China's exchange rate policy to keep the national currency undervalued
has been at the centre of interest during the last decade. Especially, developed countries like the US accuses China to keep the Yuan undervalued
in order to enhance the competitiveness of its products in the
international market. Countries debate this issue and even apply further
restrictions reciprocally, known as the “trade war”. The aim of this article
is to estimate the impact of changes in the Yuan's exchange rate over
China's international trade overall, and especially with the US. For the
period of 1991-2020, empirical findings present no significant evidence
about the impact of Yuan's exchange rate changes on China's international trade. The impact is statistically insignificant in all cases. Instead,
international trade indicators represent to have a strong correlation with
its own one-year past value.
Citation:
Karimova, G. (2021). Does the yuan's devaluation affect China's international trade?. ASERC Journal of Socio-Economic Studies, 4(2), 126-142. DOI:10.30546/2663-7251.2021.4.2.126