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How Would China's Exports be Affected by a Unilateral Appreciation of the RMB and a Joint Appreciation of Countries Supplying Intermediate Imports?

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  • Mizanur RAHMAN
  • Willem THORBECKE

Abstract

In 2005 55% of China's exports were "processed exports" produced using intermediate goods that came from other countries. The lion's share of the volume of imports for processing and of the value-added of processed exports came from other East Asian countries. We investigate how a unilateral appreciation of the RMB and a joint appreciation of countries supplying intermediate inputs would affect China's exports. To do this we estimate a panel data model including ordinary and processed exports from China to 33 countries. Results obtained using generalized method of moments techniques indicate that a joint appreciation would significantly reduce China's processed exports while a unilateral appreciation would not.

Suggested Citation

  • Mizanur RAHMAN & Willem THORBECKE, 2007. "How Would China's Exports be Affected by a Unilateral Appreciation of the RMB and a Joint Appreciation of Countries Supplying Intermediate Imports?," Discussion papers 07012, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:07012
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    References listed on IDEAS

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    Cited by:

    1. Mizanur Rahman & Kaliappa Kalirajan, 2009. "The effect of a collective exchange rate adjustment on East Asian exports," Economics Bulletin, AccessEcon, vol. 29(4), pages 2853-2859.
    2. Françoise Nicolas, 2008. "The political economy of regional integration in East Asia," Economic Change and Restructuring, Springer, vol. 41(4), pages 345-367, December.
    3. Shaghil Ahmed, 2009. "Are Chinese exports sensitive to changes in the exchange rate?," International Finance Discussion Papers 987, Board of Governors of the Federal Reserve System (U.S.).
    4. repec:wsi:serxxx:v:55:y:2010:i:01:n:s0217590810003584 is not listed on IDEAS
    5. Hooy, Chee-Wooi & Siong-Hook, Law & Tze-Haw, Chan, 2015. "The impact of the Renminbi real exchange rate on ASEAN disaggregated exports to China," Economic Modelling, Elsevier, vol. 47(C), pages 253-259.

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