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On July 21, 2005, China’s exchange rate system has been adjusted again. By now, China’s exchange rate system has experienced five times change : mobile adjustment period ;Focusing on "a basket of currencies" float period; Gradual adjustment period; Based on market supply and demand, a single, managed floating exchange rate period; Based on market supply and demand, reference to a basket of currencies conditioning, managed floating exchange rate period. It has been 11 years since last time. It makes a wide range of arguments in the domestic and international. Why China’s exchange rate appreciation? It will continue to rise? RMB appreciation is advantages or disadvantages to China? In tackling these questions, the paper analyses it.China carries out a long-term managed exchange rate system. In fact, it focuses on the dollar exchange rate system in recent years and adjusts with the dollar exchange rate accordingly. According to the classical theory of exchange rate decision, The deciding factors of exchange rate include national income, exchange rate fluctuations, changes relative inflation rates, the relative level of interest rates, the level of foreign exchange reserves, and so on. Based on the above factors, we conclude that the causes of China’s exchange rate change are China’s long-term economic growth , the huge increase in foreign exchange reserves, our national strength and external pressures, and other factors.In the national economy, foreign exchange rate is a variable of economic development. But in today’s open economy, it is a very important economic variable, because the changes of foreign exchange rate will affect a country’s capital market, foreign trade, finance, price and even behaiver of government, that is, it affects the consumption, investment, purchase of government, import and export. Therefore, the changes of foreign exchange rate should be treated as a major event in the national economy. Meanwhile, the national economy will in turn affect the exchange rate changes: economic growth, the currency appreciation; Economic recession , the currency devaluation.The paper analyses the influence of the RMB appreciation to the Chinese economy. First, according to the general analysis, we point out beneficial aspects: enlarging China’s imports, reducing costs to relying on imports of raw materials manufacturers, enhancing capacity of domestic enterprises foreign investment,
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