A Study On The Impact Of RMB Exchange Rate Fluctuation On China 's Economic Growth

Since2005，China’s exchange rate on showing the trend of steadily, the centralparity of RMB against the U.S. dollar to the current "six times" from the earliestcontinuous appreciation of the RMB,"eight times" to "seven times", and press nowthe trend, there is still room for further appreciation. As the market continues todeepen our degree, our foreign economic GNP throughout the proportion rising, it canbe said, the overall development of foreign economic situation plays an important roleon our economy. The amounts of the domestic markets as the intermediate linkexchange with foreign markets, its role in the economic development process ofself-evident. Therefore, studies on the impact of exchange rate changes caused byChina’s economic growth will be very necessary for us to understand the role ofexchange rates in the economy and in the face of the principle of RMB appreciationtrend of countermeasures to be taken is of positive significance.The main research of this paper can be divided into two parts. The first mostly istheoretical analysis and research status. Theoretical analysis of the main basicconcepts introduced exchange rate and the current mainstream international researchstatus and partly in light of China since1994, respectively, and the price level, importand export trade and foreign direct investment are analyzed on the basis of changes inexchange rates, from the trend graph found that there is a correlation between them, aswell as empirical analysis below variable selection; second most largely empiricalanalysis and suggestions. Empirical analysis were analyzed by constructing a modelof exports, imports and foreign direct investment, the calculated impact of exchangerate changes on three levels, based on macroeconomic theory is calculated using thespecific degree of exchange rate changes affect the entire national economy. In termsof suggestions, from the exchange rate regime, suppressing the price level, reasonablesuggestions to introduce foreign direct investment and structural adjustment of importand export trade, and made all decisions for the purpose of the principle of economicservices. Data from the Bank for International Settlements paper and China StatisticalYearbook, chosen based on quarterly time series from2000—2013as an empiricalanalysis of the main variables have the real effective exchange rate, exports, imports,foreign direct investment, and GDP foreign income, unified data to2010as the baseyear, data processing measured using statistical methods, such as co-integrationanalysis excluding the effects of inflation in the premise. The empirical results show that: exchange rate movements and exports, importsand foreign direct investment in long-term stable relationship exist. Exchange rate,leading export commodity competitiveness decline in the international market, lostthe advantage to reduce the market share, is not conducive to export; cause thecurrency to appreciate, the currency increased demand and thus imports increased;would lead to increased foreign direct investment costs, reduce foreign-expectedprofit thus investment declined. And you can see the impact of exchange rate changeson exports of the largest foreign direct investment in the middle according to thedegree of elasticity of the empirical analysis based on the import equation leastaffected. Finally, on the basis of exchange rate changes determined based on thedegree of influence of each variable on the relationship between China’s economicgrowths: increase in the RMB exchange rate will lead to a decline in China’seconomic growth.