Exchange Rate Movements and China-East Africa Trade Balance

A New Perspective From RMB

Bibliographic Data

ID3435935
AuthorsPengyu Ren (0000-0002-3050-8601, Zhongnan University of Economics and Law), Ibrahim Sakouba (0000-0002-4749-6993, Hefei University of Technology, corresponding author)
Year2024
Volume14
Issue1
Publication date2024-01-01
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/21582440241230805
OpenAlexW4391935211
LanguageEN
Citations received1
References cited54

This study estimates the long-term impact of Chinese RMB exchange rate movements on the trade balance between China and the Eastern African Belt and Road Initiative countries. The Pedroni cointegration analysis and the fully modified and dynamic OLS techniques are applied to the dataset from UNComtrade and China Statistical Yearbook 2019. Some specification novelties are the use of imports and exports as independent variables. By so doing, the paper proposes an alternative measure of the trade balance. We find that the RMB exchange rate movements are stable during the sample period and slightly affect the trade balance between China and the Eastern African BRI countries. Additionally, the study does not find evidence supporting the J-curve effect in China-East Africa trade balance. The empirical results suggest that the Eastern African BRI countries would gain much more trading collectively with China than individually. Therefore, the study strongly recommends that the East African Community accelerate its integration process and establish Export Quotas for trade outside the bloc

Balance of trade · China · East Asia · Economics · Exchange rate · International trade · Monetary economics · Political science · Global Financial Crisis and Policies · Global trade and economics · International Development and Aid · Psychology

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Open DOIOpen Access