Analysis Of The Impact Of Exchange Rate On China-Japan Import And Export Trade

Recently popular topics include “One Belt and One Road”,exchange rate reform,AIIB,and Sino-US trade wars.These nouns constantly explain to us the importance of the exchange rate on the influence of a country’s economy and import and export trade.For us as a trading power that relies on import and export,it is self-evident to explore the impact of real exchange rate changes on import and export trade.China and Japan not only play a pivotal role in Asia,but also the development of trade between the two countries has profoundly affected the economic development of the world.Therefore,this article regards Japan as a water-strapping country as the object of our research and discussion.Most domestic and foreign scholars’ analysis of the trade impact between China and Japan,mainly from the perspective of exchange rate changes,is relatively rare in measuring the exchange rate fluctuations between the two countries,and the analysis of the factors affecting the trade between China and Japan is not comprehensive..In view of this special situation,based on the research of domestic and foreign scholars,this paper first collects and organizes the data,and through descriptive statistical analysis,it examines the exchange rate and exchange rate fluctuation from the perspective of SinoJapanese trade balance and import and export trade volume.,the extent of direct investment and the impact of economic growth on Sino-Japanese trade.Since the establishment of diplomatic relations between China and Japan in 1978,the scale of trade between China and Japan has continued to expand.By the end of 2017,the total foreign trade volume between China and Japan reached 299.51 billion US dollars.Based on the previous literature,this paper summarizes the important factors that may affect the import and export volume of the two countries: China and Japan’s GDP,exchange rate,exchange rate fluctuations,and foreign direct investment,and then from the following three parts Analysis: First,the economic comparison between China and Japan;Second,the internationalization of the RMB and the exchange rate changes between China and Japan;Third,the impact of exchange rate changes on China-Japan import and export trade.Initially,the following conclusions were reached: 1.The country’s economic growth rate has shown a straight upward trend before the financial crisis.Without considering the quality of economic development,the Japanese economy has been in the past few years in terms of the absolute value of the economy.It tends to stagnate or even show significant negative growth.2.The scale of import and export trade between China and Japan fluctuated significantly.In the third quarter of 2015,there was a major decline in the import and export trade between China and Japan.At this time,it was the important time node of China’s "811 exchange rate reform".It can be seen that the reform of the exchange rate system has had a profound impact on China-Japan import and export trade.3.In recent years,China’s dependence on Japan’s trade has gradually declined,and Japan’s dependence on China’s trade has gradually increased.However,from the standpoint of trade and trade,China is in a long-term trade deficit.In the quarterly data observations of the two countries,the author found that the actual GDP data and import and export volume of the two countries have obvious seasonal effects: the first quarter of each year,the GDP is lower,the fourth quarter is higher,the first quarter The high level of China’s imports,so if it is not adjusted,it will not be able to correctly measure the changes of these data.Therefore,this paper uses the X-12 multiplication model for seasonal adjustment,and obtains new data that eliminates seasonal effects.Since the exchange rate changes can be divided into exchange rate levels and exchange rate fluctuations,in order to better measure the impact of exchange rate changes,this paper first uses the OLS model to detect the monthly real exchange rate fluctuations between China and Japan from 2004 to 2017,and observes that the residuals have “spikes and thick tails”."The phenomenon confirms that there is a significant ARCH effect in the exchange rate change during this period,thus establishing the GARCH model.After excluding the ARCH effect,the exchange rate fluctuations of the two countries during this period were obtained.Then through the VAR model,the economic level of the two countries,FDI,exchange rate,exchange rate fluctuations,the degree of interpretation of the two countries’ import and export volume,and the comparison with the previous texts are drawn.Through analysis,from the perspective of China’s imports to Japan,exchange rate fluctuations have the greatest impact,followed by exchange rate levels,domestic economic development levels,and foreign direct investment levels;among exports,the most influential is still exchange rate fluctuations,and then They are foreign direct investment,exchange rate levels,and the level of economic development in Japan.It can be seen that exchange rate fluctuations have a great impact on the changes in import and export volume,and Japan’s stagnant development has caused its impact on China-Japan exports.At the same time,we find that the impact of exchange rate on the import and export of the two countries is 6-7,which coincides with the J-curve effect in the traditional theory.The conclusion of the descriptive statistical analysis part is verified once again.At the end of the article,four suggestions were made: 1.Improve the exchange rate formation mechanism,promote the process of internationalization of the RMB market,let the exchange rate of the RMB more accurately reflect the exchange rate of the market,and strengthen the guiding role of the exchange rate for import and export trade;Expand domestic demand and increase the important role of consumption in the development of the country’s economy;3.Attract foreign investment,face the interests of foreign direct investment,pay attention to the form and scale of foreign capital utilization;4.Strengthen political dialogue between the two countries,and correctly treat the two countries because of politics.Economic fluctuations caused by disputes will achieve a win-win situation for both countries.