A Study On The Effect Of RMB Exchange Rate Volatility On China’s Trade In Financial Services

In recent years,the total amount of trade in financial services in China has been growing rapidly.Although the export volume of China’s trade in financial services is growing faster,China’s trade in financial services is in a relatively weak position compared with the developed countries.The development of trade in financial services in China is still in a primary stage.At present,China is in a critical period of tapping new energy of economic development,seizing opportunities,meeting challenges and catching up head-on.Promoting the development of trade in financial services is not only the need for China to enhance its status as an international trade in services,but also helps China to improve the efficiency of the use of domestic elements and the added value of trade in goods,so as to enhance China’s position in the global value chain.Exchange rate is the key factor affecting trade.with the continuous progress of RMB exchange rate reform,RMB exchange rate is more sensitive to the change of international economics and politics,especially experiencing the "811 Exchange rate Reform" in 2015.Then,the impact of RMB exchange rate volatility on China’s trade is worth studying.More importantly,as an important financial variable,the impact of exchange rate on the special industry of financial services trade must be heterogeneous,so the problem of RMB exchange rate fluctuation affecting China’s trade in financial services needs to be further explored and discussed at the theoretical and empirical levels.Based on this,the first part of this paper introduces the research background,purpose,ideas and content arrangements,and combs the basic context of the article.The second part of this paper studies and combs the literature on the influencing factors of trade in financial services and the relationship between exchange rate fluctuation and trade.The third part of the article briefly introduces the development of China’s trade in financial services,mainly covering the concept of financialservices trade,statistical methods,the current situation of the development of China’s trade in financial services and through the international market share index,revealed Comparative Advantage index and trade competitiveness index,comparing the relative position of China’s Competitiveness in the international market.In the fourth part of this paper,the mechanism of exchange rate fluctuation affecting financial services trade is combed theoretically,and its mechanism is expounded from direct effect and indirect effect.The fifth part of the article is based on empirical research,first of all,the impact of RMB exchange rate volatility on China’s trade in financial services is tested;Then the above-mentioned impact mechanism is tested,and finally the heterogeneity of the exchange rate fluctuation of the RMB is checked by grouping the trade partner and the industry.It is found that the volatility of RMB exchange rate plays an important role in promoting the export and import of China’s trade in financial services,and the promoting effect of RMB exchange rate volatility on China’s trade in financial services is realized through the trade of banking and securities industry.RMB exchange rate volatility will promote China’s trade in financial services by influencing foreign direct investment,while the international short-term capital flows caused by RMB exchange rate volatility have little impact on trade in financial services.RMB exchange rate volatility is more significant in promoting China’s trade in financial services exports to developing countries and trade in financial services imports from developed countries.The higher the openness of China’s financial market,the greater the impact of RMB exchange rate volatility on the import and export of China’s trade in financial services.Finally,Based on the results of the study,combined with the current economic situation and account orientation in China,specific policy recommendations are given.