Research On The Impact Of Sino US Trade Friction On RMB Exchange Rate

Trade friction between China and the United States has a long history.In recent years,the United States frequently launched trade investigations against China.In 2018,it even turned into a trade war between China and the United States.During this period,the United States imposed several rounds of tariffs on China’s imports.At present,the spread of American trade protectionism and the high construction of trade barriers have had an impact on the RMB exchange rate.With the deepening of the reform of China’s exchange rate system,the fluctuation range of RMB exchange rate is expanding,and the government’s measures to adjust the exchange rate are jointly implemented,which makes the impact of Sino US trade friction on the exchange rate more uncertain.Therefore,to study the impact of Sino US trade friction on the exchange rate,and the regulatory role of China’s exchange rate system reform in the impact is very important,which can play a role in promoting exchange rate reform and guarding against foreign exchange market risks.The article aims to study the impact of Sino US trade war on the exchange rate and its channels of action,and also consider the role of exchange rate system reform.Firstly,it summarizes the previous studies on the determinants of the exchange rate,and then analyzes the evolution process and the development status of China’s de facto exchange rate system,so as to lay a theoretical foundation for the research.Secondly,based on the idea of event analysis,the article uses the ARCH model,and uses the data of RMB exchange rate during the Sino US trade war and Sino US trade policy statements to explore the impact of various events and exchange rate policies during the Sino US trade war The robustness of the results was tested by changing the event window.Thirdly,the article constructs SVAR model to explore the impact of Sino US trade frictions on the exchange rate and the role of the exchange rate system in the three different periods of 1999～2005,2005～2015 and 2015～2020 divided by the time points of China’s exchange rate system reform.Finally,the article summarizes the research conclusions and puts forward policy recommendations.Through the analysis of the empirical results,the article finds that:(1)the deterioration of the Sino US trade war makes the RMB devalue through the channels of restricting export trade and impacting the foreign exchange market,and the relaxation of the Sino US trade war dissolves this trend;(2)the impact of tariff increases in the United States and trade negotiations between China and the United States on the exchange rate is particularly obvious;(3)the aggravation of trade war makes the foreign exchange market turbulent and aggravates the exchange rate fluctuation.The Sino US trade negotiations and the re implementation of appropriate intervention policies with counter cyclical factors reduce the exchange rate fluctuation;(4)the fluctuation range of RMB exchange rate under the impact of Sino US trade friction gradually decreases with the progress of exchange rate reform.The exchange rate system reform makes it adjust better in dealing with small-scale trade friction.