Analysis of the relationship between Korea’s export to China and exchange rate

Abstract

Background/Objectives: The purpose of this study is to analyze the relationship between Korea’s exports to China and won/dollar, won/100yen, won/yuan, and suggest directions for the future. Methods/Statistical analysis: Monthly data used in the analysis period were analyzed by using Excel, e-views and SPSS. In addition, I will examine trends and correlations between Korea’s exports and imports and exchange rates of major countries over the last 213 months through descriptive statistics, correlation, regression analysis, normal distribution, Scatter, Quantile-Quantile and Box-Plot analysis. Findings: Korea’s exports, imports, trade balance data to China used in this study were collected from Trade Statistics of the Korea Customs Service. Won/Dollar, Won/100Yen and Won/Yuan was obtained from the Economic Statistics System in the Bank of Korea. The analysis period was from January 2000 to September 2017 for a total of 213 months (17 years 9 months). The correlation between Korea’s exports to China and exchange rate was Won/Dollar -0.491, Won/100Yen -0.386, Won/Yuan -0.406. In the regression analysis, Won/Dollar and Won/Yuan were statistically significant. However, the Won/100Yen was statistically insignificant. In the parallax analysis between two variables, exchange rate fluctuations affects exports with a time lag of 4 or 5 months. Improvements/Applications: In order for Korea’s exports to China to continue to increase in the future, Won/dollar and won/yuan should move favorably. And I will try to predict the future direction.