The Comparative Analysis About The Effect Of RMB-USD Exchange Rate Fluctuation On Classified Imports And Exports

With the continuous development of the international trade, the link of eachcountry has intensified and the foreign trade has played a more and more importantrole in the whole economy, especially in the extrovert type economy. The fluctuation ofexchange rate is an important factor to effect a country’s economy development,especially in foreign trade. More and more domestic and foreign scholars begin toresearch it.In2005， we carried on exchange rate reform, RMB no longer fixed onUSD,instead of " a basket of currencies", making exchange rate system more elasticity.The reform of RMB exchange rate accompanies with each step of our country’seconomy development, especially in2005, the significant revaluation of RMB has animportant effect on our economy. On the one hand, RMB continuously revalues,making our foreign trade faces a big challenge and on the other hand, the turnover ofour foreign trade continuously increases, we totally have a trade surplus. In order toaccount for the realities of our country’s foreign trade, this paper takes HS standard toclassify foreign trade product, using real effective exchange rate index to explain thesituation of our country’s foreign trade.According to HS standard, this paper classified foreign trade product into22typesand studied the reaction of each product toward foreign exchange rate fluctuation,using a non-structure method—vector autoregression model, namely VAR model.According to the research, the exchange rate fluctuation has a different effect on eachkind of import and export product, Marshall-Lerner Condition doesn’t always establish,so it doesn’t right to say that RMB continuously appreciation has an active effect onexports and a negative effect on imports. In fact, Marshall-Lerner Condition in some products, especially in industrial manufactured products doesn’t establish, and thesetypes of products account for a large share in China’s foreign trade. All these explainedwhy RMB continuously appreciates and the foreign trade of our country sustainsextensively.To sum up, We should well grab the opportunity of RMB revaluation, activelytune and upgrade our country’s trade structure to make our country occupy morebeneficial situation in the international trade.