Research On The Relation Of RMB Exchange Rate Fluctuation And Shandong’s Foreign Trade Manner

Since21st century, there has been an increasingly close relationship between China and the world, with the fast growing comprehensive national strength and foreign economic development. In the case of Chinese increasing trade surplus, the voice which commands the appreciation of RMB is also increasingly higher. With the development of financial market orientation and liberalization, the fluctuation of exchange rate is no longer just a tool which could be manipulated by government, but simultaneously decided by the world and the country’s economic situation. Exchange rate, as an important tool of national macro-economic regulation and economic lever, is playing an increasingly important role in the development of the national economy. It also affects the foreign trade. Its main role is to change the foreign trade volume and adjust the structure of foreign trade. In recent years, with the increase of the researchers’number in related field, the impact manner and extent to the international trade structure are gradually payed attention by scholars. They research the relations between the exchange rate and foreign trade from different aspects, but rarely study what the relation is between foreign trade of a province and exchange rate. The purpose of this study is to prove whether the rise of RMB exchange rate could impact Shandong’s foreign trade, promote the the structure of foreign trade, change the way of foreign trade and improve the level of foreign trade positively.Starting from the background of this subject, I collect a lot of data using data-analysis method to analyze and collate firstly. Show the current situation of the appreciation of RMB and the status of the rapid development of foreign trade of Shandong Province; then set out the relevant background information and theoretical knowledge about the subject and summarize the ex-research of scholars. In the third part, this article describes the current situation of the development of foreign trade of Shandong Province, then presents the mechanism for exchange rate and foreign trade manners. The fourth part, using quantitative-analysis method, empirically study the impact of RMB exchange rate fluctuations on the Shandong’s foreign trade manners. Finally, the article shows the problems foreign trade manners exist in Shandong Province, points out the lack of development of foreign trade and proposes relative countermeasures.The innovation of this paper lies in the following aspects:firstly, the selection of samples. Compared with existing research, this paper selects monthly data from January2002to December2012.more updated to the sample size, more relevant to to current situation lor the findings of this article. Secondly the research perspective, previous studies, often stood from national perspective, to study the relationship between a country’s import and export trade and real effective exchange rate, by taking the import and export trade volume as factors. This article chooses structure of import and export trade manner as factor to analyze of the correlation between the real effective exchange rate of the RMB and import and export trade manner structure. Thirdly, the research methods. This article uses a combination of qualitative analysis and empirical analysis of the data by using unit root test, co-integration test. Granger causality test and OLS regression model to find the relationship between fluctuations of the data. Data processing steps are more scientific, results are more convincing.This paper draws the following conclusion by empirical analysis: the appreciation of the RMB exchange rate could promote the development of processing trade and general trade of Shandong Province, with higher impact on the general trade volume than processing trade volume, to some extent this could be able to optimize the trade structure of our province. Processing trade, as a lower value-added industrial chain in the mode of production, should not occupy a large proportion of the total foreign trade, with RMB appreciating. Shandong Province should think about how to adjust and optimize trade structure to make foreign trade better.