Influence of RMB Exchange Rate on Imports of Soybean in China

This paper constructs a theoretical model where domestic soybean importers seek the maximization of profits. We use the monthly data over the period from July 2005 to July 2008 to study the influence of RMB nominal exchange rate and exchange rate fluctuation on the import volume of soybean in the empirical model. The study finds that the appreciation of the RMB exchange rate will increase the import of soybean, while exchange rate fluctuation will reduce the import of soybean. It also shows that the alteration of the RMB exchange rate has stronger impacts on the import of soybean than price factors.