Abstract
By using co-integration analysis, vector error correction model and granger causality test, and based on the quarterly data between China and the United States, this paper give an empirical analysis on the relation between the real exchange rate and Sino-US trade. The conclusions are as follows: factors affecting Sino-US trade balance includes U.S. real GDP, China’s real GDP and real exchange rate, the most important factor to impact on Sino-US trade is the U.S. real GDP, and there is a clear J-curve effect between Sino-US trade. Based on the research results, at last the author gives the proposition of the RMB exchange rate’s reform.
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