Relationship Between RMB’s Real Exchange Rate And Sino-US Import And Export

Since President Nixon visited China and Sino-US "Shanghai Communique" wasannounced in1972, China and the United States gradually return to normal trade, theeconomic and trade relationship between the two countries is increasingly close, bilateraltrade is developing rapidly. Strong complementarity is showed in the level of tradestructure and industrial development. The trade balance between the two countries is risingrapidly. After40years of development, the Sino-US trade has moved forward to a win-winsituation with friction. China, as origin of a huge trade deficit to United States, the RMBexchange rate issue has become a key issue for Sino-US bilateral relations. In this thesis,qualitative research method and quantitative research method are used for the study on“Relationship Between RMB’s Real Exchange Rate and Sino-US Import and Export”.Through qualitative analysis, it was found that to keep the RMB exchange rate relativelystable, adhere to a managed floating exchange rate system is the ideal choice. RMB againstthe U.S. dollar in the coming year will appreciate slightly, but the appreciation is of limitedspace. Trade friction between China and the United States will continue to happen, but willnot be intensified, the prospects of Sino-US trade is still great. Through quantitativeanalysis, we found that in the long run, variables in all three equations have co-integrationrelationship, that means the existence of long-term equilibrium relationship; The impact ofRMB’s real exchange rate on exports is not significant, exports is mainly affected by U.S.GDP; The impact of RMB’s real exchange rate on imports is significant and positive,China’s GDP has a significant effect on imports; The impact of RMB’s real exchange rateon trade balance is significant, but limited statistically. The coefficient of elasticity is0.89,the ML condition maybe exist in the long term. U.S. GDP is the main factor for the tradebalance; lag of the real exchange rate is statistically significant, indicating that timelag-effect is existed in China; the impact of China’s GDP on the trade balance is notsignificant. Finally, the thesis analyzes relevant reasons, and put forward some suggestions.