An empirical analysis of the RMB exchange rate affect China's tea exports

Abstract

With the appreciating of the RMB, the upward trend of China's tea exports has slowed down. This essay selects eight countries or regions, which are the major areas of importing tea to research. In order to find out the relationship between RMB exchange rate and China's tea exports, we choose the gravity model, which takes into account factors, such as RMB exchange rate, the fluctuation of RMB exchange rate, the yearly output of China's tea, the annual imports and the GDP of tea importing countries or regions and the technique trade barrier. Finally we find that RMB exchange rate is positively correlated with China's tea exports, reveal the problem of China's tea enterprise, and present effective solution.