Impact of RMB Real Effective Exchange Rate on China's Import and Export——An Empirical Study Based on Data through 1995-2011

This paper conducts an empirical study of the long-term static and short-term dynamic impact of RMB real effective exchange rate on China's import and export by using the Johansen cointegration test and building the VEC model.The results show that in long-term,both import and export are not sensitive to the change of REER with insignificance though the exchange rate elasticity of import is larger than that of export.In the short-term,both import and export exchange rate elasticity are negative,which means if REER depreciates,import and export will increase together,and if REER appreciate,both will decrease with more import decrease.And it is slow to adjust to the equilibrium.The conclusion is that only exchange rate policy cannot change the imbalance of China's trade.