Exchange rate changes will cause changes in import and export commodity prices, so the phased appreciation of RMB exchange rate will affect imports and exports. The rise of RMB exchange rate will increase the purchasing power of RMB, so that more goods can be bought abroad, but it will also lead to the decrease of foreign imports of China goods, which is beyond doubt.

From an economic point of view, both supply and demand will eventually tend to be balanced, and so will international trade. As foreign investment in China increases, so will domestic investment. On the contrary, when foreign investment in China decreases, domestic investment will also decrease.

Extended data

Every country has inflation. If its inflation rate is higher than that of foreign countries, its currency will depreciate and the foreign exchange rate will rise. The influence of interest rate level on foreign exchange rate is that short-term capital flow leads to the change of foreign exchange demand through the difference of interest rate level in different countries.

If a country's interest rate rises, foreign demand for its currency increases, its currency appreciates and its exchange rate falls. Of course, the influence of interest rate on capital flow needs to consider the influence of forward exchange rate. Only when interest rate changes offset the adverse changes in the future exchange rate can capital flow internationally.