| Since the 1990s, China's balance of payments had been imbalanced seriously along with China's rapid economic growth. Except for a few years, our country has maintained the double surplus of the current account, capital and financial account. Especially in the 21st century, with the accelerating pace of China's opening up, the size of China's double surplus appeared to expanse rapidly. Meanwhile, the foreign exchange reserves grow rapidly and the pressure of RMB appreciation increased gradually. To ease the pressure of RMB appreciation, The People's Bank of China reformed the RMB exchange rate formation mechanism on July 21,2005. The nominal exchange rate of the RMB against the U.S. dollar increased by 1.9% on that very day. Until now, regardless of the bilateral nominal rate of RMB against the U.S. dollar or the effective exchange rate of RMB has continued to appreciate. However, it does not change the rapid growth of double surplus of China's balance of payments. How RMB appreciation impacts on the change of the double surplus of China's balance of payments? This becomes a focus to which domestic and foreign scholars, government and community pay much attention. As a weighted average of bilateral exchange rate of our nation and major trading partners or competitive countries, real effective exchange rate can reflect truly the overall value of a currency and the overall competitiveness and the real purchasing power in international trade. And the changes of the real effective exchange rates have the obvious influence on the growth of the national economy. Therefore, to measure the true impact objectively of real effective exchange rate of RMB against of China's balance of payments is not only conducive to make concise evaluation of China's exchange rate policies, but also provides decision-making basis for the future reform of RMB exchange rate formation mechanism. Based on this, the topic has great theoretical and practical significance.This paper selects related monthly data as sample from August,2005 to March, 2010. This thesis analyzed the influence of the real effective exchange rate on China's balance of payments by constructing a stable VAR model to establish cointegration equation, using Johansen co-integration test methods, utilizing Granger causality tests, generalized impulse response function and the variance decomposition method.The article is structured as follows. The first chapter describes the background and significance of the topic. On the base of the results of domestic and foreign scholars' precious study, this paper put forward ideas and research methods of it.The second chapter analyzes the main characteristics and performance of China's balance of payments. Results show that:double surplus is the main features of China's balance of payments, in which trade surplus is the main source of current account surplus. The rapid growth of Foreign Direct Investment is the main driving force of capital and financial account surplus. Net errors and omissions reflect short-term capital flows outside of the Government's monitoring.In the third chapter, it uses bilateral trade model with variable weight, selecting 15 countries and regions as major trading partners to measure the real effective exchange rate of RMB. And according to the monthly trade volume, the paper calculates the real effective exchange rate indexes. Then, based on the GARCH model, the thesis measures the volatility of the real effective exchange rate of RMB. Finally, it measured the equilibrium real effective exchange rate of RMB and misalignment conditions on the basis of the BEER model by referencing the results of ERER research.The forth chapter analyzes empirically the impact of changes of real effective exchange rate on China's balance of payments. This chapter integrates real effective exchange rate levels, volatility and extent of misalignment, to analyze the influence of changes on the trade balance, long-term capital flows and short-term capital flows respectively.The fifth chapter is the conclusion. |
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