The Unconventional Monetary Policy In The United States On Import And Export Trade Of China

With the constant improvement of China’s market opening up, the Chinesecontact with the world economy is increasingly close, the Chinese economy andworld economy gradually become into one. As a part of the world economy, China’seconomic trends by the huge impact of the changes in the world economy..As isknown to all, the United States as the world’s most important economies, itsinfluence is no doubt.While China is the world’s second largest economy, is also animportant import and export country, its external dependency is high, especiallydepending on the United States. market.The changes in the United States wouldhave important influence and significance on China’s import and export trade, eventhe entire economy. Especially after the global economic crisis caused by thefinancial crisis in the United States in2007, the impact of changes in the U.S. marketon the Chinese economy has become more prominent. America’s recession, anincrease in the unemployment rate, reduced external demand, and so on are seriousatrophy of China’s foreign trade, economic growth slowed sharply, domesticeconomy is facing severe test. Quantitative easing monetary policy in the UnitedStates launched one after another, the more severe the internal and external situationof the Chinese economy: domestic inflation heats up quickly, a large number ofexport enterprises go bankrupt, an obvious rise in unemployment and an increase infinancial risk; An appreciating of the RMB, the severe decline in exports, net exportsamount has been narrowing. In such a world economic invironment, China’s importand export trade by the unprecedented severe blow. This paper aims to study theconcrete implementation of monetary policy in the United States between2006-2012, from the angle of propagation effects between the two countries economic changesin trade channels, trying to reveal U.S. monetary policy on the specific impact ofChina’s import and export trade, so as to find the solution to the problem of China’seconomic woes. Trade links between China and the United States by way ofempirical research to quantify the tightness, and look for ways to reduce the Chineseeconomy’s dependence on foreign reasonable opinions and suggestions made for therecovery of the Chinese economy, and take off again, to promote the development ofChina’s economy.In the first chapter, the article briefly introduced the background andsignificance of the paper produced, and briefly describes the research methods of thedomestic and foreign scholars in related fields of many important researches and thisarticle. This article is based on the results of previous studies and experience,andfrom a unique entry point to conduct innovative research to reveal the economic tiesbetween China and the United States.The second chapter introduces the financial theory and research. It conducts abrief introduction to the famous international finance theory, Mundell-FlemingModel, and a detailed analysis of the impact of foreign trade channels and effects ofmonetary policy providing a theoretical basis for the empirical research.The third chapter is the core part of this article, using Eviews6.0Software to conductthe econometric analysis of monthly data from2006to2012. Through a series ofmodel tests and analysis,such as ADF test, cointegration analysis, Grange causalitytest, VEC model analysis, impulse response analysis and variance decomposition,it’s obviously to get the conclusion that the economy between China and theUnited States have a long-term and stable relationship, the increase in the amount ofU.S. money supply in the short term would have obvious negative effects to China’simport and export trade, to some extent, have a negative impact on the Chineseeconomy. As time goes on, this negative impact will gradually vanish through the internal adjustment mechanism, China’s foreign trade will gradually return toequilibrium, but this process will relatively long. To restore the economy to achieveeconomic stability quickly, the Chinese government has to take appropriate measuresto help the market to recover.Finally, in the fourth chapter, the paper argues that in the context of the currentworld economic terms, it is both an opportunity and a challenge to China to revivethe economy. The Chinese government should draft a long-term plan to activelypromote economic reform, learn the lessons in the economic crisis, and promoteChina’s economic leap again. In this process, China should actively adjust thestructure of imports and exports, speed up industrial upgrading, turn the simpleexport processing trade to the high-tech product trade, change the image of Chineseproducts worldwhile, while expand domestic demand, reduce the dependence onexports, promote national consumption, adjust the investment and consumption inparallel. In the financial sector, the government should adjust monetary policy in atimely manner to provide a stable financial environment to the import and exportenterprises. Also, it’s time to reform the government functions to service import andexport enterprises. Market economy and government should work together topromote China’s economic development faster and better.