The Analysis of the effect of RMB exchange rate variation on the export trade in ZHUHAI
Abstract
Since July 21st, 2005, when China began to carry out the floating exchange rate system which was based on the market supply and demand and was managed, the flexibility of RMB exchange rate was increased progressively. This new change of the financial markets produced a greater effect on the rapid development of the export trade in ZHUHAI. The ZHUHAI City kept increasing of its export, at same time the factors of supporting external trade increased was changing. This change was embodied in the mode of trade, the nature of business, composition of commodities and so on, which affected sustainable development of ZHUHAI export trade in different extent. The influence of fluctuation of exchange rate on export trade was controlled by the price adjustment system. The age of RMB kept rising was coming. It means the past mode of low price competition faced a big pressure of transformation. The companies which were used to doing business under the fixed exchange rate had to learn to face the uncertainty of exchange rate risks. This article analyzed the positive and negative effects of ZHUHAI export by the changing of RMB exchange rate which based on the analysis of ZHUHAI city, where have nearly 30 years export trade history. Using empirical analysis method to verify the effect of changing RMB exchange rate on the structure of export trade in ZHUHAI City At last, according to the actual situation of ZHUHAI export trade, author renders countermeasures to the risk of changing RMB exchange rate from government and enterprises two planes.