The Population Age Structure, the Real Effective Exchange Rate and the Current Account Balance—Empirical Analysis Based on the Data of Chinese Provincial Panel

摘要

This paper takes the panel data of 29 provinces, municipalities and autonomous regions in China as samples from 1994 to 2015, using dynamic panel GMM to analyze the relationship between China’s population age structure, the real effective exchange rate and current account balance. System generalized method of moments and robustness test show that the adjustment of China’s current projects has obvious inertial characteristics; the change of population age structure has significant negative influence on the current account balance, the impact of youth dependency ratio on the current account is not significant, the elderly dependency ratio has a significant negative impact on current account; the effect of the real effective exchange rate on current account is not significant, the “Theory of Exchange Rate Manipulation in the Chinese Government” is not valid and untenable. The conclusion of this paper shows that the change of population age structure is an important reason for the long-term surplus of China’s current account.