Research On The Influence Of Exchange Rate Appreciation And Technological Progress On China’s Industrial Structure Upgrading

Both the nominal and real RMB exchange rate have appreciated significantly since the reform beginning from2005, which deeply impact all aspects of our economy, such as industry structure, trade structure, FDI, etc.. Facing the new situation of the RMB exchange rate appreciation, raising factor costs, exports decline caused by the financial crisis, China needs to transform from extensive into intensive economic growth pattern, in which, accelerating technological progress and upgrading industrial structure is a necessary way. Therefore, in view of economic globalization, this paper focuses on the impact of the RMB exchange rate appreciation and technological progress on China’s industrial structure upgrading problems.From a new research perspective of meso-industry,by summarizing of previous theoretical and empirical research and considering different industry has different exchange rates sensitivity and different technological progress rate, this paper uses trade-weighted and DEA methods to estimate the industrial real effective exchange rate(IRER) and the industrial technological progress rate(TFP) respectively, then runs four regressions of all industries, labor-intensive industries(LⅡ),capital-intensive industries(KⅡ) and technology-intensive industries(TⅡ) by panel data methods.Based on theoretical and empirical analysis, this paper finds that the appreciation of the RMB IRER is conducive to China’s industrial development as a whole through TFP, FDI, trade and other pathways. Moreover, the appreciation has positive impacts on LⅡ and KⅡ, but negative impacts on TⅡ and the positive impact of TFP is not significantly right now. This phenomenon will lead to reallocation of resources between different industries and accelerate the industrial transformation, so as to upgrade the industrial structure. So this paper proposes suggestions from four perspectives of accelerating technological progress, improve the exchange rate mechanism, optimize trade structure and FDI investment structure correspondingly, hoping to be helpful to our industrial structure optimization problem.