The Spillover Effect Of Japan’s Quantitative Easing Monetary Policy On China

Since the implementation of Japan’s quantitative easing monetary policy, Japan, as a world economic power with a close economic ties with the China, has injected a lot of liquidity into the economy in Japan as well as the system with close economic ties with Japan, under this major economic background, we can expect that China, with a close economic ties with Japan, will most likely be adversely affected negatively impact and spillover effects of Japan’s quantitative easing monetary policy.Based on a review of the history of Japan’s quantitative easing monetary policy, this article carries a carding and discussion on the basic theoretical model mainly the MFD model of the spillover effects of monetary policy, and further conducts the empirical analysis and research on the spillover effects of Japan’s quantitative easing monetary policy on China by establishing SVAR econometric model, and simultaneously analyzing the impact of Japan’s quantitative easing monetary policy on China’s output by applying SVAR econometric model, this paper also examines the impact of Japan’s quantitative easing monetary policy on China’s foreign trade term, inflation, interest rates and exchange rates, and studies by which main channels the Japan’s quantitative easing monetary policy affect China’s output level through a comparative analysis.According to the empirical research of SVAR econometric model, the results show that Japan’s quantitative easing expansionary monetary policy will have some negative spillover effects on China in the long term, and will affect China’s output level mainly through the trade and output channels. Therefore, in order to better cope with the negative spillover effects of Japan’s quantitative easing monetary policy on China, we should pay close attention to Japan’s latest trends and actively seek countermeasures so as to minimize this negative influence and impact of this spill risks on the Chinese economy and output.