Real Effective Exchange Rate Of RMB,International Balance Of Payment And Economic Growth

With the increasing openness and dependence of China to the outside world,the development of China's economy will inevitably be affected and impacted by the world economy,how to balance the domestic and foreign markets,maintain the stability of exchange rate and economic stability has become an important issue.The influence of exchange rate on a country's import and export trade,foreign direct investment and economic growth can not be ignored as a link between domestic and foreign markets,it is therefore necessary to study in depth the hypotaxis among import and export trade,exchange rates,in the balance of payments and foreign direct investment,and economic growth.In this paper,the effect of the effective exchange rate of the RMB on the balance of payments and economic growth is the starting point,the balance of payments is divided into capital accounts and current accounts,expressed in terms of foreign direct investment and import and export trade,respectively,with respect to the real effective exchange rate of the RMB and the import and export trade in the balance of payments,The relationship between foreign direct investment and economic growth is studied in order to obtain more accurate and reliable conclusions,to further enrich and expand the relevant theories,and to make more reasonable recommendations for the corresponding decision makers,as well as the understanding of the relevant theoretical basis,combined with the actual situation in China,we have in-depth understanding of the real effective exchange rate of the RMB.Based on the theoretical and empirical research on the relationship between balance of payments and economic growth,this paper makes descriptive statistics on the relationship among the real effective exchange rate of RMB and the relationship between balance of payments and economic growth in China.And on this basis,collect and collate monthly data on the real effective exchange rate of the RMB from January 2005 to October 2018,import and export,foreign direct investment and industrial value added,first of all,the correlation test and stationarity test are carried out to get that the real effective exchange rate of RMB,import,export,foreign direct investment and industrial value added are all a single and integral sequence of the first order.An empirical analysis of VAR model is then carried out,first of which is to determine the hysteresis order of the model and to test the stability of the model,then the Johansen co-integration analysis is carried out to obtain a long-term equilibrium relationshipamong the variables.Then the vector error correction model is used to correct the deviation from the equilibrium state in a short period of time,and then the Granger causality test is used to find the statistical causal relationship between the variables.Then through the impulse response function to study the change path of each variable under the impact of a unit standard deviation,and to study the contribution degree of the endogenous variables of different structural shocks by variance decomposition analysis.Finally,based on the above empirical analysis,the main conclusions are drawn:exchange rate has little impact on import and export trade and foreign direct investment,import is mainly affected by export and economic growth,and export is mainly affected by economic growth.Economic growth is mainly affected by exports and foreign direct investment in the short term,and is more affected by exchange rate and imports in the long run.Then,combined with the conclusions drawn,the paper gives targeted suggestions to enterprises and the government respectively,mainly to expand imports,actively introduce foreign capital and advanced technology,and management experience,and to maintain the stability of the exchange rate.Reduce the sharp fluctuations in the exchange rate.