A Study On The Macroeconomic Effect Of Crude Oil Price Fluctuation On Chinese Economy

The oil crises that happened from 1973 have braught very serious negative influence to global economy, and aroused extensive attention. To China, a country which the oil consumption is growing rapidly and the dependence on oil imports is increasing continuously, the influence of the explosive oil prices since 2003 has become increasingly noticeable. Based on the analysis of mechanism about bridge scour and China’s economic situation, this paper studied systematically the characters of oil price fluctuation, the types of oil price shocks, the driving force factors of oil price, as well as Chinese effects on oil price. On the basis of the mechanism of the pass-through of oil price to macro-economy, this paper estimates the effects of linear and nolinear oil price shocks on China’s macro-economy.Through estimating the GARCH model based on five kinds of oil price, the statistical characteristics of oil price are as follows:1) the oil price is random drift,2) the oil price is reversive on its stable value,3) the stable value of oil price exist trend,4) the change rate of oil price has considerable inertia,5)the fluctuation of oil price is long memory and asymmetrical.There are 3 types of strength that caused oil price changes, which include oil production, demand and speculation. By the SVEC and SVAR models, the results of oil price’s historical decomposition and variance decomposition show that the oil price fluctuation of oil price is mainly caused by the oil demand shock and speculation shock over the last decade, and effects of the oil production shock is very weakly. Along with the sustained, rapid and healthy development of China’s economy, China will get more and more important in global oil market. However, the result of historical decomposition of oil price shoes that China hasn’t caused large fluctuation of oil price. So, the oil price vaiance could be treated as exogenous variable when we study its effects on China’s macro-economy.The transmission channels of oil price to macroeconomy include the incompete competition, the oil share in production and the energy efficiency. By analyzing the pass through mechanism, this paper shows that the stronger monopoly, increasing dependence rate on import oil as well as the lower energy efficiency would all bring negative effects to maco-economy.The effect of oil price on China’s mcro-economy is fairly complicated. The results of SVEC and SVAR show that China’s macroeconmic responses are all statistically insignificant, whether to the linear oil price or the nonlinear shocks. It reflects the complex of the transmission mechanism. However, the variance and historical decomposition are all prove that oil price is a very important to China’s macroeconomy.According to the transimission mechanism and effects degree of oil price on China’s macro-economy, some measures should be taken to alleviate the oil price negative effects. These measures include promoting the industrial structure, perfecting market system as well as improving energy efficiency in the long run. To deal with the oil crisis, we should establishe oil strategic reserve system.