Real Exchange Rate in China：A Long-run Perspective

This paper investigates the RMB exchange rate from a long‐run viewpoint. Whether China's rapid economic growth brought about real exchange rate appreciation between 1975 and 2002 is empirically examined, based on a supply‐side model, the Balassa—Semuelson Hypothesis (BSH). The same test is conducted on Japan, Hong Kong, Korea, Malaysia, Singapore, Thailand, the Philippines, Indonesia and India. Our result indicates that the BSH only exists where the industrial structure has been upgraded and the economy has been successfully transformed from an agricultural economy to a manufacturing economy. Interestingly, China, among those where the BSH does not present, appears to be upgrading its industrial and trade structure. We then try to answer the question of why past rapid growth has no significant relationship with the RMB real exchange rate and what factors are underlying the trend of the RMB real exchange rate. We expect an appreciating trend of RMB real exchange rate in the foreseeable future, presuming that China's industrial upgrading process continues and the factors pertaining to the BSH's prediction, such as rise of wage rates in both tradables and nontradables, become more significant. (Edited by Xiaoming Feng)     

人民币实际有效汇率的构建方法研究

当今外汇市场上每天用于贸易交易的外汇交易量不到5％,95％以上都是与贸易交易无关的虚拟资本流动。但迄今为止,理论界和实务部门仍主要从贸易角度入手构建人民币实际有效汇率。本研究从国际收支即同时从经常帐户和资本与金融帐户角度考虑人民币实际有效汇率的形成机制,将相对生产率进步指标纳入人民币实际有效汇率权重的构成中,既吸收了篮子货币的优点,又能减轻由于非汇率对实体经济的冲击造成汇率的较大波动,从而保持一个较稳定的人民币实际有效汇率。论文的模型比IMF的模型更符合当代汇率的形成机制,论文预测了2009和2010年人民币实际有效汇率分别较上一年升值1．36％和1．17％。     

Macroeconomic Policy, Exchange Rate Regimes and Economic Growth

China has been keeping high economic growth rate since it carried out managed floating exchange rate regimes in 1994, while now begins to face retrenchment pressure brought by the depression of internal and external economy. The establishment of RMB exchange rate regime should take account of the validity of macroeconomic policy, macroeconomic growth and the regional internationalization of RMB.     

人民币实际有效汇率波动对中国进出口贸易的影响

汇率是实现经济内外均衡的调控工具,研究其对进出口贸易的影响对制定宏观经济政策有重要指导意义。本文运用AR-GARCH模型和协整理论,分析了人民币实际有效汇率波动对我国进出口贸易的影响作用。结果表明,长期内人民币实际有效汇率波动与我国进出口之间存在协整关系,但短期内影响作用不显著。     

Currency Exposure in China under the New Exchange Rate Regime: National Level Evidence

The present paper studies China's national level currency exposure since 2005 when the country adopted a new exchange rate regime allowing the renminbi (RMB) to move towards greater flexibility. Using generalized autoregressive conditional heteroskedastic and constant conditional correlation‐generalized autoregressive conditional heteroskedastic methods to estimate the augmented capital asset pricing models with orthogonalized stock returns, we find that China equity indexes are significantly exposed to exchange rate movements. In a static setting, there is strong sensitivity of stock returns to movements of China's tradeweighted exchange rate, and to the bilateral exchange rates except the RMB/dollar rate. However, in a dynamic framework, exposure to all the bilateral currency pairs under examination is significant. The results indicate that under the new exchange rate regime, China's gradualist approach to moving towards greater exchange rate flexibility has managed to keep exposure to a moderate level. However, we find evidence that in a dynamic setting, the exposure of the RMB to the dollar and other major currencies is significant. For China, the challenge of managing currency risk exposure is looming greater.     

The Behavior of the Real Exchange Rate Under Fixed and Floating Exchange Rate Regimes

This article investigates the behavior of real exchange rates under fixed and flexible exchange rates. Using data from both the Bretton Woods and the modern floating periods, we decompose real exchange rate movements into components attributable to supply shocks, real demand shocks, monetary shocks, capital flows shocks, and real oil price shocks. Empirical results show that real demand shocks are an important source of real exchange rate movements under both fixed and flexible rates, while monetary shocks are negligible. Supply and oil price shocks seem to be more important under Bretton Woods, while capital flows shocks seem to explain a relatively higher proportion of real exchange rate movements under the modern floating period.     

is China＇s Economic Growth Extraordinary or Mediocre？ The Role of the Exchange Rate

Results derived from evaluations using different measures for China＇s economic growth are divergent, especially when the RMB exchange rate has experienced large depreciation. Focusing on the changes in the RMB exchange rate matching the demands of economic development, we offer some plausible explanations for the variations in the evaluation results. The significant gaps between different economic performance evaluation results before the mid-1990s, and evidence from international comparisons of factor productivity indicate that the quality of economic growth in China is different from that of other economies. Evaluation of economic development should take into account both quantitative expansion and qualitative improvement. From this perspective, evaluation results indicate qualitative improvement in the Chinese economy after the mid-1990s.     

实际有效汇率波动对上海出口商品结构的影响

文章先构建了分析实际有效汇率波动对出口商品结构影响的计量模型,然后以上海的月度数据为例,采用边限检验方法判别变量间的长期协整关系。并采用ARDL和ECM模型分析了2002--2008年期间人民币实际有效汇率波动对上海出口商品结构的长期和短期影响。结果显示无论从长期还是从短期来看,实际有效汇率的波动都会减少劳动密集型、资源密集型、资本密集型和技术密集型商品出口,但四类商品受影响程度不同,并且技术密集型商品出口方程的误差修正项系数较大,表明其出口受到冲击以后,向均衡回复的速度较快。     

Foreign Direct Investment and Real Exchange Rate Interlinkages

This paper examines theoretically and empirically the relationship between Foreign Direct Investment and the real exchange rate. It is found that in large countries with freely floating currencies, such as the USA, the UK and Japan, causality runs from the real exchange rate to FDI. These results are consistent with the predictions of models of financial behavior. Causality runs both ways in small countries with fixed or quasi fixed currencies, such as the EU countries. These results are consistent with models, which emphasize on trade integration. It is shown that a weaker euro will not have uniform effects on FDI inflows across the unified Europe.     

Changing Comparative Advantage,Real Exchange Rate Impact and Sino–Japanese Trade Fluctuations

China, as an important source country in the global value chain, especially in the East Asian production networks, has exerted significant influence on Sino–Japanese trade fluctuations. This paper explores the real factors that lead to the fluctuations in Sino–Japanese trade. Using the Hodrick–Prescott filter technique and OECD–WTO Statistics on Trade in Value Added from 1995 to 2011, the impact of the changing comparative advantage between the two countries is also examined. The empirical results indicate that determinants of the fluctuations in Sino–Japapese trade include changing comparative advantages, the volatility of the real exchange rate and quite a few external shocks. Some policy suggestions are put forward in regards to the stability of trade between the two countries.     

中部六省省会城市金融集聚与区域经济增长耦合发展研究

随着金融业的快速发展,金融集聚对区域经济增长的影响越来越凸显。基于此背景,文章构建了中部六省省会城市金融集聚与区域经济增长综合评价指标体系,建立了耦合度函数与耦合匹配度函数,并划分出耦合系统匹配度类型。在此基础上,对近年来中部六省省会城市金融集聚与区域经济增长之间的耦合协调度进行了实证分析。结果表明:在2010-2012年,中部六省省会城市金融集聚与区域经济增长之间的耦合协调性存在较大差异。从总体上看,武汉、郑州、长沙等3个省会城市金融集聚与区域经济增长之间耦合性较好,而合肥、南昌、太原等3个省会城市金融集聚与区域经济增长之间耦合性不够好。     

Exchange Rate Regime,Financial Market Bubbles and Long‐term Growth in China: Lessons from Japan

Since 2014, capital inflows into China have turned into capital outflows, reversing the gradual appreciation path of the renminbi against the US dollar into an erratic depreciation path. The paper explains the current capital outflows by comparing China and Japan with respect to the impact of exchange rate expectations on speculative capital flows. It is argued that both in China and Japan, given benign liquidity conditions in the USA, policy‐induced appreciation expectations have generated capital inflows that have contributed to overinvestment and financial market bubbles. The current reversal of capital flows is seen as a signal that the bubble in China has burst. To stabilize growth in China and to discourage speculative capital outflows a fixed exchange rate to the dollar is recommended. Given Japan's experience and given that China's foreign assets remain high, the depreciation pressure on the Chinese renminbi can be expected to abate.     

制度质量与中国区域经济增长差异的格兰杰因果分析——基于中国区域面板数据

文章以中国31个省市1994-2012年的经济增长和制度质量指标构成的面板数据为基础进行单位根、协整检验及格兰杰因果检验,实证检验了制度质量与中国区域经济增长差异之间的关系。结果表明,制度质量差异是中国区域经济增长差异的重要原因,同时经济增长差异也会致使区域间的制度环境不同。为此,各级政府应加强制度建设,促进市场化发展,为经济主体提供公平的竞争环境,改善产权关系,提高政府效率,使经济增长和制度环境得以良性循环发展,同时这也是缩小区域经济增长差异以及经济落后地区实现赶超最根本的途径之一。     

电力消费和经济增长：来自中国的证据

对1971—2009年中国人均实际GDP和人均耗电量的Zivot-Andrews单位根检验表明,两序列都是带有结构突变的趋势平稳过程,所以,采用两种方法检验两者间的因果关系:基于VAR的Dolado-Lütkepo检验,和基于去势数据的Granger因果检验。两种检验都取得了从人均耗电量到人均实际GDP的单向因果关系的有力证据。这意味着电力供应对满足日益增长的用电量,从而维持中国经济增长是至关重要的。     

A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation

Several alternative measures of “effective” exchange rates are discussed in the context of their theoretical underpinnings and construction. Focusing on contemporary indices and recently-developed econometric methods, the empirical characteristics of these differing series are examined for the U.S., the euro area, and several East Asian countries. The issues that confront the applied economist or policymaker in using the measures of real effective exchange rates available are illustrated in several case studies from current interest: (i) evaluating exchange rate misalignment; (ii) testing the Balassa-Samuelson effect; (iii) estimating the price responsiveness of trade flows; and (iv) assessing the potential impact of competitive devaluations. JEL Classification Numbers: F31, F41     

Understanding China's Economic Growth from a Regional Policy Perspective

There has been ongoing interest in China's economic growth. What were the drivers of China's economic growth in past years? What policies were used to promote China's economic growth? Although different lenses may be used to understand and explain China's economic growth, this paper draws on historical, theoretical, and empirical perspectives to discuss the nexus between China's regional policies and economic growth. First, we review the evolution of China's regional policy and the policy's changing emphasis in different development stages, from balanced, unbalanced, and coordinated development to synergistic development. Then we construct a theoretical model to illustrate the impact of regional policy on the local economy and conduct an empirical examination with a case study of regional policy using regression discontinuity design. This paper analyzes the concept of regional policy and the underpinning logic of economic growth and presents practical approaches to formulate a better regional policy framework.     

Real Exchange Rate Fluctuations in East Asia: Generalized Impulse-Response Analysis

Using generalised impulse response analysis, this paper investigates the dynamic adjustment of real exchange rates to real shocks for a group of East Asian currencies. The analysis reveals that the fundamentals, or real factors, explain some, but not all, of the variations of real exchange rates, and that the different disturbances have different degrees of importance for each currency. Therefore, there is no universal panacea for fluctuations in real exchange rates. The findings leave considerable scope for policy intervention to mitigate the unfavourable effects.     

Provincial Development in China: Lessons from EU Regional Policy Experience

Abstract

This article evaluates and compares regional development in the Chinese provinces and in the regions of the European Union (EU) countries. Development efforts in southern Italy, northeast England and eastern Germany are reviewed along with EU, Community-wide regional development programmes. Equity concerns suggest promotion of regional policy, but the pursuit of maximum national economic growth would avoid it, since it sacrifices some economic growth. The impact of foreign direct investment (FDI) and domestic investments on individual Chinese provinces is compared with their impact in Europe. There is an implicit contrast between public sector regional development programs and more effective private foreign direct investments.