The Impact of RMB Revaluation on China’s Foreign Trade.docVIP

The Impact of RMB Revaluation on China’s Foreign Trade 　　【Abstract】Since China reformed the exchange rate regime on July 21， 2015， RMB exchange rate has been revalued by 21% so far. The remarkable appreciation of RMB exchange rate has affected China’s foreign trade deeply in the past 10 years. This thesis aims at analyzing the impact of RMB revaluation on Chinese imports and exports from economic point of view， and tries to propose some suggestions and strategies to face the future revaluation and negative effects caused. 　　【Key words】RMB revaluation； Import and export； Foreign exchange； Impact 　　1 Introduction 　　In recent years， major currencies of the world have significantly been adjusted and US Dollar continued its depreciation era. As the trade relationship between China and the world economy gets closer， exchange rate fluctuation has exercised more crucial influence on Chinese foreign trade. From the dual exchange rate in 1981 to a single peg to the USD in 1994， from the free convertibility under current items to the present managed floating based on market supply and demand with reference to a basket of currencies， all the significant adjustments on the exchange rate regime are closely related to the status of imports and exports. Thus， an analysis of impact of RMB revaluation on China’s foreign trade is of significance. It is hoped that such a study may somewhat contribute to China’s foreign trade. 　　2 Advantages of RMB Revaluation on Foreign Trade 　　Firstly， seen from the export commodity structure， RMB fluctuation exerts more influence on the exports of primary products which have more dependency on exchange rate. Such export commodities will increase pressure on internal resources and environment in a long term. To manufactured products industries， RMB revaluation is good for the import of advanced technology and equipment， which will make the related internal enterprises to walk on a more competitive road with technology， and lead Chinese forei