Study Of Fluctuations In International Commodity Prices, The China Factor

Commodity price and its fluctuations have attracted wide attention at all times. But in recent years, because of the huge fluctuation of commodity price, the global community debated a lot for the reasons led to this phenomenon. In the divergent views of the discussion, the impact of the "Chinese factor" on commodity price was ardently discussed. However, almost all of the current studies are descriptive analysis, which indicated China's demand for commodities would impact the world commodity market and the commodity price. But none of them put the "Chinese factor" in a unified framework or gave out enough discussions with quantitative analysis or strong data support. Aimed at the impact of the "Chinese factor" to the fluctuations of international commodity price, which has not been studied deeply as described above, this paper will discuss the correlation between commodity price and the "Chinese factor" under a unified framework with theoretical and empirical analysis. We will also try to provide effective and scientific suggestions for the commodity strategy in China based on the relevant conclusions.In the theoretical part, the paper will put the "Chinese factor" into a unified analytical framework based on the theory of supply and demand. In the empirical research, this article will use VAR model and introduce a series of China's macro economic variables, such as GDP, currency supply, import, export, production, etc., to quantify "Chinese factor" and study their impact on various international non-ferrous metal prices in a dynamic model. In the end, the paper proved that "Chinese factor" have significant impact on international non-ferrous metals price, and different kind of Chinese macro economic variables have different impact on different international non-ferrous metal price.The paper is divided into six chapters. In Chapter 1, we'll introduce the background, significance, current research and the research method of this topic. In Chapter 2, we will explain the reasons for picking non-ferrous metals as the representatives for international -commodity, and select a series of macro economic variables to quantify the "Chinese factor" reasonably. In Chapter 3, the Chinese factor and commodity price will be put in the unified framework of supply and demand. We'll also introduce the supply and demand conditions of six kinds of non-ferrous metals in global and Chinese market and analyze the possible mechanism that "Chinese factor" can impact commodity price. In Chapter 4, we'll set up the research hypotheses, explain the research methods and construct the models. In Chapter 5, according to the model in front, we will use empirical test to prove or disprove the research hypothesis. Finally, in Chapter 6, we will make the conclusion, and give out suggestions and recommendations for China's commodity strategy.