Is Marshall-Lerner Condition Applicable in China?——Based on the positive analysis of accounting matrix of Chinese society in 2000

Marshall-Lerner condition holds that if the absolute value of a nation's export flexibility plus that of import flexibility is bigger than one,devalue of home currency can improve international balance of the nation.Since 1995,actual effective exchange rate of RMB,whether calculated by CPI or EPI,and RMB itself are under evaluated and there exists pressure for revalue;the absolute value of Chinese export flexibility plus that of import flexibility is bigger than one and it satisfies Marshall-Lerner precondition but by calculating the impact of SAM in 2000,we can't draw the conclusion that devalue of RMB calculated by actual effective exchange rate will improve China's trade balance,i.e.,Marshall-Lerner condition is not applicable in China.Conclusions: firstly,revalue of RMB should be handled carefully,mild and slow revalue having less influence upon the society and economy;secondly,revalue of RMB will improve China's trade balance;finally,domestic employment pressure caused by the revalue of RMB will possibly have a negative effect on the formation of capital,individual income tax and transferred payment of government to businesses.