exchange value of the Renminbi and China"s balance of trade an empirical study by Zhaoyong Zhang

Cover of: exchange value of the Renminbi and China

Published by National Bureau of Economic Research in Cambridge, MA .

Written in English

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Subjects:

  • Foreign exchange rates -- China.,
  • Balance of trade -- China -- Effect of foreign exchange rates on.

Edition Notes

Book details

StatementZhaoyong Zhang.
SeriesNBER working paper series -- working paper 5771, Working paper series (National Bureau of Economic Research) -- working paper no. 5771.
ContributionsNational Bureau of Economic Research.
The Physical Object
Pagination26 p. :
Number of Pages26
ID Numbers
Open LibraryOL22411687M

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THE EXCHANGE VALUE OF THE RENMINBI AND CHINA’S BALANCE OF TRADE: AN EMPIRICAL STUDY ABSTRACT This paper aims at assessing the relationship between the exchange value of the Chinese Renminbi (RMG) and China’s trade balance by means of some recent econometric techniques designed to evaluate the existence and the direction of causality.

The Exchange Value of the Renminbi and China's Balance of Trade: An Emp irical Study. Zhaoyong Zhang Share. Twitter LinkedIn Email. Working Paper DOI /w Issue Date September This paper aims at assessing the relationship between the exchange value of the Chinese Renminbi (RMG) and China's trade balance by means of some Cited by: Exchange value of the Renminbi and China's balance of trade.

Cambridge, MA: National Bureau of Economic Research, © (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Zhaoyong Zhang. Get this from a library. The exchange value of the Renminbi and China's balance of trade: an empirical study.

[Zhaoyong Zhang; National Bureau of Economic Research.] -- Abstract: This paper aims at assessing the relationship between the exchange value of the Chinese Renminbi (RMG) and China's trade balance by means of some recent econometric techniques designed to.

The Exchange Value of the Renminbi and China's Balance of Trade: An Emp irical Study. Downloadable. This paper aims at assessing the relationship between the exchange value of the Chinese Renminbi (RMG) and China's trade balance by means of some recent econometric techniques designed to evaluate the existence and the direction of causality.

We find strong evidence suggesting that changes in the trade balance and each of its components Granger-cause changes in the exchange.

Zhang, Zhaoyong, The Exchange Value of the Renminbi and China's Balance of Trade: An Emp Irical Study (September ). NBER Working Paper No. w   On Ap Zhou Xiaochuan, the governor of China’s central bank, the People’s Bank of China, once again set off alarm bells during a speech at the International Monetary Fund (IMF).

Eswar Prasad, a professor of trade policy at Cornell University, has published an important new book on China's economic rise; albeit through the prism of its currency: the yuan, or the Renminbi. Nonetheless, adding the renminbi to the SDR basket would be symbolically important, implying recognition of China’s growing global stature.

The renminbi is already a major currency for world trade and investment, and accounts for a growing share of international financial transactions and reserve holdings. The Exchange Value of the Renminbi and China's Balance of.

China’s currency, the renminbi or yuan, is tied to the U.S. dollar, the currency of China’s largest trading does this to hedge against risks in changes to the dollar’s value. China also has been accused of deliberately keeping the yuan’s value low to depress its export prices, but currency manipulation is difficult to prove.

Balance of Trade in China averaged USD HML from untilreaching an all time high of USD HML in May of and a record low of USD HML in February of This page provides - China Balance of Trade - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Additionally, China holds large amounts of US and other foreign securities as part of its strategy to manage the RMB’s value. The EU’s trade deficit with China more than doubled in real terms between andand reached a record high of € billion insparking concern over China’s exchange rate policy across the continent.

By estimating trade balance equation, export equation and import equation, this paper shows empirically that China’s trade surplus is not sensitive to the fluctuations in the real effective exchange rate, but the price elasticity has become large and significant in the period from onwards after the new exchange rate regime was instituted on 21 July, The objective of this paper is to test the relationship between the exchange value of the renminbi (RMB) and China’s trade balance over the period.

Using some recent econometric techniques designed to evaluate the existence and the direction of causality, we find no evidence to support the hypothesis that the new reformed foreign trade regime has made the balance of trade. How Effective is the Renminbi Devaluation on China’s Trade Balance Zhaoyong Zhang, Edith Cowan University and Kiyotaka Sato, Yokohama National University Working Paper Series Vol.

June The views expressed in this publication are those of the author(s) and do not necessarily reflect those of the Institute. The rapid rise of the Chinese economy is creating opportunities for many but also causing increasingly trade disputes with its major trading partners.

During the recent years, the Renminbi (RMB) exchange rate issue has been at the centre of ongoing debate over the source of global current account imbalance, especially with the United States.

The United States and other countries have expressed. The impact of China's exchange rate on both its current account balance and the US-China bilateral trade balance is considerable.

A 1 percent rise in the real effective exchange rate would cause a reduction in China's current account surplus of to percent of GDP. Using a computational general equilibrium model, we analyze the impacts of Chinese real exchange rate appreciation on the trade balance of China and the USA and on various industries of both countries.

We use several scenarios with6 and 12 percent real exchange rate. The balance of trade impacts currency exchange rates as supply and demand can lead to an appreciation or depreciation of currencies.

A country with a. China’s reserve assets held in foreign currencies, the world’s largest war chest, have been stuck between US$ trillion and US$ trillion since because the People’s Bank of China.

18th World IMACS / MODSIM Congress, Cairns, Australia July How Effective Is The Renminbi Devaluation On China’s Trade Balance Zhang, Z.Y.1 and K. Sato 2 1 School of Accounting, Finance and Economics, Edith Cowan University, Western Australia 2 Faculty of Economics, Yokohama National University, Japan Email: @ (Zhang) and [email protected] (Sato).

But as China is a net exporter, with a positive trade balance of $ billion with the U.S. in alone, having a “strong” currency flips the benefits in the scenario we see above. ADVERTISEMENT. Central Bank Balance Sheet in China decreased to CNY HML in October from CNY HML in September of Central Bank Balance Sheet in China averaged CNY HML from untilreaching an all time high of CNY HML in September of and a record low of CNY HML in February of This page provides - China Central Bank Balance.

China’s currency weakened by percent against the dollar on Tuesday. It was a decline that — on its own — seems unremarkable.

But as the trade. The value of the renminbi dropped this week because China, fed up with Trump's trade war, basically threw up its hands and stopped trying to resist the downward pressure. First of all, this country has virtually no risk of running into a balance of payment crises. Secondly, changes in its exchange rates are almost innocuous, because most of the international trade prices are denominated in this currency.

Following the two previous benefits, it has an almost illimited autonomy for its economic policy. Valuation. Untilthe value of the renminbi was pegged to the US China pursued its transition from central planning to a market economy and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese industry.

It has previously been claimed that the renminbi's official exchange rate was undervalued by as much as %. The Trump administration labeled China a currency manipulator on Monday, after China allowed the value of its currency to fall. The designation — which the United States last used against China.

Skeptics argue that because the US trade deficit with China did not decline during this period, appreciation of the yuan is not an effective remedy for China’s surpluses or for US deficits. As just indicated, this note presents evidence showing instead that the strength of the renminbi does affect China’s external balance.

What’s happening to China’s yuan. The yuan usually changes in value a fraction of a percentage point in a day. But on Tuesday, China’s central. The real renminbi-dollar exchange rate adjusts the exchange rate peg for changes in relative inflation rotes, thereby providing a clearer picture of China's competitiveness.

On a real basis, the dollar has appreciated only % against the renminbi since the beginning of the peg; that movement cannot confer much of a trade advantage on China.

Chinese trade balance is where it should be. There is still the question of the overall balance of payments, the sum of the current account and the private capital account. The statistics show that the foreign exchange reserves held by the People’s Bank of China continue to increase.

This says that China is running a surplus on its overall. Inthe U.S. trade deficit with China hit an all-time high of $ billion, the largest deficit ever recorded with a single country.

Chinese currency, the yuan, has risen in value by perce. In Octoberthe trade surplus in China amounted to approximately billion U.S. dollars. A positive value implies a trade surplus, a negative trade balance implies a trade deficit.

Companies engaging in international trade tend to keep a close eye on the dollar's exchange rate with China's yuan, given that China is at present the United States' third-largest and fastest-growing export market, and our number one import China is also our only large trading partner whose currency is managed rather than freely floated, this article provides some historical context.

However, developing countries whose economies depend on trade will be reluctant to allow their exchange rates to fluctuate freely. In the Chinese government made the decision to peg the RMB to the US dollar at a rate of US$1 to RMB, a year later the Renminbi appreciated 5% and was revalued to RMB The Chinese currency, the Renminbi, is a subject of controversy between China and its trading partners (particularly the USA), the blame China manipulating its exchange rate to its exports artificially cheaper.

You feel the renminbi as an unfair weapon in international competition. exchange rate alternaion trade liberalization and coordinated development of chinas economychinese edition Posted By Erskine Caldwell Library TEXT ID c6f Online PDF Ebook Epub Library implication and conclusion are drawn in section 6 2 chinas foreign trade reform the phases of 8 liberalization prior to adopting the open door policy in china had.

China’s economy is now the second largest in the world and a key driver of global growth. Its currency, the renminbi (RMB), was only recently elevated to the status of an official reserve currency.In finance, a currency swap (more typically termed a cross-currency swap (XCS)) is an interest rate derivative (IRD).In particular it is a linear IRD and one of the most liquid, benchmark products spanning multiple currencies has pricing associations with interest rate swaps (IRSs), foreign exchange (FX) rates, and FX swaps (FXSs).

The Chinese currency exchange, the renminbi, has remained a matter of controversy between China and its trade partners (especially the US), which accuse China of manipulating its exchange rate to make its exports artificially cheaper.

They see the renminbi as an shameful weapon in worldwide competition.

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