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The Impact of RMB Appreciation on Shandong Foreign Trade Enterprises , AN Tongxin1 WU Meirong2 1.School of Economics, University of Jinan, Jinan, China, 250022 2.Beijing Generous Medical Device Co. Ltd China 102628 [email protected] , , Abstract: With China Joins the World Trade Organization, China’s foreign trade develops unceasingly. Chinese economy has been developing in good state for many years, The strength of China economy has impetus to RMB appreciation in objective. this article teases at home and abroad on the basis of relevant literature, and analyzes the present situation and the reason of RMB appreciation in view of the present situation of Chinese economy and the situation of international economy, by drawing on the world experience of confronting currency appreciation, and linking up the theory that the change of exchange rate affects international trade, It is to elaborate the influence of RMB appreciation that could produce effects to the foreign trade enterprises for example Shandong foreign trade enterprises. and under the RMB appreciation condition, Seize the opportunity to appropriately adjust the exchange rate system to deal with the challenges brought by the RMB appreciation , and promotes the Shandong foreign trade enterprise development. Keywords: RMB appreciation Exchange rate Shandong foreign trade Introduction Exchange rate is the price of one currency in terms of another currency. It is the most important comprehensive price’s indicators that a country’s international economic exchanges. and the functions of conversion price in the international financial and international trade activities. thus becoming an important lever of a country balance of trade regulation. Its changes have a profound impact on a country’s import and export trade, and domestic economic activities. Since the second half year in 2002, the voice of RMB appreciation that some countries ask continuously strengthen. The reform of RMB exchange rates system faced with tremendous external pressure. This shows that the RMB exchange rate has become an extremely important issue, which has impact on China’s economic development and international economic relations in current and future period. According to network data of People’s Bank exchange rate of RMB to the dollar exceeded 7.0 juncture firstly in April l0,2008. that hits a new high level. The RMB appreciation will affect the healthy development of foreign trade enterprises, therefore, we must pay attention to a serious analysis, the proper response, a more comprehensive strategy of RMB exchange rate system’s reform. 1 The status of RMB exchange rate’s appreciation and objective analysis 1.1 The status of the appreciation of the RMB exchange rate From July 21,2005,the Chinese Government announced major reform of foreign exchange rate, a change in the RMB singly pegged to the US$, that is ,a managed floating exchange rate system is based on relationship of market’s supply and demand, and on a basket Currency regulation[1].Then the RMB-dollar exchange rate has breakthrough 8.1,8.0 juncture, the appreciation rate to 3 percent in 2005.The reform of RMB exchange rate system initially establishes the trend of long-term RMB appreciation, There is a gradual appreciation’s process of the RMB exchange rate in three years from 2005 to 2008 (as table). 822 RMB exchange rate (some data) Date US$ HK$ 2005-7-21 8.1100 1.0638 2005-7-26 8.1099 1.0425 2006-3-9 8.0480 1.0369 2006-9-11 7.9608 1.02353 2007-1-11 7.7977 1.00004 2007-8-9 7.5648 0.96645 2008-4-9 7.0025 0.89896 2008-4-10 6.9920 0.89778 Source: China People’s Bank net data [myself for the Table] 1.2 Objective Analysis on the appreciation of the RMB In recent years, China’s economic growth is rapid exchange rate fluctuation increasingly become the focus that people attend. Analyzing objectively the appreciation of the RMB exchange rate is decided by international political and economic aspects. Since 2008,the appreciation of RMB faced pressure continually, the international voice of RMB appreciation is more and more from U.S.A, EU, Japan gave pressure, so that forced RMB to appreciate. The reasons of RMB exchange rate appreciation from the economics mainly as follows: firstly, in recent years China’s rapid economic development, its national strength have undergone profound changes. Secondly, since the 1990, a number of authoritative international organizations and trade partners has been thought that there are different under valuation of RMB ,then in recent years, China’s foreign exchange reserve grow quickly with the principles of international economics, foreign exchange saving is more, and the foreign currency prices itself too high, and the RMB pricing is too low, so that the RMB faces the pressure of appreciation. Analyzing from international polities, recently, the United States “Sound dollar Union” put forward through the “301” clause to urge the appreciation of RMB exchange rate. Greenspan’s speech forced the world people to the RMB at the global deflationary pressure[2].The dispute of the RMB exchange rate that provoked by Japan and taken the struggle by United States fully staged, it make China to the world’s attention at the center. The possibility of the Japanese yen as the Asian currency-led is become smaller, it because Japan’s economy dispirited. Due to China’s rapid economic growth has gradually become the locomotive of Asia’s economic development and the world “engine” of the economic development, therefore, the value of the RMB has become more evident, and has begun to form a “RMB Belt” in China’s neighboring countries, that led Japan worried it. The Finance Minister Jyujiro Sio made a document for the G-7 that adopted the “Plaza Agreement” to yen in 1983.forcing the RMB appreciation to the summit, so that abstract the challenges of the RMB against the Japanese yen through the appreciation of the RMB exchange rate, and assure the future dominant position of yen. 2 The impact factors of the appreciation of the RMB exchange rate In opening economy, exchange rate is the currency’s relative prices, the variables’ role of the exchange rate will be express in different levels, The change of exchange rate is closely related with domestic interest rates. supply of money, the level of national income, and price’s level and so on. From the main factors of deciding exchange rate and affecting exchange rat, the impact of the appreciation of the RMB exchange rate specifically include the following: 2.1 Analysis of the economic growth rate Economic steady growth and the increase of national income means the strength of the Purchasing Power, that will bring the increase of the imports economic growth also means the increase of productivity and enhance of products’ competitiveness, which will bring about the exports’ increase. In 823 addition, economic growth also means the increase in investment’s opportunities that benefits to attracting foreign capital inflow and improving the capital account. In the long term, high economic growth is the deciding factors of strengthening the currency exchange rate. In recent years, China’s economic development is strong, and overall national strength is increased, according to the National Bureau of statistics data showing that there was achieved 10 percent growth in continual five years, which is rare in the world, and this trend will continue in the next few years. China’s GDP value reached 20.9407 trillion yuan in 2006,and increase 10.7 percent. And 3.9 trillion yuan of fiscal revenue has provided effective protection for the appreciation of the RMB exchange rate in 2006, China’s economic growth reached to 11.1 percent in 2008 a quarter, showing a rapid growth that doesn’t close for many years . National economic development experience shows that a country’s rapid economic growth and the rising of the world economic status will bring about the rising in the value. Given China’s current high economic growth rate, the RMB will certainly face pressure of appreciation. 2.2 From the difference of the level of interest rate at home and abroad In opening economy, The changes of interest rate are closely related with the changes of exchange rates, and its role is at the core of capital flows, the impact of capital projects in the account. If a state’s level of interest rates relatively higher than other countries, will stimulate the increase of foreign capital inflows ,reduce the outflow of domestic funds. Foreign capital inflows means the increase of foreign supply ,the currency appreciation will face pressure. At the same time ,we should pay attention to the causal link between the changes of interest rates and the changes of exchange rates. If a country’s raising of interest rates is caused by the appreciation will not turn to the domestic currency appreciation. The another important impact of the interest rates’ level on the exchange rate is that result in long-term exchange rate’s changes. Keynes’s interest rate parity theory first analyze the impact systematically from the international capital flowing ,and clearly put forward that the changes of long-term exchange rate decides on the difference of the two countries’ interest rate. According to China’s financial network data revealed that the existing(after 2007)one-year deposit rate is 4.14 percent the lending rate is 7.29 percent from the current level of money market rates increased. Although the bank deposit rate is still at a historic low, but still has a higher level compared with the one percent of federal funds rate levels of substantial decline in a row not to mention compared with Japan that its interest rate is almost zero, moreover from the United States and Japan’s monetary policy, the implementation of more relaxed monetary policy is their future options in a longer periods. Therefore, from the impact factors of interest rate the current RMB face pressure of appreciation. 2.3 Analysis from the international balance of payments and international reserves Generally, if a country’s international balance of payments surplus, the foreign exchange in foreign exchange market supply exceeding demand, the domestic currency is shortage, that result in decrease of foreign exchange rates ,and increase of the currency exchange rate. At the same time more international reserves show that government’s ability is stronger of intervention in the foreign exchange market, and stable currency exchange rates. Thus the increase of international reserves can enhance the foreign exchange market confidence in the national currency, to strengthen the national currency. In recent years, China’s trade surplus expanded rapidly. “Double Surplus” of recurrent items and capital projects is the major source of China’s foreign exchange reserve growth the first half of 2006 current account surplus of China’s international balance of payments 91.6 billion US$, capital and financial account’s surplus was 38.9 billion US$ , such a large surplus leads China’s foreign exchange reserves have continued to grow, absolutely, the scale of china’s foreign exchange reserves have climbed to 1.0663 trillion US$ figures by the end of December 2006 ,it has gone beyond Japan, and first in the world, the scale of China’s foreign exchange reserves are rapidly growing. At end of may 2007,foreign exchange reserves was 1.202 trillion US$, the end of May 2008 ,the country’s foreign exchange reserves was 1.6822 trillion US$. The continual expand ace of trade surplus has become a prominent issue of the domestic economy, the huge surplus generated strong demand for the RMB, so that the RMB exchange rate has upward motive. Therefore, the international balance of payments and international reserves in 824 good condition, there is also important factors of the RMB appreciation. 3 The impact of the RMB exchange rate appreciation on foreign trade enterprises in Shandong Appreciation of the RMB exchange rate has been expected to become a reality the impact of the RMB exchange rate appreciation the impact on China’s import and export enterprises can be described as “being out of moving body” on the import of enterprises, the impact is positive, and export enterprises increased pressure. This is bound to have a certain impact on the foreign trade enterprises in Shandong Province. Speaking objectively that the RMB exchange rate appreciation like a double-edged sword has advantages and disadvantages. The appreciation of the RMB exchange rate make foreign consumer goods and capital goods cheaper than before, it helps reduce import costs and help alleviate pressure of debt servicing and reduce the external debt burden from long-term the trends of appreciation of the RMB exchange rate is a necessary of China’s economic growth and strength of the international status. However the negative impact of the continuous appreciation of the RMB exchange rate on China’s economic growth should not be overlooked, the most direct impact on foreign trade industries. Although after China’s accession to the WTO, the Government’s intervention of the RMB is reduced, the appreciation of the RMB exchange rate has become the market consensus, many enterprises have done the corresponding preparations, but even so, the impact of the appreciation of the RMB exchange rate on foreign trade or business is very big[3].In order to identify the practical implications of exchange rate movements on foreign trade enterprises, understanding a few representative of Shandong’s foreign trade enterprises, and the appreciation of the RMB exchange analyzing the different effects of rate. 3.1 Shandong foreign trade enterprises’ beneficial effects 3.1.1 External debt servicing and reduce the pressure on the purchasing on power of the enhanced Enterprises in Shandong in order to expand the scale of production and other needs borrow debt with the increasing RMB appreciation, so that Shandong foreign trade enterprises will reduce the pressure on debt servicing. In 2008,the value of the Chinese RMB can be said that all the way up, the RMB exchange rate started into 6.0 RMB gateway per dollar. The attendant is RMB around the world play a strong purchasing power. So for those paper, steel, petrochemical, and other raw materials, equipment or components that rely on imports of foreign trade enterprises, the appreciation of the RMB means that the costs come down. 3.1.2 Conducive to the development of import enterprises At present, China is now in a stage of development of heavy chemical industry, the economic that the many important energy ,resources ,technology, must rely on imports, in this case, the appreciation of the RMB exchange rate is conducive to enhancing purchasing power of engaging in trade enterprises for raw materials supplies, and import costs decline. At the same time, enterprises can get more profits. RMB exchange rate appreciation for the many refining enterprises depend on imported crude oil, that is a good news.2 percent appreciation of the RMB exchange rate (July 21,2005),means that imports prices of crude oil fell 2 percent, according to the current conversion price, the import cost of crude oil fell nearly 100 RMB, which would expand the price level of spread and improve oil refining corporate profit margins. Like Shandong Zhenghe Group(former Shandong Guangrao petrochemical Group),is one of the oil products business group ,ranked the top of 100 chemical enterprises ,processing vast majority of crude oil rely on imports. In 2005,the Group will have crude oil processing capacity of 400,000 tons in the second half, in the July 21, the appreciation of the RMB exchange rate is two percent, this can reduce the costs of 40 million. For the agricultural product processing industry, the appreciation of the RMB exchange rate make China's foreign agricultural products will be cheaper, correspondingly agricultural production will lower, it will help Shandong agricultural products processing enterprises to reduce production costs, thereby get the benefits, and help adjust the agricultural structure. 825 The appreciation of the RMB exchange rate brought about the opportunities of the relative prices of imported materials to reduce and rapid changes in foreign trade enterprises, vigorously develop the processing trade. As Changyi city in Shandong Province the plastic goods limited liability company, polypropylene imports 10,000 tons, 1,080 U.S.$ per ton, the import volume reached 10.8 million U.S. $, according to July 21, 2005 announced the exchange rate: one U.S.$ to 8.11 RMB, The appreciation of the RMB against the U.S. $ is projected 2 percent, the enterprises will reduce production costs 1.75 million RMB. 3.2 The adverse effects on Shandong foreign trade enterprises The appreciation of the RMB exchange rate, will raise the prices of Chinese products, and increase the cost of capital investment, and bring about the decline of the competitiveness of Chinese exports, and also affect the development of Shandong export’s foreign trade enterprises, for example Japan, in 1985, in order to curb the export surge of cheap Japanese goods, the United States, France, Germany and Britain their financial heads have been taken on the appropriate means to force Japan signed the "Plaza Agreement", forcing appreciation of the yen be 30 percent. From 1985 to 1996 the 10-year period, the yen-dollar rate from 87:1 to 250:1, the appreciation is nearly three times, "Plaza Agreement" was recognized as the culprit of the Japanese economic recession[4]. The substantial appreciation of the RMB exchange rate will also have a great impact on export enterprises. Below from the industry point, view the impact of continued appreciation of the RMB exchange rate on China's Shandong foreign trade enterprises. 3.2.1. A greater impact of the RMB appreciation on agriculture China's agricultural products compete mainly depend on the price advantage in the international market, the appreciation of the RMB will weaken competitiveness of China's agricultural products about price in the international market. for instance, the Chinese Shandong export enterprises peanut exports to the U.S.A, originally more than 12 RMB 1 kg, equivalent to more one U.S.$ can buy, after the increase of the exchange rate, nearly two U.S. $ can buy. It is understood that the Management School of Tsinghua University has set up a task group about the impact of the RMB appreciation on agricultural products, the subject group's calculations: one percent of the RMB appreciation, the Chinese agricultural exports by at least reduce the growth rate by 10.9 percent, of which grain exports will reduce by 10.84 percent, soybean exports will reduce by 20.8 percent, vegetable exports will reduce by 2.6 percent. Shandong Province as a major agricultural province, the impact of the RMB appreciation agricultural exports enterprises is big. 3.2.2. The negative impact on the textile industry RMB appreciation will lead to higher export prices, according to the relative study showed that the RMB appreciation is every one percent, China's textile industry profit will down 2 to 6 percent. If the RMB appreciation is 5 to10 percent, industry profit margins decreased by 10 to 60 percent. China's textile and garment industry has long been the high degree of dependence on exports, and the price as the main means of competition, will face the impact of reduced income. For example the Dahai Group in Shandong: losses 1 million RMB a night, the Dahai Group is a enterprise groups that its production of fabric, printing, dyeing cloth, bedding and clothing-oriented and more than 80 percent of the cloth exports to the United States, Japan, South Korea, more than 30 countries and regions. The sales income is 1.56 billion RMB, and exports worth is 55.75 million U.S.$ in 2004. achieving sales revenue is 1.1 billion RMB, export volume reached 30.09 million U.S.$ in 2005 01-06 months. The increase over the same period last year is respectively 49 percent and 32 percent. However, the RMB appreciation make company's textile exports experiencing a sudden severe tests, and make textile export enterprises to cast a heavy shadow , before the exchange rate’s adjustment, the Dahai Group import and export Company received foreign advances and the investment about 700 million U.S.$, July 21 exchange rate’s adjustment in the evening, overnight enterprises have less income as much as more than 10 million U.S.$, or more than 100 million RMB[5]. 3.2.3 Crack down on high-tech industries Speeding up the RMB appreciation, for the Chinese high-tech enterprises, especially the effect of the export of the high-tech products is not small, the media had reported that the appreciation of the RMB is 826 every 1 percent, software exports will reduce the profits of 0.7 percentage points if the appreciation of the RMB is 3 percent, Software export profit margins will be reduced to less than 2 percent, if the appreciation of the RMB is 5 percent, almost the entire software exports profit is zero. This will be undoubtedly great crack down on software industry that the profit margin is less than 4 percent, the impact of the software outsourcing business that still at the initial stage is even more serious. At present, China's processing trade exports of high-tech products still account for a considerable proportion, and foreign-invested enterprises are still the main force for high-tech products. A group from the Ministry of Science and Technology Network statistics show that in 2006 domestic-funded enterprises in the import and export of high-tech products was only 33.59 billion U.S. dollars, less than 1 / 7 of foreign-funded enterprises exported. The statistics of Shandong Province foreign trade company the first quarter of 2007 show that Haier, Hisense and other major home appliances export enterprises exports were down by 11.5 percent and 62.1 percent, which, Shandong Province foreign trade department gives the explanation : due to exchange rate movements, foreign customers begin to suggest the year pricing requirements, and the corporate take into account changes in exchange rates, can only choose to provide short-term pricing, dare not enter into long terms, thus affecting the confidence of customers, some customers start looking for other partners, which led to substantial dropping of exports increase of high technology products in Shandong Province. 4 The measures of promoting the development ofShandong foreign trade enterprises In recent years, the continued appreciation of the RMB exchange rate, that brings about pressure and negative impact for Shandong’s economic development. Convert pressure into motive force and raise the international competition of foreign trade enterprises, the suitable measures should be adopted as following. 4.1 Accelerating the pace of industrial restructuring At present, Shandong foreign trade enterprises mainly export textiles, garments, machinery and electronic products, primary agricultural and sideline products, such as low value-added products, price advantage is the major factors to maintain these competitive advantage in the international market. And the appreciation of the RMB would undermine China’s Shandong foreign trade enterprises export commodity prices competitive advantage, to bring different levels shocks of income of corporate profits. Objectively, They should promote Shandong’s foreign trade enterprises must speed up the upgrading of industrial structure, adjust the structure of export products converting, from low value-added, beginning to the high value-added processed products, deep-processed products, we must accelerate the export brand building. Enhance the capability of independent innovation, more attention is more focused on research and development of high-tech and high value-added products, in the industry value chain, should be gradually moved on to enhance big non-price competitiveness of exports. Shandong Province as textiles Province, facing the appreciation of the RMB, formally puts forward the textile industry structural adjustment. Informing from the provincial Economic and Trade Commission, Shandong Province will urge the two categories of clothing and textile product development, encouraging enterprises to enter the industrial textiles, and forming gradual textile industry cluster of a clear comparative advantage. The current adjustment, Shandong Province will further expand the end-product, production through and improve the value-added products. In the garment products, Shandong Province will be Ye Liya,wishful Technology Group, Nanshan Industrial Co. Lan Yan, Lutai Textile as important enterprises, to develop the suits, high-grade yarn—dyed shirt, jeans series and so on, eight categories products. In the home textiles products, relying on Yaguang, Shin Kong Bougainville, and other enterprises, They should intensify investments of the extra width of printing and dyeing production lines and bedding line of processing and further enhance the level of manufacturing and color fastness, and constantly improve the quality textile products. At the same time the appreciation of the RMB exchange rate will reduce the import’s production cost advantages and accelerate the research and development of new products, enhance the similar 827 imports products competitiveness in the domestic market in China the trend of lower prices of raw materials and spare parts, playing the labor cost advantage, and vigorously developing processing trade, and promote the development of foreign trade enterprises in Shandong. 4.2 Adjusting prices property according to the exchange rate movements For the future trend of the RMB based on the enormous pressure, we must pay enough attention for the effect on their prices, and seek truth from facts, and analyze deeply the specifically historical lessons of level exchange rate fluctuations export enterprises. According to the trend of adjusting product historic prices exchange rate appropriately, to the weak profit industries, receiving collects long time enterprises, they should adopt a floating price methods linked to exchange rate for the weak profit industries and long term’s foreign exchange , reduce impacts of exchange rate fluctuations in the maximum degree. Faced with the appreciation of the RMB exchange rate, enterprises should intensify coordination and consultation with customers, and giving full consideration of the changes in RMB exchange rate, correspondingly increasing in the prices of export products and not losing the existing market for the losses to a minimum, benefits from the price. keeping stability of the RMB exchange rate is of great significance. After all, through the appreciation of the RMB to curb inflation short-term role is also limited, but the macroeconomic impact of the exchange rate appreciation is overall, the impact of macroeconomic policies on prices will be offset by the effect of the currency's appreciation on inflation. Therefore, it is necessary to seriously study the integrated treatment of exchange rate appreciation by influencing prices, thereby affecting the economic system, prepared for the future appreciation of the RMB to reduce negative impact on the Shandong foreign trade enterprises. 4.3 The use of financial derivatives to avoid exchange rate risks Faced with the appreciation of the RMB exchange rate likely to continue the trend, how to avoid exchange rate risk has become an important research issues of foreign enterprise risk management as foreign trade enterprises should make use of financial derivatives, such as RMB forward foreign exchange transactions, forward exchange transactions, exchange options and swap transactions, and so on, managed the long-term foreign debt, dynamically and systematically, rational lock or control interest rates, exchange rate risks and control the cost of external debt. And fully understand the function of these operations, effectively circumvent the exchange rate risk and improve the exchange rate risk prevention awareness [7]. It can be said that this is a realistic way to reduce the negative impact of the RMB appreciation on the Shandong foreign trade enterprises. At the same time, the operational staffs of foreign trade enterprises are unfamiliar with financial instruments, and the inadequate understanding of the foreign exchange market, many of the potential risks did not pay attention, Shandong foreign trade enterprises damaged by exchange rate fluctuations. To this, it is necessary to speed up training of international operations personnel, learning the full financial knowledge and understanding the financial instruments, improve the management and ability of business men, thus effectively circumvent the RMB exchange rate risk. 4.4 Other methods of reducing negative impact of the appreciation of the RMB exchange rate For negative effects of the appreciation of the RMB exchange rate on the export trade ,we can timely adjust our trade strategy, and reduce economic growth dependent on external demand. The Government should implement the scientific concept of development, the implementation of the strategy of opening up, give fully its advantages in resources in Shandong and geographical advantages, promoting the upgrading of industrial structure in Shandong and realize good and fast development. First, integrate "bringing in" and "going out" more scientifically, open up wider areas, and optimize the open structure, improve the quality of opening up. Second, we must accelerate the transformation of the development of foreign trade, here in optimizing the structure of import and export efforts, and strive to improve the quality of export products and value-added. Third, we must clear the direction and focus of imports, expanding the scale of its imports. To further increase energy, raw materials, advanced technology and equipment and key parts and components imports, and promote the 828 development of high-tech industries in Shandong Province. Fourth, we should strengthen foreign exchange management, and help foreign trade enterprises to improve the capacity of exchange rate changes, increasing ability of participation in international competition Conclusion Based on the background of the appreciation of the RMB exchange rate, firstly analyze the impact factors of the appreciation of the RMB exchange rate. Through the test of the course of the RMB exchange rate change and the impact on Shandong foreign trade enterprises, for example Japan's "Plaza Agreement", for characteristics of the Shandong foreign trade enterprises at present, analyze the impact of the RMB exchange rate appreciation on foreign trade enterprises, put forward the countermeasures of promoting Shandong foreign trade enterprise’s development . For the trend of the RMB appreciation, in order to promote the development of Shandong foreign trade enterprises, should actively respond to exchange rate risks, and take the necessary measures to improve Shandong Province's international competitiveness, in order to reduce the risk of exchange rate changes and losses. References [1] [2] [3] [4] [5] [6] [7] [8] [9] Dai Shihong, The theory and practice of package exchange rate, Beijing: China Finance Press, 2008,8-13(in Chinese). Jumin, The impact of U.S. dollar’s transition on Chinese economy, University of Suzhou, 2006. Liu Zhenhai, The impact of RMB’s appreciation on import and export of Shandong, Jinan Finance, 2006, 8,26(in Chinese). Pei Ziying, The experience of Yen’s appreciation, Market Modernization, 2005,29,16(in Chinese) Xu Haiyun, The strategies of enterprises to RMB’s appreciation, China Textile, 2007,3,100-102. Wang Chunping, Liu Chuanzhe, The impact of RMB’s real effective exchange rate on import and export of Shandong, Shandong Social Science, 2007,2,32(in Chinese). Wei Gang, Xie Yihui, Avoiding the risks of foreign debt’s exchange rate and interest rate by using financial derivation Instrument, The Study and Research of Finance, 2006,5.50-51(in Chinese). Frederic S. Mishkin, Stanley G. Eakins.” Financial Markets and Institutions ” [M]. Peking: Tsinghua University Press. 2007,423,426. R. Glenn Huabbard “Money, the Financial System, and the Economy” [M]. Hebei: China Machine Press. 2008,218. Author in brief 1. An Tongxin,Ph.D in Economics,Associate Professor,e-mail:[email protected] 2. Wu Meirong, Beijing Generous Medical Device Co. Ltd China e-mail: [email protected] , 829 ,