Studies On The Effects Of RMB Exchange Rate Change On The Export Prices Of Typical Industry

Since July 21,2005,China started the reform of the RMB exchange rate formation mechanism,and implemented the managed floating exchange rate regime on the basis of market supply and demand with reference to a basket of currencies.From July 2005 to January 2010,the maximum appreciation of the RMB real effective exchange rate and the RMB nominal effective exchange rate published by BIS,respectively, arrived 26.58 percent and 21.74 percent. As Currency relative prices,how will the change of exchange rate directly effect the export goods price and the profits margin of export goods? A series of questions has attracted many domestic academics.This paper reviews abroad and domestic researches achievement from the following three parts:the non-fully pass-through effect of the exchange rate, the sticky price of the new open macroeconomics and the elasticity of demand for the exchange rate.The three approaches mentioned above are applied to analyzing the three different effects on export prices in the theoretical part.In the empirical part, using relevant data from July 2005 to January 2010, the paper analyzes the differential impact of the NEER on the export prices of the 4 industries:food industry, petroleum industry, chemical industry, mechanical industry; the profit margins on above four industries impacted by the REER.Vector auto regression model is used to analyze the export goods price index and the error vector regression model is used to analyze the profit margin in the research approach.The results show that:the influence to the export price of food and the oil industry classified the primary product by the NEER is relatively bigger and the influence to the export price of the chemical,machinery industry classified the primary product by the NEER is relatively smaller;the influence to the profit margins of the oil industry and chemical industry by the REER is positive and the influence to the profit margins of the food and machinery industry is negative.There is a very different influence on different industries effected by the exchange rate, so it will play a big role in decision of the macroeconomic policy. As exports proportion,exports of machinery industry is as high as 49.12% in 2009,hence the impact of machinery industry must be taken into account the formulation of the actual macro-policy.