RMB Revaluation and China's Trade: Does the RMB Have a Limited Effect on China's Surplus?

This study examines the influence of the RMB fluctuations on trade in primary, intermediate, and final goods between China and its 49 major trading partners over the period 1992-2009. The empirical result shows that the sensitivity of trade to the exchange rate varies substantially for different com...

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Published in:經濟論文叢刊 2018-09, Vol.46 (3), p.333-362
Main Authors: 彭喜樞(Shi-Shu Peng), 劉名寰(Ming-Huan Liou), 楊浩彥(Hao-Yen Yang), 楊志海(Chih-Hai Yang)
Format: Article
Language:chi ; eng
Subjects:
dynamic panel GMM
EconLit
exchange rate elasticity
trade surplus
TSSCI
動態一般化動差模型
匯率彈性
貿易餘額
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container_issue 3
container_start_page 333
container_title 經濟論文叢刊
container_volume 46
creator 彭喜樞(Shi-Shu Peng)
劉名寰(Ming-Huan Liou)
楊浩彥(Hao-Yen Yang)
楊志海(Chih-Hai Yang)
description This study examines the influence of the RMB fluctuations on trade in primary, intermediate, and final goods between China and its 49 major trading partners over the period 1992-2009. The empirical result shows that the sensitivity of trade to the exchange rate varies substantially for different commodities. Overall, China's exports are less sensitive to the exchange rate than imports. Counterintuitively, we find that RMB appreciation reduces China's intermediate goods imports. A possible reason is that the appreciation harms its final goods exports in the assembly sector, thus indirectly lowering the demand for the required intermediate goods imports. This finding, along with the finding that final goods exports, the major source of the trade surplus, are not sensitive to exchange rate changes, are probably the main reasons why RMB appreciation has a limited effect on restraining China's rising surplus.
doi_str_mv 10.6277/TER.201809_46(3).0001
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subjects dynamic panel GMM
EconLit
exchange rate elasticity
trade surplus
TSSCI
動態一般化動差模型
匯率彈性
貿易餘額
title RMB Revaluation and China's Trade: Does the RMB Have a Limited Effect on China's Surplus?
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