The Impact of Exchange Rate Fluctuation on Trade Balance of China

Zhe Dong

《World Scientific Research Journal》 6卷12期 (2020/12) Pp. 251-256

https://doi.org/10.6911/WSRJ.202012_6(12).0034

摘要

With the accession of RMB to SDR, the process of RMB internationalization has also experienced a milestone. But at the same time, China's development deeply depends on the international trade. With the increasing uncertainty of the world's political and economic situation, the fluctuation of RMB exchange rate is increasing. It has a profound impact on the scale of domestic and foreign trade, and has become an important factor affecting the economic development of China. This paper, taking the quarterly data of China-US trade as the sample, through the establishment of time series model, carries out an empirical analysis of the influence of the nominal exchange rate of RMB on China's foreign trade, and discusses the long-term and effective relationship between the RMB exchange rate fluctuation and the foreign trade of China since 2005. At the same time, according to the empirical test results, in view of the relationship between the current RMB exchange rate and China's trade, the suggestion is to adjust our country's money supply, stabilize the exchange rate, improve our monetary policy and fiscal policy, effectively avoid the exchange rate risk by using financial instruments, and promote the stability of the long-term economic development.

關鍵字

Foreign exchange rate ； Trade balance ； China

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