Economics at your fingertips  

Renminbi exchange rate assessment and competitors' exports: New perspective

Pei-Fen Chen, Jhih-Hong Zeng and Chien-Chiang Lee ()

China Economic Review, 2018, vol. 50, issue C, 187-205

Abstract: The currency assessment of China's Renminbi (RMB) has attracted much attention due to its growing impacts and spillover effects toward the world economy. This paper examines the impacts of currency under- and overvaluation on China's exports and the spillover effects of these misalignments toward the exports of 9 Asian main economies. We argue that the exchange rate deviation from the long-run equilibrium value, rather than the exchange rate change, is the main force for global trade imbalances. We find consistent yet mild RMB undervaluation as well as overvaluation across time. Most of the Asian economies in our analyses are impacted by these RMB misalignments. Both bilateral and weighted average real exchange rates are applied to ensure the robustness of the model estimations. We also discuss the implications from a series of China's foreign exchange policy reform and industrial structure transformations on the empirical findings. Several policy implications and suggestions are made from the empirical findings.

Keywords: Renminbi (RMB); Currency under- and overvaluation; Exports; Time-varying cointegration; Spillover effect (search for similar items in EconPapers)
JEL-codes: F31 C32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-09
Handle: RePEc:eee:chieco:v:50:y:2018:i:c:p:187-205