Global imbalance adjustment strengthens RMB exchange rate impact on FDI inflows.
The study looked at how changes in the value of China's currency (RMB) affect the amount of foreign investment coming into the country. They analyzed data from 2000 to 2014 and found that after a global imbalance adjustment in 2010, the relationship between RMB value and foreign investment changed. Before 2010, a higher RMB value led to less foreign investment, but after the adjustment, this relationship became stronger. However, the relationship between RMB value volatility and foreign investment also changed after the adjustment.