The Research On The Impact Of RMB Exchange Rate Of China’s Economic Growth

As RMB exchange rate is a tie between domestic economic and international economic，a key comprehensive index of measuring a country’s participation in international affairs, ithas a very important influence on China’s economic growth. On July21,2005, the people’sbank of China began to reform of RMB exchange rate, RMB began to appreciate, in the yearto March2014, the RMB exchange rate against the dollar is from8.11to6.12in therevaluation, the RMB appreciation of about32.5%,and the growth is huge. The influence ofRMB rising on all aspects of the economy in our country is more and more significant, China’srapid economic growth is facing greater pressure.This paper obtains from the basic theory of exchange rate, based on theoretical analysis,to find out the influence of the interaction between exchange rate and economic growthmechanism, using the simultaneous equations with stationarity test, least-square method as atool for empirical analysis. The empirical part adopts the1994-2012quarterly data for thesample. According to the empirical part, we get the following conclusion: RMB real exchangerate rose1%, exports fell by1.6531%, imports increased by0.1315%, the foreign directinvestment fell by0.4183%, residents’ consumption increased by0.0614%, resulting in a0.2979%drop in economic growth.Finally, based on the results of empirical analysis we put forward the followingsuggestions: in the face of strong upward pressure on the outside, the real effective exchangerate should strive to maintain stability; to be more fully rational utilization of foreigninvestment, promote the optimization and upgrading of industrial structure; support andencourage Chinese enterprises "going out" and improve the international competitiveness ofChina’s exports.