Exchange Rate Volatility Effects And Prevention Research On Chinese Manufactured Goods Exportation

Since the reform and opening up, Chinese foreign trade has made great achievements, and gradually adjusts the structure of exporting goods. The exportation has made tremendous contributions to Chinese economic and social development. Data shows that manufactured goods’importation and exportation in our country has been more and more important. In 1990, the proportion of primary products and manufactured goods in exportation were 25.6% and 74.4%. According to customs’ statistics, in 2012, the industrial manufactured goods exportation reached about 1.94 billion dollars, whose proportion is 95.1% of the total exportation. Obviously, the smooth exportation of manufactured goods can sustain the development of Chinese foreign trade and enhance the economic strength.In general, There are still many problems with Chinese manufactured goods exportation. The product added value is low, and export countries are too concentrated in the developed countries. The exportation may be affected by fluctuations in the international market. And in recent years, the exchange rate of RMB continued appreciated under the pressure from the western countries. After July.2005, China began to implement a floating exchange rate system; since then, the RMB appreciation enlarged. On April.2012, Chinese central bank increased the exchange rate floating range from 5 per thousand to 1%. On October.2013, the RMB exchange rate against the dollar is about 6.14, which has been appreciated by about 30%. In 2014, the exchange rate of RMB began to depreciated. Exchange rate fluctuation has expanded more flexibly. Therefore, in the background of violent fluctuation of the RMB exchange rate, Chinese exportation of manufactured goods became more sensitive. The fluctuation of exchange rate has become an important factor which is restricting the exportation of manufactured goods.Research shows that both in China and at abroad, the short-term fluctuation variation of exchange rate influenced agricultural and primary products exportation less. But the influence on the manufactured goods exportation is more remarkable. Since the trend of RMB appreciation fluctuation is difficult to be changed, this paper analyses to how to avoid the risk of exchange rate fluctuations for China’s manufactured goods exportation and puts forward some corresponding suggestions based on the domestic and foreign related theory research. This paper adopts many kinds of methods of analysis and tries to analyze the risk conduction mechanism of the exchange rate.This paper also study the specific impact of China’s manufactured goods exportation.Based on the analysis of the RMB exchange rate fluctuation, this paper gives suggestions to avoid the exchange rate risk and stabilize the exportation of manufactured goods. This paper is divided into six parts:The first part is "introduction". This part includes the research background, the research purpose and research ideas and methods. At the end of this part, Related research results in china and abroad are summarized; The second part is about the development status of Chinese manufactured goods exportation, this part introduces the important role of Chinese manufactured goods exportation in economic development, the characteristics of Chinese manufacturing exports, and the influence factors of Chinese manufactured goods completive power; The third part is the analysis of the transmission mechanism of exchange rate fluctuation.This part includes the background of RMB rate fluctuation, the transmission mechanism of exchange rate fluctuation and the impact of other factors to the exportation; The fourth part is the positive impact of the exchange rate fluctuation on the exportation of Chinese manufactured goods; The fifth part is the negative impact of the exchange rate fluctuation on the exportation of Chinese manufactured goods; The sixth part is the research of countermeasures to prevent the risk of exchange rate fluctuations. The suggestions to the government mainly include the exchange rate policy, trade strategy, industry strategy and security strategy. The suggestions to the enterprise mainly include the improvement of risk management consciousness, flexible uses of trading financial derivatives, more reasonable exportation product structure and diversification of the exporting market.