Using detailed China’s multi-lateral export data over 1997-2005, this paper accesses how exchange rate affects trade with respect to different trade regime and firm ownership. Since processing trade involves significant global sourcing and accounts for an important share of China’s total trade, we argue that it is less sensitive to China’s exchange rate compared with ordinary trade. We provide a thorough analysis by: 1) using the highly disaggregated bilateral imports and exports between China and all its partners; 2) decouple trade quantity and value in a rigorous way; 3) distinguish processing trade from ordinary trade; 4) explore the trade pattern response by firm ownership; and 5) analyze nominal as well as real exchange rate. We find that China’s import and export respond to exchange rate and relative income movements in our anticipated manner. The elasticity of exports to the real exchange rate is close to unity (0.9), whereas the responsiveness of imports is much smaller (0.2). Furthermore, processing trade is less responsive to exchange rate than ordinary exports. Products with greater foreign content are found to display significantly less sensitivity to the exchange rate.