Theory And Evidence: The Exchange Rate And China's Economic Growth

In recent years, RMB have been facing the pressure that has appreciated all the time , the main inducement of this kind of pressure is devaluation of U.S. dollar and Sino-America trade deficit. In this case, international hot money and idle fund flow into our country in a large amount , gamble the appreciation expectancy of RMB, become of our country foreign exchange reserve with foreign currency account for main reason that fund rise fast in recent years. Meanwhile, having brought out or aggravated the price of real estate of our country and risen violently all the way, some inflation, the currency devalues inwards. In this case, no matter RMB appreciate and maintain the present exchange rate to the outside, will bring some profound level changing and fluctuation difficult to controls to economy of our country .July 21, 2005, People's Banks issued announcement: "Today, our country to start to implement take the market supply and demand as the foundation, refers to a basket currency to carry on the mediation, has the management the floating exchange rate system. At the same time, the RMB & US dollar exchange rate rises 2%. After the RMB passes through half year adjustment, analyzing the influence to the Chinese economy, has become the starting point which this article studies and key point.In the first part of the article, we raise an issue -- since July 2005 after the revaluation of the RMB, more than half a year have passed, we should estimate if there is any impact on China's economy and how much the influence is .The second part is about the related knowledge. Include exchange rate theory and a synthesis of existing literature of the relationship between RMB exchange rate and the economic development. In this part, we introduce real effective exchange rate and several simple calculation...