The Impact Of RMB Appreciation On China’s Exports Of Textile And Garment Industry

With the development of the word’s economic globalization and trade liberalization, thecountries become more and more closely. The exchange rate as an important medium of tradesettlement between the counries, it’s changeing have become one of the most important factorof affecting a country’s economic stability.With the development of the China’s economic, the RMB exchang rate movements havegenerally become the focus of the international community and the academic. After the RMBexchange rate reform, the RMB has been in appreciation, the RMB appreciation impactingour country economy has attracted more and more scholars’ attention. However,the presentresearch mainly focused on RMB appreciation on China’s macroeconomic impact, such as theChina’s economic structure, foreign trade, employment, the influence of economicdevelopment and stability. The RMB appreciation on our country,especially the influence onthe specific industry research is shortage.In the traditional economic, the textile and garment industries are the pillar of thenational economy industries, it plays an important roal in the economic prosperity,employment stable, expanding the economic trade and increaseing the national income. Butwith the development of our national economy, especially the impact of the external financialcrisis and the rising of the domestic production factors prices, the RMB exchange rate rising,the traditional advantage has no longer exists on originally cheap labor,cheap raw materialsand the domestic market. The textile and garment industry is facing unprecedenteddifficulties.This paper, from the angel of the RMB exchange rate, analysis the influence of RMBappreciation on China’s textile and garmet export industry. Basing on introduction of therelated theory of exchange rate, this paper discusses the history of China’s exchange ratereform and analyzes the influential factors of the RMB exchange rate. Then, brieflyanalyzesed the environment of our country textile and garmet export industry, the industrycharacteristics and the related industry chain development situation of the textile and garmetindustry. Finally, through theoretical and empirical analysis the influence of the appreciationof the RMB on China’s textile exports. In the theory, through the international trade theories, analysis the appreciation of theRMB influence transmission mechanism on our country textile and garmet export industry,then using a simple supply and demand model analysis the influence of RMB appreciation. Inempirical term, this paper uses cointegration test technology and ECM model to analyze therelationship of the appreciation of the RMB and China textile and clothing export.Showingthat the appreciation of the RMB is the important reasons of causing China’s textile andclothing export change.Through the above analysis, proposing some suggestions and measures on China textileand clothing export industry, and hoping that China’s textile and clothing export enterprisemay take the opportunity to achieve enterprise’s scientific and technological innovation andtechnological upgrading, and improve the international competitiveness, so as to improve thewhole textile and clothing export industry’s international competitiveness.