Research On Effect Of The RMB Real Effective Exchange Rate On Trade In Goods And Services In China

In recent years, China’s labor costs and improve our environmental carrying capacity are deteriorating.Chinese government has sought to carry out industrial upgrading transformation.At the same time high-tech trade in services with high added value and environmentally friendly features, so that the status of trade in services is becoming increasingly important. RMB conducted a landmark exchange rate reform in 2005, This RMB exchange rate regime improve the exchange rate system. Changes in exchange rates on trade in goods and services research on both important theoretical and practical significance.This article will draw on past exchange rate theory including theory of exchange rate influences international trade balance and exchange rates impact international trade structure. We select indicator of the effective real exchange rate of RMB with the exclusion of all prices change.We want to analyze the RMB exchange rate influences China’s import and export trade (including trade in goods and trade in services). We find that the previous study only study the nominal exchange rate impact on international trade, or just study the impact of RMB real effective exchange rate for commodity trade. In this article,we will make up the limitations of the former study.In this paper, we not only study the effects of effective real exchange rate of RMB changes on China’s import and export trade, but also study the effects of effective real exchange rate of RMB on trade in services and trade in goods similarities and differences. The first chapter is the introduction part, It contains some aspects of the research background, significance, research methods. The second chapter is literature review section. In this paper, we select the file representative scholars summarized. The third chapter is the theoretical part of the exchange rate, the theoretical basis of this paper and exchange rates for the elastic theory incomplete transfer theory. The fourth chapter describes the status of the development of China’s import and export trade. The fifth chapter is the empirical side, the first use of EG two-step method to obtain long-term co-integration relationship between the real effective exchange rate of China’s import and export trade of goods and services, import and export trade, then in the use of error correction model analysis of short-term impact. Effect of exchange rate on exports come more significant than the impact of imports, the impact of domestic and foreign production on exports worth far more than the impact of exchange rates and the impact on the exchange rate impact on trade in services is greater than merchandise trade.we also find that trade in services due to the characteristics of the industry, that is, its product heterogeneity larger and irreplaceable, the impact of exchange rate appreciation or depreciation of the service trade import and export volume is much smaller. This makes the service trade has some industrial advantages. The sixth chapter is combining the conclusions and policy recommendations at the national level and at the enterprise level in two ways. To achieve our guard against exchange rate risks and to promote the optimization and upgrading of the structure of international trade has important practical significance.