Influence Research On Importing Copper In China Due To RMB Appreciation

Since July2005the Chinese Government started the reform of the exchange rate mechanism, RMB exchange rate appreciation trend has remained for a long time. As the U.S. economy remains in the doldrums, the risk of implementing QE3to the U.S. government is increased. That has also increased the possibility of further appreciation of the RMB. According to the general theory of international business, Changes in a country’s currency exchange rate have a great impact on the country’s import trade. As China’s copper consumption is increasing in recent years, the capacity of the copper smelting enterprises are constantly expanding and the import quantity of Copper concentrate is also increasing year by year. So the RMB exchange rate appreciation must play a more important role in the imports of raw materials for Chinese copper smelting enterprises.Through the careful introduction to the RMB appreciation history and the analysis to the reasons of the RMB appreciation, this paper can speculate the development trend of the RMB exchange rate changes. And on this basis, this paper can have a comprehensive understanding of the research questions by studying the industry chain status quo and development trend of the copper smelting enterprises in China. At the same time by using the means of reality speculate, theoretical analysis and empirical analysis, we can conduct a comprehensive analysis of the impact of RMB appreciation on the imports of raw materials for China’s copper smelting enterprises. The paper draws the following conclusions:(1) RMB appreciation has significant effects on the quantity of raw materials imported for copper smelting enterprises and also has significant lag effects on it.(2) As the blind expansion of production capacity, the Chinese copper smelting industry may have been out of the economic fundamentals. Based on the conclusions obtained, this paper can put forward corresponding policies for the problems in the actual operation of the import raw materials imports for China’s copper smelting enterprises. For example,(1) be careful about the terms of the contract and has the flexibility to choose trade contract.(2) The Chinese copper smelting enterprises should select reasonable financing channels to make sure that they have enough money to import copper concentrate.(3)The Chinese copper smelting industry should do a good copper concentrate inventory hedge design against inflation.(4) The Chinese copper smelting industry should adopt the Union means to strengthen its position in the copper industry chain.