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This study examines the impact of exchange rate volatility on China-Pakistan trade flows from 1980 to 2020. Using data from 42 import industries and 34 export sectors, bilateral trade between China and Pakistan is analyzed, with the US as the third country. Cointegration analysis reveals a strong relationship between Pakistan-China trade flows and exchange rate volatility. The yuan/dollar exchange rate negatively affects 22 import and 24 export industries in Pakistan, while the rupee/dollar exchange rate negatively impacts 31 import and 17 export industries. Findings suggest that the exchange rate volatility of the third country hampers bilateral trade between Pakistan and China. [ABSTRACT FROM AUTHOR]

This research was aimed at understanding the effects of exchange rate volatility on UAE's international trade. To examine the effects, 10 of the top trading partners of UAE were considered for this study. Additionally, in order to determine the volatilities of UAE's top 10 trading partners' currencies, the GARCH (1,1) model was used. After that the Autoregressive Distributed Lag (ARDL) bound testing approach determined the long-run relationship between the volatilities of the currencies and the trade of UAE. Furthermore, the short-run relation between volatility and trade was detected using the Granger causality test. The results indicated that in the long run the volatility of the Chinese Renminbi, the Euro and the Saudi Riyal affect UAE's exports, while UAE's imports in the long run are affected by the volatility of the Iranian Rial and the Euro as well. On the other hand, the volatilities of the Indian Rupee and the Omani Riyal tend to affect UAE's exports in the short term, however, the imports of UAE in the short run are actually affected by the volatilities of the Euro and the Swiss Franc. [ABSTRACT FROM AUTHOR]

Motivated by the theoretical link between real exchange rates and oil prices, we utilize a univariate moving average (MA) and an augmented MA (A-MA) model to generate multi-period forecasts of China's real effective exchange rate for 2008–2018. The MA model utilizes past information in real exchange rates, and the A-MA model utilizes past information in both real exchange rates and oil prices. We show that the A-MA forecasts are unbiased and embody useful predictive information beyond that contained in the MA forecasts. In addition, the A-MA forecasts are directionally accurate under asymmetric loss. Such accurate forecasts are useful as inputs for policymakers to design an optimal real exchange rate policy to promote trade and attract foreign investment, and for foreign entities that regard China as an attractive environment for investing in various sectors. [ABSTRACT FROM AUTHOR]

Research background: Most transactions in world trade are invoiced in several international currencies. The changes in the distribution of the great economic powers and the strengthening of the position of developing countries make it necessary to consider the factors determining the choice of trade invoicing currency and to assess the prospects of the dollar as an invoicing currency and the possibility of strengthening the position of developing countries' currencies in this function. Purpose of the article: The aim of the paper is to assess the factors influencing the choice of invoicing currency for international trade in 2000-2019. Methods: The analysis of factors influencing the choice of international trade invoicing currency is based on panel data modelling. The study is conducted for a group of 55 countries. It is assumed that the following variables may influence the currency position in the trade invoicing function: the share of the issuer's country in the bilateral trade, inflation and exchange rate. Findings & value added: The analysis showed that despite the decreasing share of the United States in world trade, the U.S. dollar remains the most important export invoicing currency. The main factors influencing the dollar's dominance are the U.S. share of countries' exports, inflation in developing countries, and the exchange rate in advanced economies. The great significance of trade share as a determinant of the position of the trade invoicing currency is an important indication of the strengthening position of developing country currencies, particularly the Chinese yuan. The obtained results confirm, with the use of more complete data, the validity of the dominant currency paradigm and enrich the still underdeveloped analysis in the area of international macroeconomics using panel data analysis. [ABSTRACT FROM AUTHOR]

From the Bretton Woods agreement in 1944 till the present day, the US dollar has been the dominant currency in world trade. However, the rise of the Chinese economy has recently led to the emergence of trade transactions in Chinese yuan. Here, we mathematically analyze how the structure of international trade flows would favor a country to trade whether in US dollar or in Chinese yuan. The trade currency preference of a country is modeled as a binary variable with the properties of a spin in an Ising model. The computation of this trade currency preference is based on the world trade network built from the 2010–2020 UN Comtrade data and is determined by two multiplicative factors: the relative weight of trade volume exchanged by the country with its direct trade partners and the relative weight of its trade partners in global international trade. The performed analysis, based on the convergence of the Ising spin interactions, shows that from 2010 to present a transition took place, and the majority of the world countries would now have a preference to trade in Chinese yuan if one only considers the world trade network structure. [ABSTRACT FROM AUTHOR]

Copyright of Investigación Económica is the property of Universidad Nacional Autonoma de Mexico, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Nearly all studies in the literature have assessed the impact of exchange rate changes on trade flows for goods. Service industries, however, have not received much attention. Two studies have assessed the effects of exchange rate changes on U.S. service trade with its partners. We add to this literature with a new study that assesses the symmetric and asymmetric effects of changes in the real effective rate of the yuan on China's trade in 11 service industries with the world. While we find short-run effects on imports and exports for almost all service categories, short-run effects last into long-run asymmetric effects in six Chinese importing service industries and eight Chinese exporting service industries. [ABSTRACT FROM AUTHOR]

Following recent advances in asymmetric impact of exchange rate volatility on trade flows, we assess the symmetric and asymmetric effects of exchange rate volatility on China's bilateral trade with each of its 21 trading partners. We find symmetric effects in only a few bilateral trade models. However, the asymmetric analysis which required using nonlinear models revealed short-run asymmetric effects in almost all export and import demand models and log-run significant asymmetric effects in 50% of the models. In almost all models, while increased volatility was found to hurt Chinese trade, decreased volatility was found to boost them, implying that stable exchange rate is beneficial for China's trade. [ABSTRACT FROM AUTHOR]

Previous studies that assessed the impact of exchange rate volatility on Chinese trade flows reported mixed findings. They all have assumed that the effects are symmetric. In this paper, we investigate the possibility of asymmetric effects of the real yuan–dollar volatility on the trade flows of 84 2‐digit industries that trade between the two countries. We show that estimating asymmetric and nonlinear models for each industry yields much more significant outcomes than estimating symmetric and linear models. We find that trade flows of 2/3rd of industries are affected asymmetrically in the short run. Short‐run effects last into asymmetric adverse long‐run effects in 35 U.S. exporting industries (with export share of 45%) to China and in 44 Chinese exporting industries (with 76% export share) to the U.S. Since increased volatility hurts a significant share of both countries' exports, a stable yuan–dollar rate as well as inflation rate will benefit both countries in the long run. [ABSTRACT FROM AUTHOR]

Copyright of International Economics / Economia Internazionale is the property of Camera di Commercio di Genova and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper analyzed the effect of Yuan revaluation on China's external trade performance. Using break point unit root analysis, 1994 has revealed to be the beginning of a new regime for real effective exchange rate implying that Yuan peg to US Dollar really played a central role in influencing real effective exchange rate. Though in the short run real effective exchange rate influence on trade seems unimportant, in the long run the influence is positive and economically significant. Since trade involves more than one country, growth in foreign economic activities influences China's exports growth the same way as China's economic growth influences import growth. [ABSTRACT FROM AUTHOR]

The article examines the impact of the Chinese yuan-U.S. dollar exchange rate on Mexican manufacturing exports to the U.S. Topics discussed are market share of Mexican manufactures in the U.S. compared with Chinese manufactures, determinants of manufacturing exports, effect of Chinese exchange rate policy on Mexican manufacturing exports, relationship of labor productivity and external demand with manufacturing exports and its policy implications for the Mexican economy.

To play the role of a unit of account, an international currency must be a currency widely used to invoice international trade. This paper investigates the determinants of the use of currencies in trade invoicing and evaluates the potential of the renminbi for the denomination of cross-border transactions in the Asia-Pacific region. In particular, we develop a simple model and establish the evidence showing that there is a convex relationship between the invoicing share of a currency and the economic size of its issuing country because of a coalescing effect and thick market externalities. We use the ratio of the foreign exchange ( FX) turnover share of a currency to the global GDP share of its issuing country as a proxy for the size of thick market externalities, which we argue reflects capital account openness, financial development and exchange rate stability of the country. This ratio is very small for the renminbi compared with the ratios for established international currencies. Our quantitative analysis suggests that the renminbi can be a major invoicing currency in the region only if China sufficiently opens up its capital account and liberalises its financial sector. We also draw a parallel between the renminbi and the euro and forecast the invoicing share of the renminbi in the Asia-Pacific region if the renminbi market attained the same degree of thickness as the euro. [ABSTRACT FROM AUTHOR]

Unlike the depth of international political economy (IPE) research on finance and money in North America and Britain/Europe, or the amount of work that has been done inside China on the IPE of international trade, the IPE of global finance and money is still at a nascent stage inside China. The paper examines the evolution of Chinese IPE research on global finance and money and suggests that research in these issue areas appears to be reaching a turning point. The main empirical finding is that this shift in knowledge production has been induced principally by China's emergence as a financial force and the national developmental concerns this entails, as well as by the onset of the 2008–09 global financial crisis and the rise of the emerging economies’ grouping. The growing Chinese scholarship on the IPE of finance and money is adding analytical depth and broadening Chinese IPE, particularly on the impact of financial globalization on developing and emerging economies. While such research will likely contribute to Chinese policymaking in the future, the scholarly test for Chinese IPE is whether and how it will contribute to filling the global knowledge gaps on the determinants of financial and monetary policy, and whether it will give rise to new understandings on global finance and money, especially the causes of international financial crises. Heretofore, much of the literature has been heavily policy-oriented and normative. [ABSTRACT FROM PUBLISHER]

Abstract: This paper analyzes the ex-ante short-term impacts of the Chinese RMB appreciation on the Chinese and world economy, using a novel approach of modeling nominal exchange rate adjustment in the GTAP, a global CGE model. Scenario results show that Chinese economy will be affected negatively, with lower real GDP, lower employment rates, and a decline in the trade surplus. Chinese currency appreciation has positive impact on the GDP of the major countries and regions, although by a small margin. With higher Chinese exchange rate, trade balance for other trading partner countries improves with the exception of the U.S. [Copyright &y& Elsevier]

China and India had similar development strategies prior to their breaking out of their deliberate insulation from the world economy and the ushering in of market-oriented economic reforms and liberalization. China began reforming its closed, centrally planned, non-market economy in 1978. India always had a large private sector and functioning markets, which were subject to rigid state controls until the hesitant and piecemeal reforms of the 1980s. These became systemic and far broader after India experienced a severe macroeconomic crisis in 1991. The political environments under which reforms initiated and implemented in the two countries and their consequences were very different. India continues to be an open, participatory, multiparty democracy, while China has an authoritarian, one party regime, however, it is liberalizing. In the Indian context, the analysis of macroeconomic data brought forth the fact that in the last decade and more so, in the last few years, China has become a major trading partner in trade activities of India. The main objective of the study is to find the impact of valuation i.e., appreciation of Chinese Renminbi (RMB) on India's trade with China. The findings of the paper hold that appreciation in RMB will affect the bilateral trade between India and China. [ABSTRACT FROM AUTHOR]

This study analyses the impacts of economic activity and exchange-rate movement and its volatility on exports and imports between Korea and China. Using monthly data from April 1994 to December 2007, Error-Correction Models (ECMs) are specified to estimate the cumulative effects of determinants for export and import demand. According to the empirical results, the depreciation of exchange rate would stimulate the export growth. In addition, it would be desirable to stabilize exchange rate in order to boost trade flows. [ABSTRACT FROM AUTHOR]

This study provides quarterly estimates of the misalignment in the real effective exchange rate (REER) of Renminbi (RMB) for the period 1999-2008. Starting from a commonly used economic approach, the estimates are obtained from an extensive application of econometric techniques on a carefully constructed database that covers 22 economies that account for roughly 70 per cent of China's total foreign trade. Our estimates demonstrate that the RMB underwent a period of undervalued misalignment during the early to mid-2000s, if measured vis-à-vis the REER of a multilateral currency basket of the 22 economies, but the misalignment margin has disappeared since 2008. However, if the RMB is only evaluated by a subpanel dataset including only the United States and the Euroland, the resulting misalignment estimates are much more pronounced and withstand the recent recession. The difference between the full-panel dataset and subpanel dataset estimates suggests that the current misalignment problem lies more with overvalued USD and euro rather than with an undervalued RMB. The finding thus refutes the claim that the current global trade imbalance could be resolved mainly by further and greater appreciation of the RMB. [ABSTRACT FROM AUTHOR]

The present paper investigates the effect of China's share of US imports on the aggregate-level exchange rate pass-through to US import prices over the period from January 1999 to December 2008. The paper also focuses on the post-reform period, after 2005, allowing greater flexibility of the RMB to explore the change in the role of the Chinese import share in determining the trend in the US exchange rate pass-through. Evidence reveals that China's share of US imports has a negative effect on the exchange rate pass-through. However, this negative effect has been moderated to a negligible level since China's exchange rate reform. An important implication is that the exchange rate flexibility of the RMB has been raised to a significant level may no longer cause distortion in the US competitive environment and prevent the USA from adjusting current accounts. [ABSTRACT FROM AUTHOR]

This paper estimates the impact of intra-regional real exchange rate flexibility on East Asian exports. The hypothesis is that the impact would be negative for East Asian countries regardless of their exchange rate regimes. The results validate the hypothesis. The findings show that for Chinese exports the long-run effect is as much as that of a real appreciation of renminbi. By contrast, for Japanese exports the effect is three times larger than that of a real appreciation of the yen. The findings imply that a regional currency basket mechanism would lessen the adverse effect of exchange rate flexibility and engineer a collective exchange rate adjustment for resolving the global payment imbalance against East Asia. [ABSTRACT FROM AUTHOR]

In July 2005, the Chinese Government unpegged the RMB from the US dollar. As the RMB has followed a remarkably predictable appreciation over time, I examine the price of Chinese exports to the USA after unpegging the exchange rate. Results suggest that the Chinese industries with greater import market share were able to raise their prices after the removal of the pegged exchange rate regime; however, over time there is a significant deflationary trend. Chinese export prices tended to decrease under an unanticipated RMB appreciation; this effect was more pronounced for industries with more pricing flexibility. This suggests that Chinese exporters are consistently “pricing to market” and thus creating a significant foreign exchange policy implication. Specifically, a more flexible exchange rate regime will likely have little impact on the prices of Chinese exports to the USA but might increase the profit volatility of Chinese firms. [ABSTRACT FROM AUTHOR]

Abstract: This study uses a computational general equilibrium model to examine the effects of the Chinese currency on the consumption, investment, trade, output, and welfare of different countries or regions. The results indicate a general decline in welfare across the globe. China is the biggest loser, with a reduction in output. Its domestic interest rate is likely to decline, leading to a potential liquidity trap. The policy implication of this research is that China should minimize changes in its currency value in the short run. [Copyright &y& Elsevier]

Using a computational general equilibrium model, we analyze the impacts of Chinese real exchange rate appreciation on the trade balance of China and the USA and on various industries of both countries. We use several scenarios with 2.1, 6 and 12 percent real exchange rate appreciations for our simulation analysis. The results indicate that China's exchange rate appreciation might not solve the enlarging US current account deficits. Chinese outputs in both primary and manufacture sectors will increase, whereas the outputs of energy and services sectors will be adversely affected. The price of value-added products declines in light of the renminbi appreciation. (Edited by Zhinan Zhang) [ABSTRACT FROM AUTHOR]

The author questions on whether East Asia can be considered a RMB bloc. Topics discussed include information on nominal exchange rates tend to be more volatile than real exchange rates; author presents his views on use of U.S. dollar as a vehicle currency in International trade; and comments on trade flows and capital market in China.

The article focuses on the Chinese trade flows. It states that the changing economic structure and different import intensities in China may exhibit instability in the financial position of the country. It further states that Chinese imports rise in response to renminbi (RMB) depreciation but exports do not decline according to the RMB depreciation and the Chinese trade flows do not respond to exchange rate changes.