Positive Analysis of the Influence of Real RMB Exchange Rate on FDI Inflows

In this article, I use fixed effect model to analyze the relationship between real exchange rate changes and the FDI inflows based on the statistics of our national exchange rate and FDI inflows from 1984 to 2000. Besides, in order to have a comprehensive analysis on the relations between real exchange rate and FDI inflows, I use the mixed traversal data model to analyze the data, through the two models, we can safely get the following conclusion: the changes of real exchange rate has a long-term stable equilibrium relationship with the FDI inflow. The short-term change of real exchange rate has a explicit impact on FDI inflow, if the RMB depreciate in a short term, the FDI will increase; while in a long term, the depreciation of RMB has no explicit impact on FDI.