Empirical Research On The Influence Of RMB Exchange Rate Fluctuation On The Import And Export Trade Between China And Asean

With the development of economic globalization,China's foreign trade has developed rapidly.As China's third largest trading partner,ASEAN occupies an important position in China's import and export trade.The establishment and upgrading of China-ASEAN free trade area promote the rapid growth of bilateral trade.ASEAN located on the path of China's "One Belt And One Road",which provides new opportunities for further cooperation between the two sides.The Chinese government promote the cross-border settlement of the RMB.The central bank has signed bilateral settlement agreements with most of the ASEAN countries,and RMB can be directly traded with the Thai baht and Ringgit.Therefore,the RMB exchange rate and its fluctuations have an increasing impact on import and export trade.The central bank implemented reform of RMB exchange rate system and the reform in 2005 and 2015 improve the marketization of RMB exchange rate formation mechanism,Therefore,the two-way fluctuation of RMB exchange rate will become common,which will have an impact on import and export trade.This paper takes the exchange rate fluctuations of the RMB bilateral exchange rate as a key variable,we want to find the impact of RMB exchange rate fluctuations on the import and export trade between China and ASEAN.This paper makes an empirical analysis of the quarterly panel data of the five ASEAN countries during the period from 2000 to 2016.By establishing the panel fixed effect model,the corresponding import equation and the export equation are estimated.The article takes the two exchange rate reform into account,and also consider the financial crisis of 2008 and the influence of the establishment of the free trade zone in 2010.These four events are put into the import and export equation as dummy variables to make the estimated results more accurate.According to the results,the RMB exchange rate volatility has a negative effect on the import and export trade,the establishment of a free trade area has a positive influence.In 2005,RMB exchange rate reform had a positive impact on exports,and the one in 2015 had a negative impact on imports.Based on the empirical results,this paper puts forward three policy suggestions: the government should upgrade the free trade zone,improve the RMB exchange rate formation mechanism and create exchange rate financial derivatives.