Empirical Testing Of The Fluctuation Of Exchange Rate On China’s Export Commodity Structure

Since2005, the exchange rate of RMB has been continuously appreciating against the U.S. dollar, during the recent five years, it has been promoted by22%. Appreciation on export prices, then significantly affects export scale has been supported by a large number of both theoretical and empirical proofs. So, will the fluctuation of RMB or even the increase of expected appreciation affect China’s export commodity structure? Considering that the appreciation of RMB may result in labor-intensive export profits plummeted, the growing financial risks, but may also cause the transformation of economic structure, and promote the internationalization of RMB, this paper focuses on the influence of the RMB exchange rate on the structure of export commodities, in order to orientate the future RMB exchange rate policy in some way.In this paper, the writer uses the RMB real effective exchange rate index to measure the impact of the RMB exchange rate changes on the Chinese export commodity structure, and believes that the exchange rate, will impact on commodity structure changes from two aspects, one is the foreign elasticity of demand of goods, the other is production factors. Besides, the writer depicts the exchange rate pass-through tree. The measure of the export commodity structure in this article is different from most of the literature, which use SITC5,7and SITC6,8classification methods, but use the added-value of products for the basis of classification, and make Lall structure of export commodities index according to the complexity(Lall (2002,2005)). Then this paper investigates the long-term impact and short-term impact of RMB exchange rate; Besides that, considering the particularity of the Chinese statistics, in order to observe the short-term impact more clearly, the article analyzes high-tech product export structure, to observe the short-term impact of the RMB exchange rate on the structure of export commodities.The study results shows, in the short run, the appreciation of RMB has small impact on the Lall export commodity structure, but in the long-term case, the effect of exchange rate changes on the structure of export commodities is beginning to show up. So with the progressive introduction of more flexible and competitive exchange rate system, the future trend of RMB up-valuation will more and more distinctively promote the process of optimizing the commodity structure.Chapter1shows the background of the study and its significance. Chapter2reviews the research literature and related mathematics basis of the exchange rate affection on the structure of export commodities, after that, this paper depicts the path of the exchange rate impact on Chinese export commodities structure. Chapter3describes the results of the reform on RMB exchange rate system and the status quo of China’s export commodities structure, then constructs two export commodity structure indexes on this basis, and does some qualitative analysis. Chapter4is the empirical research of the two export commodity structure and the analysis of the results. Finally, it is the policy recommendation of this article.