The Political Economy of American Exchange Rate Bill Voting: From the Perspective of RMB Appreciation

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Abstract Under the theoretical framework of international trade political economy, this paper examines whether interest groups can dominate the voting of the US Exchange Rate Manipulation Act in 2015 from the perspective of RMB appreciation. Taking 100 senators as samples, this paper makes model estimation by using Full Information Maximum Likelihood Method (FIML), and quantitatively investigates the deep-seated driving factors behind the voting results of the US Exchange Rate Manipulation Act. The empirical results show that the influence of political donations from different interest groups on the voting behavior of parliamentarians is different. The political donations from American labor organization significantly affect the voting behavior of parliamentarians, but business groups and ideological organizations do not play a significant role in the voting results. In addition, senators’ personal characteristics affect the political donation of the bill to a certain extent, but do not affect the voting results. In the future, China needs to continuously pay attention to the latest progress of US exchange rate policy, correctly evaluate its impact on China’s economy, and maintain communication and coordination with important US interest groups to reduce the negative impact on related industries in China. JEL classification numbers: F14, F50, F31. Keywords: RMB Appreciation, Trade Protection, Bills Voting, Political Donation, Interest Group.