The Analysis Of Industry-specific Exchange Rates' Impact On Manufacturing Export Diversification

Since the reform and opening up policy,foreign trade have develop rapidly,and China has been integrated into the huge tide of the world economy gradually which have made a significant impact on China.Certain external shocks have made a huge negative impact on the economy of our country.Thus China is trying to find measures to promote exports and steady economic development.Export diversification has been proved to be one of an effective tool to promote trade,to improve terms of trade and to promote the stable development of economy.At the same time,the exchange rate appreciated sharply in recent years,resulting in decreasing manufacturing export competitiveness,affecting the businesses' export decisions and a country's export of new varieties.So how does the exchange rate changes affect the development of China's export diversification?What is the difference for different industries,especially for different factor intensive industries?It is worthy to analysis and verification the problems.Therefore,it really has a certain theoretical and practical significance to study the RMB's impact on the development of China's export diversification.Condisering the representation of manufacturing exports in total exports in our country,this paper studies the impact of exchange rates on export diversification from the industry point of view.Firstly,this paper analyzes the mechanism of the exchange rates' impact on export diversification through two ways which are international trade balance and foreign investment base on the new new trade theory.Then this paper calculates the lever of China's manufacturing export diversification and the real effective exchange rate,and analysis of the trends and the reasons for their recent years.The results show that the level of manufacturing export diversification showed a downward trend after the first rise and an obvious step change due to the advances in technology,national policy support,trade barriers and other reasons.While the industry-specific real effective exchange rate shows a consistent trends,the gap of change in different industries is large,trends in some industries are different.Secondly,we use Chinese manufacturing-related data from 2002 to 2011 to construct the panel data models for manufacturing and three different factor intensive industry,and empirical analysis of the exchange rates'impact on export diversification for manufacturing and different factor intensive industries.The empirical results show that for both manufacturing and different factor intensive industries,changes in exchange rates have a significant impact on export diversification.Depreciation have a certain role in promoting the exports diversification,and appreciation is not conducive to the development of export diversification.We can also find that the degree of influence for different industries is different.By comparing the empirical results,we can see changes in the exchange rate have a biggest impact on capital-intensive industries,followed by the technology-intensive industries and labor-intensive industries.Finally,combining the basis of empirical findings,we put some policy recommendations for relevant departments and enterprises in four areas which are improving the exchange rate regime,a reasonable choice of foreign direct investment,paying attention to R&D investment,as well as improving the quality of workers.