The Research On The Impact Of RMB Exchange Rate Fluctuates On China’s Outward Foreign Direct Investment

Since the accession to the WTO, especially a managed floating exchange ratesystem reform in2005, our country’s current and capital accounts "double surplus"continues to expand, international friction intensified, and the RMB appreciationpressure. With the deepening of trade liberalisation and deregulation of the capital,scale and capacity of China’s foreign exchange market will undoubtedly expandedrapidly. In this case, the relationship between research and foreign direct investmentof RMB exchange rate has gradually highlight its important theoretical and practicalsignificance.In this paper, on the basis of the review of related literature at home and abroad,first of all, we elaborates the relevant theories of exchange rate and foreign directinvestment, then introduces the general situation of the RMB exchange rate andforeign direct investment in China, and then using co-integration test and grangercausality test measurement methods analysis the relationship between research andforeign direct investment of RMB exchange rate with data from1985to2012, andthen analyzes the RMB exchange rate effect on the structure of foreign directinvestment in China from three aspects of location, industry and the way. At the endof the paper,we combines the actual conditions of current China and put forwardrelevant policy suggestions.