An Empirical Study Of The Impact Of The Change Of Rmb Exchange Rate On Shaanxi Province’s Foreign Trade

Today’s world is a world of highly open, under the background of economic globalization, foreign trade plays an irreplaceable role to a country or region’s economic growth and the living standards of the people. The exchange rate is the price ruler of the trade exchanges between countries, and its fluctuation has important influence on the foreign trade of a country or region.Since the exchange rate reform in 2005, China has implemented a floating exchange rate management system, the RMB exchange rate is facing a tremendous pressure of appreciation, and its volatility is also growing. Since the reform and opening up to the outside world, Shaanxi Province’s foreign trade has made great development. At present, China is vigorously promoting the " One Belt And One Road " construction, in this big background, Shaanxi Province’s foreign trade faces an unprecedented opportunity, the future is bound to develop by leaps. The fluctuation of the exchange rate of RMB will also have a greater impact on foreign trade of Shaanxi province. Therefore, it has a strong practical significance to study the impact of RMB exchange rate on foreign trade of Shaanxi province.The paper elaborates the importance of foreign trade on promoting a country or a region’s economic take-off from three dimensions: a global perspective, from the perspective of China, from the perspective of Shaanxi. As the price scale in the international trade, the exchange rate plays an important role. The paper theoretically analyzes the influence of the change of exchange rate on trade balance. On this basis, the paper adopts the empirical analysis method, using the 1985-2013 annual data of Shaanxi foreign trade, constructs a trade balance model including import and export、REER、the votality of REER、foreign direct investment、the domestic and foreign real income. In this paper, GARCH model is used to calculate the volatility of REER. Furthermore, a series of econometrical methods including the KPSS unit root test、Johansen cointegration test、 VECM model、pulse response function and variance decomposition are adopted to test and estimate the constructed trade balance model. Through the measurement, we can obtain the conclusion:the volatility of exchange rate has a different influence on Shaanxi’s export and import, and long-term and short-term results are also different. Based on empirical analysis results, in view of the present situation of the development of foreign trade in Shaanxi Province, this paper puts forward the corresponding policy recommendations on how to avoid the volatility of exchange rate on Shaanxi’s foreign trade, how to make Shaanxi foreign trade bigger and stronger and increase Shaanxi economic extroversion degree under the background of " One Belt And One Road ".