A Study On The Impact Of Exchange Rate Change On Chinese Outward Direct Investment

Under the background of economic globalization,outward foreign direct investment from a country to a country is more and more important significance.Along with our country economy growth and accelerating step of the "going out",Chinese outward foreign direct investment in the world market plays a more and more important part on the international stage.At the same time,Chinese growing trade surplus,a good state of balance of payments and foreign exchange reserves make RMB face strong appreciation pressure.Facing the pressure of appreciation of RMB exchange rate has a certain degree of influence on our country's outward direct investment.The relationship between exchange rate and foreign direct investment in developing countries do not have a unified conclusion.This paper firstly introduces the process of exchange rate system reform in our country and the development of Chinese outward foreign direct investment,and analyzes in detail the characteristics of outward foreign direct investment in China based on reviewing the existing research.Then the paper uses empirical analysis model with RMB real effective exchange rate,and outward foreign direct investment flows for 2005-2013 date and analyzed that the RMB exchange rate has an effect on Chinese overall outward foreign direct investment from two aspects of exchange rate and exchange rate volatility.Thirdly this paper uses the panel data model to analyze the influence of the exchange rate on the selecting the 25 provinces' foreign direct investment and the relationship between exchange rate and outward foreign direct investment in various industries in China respectively using the data of 2003-2013 and2005-2013.The study finds that the appreciation of RMB will promote the increase of China's outward foreign direct investment.Finally,according to the empirical analysis results and the characteristics of RMB exchange rate and foreign direct investment in China,the paper comes out some policy suggestions.