An Analysis Of The Main Influencing Factors Of China’s Imported Inflation

An important feature of the world economy today is global economic integration. China since the reform and opening up, especially since2001joining the WTO, China’s economy has gradually rapidly been integrating into the world economy. China’s economic linkage with the world economy is gradually strengthened. It is very difficult for China to sit idle by with the gradual opening up, we can say that China’s inflation is no longer just the inflation in the domestic sense, it may show up in China, but its influencing factors may be rooted in foreign. In recent years, some studies have shown that China’s domestic inflation has been obviously influenced by more and more international factors. The study and discussion on imported inflation also become a hot topic. For inflation, compared to many domestic influencing factors, some international influencing factors are more difficult to grasp and control. So it is very significant whether for policy makers to manage inflation, or ordinary producer, consumer to response to the impact of inflation to gain an insight into the type and pathway of the external imported factors. The author hopes to provide policy makers、ordinary producers and consumers with some reference and inspiration for a more rational understanding and response to today’s increasing inflation by revealing the pathway of the various factors, the size of affection.This study is based on theoretical analysis and integration of quantitative analysis and qualitative analysis, and is the organic unity of empirical analysis and normative analysis, then show the feedback to theory and empirical analysis and explain to the actual situation. The logical thinking of this paper is as follows: Firstly, do a simple combing literature of the theory of inflation and imported inflation, I will explore the pathway of imported inflation by three perspectives of Keynesian, monetarist and structuralist and three aspects of trade, currency, and the expectation, give an analysis and of various factors and select the main factors; Secondly, establish a econometric models, such as the VAR model, based on the necessary statistical treatment of data according to the choice of the variables of the main factors; and then do empirical analysis and test, such as unit root tests, use by statistical software; Finally, give a summary of the relevant conclusions and make recommendations based on the existing empirical outputs according to actual situation.This paper contains a total of six chapters, the main structure of the organization and the content is as follows.The first chapter is an introduction which introduces the research background, purpose and significance, the selection of research methods, and the general structure of the paper. This paper analyzes the pathway, identify the main influencing factors of China’s imported inflation, and then proceed to the empirical analysis, in order to draw relevant conclusions and given inspiration and the corresponding recommendations, based on theoretical analysis of imported inflation and according to China’s actual situationThe second chapter is the related theory and literature review which mainly contains the existing collection of the definition of imported inflation, a brief review and synthesis of factors and then do related research to sort out and give a simple comments. The inflation theory involves traditional inflation theory and modern theory of inflation two categories. The so-called imported inflation is an economic phenomenon that a country’s economy is so closely with the international market in an open economy that when the phenomenon of inflation happened on the international market, the country’s domestic prices generally, the continuing rise due to the import of the rising prices by the pathway of international inflation.The third chapter is the analysis of pathway of imported inflation based on the introduction to related inflation theory, firstly do analysis on the pathways from the Keynesian, monetarist and structuralism three different perspectives. The next is a comprehensive analysis in the comprehensive analysis of trade conduction pathway、currency conduction pathway and the pathway of expectation.The fourth chapter is the analysis of the influencing factors of China’s imported inflation. This chapter mainly summarizes and classifies the influencing factors of China’s imported inflation and describes the reasons for the selection of the main factors and other variable factors.China’s imported inflation factors can be divided into two categories:conditional influence factors and non-conditional impact factors.Chapter five is an empirical analysis on the influencing factors of China’s imported inflation, this chapter includes a total of five:section Ⅰ is the selection of variables; section Ⅱ is the selection and processing of data; Section Ⅲ is co-integration test among variables; section Ⅳ is the Granger causality test between variables; Section Ⅴ is a model of selection and establishment of VAR model; Section Ⅵ gives the empirical results and analysis,Chapter six is conclusion and suggestions.This paper may have some places regarded as innovation:the first place, in order to more vividly understand the pathway of imported inflation, this paper proposed the connectivity principle of imported inflation. In addition, the model of the analysis of price transmission processes to be dynamic, expecting it closer to the real situation. The second place, this paper has a conversion of ideas based on the explanation of imported inflation by the different schools and analyzes the pathway of imported inflation in accordance with the classification of the BoP. The third place, this paper doesn’t just analyze the pathway of imported inflation, but classifies influencing factors detailed, then analyzes a few main factors.