The Effect of Exchange Rate Changes on Trade in East Asia

Abstract

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Impact of Renminbi Appreciation on China’s Trade Balance: From Empirical Evidence

“…His results indicate that a ten percentage of Renminbi appreciation decreases Chinese final exports by nearly 13%. However, the Renminbi appreciation does not have significant impact on imports [4]. Shu and Yip estimate the impact of exchange rate movements on the Chinese economy as a whole and show that Renminbi appreciation can reduce exports via an expenditure-switching effect and contraction effect on aggregate demand [5].…”

Distribution, Domestic Politics and Monetary Cooperation in East Asia

“…final consumer demand still lies outside the region and because of the impact of intra-regional exchange rates on both regional intermediate goods trade and extra-regional trade imbalances (Thorbecke 2011).…”

“…First, because of the level of intermediate products trade within intra-regional trade flows, any currency realignments need to be sensitive to this (Thorbecke 2011). Although there is dispute about the degree to which currency revaluations would redress these imbalances, it is clear that in the short term many countries in the region see currency values as secondary to more structural characteristics of their economies (e.g., Zeti 2005).…”