The Research Of REER Impact On Trade Patterns

China has sustained a trade surplus for many years, mainly coming from processing trade,although the scale of import and export of general trade and processing trade is considerable.Since the2008financial crisis, the slowdown in world economic growth, prices of raw materialsand domestic labor, national policy, rising of the RMB, the general trade import and export scaleonce again goes ahead,with narrowed trade surplus margin. Among the many influencing factors,the exchange ratehas an important impact on a country’s foreign trade. Based on this, expand theanalysis of RMB exchange rate changes in long-term trends and short-term fluctuations in theimpact of different trade patterns in China. On this basis, the decision of the RMB exchange ratemechanism as well as the transformation and upgrading of processing trade issues werediscussed.Using monthly data of1995~2011，REER, GDP, exchange rate volatility，GDP*，FDI，the first to use JJ method to study the long-term impact of the RMB exchange rate. Concludedthat, in the long run, these economic variables have cointegration relationship.Finally,advisingthat effective measures should be taken to speed up to promote economic structural adjustment,speed up the income distribution system reform and improve the construction of the socialsecurity system,to promote domestic consumption, to improve the current serious dependenceon the outside needs of the situation, release the pressure of RMB appreciation;graduallyliberalize the RMB exchange rate formation mechanism.