The Affect Of RMB Exchange Rate Changes On The Chinese Manufacturing Industry Structure

Through a long development China's manufacturing industry is facing the industrial structureadjustment and upgrading, and this is a necessary way of the continuing development of themanufacturing industry. As an important valuation standard, RMB exchange rate affects the structure ofChina's manufacturing industry through the profits changes of manufacturing companies, manufacturedgoods' import and export structure, the cost of international capital flows. In this paper, manufacturingis divided into two categories in accordance with the technical content standards: low-skilledmanufacturing and high-tech manufacturing. On this basis, the author analyzes the impact of the RMBexchange rate fluctuations on China's manufacturing industry structure adjustment, and describes theimpact of the exchange rate on manufacturing industrial structure upgrade.The theoretical analysis section in this paper describes that the RMB exchange rate changes affectsthe Chinese manufacturing industry structure in three ways: corporate profits, foreign trade andinternational capital flows, the author uses graph to describe the conduction process and the role ofintermediate variables, and in the transmission of the RMB exchange rate changes to foreignmanufacturing product prices and raw material price changes is a key factor. In the empirical analysissection of the article, the author calculated the elasticity of the dependent variable to the independentvariables, finding that the elasticity of Chinese manufacturing industrial output value structure to realeffective exchange rate is positive. In this paper, impulse response analysis is used to compare theimpact of the intensity of the independent variable on the dependent variable, finding that the realeffective exchange rate has persistent negative impulse response to the Chinese manufacturing industrialoutput value structure. From the empirical results, if it's separately considered, the real effectiveexchange rate impact on Chinese manufacturing industrial structure is negative, that is the appreciationof the RMB is to hinder the upgrading of industrial structure of Chinese manufacturing industry; but inthe real economy, considering that appreciation of the RMB has a positive impact of China'smanufacturing industry structure upgrading through other pathways, RMB appreciation led to thechange of the economic environment of the Chinese manufacturing industry which is conducive toChina's manufacturing industry structural upgrading.In order to change the unfavorable factors brought about by the appreciation of the RMB, andsmooth RMB appreciation positive pathway to enhance China's manufacturing industry structure,Chinese manufacturing enterprises should increase concentration; enhance the status of themanufacturing enterprises in the international industrial chain; use talent rationally, introducing newelements for the "Made in China". Government should take the industrial promotion measures:improving the manufacturing industry standards; technological innovation policy; actively promote theRMB as the international pricing and settlement currency of manufacture.