Threshold Effects of RMB Exchange Rate Fluctuations on the Restructuring of Sino-US Bilateral Value Chains
DOI:
https://doi.org/10.53469/ijomsr.2025.08(04).03Keywords:
Exchange rate, Global value chains (GVCs), Threshold effects, Sino-US trade, Nonlinear adjustmentAbstract
The interplay between RMB exchange rate fluctuations and the restructuring of Sino-US bilateral value chains has emerged as a critical issue amid the retreat of globalization and geopolitical-economic competition. This study integrates exchange rate pass-through theory, Global Value Chain (GVC) decomposition frameworks, and threshold regression models to systematically analyze the nonlinear impact pathways of exchange rate volatility on bilateral value chain adjustments. The findings reveal a significant threshold effect in the role of RMB exchange rates in shaping Sino-US value chain specialization. The critical threshold is jointly determined by trade policy uncertainty, supply chain resilience, and technological dependence. When exchange rate fluctuations exceed this threshold, structural shifts occur in corporate production relocation, intermediate goods trade substitution, and technology spillover pathways. Future research should deepen the dynamic modeling of the triadic coupling mechanism ("exchange rate–value chain–threshold") and incorporate emerging variables such as digital trade and green trade barriers.
References
Amiti, M., Itskhoki, O., & Konings, J. (2019). International shocks, variable markups, and domestic prices. Review of Economic Studies, 86(6), 2356–2402.
Baldwin, R., & Freeman, R. (2021). Risks and global supply chains: What we know and what we need to know (NBER Working Paper No. 29444). National Bureau of Economic Research.
Cheng, D., Li, X., & Lu, Y. (2021). Global value chains and exchange rate pass-through: The role of production fragmentation. Journal of International Economics, 133, 103536.
Fauceglia, D., Shingal, A., & Wermelinger, M. (2022). Exchange rate pass-through and global value chains: Evidence from emerging Asia. World Economy, 45(1), 234–261.
Goldberg, P. K., & Knetter, M. M. (1997). Goods prices and exchange rates: What have we learned? Journal of Economic Literature, 35(3), 1243–1272.
Gopinath, G., Itskhoki, O., & Rigobon, R. (2020). Currency choice and exchange rate pass-through. American Economic Review, 110(3), 677–719.
Handley, K., & Limão, N. (2017). Policy uncertainty, trade, and welfare: Theory and evidence for China and the United States. American Economic Review, 107(9), 2731–2783.
Hansen, B. E. (1999). Threshold effects in non-dynamic panels: Estimation, testing, and inference. Journal of Econometrics, 93(2), 345–368.
United Nations Conference on Trade and Development [UNCTAD]. (2023). Digital economy report 2023: Value creation and capture in the digital economy.
Zhang, L., & Sato, K. (2022). Exchange rate volatility and global value chain restructuring: Evidence from China-Japan trade. Journal of Asian Economics, 78, 101456.