The Influence Of Rmb Exchange Rate On China’s Textile Exports To Euro Zone

With the development of global economy and trade, the exchange rate has become an important means of trade settlement. Since the reform of the RMB exchange rate in 2005, the exchange rate of RMB has been constantly changing. Textile is an important export commodity in China, which has a great influence on the national economy. The euro zone is an important textile export trade zone in China. China’s textiles are mostly low price, low value-added products,mainly dependent on exports, so that the exchange rate of the RMB exchange rate changes, which will affect the price advantage of textiles. This paper uses theoretical analysis and empirical analysis to study the impact of RMB exchange rate on China’s textile exports to euro zone.Firstly, this paper introduces the important theory of exchange rate changes on trade effects,including the elasticity analysis method, the J curve effect, the international lending theory, the Fleming – Mundell model, Dom bush model and so on. Secondly, the paper analyzes the impact of exchange rate fluctuations on the euro area of China’s textile exports from four perspectives. the first angle is the elastic analysis about Exchange rate changes on China’s textile exports to the euro area.and the second angle is the price effect about exchange rate changes on China’s textile exports to the euro area, the third point is the income effect analysis of textile exports to the euro zone, the four angles is the export trade environment and competition analysis about export trade environment and competition analysis. Finally, the status of the euro area of China’s textile exports and the exchange rate of the RMB exchange rate fluctuations are described, and the impact of RMB exchange rate on China’s textile exports to euro zone is analyzed by the method of measurement. In the empirical analysis, this paper uses 2005 to 2014 years of quarterly data, unit root test, and cointegration test. These results show that long-term stable relation in these variables.It show that other variables is the Granger cause of export,through the Granger causality test.Through multiple linear regression model and the error correction model to analyze the data, the result is that RMB exchange rate changes and the euro area of China’s textile exports have thesame direction change in the long-term and short-term. According to the result,the paper gives relevant suggestions.