International Trade Growth,RMB Fluctuation and Trade Exchange Rate Equilibrium of China in Transition Period: A Two-country Model and Policies Analysis

Based on economic transition of China and literatures on foreign exchange rate of RMB,this paper induces a two-country theory model to analyzes RMB fluctuation and equilibrium for export and import in China,and proposes some countermeasures to deal with some problems of RMB reform.This paper points out:(1) it is very difficult to calculate RMB value correctly because of non-market goods and serves in transition economy;(2)equilibrium of international trade would emerge only in rigid conditions;(3) foreign exchange rate equilibrium exhibits different characteristic in international economy;(4) flexible policies for trade and foreign exchange rate should be suitable for China.