Research On The Impacts Of RMB Real Effective Exchange Rate Changes On China's Employment

Employment is both an economic and a social problem.From the economic point of view,labor force,as one of the production factors,is the fundamental driving force for the creation of social output and social aggregate demand.Employment increase is often accompanied by the economic progress.From the social point of view,full employment is related to the social stability.Exchange rate is the key factor for a country to adjust internal and external equilibrium and maintain economic and financial stability,and influences both employment situation and foreign trade of the country.On October 1,2016,the RMB officially "entered" SDR,surpassing the share of the yen and the Pounds and playing an important role in the system of current international monetary.Starting in 2017,the formation mechanism of RMB exchange rate has become more and more flexible,the trend of two-way exchange rate fluctuation has gradually become the norm.The volatility of RMB exchange rate fluctuation and volatility elasticity have increased significantly.For a long time,the growth of new jobs in china's cities and towns has been small,slow and out of sync with the rapid growth of the economy.Affected by the 2019 " Novel Coronavirus Pneumonia ",Sino-US trade frictions and other internal and external adverse factors,the employment situation is becoming more serious.Under the new economic situation,it is of both theoretical and practical value to study the impact of exchange rate changes on employment in China to resolve the employment problems.This paper first combs out the relevant theories at home and abroad,summarizes and puts forward the three main intermediate transmission channels affecting employment by exchange rate changes,analyzes the influence of RMB exchange rate on employment by labor supply model and labor demand model,and uses the national employment level and the real effective exchange rate of RMB since 2000,the scale of import and export,foreign direct investment and economic development as the research object,and uses various measurement methods to carry out empirical research.The results show that RMB appreciation will bring adverse effects on China's employment,RMB depreciation is beneficial to China's employment,and the two have a long-term co-integration relationship.At this stage,every 1 percentage point increase in the real effective exchange rate of RMB will result in a corresponding decrease of about 4.07 percentage points in the overall employment level of our country.The real effective exchange rate of RMB,the size of China's economy,foreign direct investment,China's imports and exports are all the Granger reasons for the change in China's total employment.Export growth and increased direct foreign direct investment are good for domestic employment,while import growth is not good conducive to domestic employment.In addition,the result of the pulse response analysis give the short-term transmission mechanism of the real effective exchange rate of RMB,and the results of the variance decomposition show that the contribution rate of the real effective exchange rate of RMB and the overall impact of China's export volume in China occupies the main position.Finally,on the basis of in-depth exploration and study of the impact of RMB exchange rate changes on national employment at this stage,the main problems facing China's economic development at this stage are revealed,and the corresponding development proposals are put forward:deepening the reform of exchange rate marketization and actively promoting the internationalization of RMB;play the role of macro-control to enhance the competitiveness of the real effective exchange rate of RMB;optimize and upgrade the industrial structure and reasonably introduce foreign direct investment;improve the employment service system and improve the comprehensive quality and skills of workers.