Analysis of The Impact between Fluctuations in the Exchange Rate of RMB against The U.S. Dollar and China's Export Business

Abstract

In this project, when the exchange rate of RMB against the U.S. dollar rises in the trade between China and the United States, due to the decline in the income of export goods, the decline in total export value will lead to a decrease in the number of dollars exchanged by China, and on the contrary, the income from imports will increase, so Imports also increase, causing more dollars to be spent. In this way, after a certain period, the total amount of U.S. dollars held by China will decrease, which will lead to an increase in China's demand for U.S. dollars, which will lead to the appreciation of the U.S. dollar, that is, the exchange rate of the RMB against the U.S. dollar will decline.