The Impact And Strategy Of RMB Exchange Rate Changes On China’s Import And Export Trade Of Cars

Exchange rate as an important indicator of price when economic exchanges between trading countries, plays an irreplaceable role in international trade. In July21,2005, China conducted the reform of the exchange rate, to implemented a market supply and demand with reference to a basket of currencies, managed floating exchange rate regime. With the reform of the exchange rate regime, the RMB appreciation trend is beginning to show steady. Changes in the exchange rate has a profound impact on fluctuations of a country’s balance of foreign trade and domestic economic activity. Under the new situation of economic globalization, import and export trade as an important means of promoting economic development, the efficient allocation of resources and the introduction of advanced technology and equipment, it plays a decisive role in promoting China’s rapid economic development.With the gradual deepening of the national pace of reform, our contact with the world’s increasing closely. Our country’s car industry has occurred great changes. It has entered a new period of development, however, compared with developed countries, there is a great disparity in the sedan’s quality and the production process. So our demands for high-end cars still rely heavily on imports from abroad. Our domestic car companies also studied abroad sedan advanced production technology while importing cars. Constantly improve the deficiencies on car production. It will has a huge role for the development of China’s car industry. Today, China has become the world’s trading nations of exporting cars. Therefore, the fluctuatly of the RMB exchange rate will continue to affect our car trade.This pape rmainly studies the impact and strategy of RMB exchange rate changes on China’s import and export trade of cars. Firstly, the article reviews the related research literature about impact of exchange rates on trade, and analyses the existing research results and methods that were commonly used by the Scholars at home and abroad in this field, which establish basis for this paper research;The second part of the paper introduces the related concepts of exchange rate as well as the theoretical analysis of the impact of exchange rate fluctuations on trade; The third part studies the characteristic and situation of China’s car import and export trade on the basis of analysis on the part of theory, and also describes the development status and existing problems of the car trade in China today. The fourth part makes the theoretical analysis on how RMB exchange rate change affect China’s car import and export trade by using the elasticity analysis theory, J curve effect and balance of trade theory of exchange rate change, and makes a preliminary qualitative analysis by using a simple chart; Then makes the empirical analysis of the impact of the RMB exchange rate changes on China’s car import and export trade, firstly,we need to build a multivariate regression analysis model, On the basis of the data samples between1994-2012,the paper analyses the reaction of China’s car import and export trade to the appreciation and depreciation of RMB. This paper selects import, export trade volume of Chinese car,China’s and its trade Partner’s GDP and the RMB exchange rate as variables, then analyses the data with the multivariate linear regression method in econometrics. Through the ADF stationarity test, cointegration test and Granger causality test, we obtains the result that the variables in the regression equation of import are stable in the first-order temporal sequence, and there exists long-term cointegration relationship,so we can use a Multiple regression equation. Conclusion of the regression equation is that, the real effective exchange rate and the GDP of China have positive influence on the import volume of car, but they have negative influence on the export volume; There was a positive correlation between the car export and the RMB real effective exchange rate, trade partner’s GDP and car imports volume.Finally, this paper puts forward some countermeasures to cope with exchange rate changes, this chapter illustrates these related countermeasures and suggestions from the three levels of enterprise,state and industry separately. Firstly, we make analysis from the enterprise level, companies should reduce production costs, learn financial knowledge actively, improve the quality of car products, develop the the diversification situation of export market, change the growth mode of foreign trade and the expand the share proportion of China’s car products in the domestic market; Second, from the national level, it should provide guidance and promote the development of financial instruments, combine fiscal policy with monetary policy,improve legal system, to promote the development of enterprises to achieve industrial cluster; finally from the industry level, it should fully play the role of bridge and link between government and enterprise, and maintain foreign trade order and business interests.