The Impact of the Fluctuations of RMB Exchange Rate on Shaanxi Export Trade under the Background of “the Belt and Road Initiative”

Abstract

In contemporary export trade, the fluctuations of RMB exchange rate has a great impact on the total volume of the export trade. The formal implementation of the "the Belt and Road" strategy put forward by President Xi brought new challenges to Shaanxi export trade. Under the new economic environment, it is necessary to study the new relationship between the exchange rate fluctuation and the export trade of Shaanxi. This paper presents a detailed study on how the total volume of export trade of Shaanxi is affected by the exchange rate through a new VAR model. Besides GDP, CPI, the policy variable of "the Belt and Road Initiative" is added to the new model to explore the different effects of variables on the total volume of the export trade of Shaanxi. Meanwhile, the introduction of the new policy variable optimizes the existing trade model of the exchange rate at a certain angle. After analyzing the empirical results, a new impact relationship of the exchange rate and the export trade of Shaanxi has been obtained, and the corresponding suggestions for optimizing the export trade structure of Shaanxi are proposed. Keywords— RMB exchange rate; export trade volume; VAR model; Belt and Road Initiative