The Empirical Research Of Impacts Of Exchange Rate Movements On Foreign Trade Of Guangdong

Today’s society, with economic activity beginning to globalization, the degree of regional integration gradually deepened, economic exchanges from country to country are increasingly closer. The exchange rate is a composite price index of foreign economic activity, it plays an important role in efficient allocation of global resources. Foreign trade is most often a country’s foreign economic activities carried out, is a common mode of a country’s enterprises to enter the international market, and plays a very important role in economic growth of a country. Many countries of the world are by adjusting the exchange rate policy to balance the international trade balance. The relationship between exchange rate movements and foreign trade has become one of the hot economy. China is also developing as a trading nation and continue to make efforts to exchange rate policy on the adjustment, since July 21,2005 decision by the fixed exchange rate regime of the exchange rate system to a floating exchange rate system with reference to a basket of currencies.Guangdong Province belonging to an export-oriented economy, many years import and export volume ranked the forefront in the provinces arid foreign trade in Guangdong Province to the national economy plays an important role. Government attaches great importance to foreign trade in Guangdong Province, which is can be seen form the government approving the establishment of Guangdong FTA test area in this year. Since the exchange rate reform, changes in exchange rates more frequently, the impact of exchange rates on foreign trade have also been more and more people’s attention. How exchange rate changes will affect foreign trade and what policies should be developed by the government of Guangdong province become issues of concern. Based on the above essay questions, based on the theory of international trade, using econometric related methods, Positive Effect of exchange rate changes on foreign trade in Guangdong Province and the study has theoretical and practical significance.Firstly, the exchange rate affecting international trade theory are discussed, followed by empirical analysis. Empirical part is divided into two parts, the first part describes the recent years imports and exports of changes in Guangdong Province, then study the effects of exchange rate changes on the amount of import and export commodities in Guangdong Province. Secondly, it described the Guangdong Province in recent years the development of processing trade and general trade changes, then study the impact of foreign exchange rate changes on trade structure in Guangdong Province. In research methods, selecting from August 2005 to February 2015 the monthly data for the analysis of the data, on the basis of not completely replace the model to the exchange rate impact of foreign trade, using the model of econometric cointegration and error correction studys the relationship among exchange rate and import and export volume as well as trade structures in Guangdong Province. Positive results of the first part include that there is a long-term co-integration relationship between exchange rates and imports and exports, Long-term exchange rate generates a negative impact on imports and exports. RMB appreciation makes imports and exports reduce the reason is its low value-added export products and price-sensitive, the price of imported goods but have rigidity. For exports, the price rise was smaller than the magnitude of reduction in the number, the total export volume will be reduced; for imported goods, the price is greater than the increase in the number of magnitude lower magnitude, thus total imports will be reduced. Positive results of the second part include that RMB appreciation will also make the proportion of imports and exports in processing trade in Guangdong lower, appreciation of the RMB is conducive to the Guangdong Provincial Foreign trade structure transformation upgrade. From the categories, the proportion of processing trade with the RMB’s appreciation reduced, the proportion of general trade increased with the appreciation of the RMB, which means that the structure of foreign trade in Guangdong Province is being converted. Grew up on a class point of view, the proportion of processing trade processing to reduce, the proportion of feed processing to increase, which means that the structure of foreign trade in Guangdong Province is being upgraded. Guangdong provincial government in the formulation of policy, not only focuses on improving the international competitiveness of export goods, but also focuses on the development of the province’s import substitution industries, and reduce the price of imported goods rigidity, avoiding that processing trade becomes "rootless industry." The biggest difference between this article and similar studies is that scholars mainly research the affect of the actual exchange rate movements on number of import and export of goods, and this article reserve price factors in the study, using of the nominal effective exchange rate study the relationship between exchange rate and export nominal volume of Guangdong Province. Also in the study of the exchange rate impacting trade structure, the articles of researching the exchange rate on trade commodity structure are more. Based on important position of the processing trade in Guangdong Province, this article researches the influence of exchange rate to the trade structure.