An Empirical Study On The Relationship Between RMB Exchange Rate And Sino-US Trade Balance

Using measurement model and empirical analysis,this paper analyses whether there is statistical dependent relationship between RMB exchange rate and Sino-US trade deficit and discusses the influence degree and direction between RMB exchange rate and Sino-US trade deficit.The imbalances between exchange rate of RMB and Sino-US trade has been a hot issue.During the decade of 2001-2017,RMB exchange rate against the dollar exhibits a trend in appreciation,meanwhile,the Sino-US trade imbalances also significantly expand.This paper adopts Ordinary Least Square,Augment Dickey-Fuller test and Granger causality test to do a research,reaching the follow conclusions:1.The RMB's exchange rate against the dollar presents a digitally negative relationship with Sino-US trade imbalances.This phenomenon means that when the RMB's exchange rate appreciate,the Sino-US trade deficit will expand.This conclusion is contrary to the opinion which is America can ease their Sino-US trade deficit when the RMB's exchange rate appreciate.2.The huge imbalances between RMB's exchange rate and Sino-US trade has multiple causes,such as America's GDP,PCE,GPDI and GCEGI etc.The elasticity which these factors impact on Sino-US trade is greater than the impact which caused by the RMB's exchange rate.It is unreasonable to purely focus on the exchange rate of RMB.3.There exists a one-way causality between exchange rate of RMB and Sino-US trade?According to the result of the empirical analysis and the reality,the paper also puts forward some policy recommendations:1.The RMB exchange rate should choose a stable development path and the excessive appreciation of the RMB exchange rate will not help to solve the practical problems of Sino-US trade imbalance and will not benefit the recovery and future development of the global economy as well.2.The Sino-US trade will also affect the RMB exchange rate.So the Government must consider all the correlative factors such as the consumption,investment,import and export.Moreover,the government should choose the most favorable macroeconomic development policy mix from a global perspective.