The Rmb Exchange Rate And The U.s. Trade Deficit With China Correlation Analysis

American trade deficit with China appears for a long time. The financial crisis in2009gives a hit to American national and international economy, which makes that todecrease the deficit become more important in such an unusual time. America blamesthe deficit to the problem of exchange rate of RMB. It hopes to force the revaluationof RMB to reduce the export of China to America and decrease the deficit with China.For this reason, analyzing the reasons for American trade deficit with China and therelativity between exchange rate of RMB and the deficit is not only related withAmerica, but also with the balanced development of Sino-US trade. Therefore,researching on the relativity between exchange rate of RMB and America’s tradedeficit with China is meaningful theoretically and practically.Based on the former researches by scholars from home and abroad, I analyze thepresent situation of America’s trade deficit with China from the angle of scope andstructure, which assists the analysis on the reasons for the deficit. Then, I analyze therelevant theories which may cause the deficit. Through the analysis on naturalendowments differences between China and America, I conclude that such differencesare the cause for American FDI to China. Just because of this, the American tradedeficit with China increases. In the analysis on the relation between balance ofsavings and investments and the deficit, I make a conclusion that this balance is oneof the reasons for American trade deficit with China under the research about thetheory of absorption approach to balance of payments and American national statistics.American high-tech export control on China is another reason to explain the deficit.At last, through the research on the core of elasticity approach——Marshall-Lernercondition and J curve effect and the contrast between the curve and the tendency ofdeficit, I reach a conclusion that revaluation of RMB could not explain the deficit,which lays the first stone to the following empirical analysis on the relativity betweenexchange rate of RMB and American trade deficit with China. After that, I do anempirical analysis on the relativity between exchange rate of RMB and Americantrade deficit with China, I draw a conclusion that they are irrelevant, which validates the conclusion in the theoretical analysis. At last, I give some practical suggestions onhow to decrease American trade deficit with China from the aspect of America andChina.