The Impact of RMB Exchange Rate Fluctuations on Profits of Small and Medium-Sized Foreign Trade Enterprises under Sino-US Trade Friction

Qingyu Xie

doi:10.54691/skmk0m79

Authors

Qingyu Xie School of Economics and Management, Yango University, Fuzhou, Fujian, 350000, P.R. China

DOI:

https://doi.org/10.54691/skmk0m79

Keywords:

Sino-US Trade Friction; RMB Exchange Rate; Exchange Rate Volatility; SMEs; Profitability.

Abstract

With the weakening of China's economy and unstable financial relations with the United States, the impact of fluctuations in the exchange rate of the renminbi on the earnings of small and medium-sized export enterprises has gradually been growing. Panel data of Chinese A-share listed manufacturing SMEs from 2015 to 2025 were used in this study, and both fixed-effect models and moderation tests were employed to examine the impact of RMB exchange rate fluctuations on corporate profitability empirically. The results show that, when Sino-US trade friction is present, an appreciation of the Renminbi increases enterprise profits, and under such circumstances the adverse impact of exchange rate fluctuations on financial indicators is relatively larger; therefore, although small and micro enterprises are exposed to exchange rate risk to a greater extent, there is no statistically significant difference in the size-moderation effect. Based on the research results above, some strategies have been proposed to deal with the problem of foreign exchange risk in small and medium-sized export-oriented enterprises, and empirical support has also been provided for building development policies on foreign exchange and trade by the government.

Downloads

Download data is not yet available.

References

[1] Ouyang, H., & Ling, A. (2022). RMB internationalization, exchange rate volatility, RMB cross-border settlement and China's trade activity. Systems Engineering-Theory & Practice, 42, 123–135.

[2] Wang, R., & Li, S. (2019). Evaluation of China's high-quality development of foreign trade under the background of Sino-US trade friction. China Business and Market, 33, 12–24.

[3] Ma, G., & Zhao, F. (2025). Impact of great power competition on RMB internationalization: Based on the perspective of Sino-US trade friction and monetary competition advantage. Economic Theory and Business Management, 45, 23–36.

[4] Chen, L., & Su, H. (2014). The asymmetric impacts of RMB exchange rate on China's exports. Systems Engineering-Theory & Practice, 34, 2101–2112.

[5] Li, W., & Zhang, W. (2010). Trade effects of changes in the RMB exchange rate. Quantitative & Technical Economics, 27, 34–47.

[6] Lin, X. (2014). The comparative study about the both simultaneous management and independent management in the risk of RMB foreign exchange and interest rate in foreign trade enterprises. Mathematics in Practice and Theory, 44, 89–101.

[7] Gu, Y., Gao, T., & Fu, X. (2008). Equilibrium level and short-term fluctuation of RMB exchange rate in the context of international capital flow. Financial Research, 34, 56–68.

[8] Cai, Z., Che, X., & He, H. (2023). An empirical research on the impact of Sino-US trade war on enterprise R&D investment. Studies in Science of Science, 41, 56–68.

[9] Zhou, Y., & Xiao, X. (2022). Exchange rate volatility, production network and stock market risk. Journal of Financial Research, 47, 112–128.

[10] Jin, C., & Sun, M. (2025). Exchange rate shocks, balance of payments resilience and high-quality development of foreign trade. Study and Practice, 8, 78–89.

[11] Dai, S., & Wan, Z. (2022). Sino-US trade friction and the financing costs of China's enterprise foreign debts. Scientific Decision Making, 27, 89–101.

[12] Dai, G., Liu, H., Ji, S., & Wang, S. (2021). Analysis of Stackelberg game in international currency competition and its inspiration on RMB internationalization. Systems Engineering-Theory & Practice, 41, 78–92.

[13] Ma, G., Ding, B., Zhao, F., & Ma, Z. (2025). Research on the exchange rate volatility suppression effect of RMB internationalization. Contemporary Economic Science, 47, 34–45.

[14] Xiao, K. (2019). Development ideas of RMB internationalization in the "golden age" of SDR. Macroeconomic Management, 24, 45–52.

[15] Shao, H., Cai, Z., & Wang, Y. (2023). Digital transformation of trade helps high-quality development of foreign trade enterprises. China Forex, 15, 45–56.