An Empirical Study Of The RMB Exchange Rate Changes Impact On Import And Export Trade In Gansu Province

Exchange rate, as the ratio at which one currency can be converted into another currency, is an important instrument for achieving the internal and external balance of an economy. And it also is the most direct and most effective means of regulating the international economic competition relationship. After the breakdown of the Bretton Woods System in1973, large exchange rate movements appeared in the floating exchange rate system, and the growth in world trade had a significant slowdown, which motivated the study of the impact of exchange rate volatility on world trade.After the RMB exchange rate achieved the merger on January1,1994, China had implemented a single, managed floating exchange rate system based on market supply and demand. Beginning form July21st,2005, China began to implement a regulated, managed floating exchange rate system based on market supply and demand and in reference to a package of currencies. Compared to the maintained level of the exchange rates in a few years before2005, the floating flexibility of the RMB exchange rate gradually expands, and the exchange rate volatility also increases. On the other hand, the status of Gansu’s foreign trade in its economic development has become increasingly prominent. The past two years is the most frequent period of China’s exchange rate changes, then how does the increase of the exchange rate fluctuations affect the rapid development of Gansu Province’s foreign trade? in this context, what kind of policies and measures should the government take? Based on these questions, studies of impact of the RMB exchange rate volatility on Gansu’s import and export trade have great realistic value.Based on the background of the RMB exchange rate volatility increasing, we will analyze the influence of the RMB exchange rate volatility on Gansu’s trade. This paper is divided into five parts. The first part is the introduction; The second part describes the relevant concepts of the RMB exchange rate and import and export trade, and summarizes the main theories of the exchange rate changes impact on foreign trade. Simultaneously, it also analyzes the general rules of the exchange rate changes impact on the import and export trade and its influencing factors; The third part describes the course of the RMB exchange rate changes, and also elaborates the changes of Gansu Province’s foreign trade in the corresponding period; The forth part is an empirical study of the exchange rate changes impact on import and export trade of Gansu Province in quantitative analysis methods and then draws conclusions; The fifth part is to sum up relationship between the exchange rate fluctuations and trade, then we put forward some suggestions.