Real Effect of Exchange Rate in RMB and Trade Surplus in China



The relationship between real effective exchange rate (REER) of RMB from 1997 to 2006 and trade surplus between China and other trade partners was discussed using cointegration vector autoregression in the paper. The study shows that there exists a long-standing and stable relationship between REER of RMB and trade balance; the fall of the real effective exchange rate of RMB is one of the reasons of the increasing trade surplus, however, the influences it brings are less than domestic GDP and trade partner’s GDP do. So, increasing the flexibility of the exchange rate of RMB, broadening the exchange rate’s float space between RMB and dollar are a necessary part of the package policies in solving the trade surplus.
Key words: RMB appreciation, real effective exchange rate, trade surplus, cointegration vector autoregression
Résumé: La relation entre le taux de change réel (TCR) de RMB de 1997 à 2006 et le surplus commercial de la Chine avec les autres partenaires commerciaux est discutée, en utilisant l’autoregression de vecteur de cointegration, dans l’article présent. L’étude montre qu’il existe un lien stable de longue date entre TCR de RMB et la balance commerciale, et que la baisse de TCR de RMB est une des raisons du surplus commercial croissant. Néanmoins, ses influences sont moins importantes que celles de PIB de notre pays et des partenaires. Ainsi, renforcer la flexibilité du taux de change de RMB, élargir l’espace de flottement du taux de change entre RMB et le dollar sont nécessaire pour résoudre le problème de surplus commercial.
Mots-Clés: appréciation de RMB, taux de change réel, surplus commercial, autoregression de vecteur de cointegration

Full Text:




  • There are currently no refbacks.

Copyright (c)

Share us to:   


  • How to do online submission to another Journal?
  • If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:

1. Register yourself in Journal B as an Author

  • Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.

2. Submission

  • Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.
  • We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases:;;

 Articles published in Canadian Social Science are licensed under Creative Commons Attribution 4.0 (CC-BY).


Address1020 Bouvier Street, Suite 400, Quebec City, Quebec, G2K 0K9, Canada.

Website: Http:// Http://,

Copyright © Canadian Academy of Oriental and Occidental Culture