis's conclusion and the elastic analysis and the theoretical analysis, has discovered contradiction. Then, adding the variable of FDI structure, a simultaneous equation is set up which connect RER of RMB and FDI structure with import and export structure directly under the same theoretical framework, there is an empirical analysis through TSLS among RER of RMB, the structure of FDI and import and export structure. The real diagnosis conclusion explained the above real diagnosis and the theory contradiction well. Finally, give suggestion to improve our country foreign trade.