Analysis On China's Import And Export Under RMB Appreciation Trend

On July 21, 2005, China implemented adjusted and managed floating exchange regime on the basis of market supply and demand, with reference to a basket of currencies. Doubly-driven by domestic macroeconomy and international pressure, the RMB has still some room for revaluation. Along with China's economic integration with the world, the impact of exchange rate on China's import and export is increasing. Given the trend of RMB appreciation, studying the positive and negative effects of RMB appreciation on import and export trade, and Analyzing reasons for the RMB revaluation and China's gorgeous trade surplus, and dissolving exchange rate risk by the import and export enterprises are of extremely theoretical and practical significance.In recent years, the impact from appreciation of the RMB on China's import and export trade were covered in many literature, but of general ideas, not to distinguish between the appreciation of the RMB in different ways under the different trade. More literature just partially not systemically covered general trade and terms of trade. Reasons for the appreciation going with high trade surplus remains untouched, nor theoretical analysis of the slowing-down 2008 foreign trade surplus.This paper starts from the analysis of the impact of the appreciation of the RMB with factors home and aboard, using comparison method to analyse the overall trend in 2008, as well as the appreciation of the RMB Path Selection, then using the general theory and elasticity theory of exchange rate changes on the impact of import and export trade and, to explain the its the positive and negative effects on China's trade, and in conclusion, the appreciation of the RMB did little to the trade balance, but much to improve the industrial structure. RMB appreciation has different impact on different sectors, less effect in processing sector, more in commodity trade. This paper analyzes China's high trade surplus is the result of international industrial shift of "migration effect" and the substantial increase in demand for our products in the world market. And forecasting a surplus growth in foreign trade may be slowing down in 2008. Finally, it suggests,from the micro and macro level,some proposals for dealing with revaluation, our enterprises should take the initiative to hedge rate risk, to promote export competitiveness, the Government should vigorously develop hi-tech industries, further promote the price reforms on resources factor, further speed up the release of upward pressure on the RMB, guide the RMB exchange rate to reasonable fluctuations, strengthen coordination and cooperation of the international community, effectively preventing financial risks.This paper contributes in the following areas: First, systematic and comprehensive analysis and comparison of the RMB appreciation on the positive and negative effects of import and export trade, of the appreciation of the RMB in different ways under different trades; Second, theoretical analysis on reasons for China's trade surplus remaining high, the RMB exchange rate having certain impact, but will not play a decisive role, China's huge trade surplus with many domestic and international factors affecting the result; Third, forcast and reasons for the 2008 slowing-down trade surplus growth.