Effective exchange rate, Trade payment and RMB exchange rate appreciation

The reason that some peoples think that the Chinese government should appreciate RMB exchange rate is that RMB exchange rate has been underestimated. Appreciating the RMB exchange rate forcedly has heavily negative effect to our economy. This article tries to identify the current exchange rate of the RMB does not be underestimated by estimating the RMB effective exchange rate and analysing the Chinese trade payment and international reserve. Similarly this article puts forward the advice that can alleviate the RMB exchange appreciation pressure. Particularly we should reform the current RMB exchange rate system.