|Title:||How has China's balance of trade responded to changes in Renminbi's exchange rate? : an empirical investigation|
|Subject:||Balance of trade -- China|
Foreign exchange rates -- China
China -- Economic conditions -- 1976-2000
Hong Kong Polytechnic University -- Dissertations
Department of Business Studies
|Pages:||vii, 113 leaves : ill. ; 30 cm|
|Abstract:||The responsiveness of trade balance to exchange rate adjustment in transitional economies is a controversial issue. The primary focus of this study is an empirical investigation of how China's balance of trade has responded to changes in exchange rate, accompanied by incremental liberalization in both the trade and foreign exchange regimes over the period of 1985 - 1999. Econometric models, which incorporate the income and exchange rate variables in real terms and take into account of the policy constraints, are estimated. The results show that the income approach is less desirable in describing China's experience prior to 1994. Also, it is evident that policy factors have a dominant effect on the trade balance in the case of China. Subsequent to a unification of dual exchange rates, it is found that China's trade balance is more responsive to changes in exchange rate. Additionally, a J-curve characterized with a deep downward slope and a shallow stem is exhibited. However, the J-curve phenomenon is a delayed one. Moreover, it is uncovered that the long-run effect, shown by the sum of the lagged coefficients, is close to zero. Apparently, the hypothesis that trade balance responds favorably in the long run to a devaluation in the real exchange rate is not supported. Finally, there is evidence of a statistically strong causal effect running from the real effective exchange rate index to the real balance of trade.|
As a bona fide Library user, I declare that:
- I will abide by the rules and legal ordinances governing copyright regarding the use of the Database.
- I will use the Database for the purpose of my research or private study only and not for circulation or further reproduction or any other purpose.
- I agree to indemnify and hold the University harmless from and against any loss, damage, cost, liability or expenses arising from copyright infringement or unauthorized usage.
By downloading any item(s) listed above, you acknowledge that you have read and understood the copyright undertaking as stated above, and agree to be bound by all of its terms.
Please use this identifier to cite or link to this item: