The Influence Of International Oil Price Fluctuations On China’s Price Level

With the continuous expansion of China’s total economic output,the national economy need more and more oil for the normal operation.But China’s current oil production can not meet the growing domestic demand for oil The relevant analysis show that China’s oil imports dependence is rising,and hinted that it might lead to a chain reaction, especially the impact of oil price volatility on economic growth and price level of China’s growing might.So,the actual situation? What are the policy implications which may be valuable to explore?Based on the above economic background,this paper studies the impact of international oil price fluctuations on the price level.Firstly,the relevant research scholars were reviewed, and the history and current state of international oil prices,production,consumption and import and export situation of China’s petroleum statistical analysis are described in order to fluctuations in international oil prices and China’s oil supply and demand do not state balanced a preliminary understanding.Secondly, the international oil prices and China’s price level,and the relationship between them was described statistical analysis and Granger causality test, found that there is a certain relationship between international oil prices and China’s price level.For this,based on the analysis of international oil price fluctuations and price levels in our country, the paper selected the relevant variables,simultaneous equation model.then the paper analysis the international oil price fluctuations on the impact of China’s CPI and PPI direction and impact strength.Analysis showed that before the oil-importing countries into the international oil prices first affect PPI, PPI through conduction and thus on the CPI. Fluctuations in international oil prices in this period has little effect on the price level, but overall international oil prices on the our overall price level has a certain impact. After China became a net importer of oil,the impact of international oil price fluctuations on the CPI, PPI is more significant.Growth in oil imports and growth in international oil prices on China CPI and PPI has a certain influence.And the impact of the growth rate of oil prices on CPI and PPI is greater than the oil imports growth rate.Therefore, the attitude of the article is that, to avoid the adverse effects of the international oil price fluctuations on China’s price levels and our national economy, China should improve the pricing mechanism, improve China’s oil reserve system, strengthen the supervision of the oil market, determine the long-term energy strategy.