Study on the Relationship between RMB's Appreciation and the Sino-US Trade Imbalance

The current escalation of Sino-US trade friction,is essentially the problem between RMB exchange rate and China-US trade imbalance.This article firstly discusses that the impact of exchange rates on the trade balance is uncertain in the current economic environment,and then we establish VAR model to study the Granger causality between the RMB exchange rate movements and the Sino-US trade balance.This paper finds that there is no causal relationship between the RMB exchange rate movements and the Sino-US trade balance.The root cause of the Sino-US trade imbalance is the lower savings rate and the relatively lower growth rate of labor productivity of trade products.A simple appreciation of the RMB will not solve Sino-US trade imbalance.