| With the development of Chinese economy,Chinese oil consumptions and import dependency increase quickly.The rapid increases of o il prices have affected C hina’s economy heavily since 2000.After the 2008 global financial crisis,international oil prices fell below $40 a barrel.At the meantime,China lauched the economic stimulus package worth 4 Billion RMB.International oil prices began to rebound in early 2009.Then international oil prices sway at high levels.Since 2014,China’s economy has entered a period of New Normality.The monetary policy turns toward stable.International oil prices are declining and sway at low levels.So how does C hina’s demand affect oil prices? What is the relationship between China’s demand and C hinese monetary policy? What is the transmission mechanism of Chinese monetary policy on the impact of international oil prices? What is the effect of Chinese monetary policy on international oil prices? This paper will discuss these problems.Based on the domestic and foreign relevant research results,firstly this paper describes and analyzes the volatility of international oil prices since 2000.And then we analysis how Chinese monetary policy affect international oil prices according to comparison of monetary policy between C hina and the West.Short term effect is C hinese monetary policy affects international oil prices through investment demand channels.In order to analyze the short-term impacts of C hinese monetary policy on international oil prices,this paper uses the method of event study by analyzing 20 times adjustment of the People’s Bank of C hina s three-month deposit interest rate and the reaction of crude oil index during the period of 2005-2015.We find that there is a negative correlation between interest rate and international oil prices.It is 20% of all event points,the interest rate adjustments significantly affect on international oil prices.Chinese interest rates have an increased impacts on international oil prices after global financial crisis.For analyzing the impact of Chinese monetary policy on international oil prices,this paper analyzes the data from July 2005 to May 2015 with SVAR model using monthly data of the international oil prices,Chinese industrial value-added,broad measure of money supply,consumer price index and interest rate.The results show that: the output shocks and total supply shocks are the main factor influencing the international oil prices.Compares to other variables,the impact of interest rate on international oil prices is the least significant.Meanwhile,Chinese monetary policy has an impact on international oil prices through influencing the real output and prices.C hinese money supply and international o il prices have a long-term positive relationship,the reason is that increasing the money supply is conducive to economic development.The real output will increase.And then the demand of oil lead s to high oil price.The correlation between the change of China’s interest rate and the oil price is positive at first,and then turns negative.When the legal interest rate rises,the international oil prices first show downward trend because of the supply and demand.And then economic operation cost will rise up.The rising prices and the expectations of inflation will stimulate precautionary demand of financial assects,leading to sharp increases of commodity prices(especially in the house market),and the real output increases as a result.On the basis of the above analysis,this study puts forward some suggestions.Monetary policy should gradually shift from quantitative regulation to price regulation.We should improve the regulation mechanism of the oil prices and the reform of interest rate liberalization,etc. |
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