This paper mainly analyze the exchange rate of RMB on the price of China by empirical model. For long time China practices the devaluation on RMB led to more exports than imports, trade surplus is quite obvious. Domestic price is on the low level, but with China entries into the WTO, high rate takes tremendous stress to China's economy. So the Chinese government implemented the exchange rate reform. For increasing a stable RMB rate of exchange and stable China's economy, exchange rate reform is very necessary.Because the Chinese government is implementing floating exchange rate system, the Chinese government encounters short-term RMB evaluation and medium or long term RMB security issues. Long-term RMB security issues connects about China's economic competitiveness and China's economic security, also connects about global economy's stability. So it's very important to do research about RMB exchange rate.