The Study Of The Impact Of RMB Exchange Rate’s Changes On The Import And Export Of Electromechanical Products

The category of electromechanical products is the largest one of China’s trading products. Its trade is very important to China’s economic development and growth. In the context of appreciation of RMB, the trade of electromechanical products meets new opportunities and challenges. The study of the impact of RMB exchange rate changes on the import and export of electromechanical products has great practical significance.On one hand, we do an empirical study on the impact of RMB exchange rate’s changes on the import and export of electromechanical products, the RMB exchange rate’s changes include two aspects:the appreciation of the RMB exchange rate, and the volatility of it; on the other hand, we study the impact of RMB exchange rate’s changes on the structure of the import and export of electromechanical products, referring to HS2, we divide the electromechanical products into five smaller categories, and testify the different influences of the impact of the rate’s changes on them, thus testify the effects on the structure of the import and export of electromechanical products. This is the important point and highlights of this paper.This study is divided into five sections:Chapter I introduces the background of the topics, the significance of the paper, an overview of literature at home and abroad, the main content of the research, the methods and analysis frameworks.Chapter II describes the theories of the impact of exchange rate’s changes on international trade and influence mechanisms, including the classical theory, the theory of elasticity, and the theory of long delay, the absorbing analysis method and currency analysis method and the theory of imperfect exchange rate transmitting; and we analyze the impact of exchange rate’s changes on international trade balance through three mechanisms, they are relative prices changes between home and abroad, income effect, spending effect. There we lay the theory foundation for the later research.Chapter III analyzes the conditions of the import and export of electromechanical products in China. We mainly analyze it in five aspects:they are the overall development situation of China’s trade of electromechanical products, the method of its trade, the geographical patterns of its trade, the structure of its trade and the trading situation of main electromechanical products in China. We descriptively analyze the trends, seasonal characteristics, growth rate, the internal changes of its structures of the import and export of electromechanical products.Chapter IV is the empirical research of the impact of the RMB exchange rate’s changes on trade of electromechanical products. Firstly, we measure the volatility of the RMB real effective exchange rate by the use of GARCH model; then set up the model of import and export of electromechanical products. After doing the ADF unit root test, co integration test, VEC model test and VAR model, we get the regression equation in the long-term and short-term, and test whether the trade of electromechanical products meet the M-L conditions or not, verify the existence of J-curve effect. Through the establishment panel data model, we study the impact of the RMB exchange rate and its volatility on the five categories of electromechanical products, testify the different impacts, thereby affecting the structure of the electromechanical products’import and export.Chapter V is conclusion and policy advice. We have got some conclusions as follows:1. In the long term, the RMB exchange rate has a positive relation with the import of electromechanical products; while in the short term, the relationship between them is negative. There is a three-month lag. The volatility of exchange rate doesn’t have significant effect on the import of electromechanical products.2. In the long term and short term, the RMB exchange rate’s changes have a negative correlation with the export of the electromechanical products, and so do the volatility of the RMB exchange rate.3. The trade of electromechanical products meets the M-L conditions.4. The changes of exchange rate affect the structure of the import and export of electromechanical products.5. The volatility of the RMB exchange rate affects the structure of the export of electromechanical products. On this basis, this paper put forward some reasonable policy advice by adjusting the exchange rate policy and averting the risk, so as to stabilize the trade of electromechanical products and optimize the trade structure of electromechanical products.