A Study On The Foreign Exchange Market Of Shanghai And "Golden Decade" Of China's Economic Relationship

1927 to 1936 known as the Economic Development of Modern China "golden decade", in the decade, the relationship between China's economy and foreign country are close, which, when Shanghai as China's foreign trade center and foreign currency exchange center, exchange rate changes on foreign exchange markets China's Socio-economic impact is profound and extensive. This paper from the economic point of view on the modern history of China Foreign Trade Center-foreign exchange market of Shanghai exchange rates (1927-1936) and its relationship with China's economic "golden decade".1. INTRODUCTIONThis article briefly introduces the topic of the background, purpose and significance of thesis research ideas and methods, as well as the existing domestic and international foreign exchange market in Shanghai briefly summarize the research results, presentations, and made this innovation possible inadequacies.2. Shanghai'status in the modern China's foreign tradeAfter the Opium War to Modern China in Shanghai as the representative of the rise of foreign trade. After half a century of development, to the early twentieth century, Shanghai as China's largest foreign trade port, has a large amount of foreign exchange needs, developed for the Shanghai foreign exchange market provided an indispensable foundation.3. In the early twentieth century foreign exchange market of ShanghaiShanghai with the Shanghai foreign exchange market is the rise of foreign trade development, and its development is also developed with the increasingly sophisticated trade. Shanghai foreign exchange market from the beginning of the formation of monopolies by foreign businesses into the twentieth century, the development of the twenties, already a have a large number of participants, and close contact with the world silver market competition in the market. Shanghai foreign exchange market-based exchange rate determined by the performance of that supply and demand of currency (that silver supply and demand.)Shanghai foreign exchange market and the world silver market is the mutual influence, China's exchange rate change is not entirely passive follow the world silver prices, but can affect the world silver price movements.4.1927-1936 exchange rate foreign exchange market in Shanghai and its influencing factors1927 to 1936, the Shanghai foreign exchange market exchange rate has gone through four stages, namely:1927 and 1929 the stable period; 1929 to 1931 rose period; 1931 to 1933 the dollar exchange rate, on pound down period; fall of 1933 of 1936. In 1927-1931, the Shanghai foreign exchange market exchange rate has been in a down trend, mainly because Western countries have resumed the gold standard and sell the silver due to China's huge foreign trade deficit also contributed to exchange rate falls, despite good economic performance in China to help slow down the pace of decline, but not enough to reverse the downward trend.1931-1935, Shanghai foreign exchange market affect the real exchange rate of the main factors that the U.S. silver policy implementation. China's economy running smoothly, reducing foreign trade deficit, have contributed to the rise in the exchange rate. After 1931, the British-led Western countries have abandoned the gold standard is only the foreign exchange market in Shanghai adverse impact on the nominal exchange rate is not the main factors affect the real exchange rate.5.1927-1936 Shanghai foreign exchange market exchange rate changes on China's socio-economic impactShanghai foreign exchange market exchange rate changes on China's real economy is significant. To import and export trade, foreign exchange rates rise, you can promote China's exports of industrial products and agricultural products, but also to prevent dumping of foreign goods to China will help protect China's national industry and production of new technological backwardness of agriculture. Although the exchange rate also led to China's rising imports of machinery and equipment costs rise and an increased risk of foreign businessmen, but overall, from 1927 to 1931 increase in foreign exchange rates between the import and export trade of China is more good than harm. After 1931, foreign exchange rates, fell by the rise, although this may let the Chinese imports of raw materials and machinery to reduce the cost, but it is very obvious drawbacks, especially in foreign exchange rates after 1933 crash period. Exchange rate fell to a substantial increase in imports of foreign goods, squeezing the survival of the Chinese industry and commerce, national capital are concentrated, a large textile industry suffered, companies going bankrupt. The silk and tea, agricultural exports represented an impasse, thereby causing the decline of the rural economy and agricultural depression.Shanghai foreign exchange market rates rose, causing silver to flow into China, the domestic market in the moderate inflation, a great benefit to China's economic construction. Led by banks and financial institutions in a large number of deposits, the wide range of low-interest loans to enterprises, ensure that the Chinese businesses to expand production scale of the necessary funds. And there are significant numbers of silver flowing to rural areas, promote rural economic growth.1927-1931 rise in foreign exchange rates between the prosperity of the Chinese industrial and commercial development, social employment opportunities increased, a corresponding increase in national income, but also with the increasing purchasing power, the sound development of the entire social economy. After 1931, foreign exchange rates, fell by the rise of China began to outflow of silver, bear the brunt of China's financial sector. Exchange rate in 1933 fell further, the situation deteriorated, small financial institutions have closed down large financial institutions are in crisis. Industrial and commercial enterprises in the capital shortage, skyrocketing interest rates under a lot of business. The entire national economy hit hard.1927 to 1931, the Nanjing government coincided with the beginning, the Government's financial foundation is weak, but also to pay huge military spending and debt costs, rising foreign exchange rate falls, large amounts of silver into China, the government issued bonds to a large scale, through the financial crisis. At the same time, rising foreign exchange rates makes the significant increase in government debt burden and tariff revenue, our budget significantly deteriorated. After 1931, foreign exchange rates, fell by the rise, tariff revenue should increase, but since 1930 has imposed tariffs on Chinese imports of silver into gold sign, import duties can not benefit from changes in foreign exchange rates increases. 6. ConclusionIn the "golden decade", foreign exchange market of Shanghai exchange rate change is an important factor affecting economic development. In the first five years of "golden years", the Shanghai foreign exchange market exchange rate appreciation has created China's rapid economic growth; and the next five years, the decline in foreign exchange rates makes the development of China's economy has entered a difficult period. Overall, in the "golden decade", the Shanghai foreign exchange market exchange rate changes on the impact of social and economic development in China has greater positive meaning than the negative significance.