Effects of RMB Exchange Rate Changes on China's Outward FDI

With the rapid growth and the improvement of international competitiveness of Chinese economy, China's outward FDI has developed quickly, the relationship between RMB exchange rate and outward FDI has attracted more and more attentions in recent years. On the basis of constructing and analyzing the theoretical model, after method of calculation of exchange rate expectation and exchange rate volatility is given, the relationship between RMB exchange rate and China's outward FDI is explored by using the panel data from 2005 to 2013. The result shows that significantly positive correlations exist among the RMB exchange rate level, the exchange rate expectations and China's outward FDI, the RMB exchange rate volatility has significantly negative impact on China's outward FDI, which means the smaller the volatility is, the better promotion of the development of China's outward FDI.