Exchange value of the renminbi and China's balance of trade : a re-examination.
Soh, Cheow Tuan.
Lim, Wayne Sze Meng.
Date of Issue2000
College of Business (Nanyang Business School)
This paper examines the dynamic relationships amongst the real exchange value, balance of trade and domestic price of China. Granger modified causality tests for coinegrated variables are used to examine the causality amongst the variables. Results show presence of only unidirectional causality from trade balance to real exchange rate and domestic price, suggesting that the external sector has no influence on her real exchange rate and that devaluation will improve her trade balance. They also show that the price adjustment process in the Chinese economy is slow.
Final Year Project (FYP)
Nanyang Technological University