Research On The Relationship Of The Appreciation Of RMB And Manufacturing Industry Employment Of Shandong Province

At the year of2005, The central bank announced that reform the RMB exchange rateformation mechanism, the mechanism became the floating exchange rate system which canreflect the supply and demand of the foreign exchange market and refer different moneyfrom fixed exchange rate system which only refer dollar. Since the exchange reform, RMBexchange rate increasing day by day, the impact to the employment became the foucswhich caused a great concern of the government, society, academics. In recent years, withthe rapid development of manufacturing industry of Shandong Province, the employmentof Shandong provice grow quickly. the rapid development of manufacturing industryexpand the employment and drop the unemployment rate. Entering the21st century, Onemployment Shandong Province still face greater pressure, Shandong Province activelycreate the Blue Peninsula Economic Circle, adjust the manufacturing structure, vigorouslydevelop the manufacturing sector，at the same time, working hard to exapand employment.As we all know, the Appreciation of RMB will bring a series of impact to themanufacturing which can drop the pace of development of manufacturing which canreduce the employment. In this context, research on the relationship of appreciation of theRMB and manufacturing industry employment of Shandong Province can not onlyclarity the relationship of the appreciation of RMB and manufacturing industryemployment, but also can for the government provide policy advice about how to developmanufacturing and how to adjust industrial structure to expand manufacturingemployment.This paper first elaborates the views of domestic and foreign scholars on therelationship between the changes of exchange rates and employment, and summarized theabove viewpoints. Defining the concept of the nominal exchange rate、real exchange rate,and employment.At the same time, introduce the exchange rate impacting onemployment-related theories, including the aggregate demand theory,the capital replacinglabor effect，Marshall-Lerner condition. Basing on these theories, study the mechanism ofthe appreciation of RMB affect manufacturing employment, Standardized describes howthe appreciation of the RMB affect manufacturing employment.Second, we will conduct empirical test by the manufacturing data of Shandong Province. By way of Stationarity test, cointegration, Granger causality test, error correction(ECM) to research the significant level of the appreciation of RMB on manufacturingemployment of Shandong province.Finally, we conclude two conclusions: one is that slight appreciation of the RMB isconducive to the expansion of the total manufacturing employment of Shandong Province;In other words, slight appreciate of RMB prouduce the creative effect is greater than thedestructive effect and the total effect is positive. Second, the RMB appreciation can bringdifferent effect for different manufacturing sectors: restraining the development oflabor-intensive industries and reducing the amount of their employment;stimulating theenvelopment of high-tech manufacturing and thus eapand the employment.