The Influence Of U.S. Quantitative Easing Monetary Policy On China’s Stock Market Price

After the2008financial crisis, the United States and other developed countries successively took quantitative easing monetary policy to inject liquidity into the economy for saving their own economy, hoped by which to improve the situation of employment and deflation, and finally promote economic growth. However the effect is not obvious, but to make the world economy suffered a huge flood of liquidity. In particular, since the United States began to impel quantitative monetary policy in March2009,the cumulative base currency of having injected into the economies have been more than two trillion U.S. dollars.Considering the special status of the U.S. dollar as the international reserve currency, no doubt the implementation of the quantitative monetary policy in the United States will have a significant impact on the global economy, a large number of "hot money" will flow into emerging market countries, resulting in inflation and asset price bubbles in these countries. China and the United States are each other’s second-largest trading nation, has close ties with each other in the field of economic, financial and political. Meanwhile, because China is the best of emerging market countries in economies developing, the large amounts of liquidity that the U.S. released will inevitably impact on China’s economy.While China’s financial markets continue to open, China’s capital market will become the ideal market for short-term international capital chasing revenue, therefore the large liquidity of the quantitative monetary policy have released to the world economy which will certainly impact on China’s capital markets, result in the volatility of the stock market and probable lead to financial risks. Thus, during the United States continuing to implement the quantitative monetary policy, to explore its impact on China’s stock market price could make us to fully understand and grasp the potential risks, to play the role of the financial risk early warning, which seem to be crucial in order to maintain the stable development of the national economy and finance with economies in transitionTherefore, in order to more accurately confirm to quantify the impact of the United States quantitative policies on China’s stock market prices, first of all from the perspective of qualitative analysis, this paper analyzed the background of the U.S. two rounds of quantitative monetary policy, manipulation tools and effects at home and abroad, and analyzed the result why the United States third round of quantitative easing is expected to. From the point of theoretical analysis, combing the international transmission mechanism theory of monetary policy, and attempt to analyze channels which the quantitative monetary policy impact on China’s stock market price. In the empirical analysis, the article on the basis of the VAR model, took the empirical test in order to grasp its size and means of U.S quantitative monetary policy impacting on China’s stock market price. Finally, according to research findings, policy recommendations during the U.S. quantitative easing monetary policy conducive to the smooth development of China’s stock market and capital market, and take the era of global quantitative outlook.The main conclusions as follows:First, the empirical test confirmed that the U.S. monetary base, short-term international capital, the federal funds rate, the Yuan dollar exchange rate, money supply M2and deposit rates has a stable equilibrium relationship with the Shanghai Composite Index. It can be identified to quantify the monetary base, as well as the federal funds rate and stock price fluctuations in China released by the monetary policy with a stable contact and influence, which provides a basis for the following modeling.Second, through empirical research confirmed the liquidity released by the U.S. policy of quantitative easing to some extent, explains the rise in stock prices in China, China’s stock market has caused a certain risk, study finds, the U.S. quantitative easing policy released mobility is mainly a passive increase in short-term international capital and China’s money supply channel conduction to the domestic market. In this regard, in order to prevent financial market hit, preventing generate asset price bubbles and the risk of asset price bubble burst, and may impact on China’s stock market, policy measures should be very cautious.For the conclusion of this study, the final proposed the following policy recommendations:To strengthen the supervision of the international short-term capital; to maintain the RMB exchange rate basically stable; the implementation of the monetary policy of "total hedge"; Steady progress in the process of internationalization of the RMB.