A Study Of The Impact Of RMB Real Exchange Rate And FDI On The Trade Structure Of China

In recent years, with the development of Chinese international trade, comparedto "trade amount ","trade quality" which is trade structure has draw more and moreattention. The proportion of the volume of primary commodity to the volume of totaltrade is decreasing year by year, while the proportion of industrial manufacturedcommodity is rising, the trade structure has been optimized. Especially after theexchange rate system reform in2005, as well as the pressure from western countries,lead to the appreciation of the RMB, affected by this, and Chinese trade structure hasbeen thought profound change. At the same time, FDI inflows into China haveincreased year by year, industrial structure and trade structure has also gone through afar-reaching influence by FDI.Trade structure plays an important part in the healthy development of Chineseeconomy, however, the factors which affect a country’s trade structure are verycomplex，this paper creatively combine the three factors, with the data of the realeffective exchange rate of RMB, FDI, trade structure from1981to2011,classifyinggoods by the criterion of SITC, Using the methods of unite root test, cointegrationtest, error correction model to analyze the relationship between them. The resultshows: In the short term, the effect to Chinese trade structure caused by theappreciation of the exchange rate of RMB and FDI inflow is negative; While inthe long term, due to the appreciation of the exchange rate of RMB, the ratio ofindustrial manufactured goods’ export volume in total export volume is decrease,while the technology-intensive products export volume account more for industrialmanufactured goods’ export volume. and with the appreciation of the exchange rate ofRMB, the ratio of technology-intensive products in industrial manufactured goodsrose more than the ratio of industrial manufactured goods in total export. so theappreciation of the exchange rate of RMB can make Chinese trade structure better.The effect of trade structure by FDI are on the contrary, the growth of FDI canimprove the ratio of industrial manufactured goods’ export, but causes the technology-intensive products’ exports volume account less for the export volume ofindustrial manufactured goods, because the level of FDI technology is not very high,most of FDI flow into the labor-intensive industry industrial, so the effect of FDI ontrade structure is more dependent on the policy guidance.In this paper, normative analysis and empirical analysis are used to analyze therelationship among the real effective exchange rate of RMB, FDI and the tradestructure, and according to the conclusion, several policy proposals are given, whichprovided reference significance for Chinese exchange rate policy, investment policyand trade policy.