Study The Impact Of The Subprime Crisis On China's Furniture Export

The occurrence of the sub-prime crisis made the real estate of the United States to enter slump, then caused the US housing demand and purchasing power decline, at the same time the demand for imported goods be reduced. So the chain directly affects China's furniture exports which are most closely with the real estate.Firstly, Combinating the impact of the sub-prime crisis and the comparative advantages features of China's furniture export, selection the RMB exchange rate, labor costs, raw materials prices, European and American furniture demand, the export tax rebate rate, trade barriers and so on, to qualitative analysis the impact on China's furniture export.Secondly, On the base of qualitative analysis, according to the principles of target selection, using monthly date from January 2005 to May 2009, and using Eviews 5.1 software and co integration analysis, though the Johansen test, Granger causality test, the error correction model methods to do an empirical study on the impact of the sub-prime crisis on China's furniture exports. Empirical study have shown that between furniture export and these factors have a long-run equilibrium relationship, which shows the sub-prime crisis indeed had an impact on China's furniture export. Then through long-run equilibrium and short-term fluctuations in comparison, got the conclusion: RMB exchange rate obtained the existence of"overshoot"phenomenon, labor costs and furniture export in the long term positive correlation, the inhibition of the increased prices of raw materials, this article given a reasonable explanation on this phenomenon. At the same time got a conclusion: furniture import, labor cost, European and American furniture demand, the export tax rebate rate exist lag. Through the Granger causality test to test the Granger causality between each variable and furniture export, which has a great significance on the analysis of financial events.Thirdly, from three indicators: the international market share index, revealed comparative advantage indices,trade competitiveness index to analysis whether the sub-prime crisis on China's furniture export competitiveness implications until 2008.Finally, making some policy recommendations from the macro and micro levels to address the sub-prime crisis on the impact of China's furniture export, as well as how to improve the export competitiveness of China's furniture.