Study On The Influence Of RMB Exchange Rate Changes And Neighboring-Countries Effect On Bilateral Trade

Since the 21 st century,the marketization level of RMB exchange rate has become much higher,and the exchange rate changes have become much uncertain,with the continuous reform of the RMB exchange rate system.At present,it has become an unavoidable problem to study the influence of RMB exchange rate changes in the bilateral trade between China and other countries.In addition,with the resistance of COVID-19 normalization and anti-globalization,actively exploring emerging international markets and creating emerging cooperative partnerships with developing countries have become a key driving force for China’s new round of economic growth.As China’s important economic and political partner,Africa has always played a crucial role in helping and supporting China in the promotion of “The Belt and Road" initiative and “A community with a shared future for mankind” building.Common Market for Eastern and Southern Africa,which is known as COMESA,has many advantages such as broad region,large population and relatively stable political environment.Cooperating with economic organizations like COMESA is the prerequisite for further cooperation with broader Africa area,thus relevant research should be valued.This paper will study the bilateral trade between China and COMESA members to discuss the influence of RMB exchange rate changes and some other factors on them.In addition,by observing the geographical location of countries in the COMESA region,we find the general existence of territorial border or similar characteristics between COMESA members.Some studies have indicated that the geographical feature may have additional effects on bilateral trade,with some articles call it "neighboring-countries effect".Thus,by constructing a spatial model of RMB exchange rate changes and "neighboringcountries effect" influence on China and COMESA member countries bilateral trade,this paper obtains the specific characteristics of the relevant factors on bilateral trade between the two side.The main research views can be concluded as follows:(1)The relationship between RMB exchange rate changes and China’s exports to COMESA member states is positive,and the relationship between RMB and imports is negative.When the exchange rate of RMB rises relative to neighboring countries,import and export to China and target countries will be promoted.(2)When the research is conducted on the main seven countries of China and COMESA,the fluctuation of the RMB exchange rate relative to the target countries or neighboring countries will inhibit the export to target countries.(3)There is a positive neighboring-countries trade effect in the process of export trade between China to the members of COMESA,and the economic development level and political stability of neighboring countries will have a positive impact on China’s exports to the target countries.The effect of neighboring countries in import is not obvious.In addition,this paper also studied the impact of RMB exchange rate change and neighboring-countries effect on China and COMESA bilateral trade from the perspective of industry,which found that the impact of RMB exchange rate change and neighboring-countries effect are different on the import and export of different industries.In summary,according to the conclusions obtained,this paper gives corresponding policy suggestions on the issues raised,from many perspectives,such as stabilizing the exchange rate level,deepening bilateral cooperation,optimizing the trade structure,and paying attention to financial development.