Game Analysis On RMB Exchange Rate Level’s Influencing Subjects

The argument for foreign exchange rates has always been widely focused by thescholars all over the world. Moreover, alone with the Chinese economic boosting, theissue of Chinese currency is coming to our study field. Recently, the internationalfinancial communities are paying more and more attention to the Chinese exchangerate. Under the factors that the balance of payments surplus in both international tradeand foreign investment, and the steady increasing in the huge foreign reserves, etc,Chinese currency has started an appreciation journey in last10years. As we all knowthat a country’s exchange rate has seriously impact to its economic. Such as the lostdecade of Japan in the1900s and the economic crisis of Southeast Asia in1997,etc,all these issues are closely relative to the exchange rates. So it is practicalsignificance that Chinese has to solve the issue of Chinese exchange rate, which isunder all kinds of pressures.The article concludes the achievements both in and out of the country, findingthat there are rarely researches from the perspective of game theory. The article givesa comprehensive research and analysis to the issue of Chinese exchange rate by takingthe perspective of game theory, combining the game model and statistics model, andcollecting the reliant and abundant data.Basing on the Exchange Rate Determination Theory, the article analyzes thefactors that determine the level of exchange rate, and thus concludes out the subjectsinfluenced the exchange rate; furthermore, the article analyzes the affects, because ofthe fluctuation of exchange rate, on the interest and profit of each subject, and by thenbuilds the game theory models by establishing several game subjects; the models areincluding2producers each：Chinese government and foreign investors, Chinesegovernment and foreign government, and Chinese government and the public.According to the game playing analyses of the subjects, we can find out that eachsubject is gaming for its maximum interest. However, as the main subject of RMBexchange rate, Chinese government should not only take care of each other subject’sinterest but also keep the stability of the RMB exchange rate, in order to ensure thestable and healthy development of the economy. In the last, the article analyses thefluctuation of Japanese exchange rate in the period of1970s to1990s. Learning fromthe history, for the measurements and actions Japanese government took, we willselect the refined and discard the crude that would be a guideline for Chinese economic strategies, to avoid the policy deviate the right orbit.The analysis illustrates that:1. The foreign speculators are willing to gain profitfrom the dipsy doodle exchange rate. The Chinese government should ensure thepolicy-making autonomy, under the situation that key concerns are on the foreigninvestment.2. Leading by the US government, those foreign governments are themain subjects that pressure the RMB exchange rate’s appreciation, aiming to keep theinternal and external equilibrium of their own economies. However, this action isanalyzed with little effects. On the contrary, Chinese government should implementthe effectiveness policies through comprehensive analysis of the internal and externaleconomic environment, without foreign countries intervention.3. As the citizens, weare willing to have a stable and healthy developed economy, which the widefluctuation in the exchange rate is not accepted. In order to keep the good reputation,the government must control the exchange rate in a reasonable range.