Study On Impacts Of The Euro Exchange Rate Changes On China’s Agricultural Export Trade To Europe

For over 30 years’ reform and opening up, China has been experiencing rapid economic development, and maintaining close economic communication with foreign countries. In 2001 China’s formal entry into the WTO made foreign economic communication step forward. Because of this, the total trade volume is increasing year by year with continuous trade surplus. At the same time, agricultural trade is also developing rapidly. Its overall development situation is good, and it made a great contribution to promoting the rapid development of agriculture in our country, and to keeping the stable basic position of agriculture in national economy. By 2004, however, China’s agricultural trade turned to deficit, and it appeared for the first time since the rapid development period of agriculture in our country. Since then, under the influence of the financial crisis and debt crisis, the deficit sharply expand, in 2012 China’s agricultural trade deficit has amounted to-$48.94 billion.In China’s long-term foreign economic activities, the European occupies an important position. In the early 1970s, our country has already has close economic and trade contacts with most of the European Union member states. In 2008, financial crisis swept across the whole world, and from the end of 2009, the debt crisis gradually spread throughout Europe. Battered by these crises, the European economy suffered in a severe situation, and the international status of the euro has been shaken with great exchange rate fluctuations. International trade theory holds that the exchange rate change is one of the important factors affecting trade situation changes. Therefore, this paper argues that, to a great degree, the euro exchange rate changes lead to our country agricultural export trade to Europe, and it has important practical significance to make such a research.Follow the predecessors’ research methods, this article intends from two aspects, they are exchange rate and exchange rate volatility currency movements, combined with the international financial crisis and European debt crisis of the international economic background, using GARCH model, to measure the euro exchange rate fluctuation; And on this basis, using ARDL-ECM model to investigate the short- and long-term relationship between the euro exchange rate, exchange rate volatility and the influence of the euro exchange rate, exchange rate volatility in the consideration of crises, with our country agricultural product export trade to Europe, and drawing the following basic conclusions:(1) The influence on trade made by the euro exchange rate changes keeps to "J curve effect". Trade’s influence made by exchange rate changes appears in a period of time. In the short term, exchange rate changes will not improve trade, but further worsen trade conditions; (2) In both the short and long term, the euro exchange rate volatility have significant influence on the agricultural product export trade in China. (3) Our country’s agricultural export trade to Europe had affected by the crisis, the international financial crisis and the debt crisis are important reasons for the decline in our country agricultural export trade to Europe.