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The impact of the Chinese exchange policy on foreign trade with the European Union Translated title: O impacto da política cambial chinesa no comércio exterior com a União Europeia

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      Abstract

      ABSTRACT The aim of this paper is to analyze the impact of the Chinese foreign exchange policy on foreign trade with the European Union. After describing the importance of the exchange rate in an open economy and some of the methodologies employed to calculate its equilibrium value, we examine whether the Chinese competitiveness is due to the existence of misalignment (undervaluation) of its exchange rate, or rather, to other sources of competitiveness. For this purpose, we use a Vector Error Correction (VEC) model to estimate a long-run exports equation. The empirical results indicate that over the past few years, Chinese exports have benefited from an “unfair” competitive advantage resulting from the manipulation of its currency value.

      Translated abstract

      RESUMO O objetivo deste artigo é analisar o impacto da política cambial chinesa sobre o comércio exterior com a União Europeia. Depois de descrever a importância da taxa de câmbio em uma economia aberta e algumas das metodologias empregadas para calcular seu valor de equilíbrio, examinamos se a competitividade chinesa se deve à existência de desalinhamento de sua taxa de câmbio, ou melhor, a outras fontes de competitividade. Para isso, utilizamos um modelo de Vetor de Correção de Erro (VEC) para estimar uma equação de exportações de longo prazo. Os resultados empíricos indicam que, nos últimos anos, as exportações chinesas se beneficiaram de uma vantagem competitiva “injusta” resultante da manipulação do seu valor cambial.

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      Most cited references 38

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        The Purchasing-Power Parity Doctrine: A Reappraisal

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          A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the ‘business cycle’

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            Author and article information

            Affiliations
            orgnameUniversidade de Coimbra orgdiv1Faculty of Economics orgdiv2Centre for Business and Economics Research Portugal ana_cardoso_20@ 123456hotmail.com
            Contributors
            Role: ND
            Role: ND
            Journal
            rep
            Brazilian Journal of Political Economy
            Brazil. J. Polit. Econ.
            Editora 34 (São Paulo, SP, Brazil )
            0101-3157
            1809-4538
            December 2017
            : 37
            : 4
            : 870-893
            S0101-31572017000400870
            10.1590/0101-31572017v37n04a12

            This work is licensed under a Creative Commons Attribution 4.0 International License.

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            Figures: 0, Tables: 0, Equations: 0, References: 39, Pages: 24
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            Product Information: SciELO Brazil

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