The Influence Of RMB Exchange Rate And Trade Friction On Sino-US Trade Balance

With China's economic development and opening to the outside world,the RMB exchange rate system has been constantly reformed.The market is playing an increasingly important role in the formation of the RMB exchange rate.The exchange rate has become more flexible and the fluctuation range has been continuously widened.The quotation system of the central parity rate has become more transparent.Since the launch of bilateral trade between China and the United States,the total volume of trade has grown rapidly and the trade structure has been optimized,but at the same time,the Sino-US trade deficit has been continuously expanding.Economic and trade exchanges have brought benefits to China and the United States,promoting the economic development of the two countries and improving the quality of people's lives.The cause of the trade imbalance between China and the United States has been the focus of many scholars,one of which is the RMB exchange rateWhile the economic and trade relations between China and the United States are getting closer and closer,trade frictions between the two countries are also constantly occurring.The scope of trade frictions is constantly expanding,the types and degrees of trade frictions are constantly increasing,and they tend to be normalized.The Sino-US trade friction involves import and export friction,exchange rate regime friction,intellectual property protection friction and other fields.Affected by trade friction,the import and export volume of China and the United States fluctuates greatly.In this context,combined with the reform of RMB exchange rate system,this paper selects the monthly data of RMB real effective exchange rate index,dummy variables of trade friction and Sino-US trade balance from January 1995 to December 2019 as the research data.By estimating the vector error correction model and using the impulse response analysis method,this paper studies the relationship between the RMB exchange rate,trade friction and Sino-US trade balance before and after the exchange rate system reform.The results show that there is a long-term and stable equilibrium relationship between the real exchange rate index of RMB,trade friction and Sino-US trade balance before and after the reform of exchange rate system.However,the real exchange rate appreciation of the RMB will lead to the widening of the trade gap between China and the United States.The appreciation of the real RMB exchange rate does not improve the US-Sino trade deficit.Before the reform of the exchange rate system,trade friction would lead to the reduction of the Sino-US trade surplus.After the reform of the exchange rate system,trade friction could not alleviate the Sino-US trade deficit,and its impact on the ?-US trade balance would be weakened.Among the RMB exchange rate,the economic development in China and the United States,and the savings rate in China and the United States,the savings rate is the factor that has the least impact on the Sino-US trade balance.The US-Sino trade imbalance is the result of different development stages and characteristics of the Chinese and American economic development.Relying on the appreciation of the RMB and trade frictions cannot improve the US-Sino trade deficit.The Sino-US trade balance requires long-term development of the Chinese economy,a higher U.S.savings rate and a relaxation of high-tech export controls to China.