Exchange rate risk and the trade pattern of agri-food : evidence from China and Canada

Abstract

The purpose of this study is to determine whether real exchange rate between China and Canada has a significant effect on the agri-food sector of China value. Co-integration analysis is the key method used in analysis this issue. This paper examines a sample of 100 from January 2005 to April 2013. The research shows there are relationship among export, import and real exchange rate when tested statistically. It is proved that with the moving of the exchange rate, the volume of export and import will move a lot in the same direction with each other but opposite direction with the exchange rate in the long run. On the contrary, when the exchange rate moves in the short run, the export and import will moves a little in the same direction.