A Study On The Impact Of Rmb Exchange Rate Fluctuation On Export Of Chinese Manufacturing Industry

The manufacturing industry is the main body of our national economy,also a pillar industry of our country,which export share almost covers the whole export.After the reform of the RMB exchange rate system in 2005,RMB exchange rate fluctuations tends to be marketable,changing frequently.The frequent appreciation or depreciation of RMB will have an obvious impact on export of Chinese manufacturing industry.Based on this,The paper aimed to study the influence of RMB exchange rate volatility on the export of Chinese manufacturing industry,and studied further the different impact of the fluctuation of RMB exchange rate on the export of subdivision industry in Chinese manufacturing industry and analyzed the reasons,then putting forward some suggestions according to this on improving the export of manufacturing industry and the development of our country’s economy.In theoretical analysis,this paper first summarized the literature on the impact of exchange rate on trade at home and abroad,then analysed how exchange rate affects trade by Elasticity Approach,Multiplier Approach,Absorption Approach and Currency Approach.It laid a theoretical foundation for the later study.In order to study the impact of RMB exchange rate fluctuation on the overall export of Chinese manufacturing industry,based on the monthly data from August2005 to December 2017,REER,Foreign demand,export price of manufacturing industry and FDI were taken as independent variables,and the export of manufacturing industry ws taken as the dependent variable,building a VAR model to analyze it.When analyzing the elasticity of exchange rate in the subdivision industry under manufacturing industry,this paper chose the 30 sub sectors of manufacturing industry from August 2005 to December 2017,setting up a panel data model with variable coefficient and fixed effect on REER,FDI and Foreign demand.Finally,this paper drawed the following conclusions: First,the change of REER has a significant negative impact on the export of Chinese manufacturing industry.The appreciation of RMB will lead to a reduction in the overall export of Chinese manufacturing industry.Second,the change of REER has great different influence on the export of 30 subdivision industries under Chinese manufacturing industry.The change of REER has a large negative impact on China’s traditional manufacturing industry,but has less impact on the export of new manufacturing industry in China.The last,elasticity of REER on the export of various industries in the manufacturing industry has significant differences,because of their technical level.The higher the technology level of the industry is,the less negative the change of REER will be on its export.On the contrary,the change of REER will be more negative on the export of the kind of industry.According to the conclusion of this paper,this paper put forward four suggestions in order to promote development of manufacturing export trade:Further improving the exchange rate formation mechanism and promoting the process of RMB internationalization;Improving the technical level of the export products of the manufacturing industry to reduce the risk of exchange rate;Innovating supply,improving the quality of supply side to enhance the export competitiveness of manufacturing industry;Leveraging "The Belt and Road" policy and implementing of diversification strategy.