Can Renminbi Appreciation Reduce the US Trade Deficit?

Jian Zhang; Hung Gay Fung; Donald R. Kummer

doi:10.1111/j.1749-124X.2006.00008.x

Can Renminbi Appreciation Reduce the US Trade Deficit?

Jian Zhang, Hung Gay Fung, Donald R. Kummer

University of Missouri-St. Louis

Research output: Contribution to journal › Article › peer-review

Abstract

<div class="line" id="line-19"> <span style='color: rgb(28, 29, 30); font-family: "Open Sans", icomoon, sans-serif; font-size: 16px;'> 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&hyphen;added products declines in light of the renminbi appreciation. </span></div>

Original language	American English
Journal	China & World Economy
Volume	14
DOIs	https://doi.org/10.1111/j.1749-124X.2006.00008.x
State	Published - Feb 2 2006

Disciplines

Business

Access to Document

10.1111/j.1749-124X.2006.00008.xLicense: Unspecified

Cite this

@article{74a50c91cae6488b886e307ccd33ea53,

title = "Can Renminbi Appreciation Reduce the US Trade Deficit?",

abstract = " 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&hyphen;added products declines in light of the renminbi appreciation. ",

author = "Jian Zhang and Fung, {Hung Gay} and Kummer, {Donald R.}",

note = "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 countrie...",

year = "2006",

month = feb,

day = "2",

doi = "10.1111/j.1749-124X.2006.00008.x",

language = "American English",