An Empirical Study On The Effect Of Exchange Rate Volatility On China's Trade Export Volume

Nowadays,with the development of science and technology,the process of globalization is accelerating,and economic and financial integration in various parts of the world has been deeply integrated.As a result,the scale of mutual trade between countries in the world has expanded.As one of the economic troikas,foreign trade has naturally become an indispensable and important way for economic development.Among these,the essence of the exchange rate is the price of traded goods.As one of the most important variables,it is an important prerequisite for guaranteeing the healthy development of foreign trade,and it is also the most direct and effective means for regulating the economic competition among various countries.Therefore,from the beginning of international trade,the exchange rate has become the focus of many scholars.The collapse of the Bretton Woods system signifies that the international monetary system has abandoned the fixed exchange rate and gradually entered the era of floating exchange rates.At the same time,it also marks the beginning of a new stage in the management of the currencies of all countries.In order to promote more market-oriented reforms and deeper internationalization of the renminbi exchange rate,on July 21,2005,the People's Bank of China announced that the renminbi has shifted from a single peg to the US dollar to a basket of currencies for regulation and a managed floating exchange rate system.On October 1,2016,the RMB officially joined the SDR,and the pace of internationalization has achieved significant development.It is believed that with the gradual deepening of the RMB exchange rate marketi zation reform and internationalization,the RMB exchange rate will frequently fluctuate in the international market.In the past 30 years of reform and opening up in our country,the rapid development of trade exports has made important contributions to China's economic growth.In recent years,global trade protectionism has gradually risen and the impact on China‘s trade exports has become increasingly severe.In view of the important role of foreign trade in China‘s economic development,and the sharp changes in the global trade environment.Therefore,it is of great significance for China‘s economic development to study the impact on China‘s trade exports.The basic theory of this article is based on the theory of trade demand,and there are many variables affecting trade exports,such as the trade country's GDP,exchange rate,and exchange rate fluctuations.This article will focus on the exchange rate fluctuations,focusing on the impact of exchange rate fluctuations on China's export trade.This paper separately studies the impact of exchange rate fluctuations on China's trade exports at three levels.The first level studies the impact of exchange rate fluctuations on the trade export of China‘s largest trade country—the United States—using margin check-error correction models to study the long-term and short-term effects of exchange rate fluctuations on China‘s exports of US HS-classified commodities before and after the 2008 financial crisis.influences.The empirical results show that the number of classified commodities with a long-term cointegration relationship after the financial crisis is greater than the number of classified commodities before the financial crisis,and account for the absolute share of HS11 textiles and HS16 electromechanical categories before the financial crisis.It does not have a co-integration relationship and has a long-term co-integration relationship after the financial crisis.It shows that after the financial crisis,in the US market,China‘s trading goods began to show sensitivity to price,and before 2008,this Sensitive trade goods are much less.In the long term,exchange rate fluctuations have a differential impact on HS-classified commodities,the impact on some HS-classified commodities is positive,the impact on some HS-classified commodities is negative,and the impact of some HS-classified commodities is not significant..In the short term,exchange rate fluctuations have no significant impact on the trade exports of various HS classified commodities.The second level of the paper studies the impact of exchange rate fluctuations on China‘s exports to 28 countries in the world.A dynamic panel data model is used.The empirical results show that an increase in the GDP of a trading country is conducive to China‘s trade exports,and the appreciation of the renminbi will reduce the Trade exports,exchange rate fluctuations show a significant negative impact on trade exports.The third level of the paper takes into account the frequent changes in the economic and financial environment or policies of some trading countries,which affect our country‘s trade out of factors that are unobservable,but this part of the unobservable factors actually affects our country‘s trade exports,so it is used here.The non-linear model-Markov conversion model has studied China's trade exports to other BRIC countries.The empirical results show that in the environment where the trade export status is high and volatile,the impact of the variables in the trade demand model on trade exports is not significant.In the environment where the trade export status is low,the variables in the trade demand model have significant impact on the trade export,and the symbols are in line with expectations.The growth of the GDP of the trading countries helps China to export its trade.The rise in the exchange rate of the renminbi reduces China's trade exports,and exchange rate fluctuations also have a significant negative impact on export trade.It shows that in the highly volatile trade export environment,the factors affecting China‘s trade exports are more variables outside the model,while in the low-fluctuating trade export environment,the variables affecting China‘s trade exports are variables in the model,such as trade.GDP,exchange rate,etc.